REVISION APPLICATION NO 78 of 2023 clean

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA

ARUSHA SUB REGISTRY

AT ARUSHA REVISION APPLICATION NO. 78 OF 2023 {Originating from Labour Dispute No. CM.A/ARS/ARS/279/22/133/22) ADELMARCE MALLYA............ APPLICANT Versus ELERAI CONSTRUCTION COMPANY LTD................ 1st RESPONDENT NORTHERN ENGINEERING WORKS LTD............... 2nd RESPONDENT

JUDGMENT 3rd June & 19th July 2024 Masara, J The Applicant instituted a labour dispute before the Commission for Mediation and Arbitration of Arusha (CMA), Dispute No. CMA/ARS/ARS/279/22/133/22, challenging her termination from employment. According to the complaint form filed before the CMA, the Applicant pleaded breach of contract of her employment. The Applicant's opening statement and evidence reveal that she was forced to resign from her employment contract following unfair labour practices inflicted to her by the Respondents causing intolerable working environment. The Respondent, on the other hand, alleged that the Applicant, on her own volition, resigned from her employment after being informed by the 1st Respondent to relocate to another office and give room to a senior manager. 11 Following that resignation, the Respondent did receive the Applicant's resignation letter but refused to accept her resignation. Issues before the CMA were whether or not the second Respondent constructively terminated the Applicant, whether there was unfair labour practice by both Respondents and which reliefs each party was entitled to. Upon assessing evidence in record, the CMA Arbitrator was satisfied that there was no constructive termination by the Respondents against the Applicant; hence, he dismissed the dispute for want of merit but directed the Respondent to pay the Applicant two

months salary, to the tune of TZS 5,804,800/=, covering the remaining period of her contract Aggrieved, the Applicant brought this Application under the provisions of sections 91(1) (a) & (b), 91(2)(b) & (c), 91(4)(a) & (b) and 94(l)(b)(i) of the Employment and Labour Relations Act, Cap. 366 [R.E 2019], Rules 24(1) 24(2)(a), (b), (c), (d), (e) & (f), 24(3)(a), (b), (c) & (d) and Rule 28(l)(a), (b), (c), (d) & (e) of the Labour Court Rules, G.N No. 106 of 2007. The Applicant prays for this Court to revise the CMA decision in Dispute No. CMA/ARS/ARS/279/22/133/22. It is the Applicant's contention that the Arbitrator failed to analyse that there was unfair labour practice and constructive termination; thus, calls for this Court to find that: 2 I p age 1) The arbitrator failed to analyse that there was unfair labour practice and constructive termination conducted by the Respondents against the Applicant.

2) The honourable arbitrator erred in law and in fact by ignoring many pertinent fact and evidence and misconstrued the oral evidence produced at the Commission for Mediation and Arbitration.

3) The Honourable Arbitrator erred in law and in fact by ignoring the dosing submission of the Applicant herein in his decision making. The Respondent opposed the Application by filing a counter affidavit deponed by Mr Zuberi Mkakatu, a Principal Officer of the Respondent. Hearing of the application was by way of filling written submissions. Mr Allen Godian, learned advocate, appeared for the Applicant while Mr Switbert D. Rwegasira, learned advocate appeared for the Respondents. In support of the Application, Mr Godian while adopting the affidavit in support of Application, premised his submissions by providing a historical background of the dispute leading to the current Application. He stated that the Applicant was employed by the 1st Respondent in a one year contract. After commencing the work, the Applicant received a letter of transfer and re assignment of duties to the 2nd Respondent. That there were no justifiable reasons for the transfer. When the Applicant assumed her new role, she was subjected to some mistreatments and unfair labour practises. Unable to persevere, the Applicant wrote a letter of resignation and thereafter she 3 I preferred the matter to the CMA claiming constructive termination. The CMA ruled against her favour; hence, the current Application. Expounding on the first ground, Mr Godian stated that there were two issues regarding the claim of

constructive termination; namely, that the Applicant was moved from her office to the board room where there were broken chairs for the Applicant to sit and work on, an act which hindered her to fulfil her obligations. Also, that she was forced to work for two companies although she had been transferred to the 2nd Respondent. That those circumstances created by the Respondents forced the Applicant to resign, as the Respondents did not do anything to cure the situation. In support of the above assertions, Counsel for the Applicant referred to the evidence of the Respondents' witnesses (DW1 and DW2) which, to him, supported the fact that the Applicant was forced to work with two companies, although those companies are separate legal entities, with different legal personality and do not depend on each other. To cement on his submission on constructive termination, he referred to this Court's decision in Giranqo Security Group vs Rajabu Masudi Nziqe, Revision No. 164 of 2013 HC, Par es Salaam Labour Division, where it was held that constructive termination or forced resignation occurs when the conduct of the employer is unreasonable and hostile towards the employee thus making employment intolerable resulting to forced resignation. 4 | Page Submitting on the second ground which is to the effect that the CMA erred in ignoring many pertinent facts and evidence and misconstrued the

oral evidence produced by the Applicant at the CMA, Mr Godian claimed that on the basis of Exhibit P3, the Applicant proved that she was instructed to work for the 1st Respondent while she has already been transferred to the 2nd Respondent. That, the Applicant through her letter, Exhibit P4, complained to the Respondents on the intolerable working environment which made her to resign. That, all those evidences were ignored by the Arbitrator. On the third ground of revision, Mr Godian argued that the Applicant's closing submissions were ignored by the Arbitrator in the final award. That, going through the CMA award, it evidences that the Applicants closing submissions which contained evidences of intolerable working conditions and unfair labour practices she was subjected to by the Respondents were ignored. Basing on the strength of that submission the Applicant prays that the application be allowed and that the Applicant be paid as per the claims contained in the CMA Form No.

1. In reply, Mr Rwegasira contended that the Arbitrator was correct to hold that there was no unfair labour practises nor constructive termination to the Applicant. He referred to the Court of Appeal decision in Kobil Tanzania Limited vs Farbrice Ezaovi, (Civil Appeal No, 134 of 2017) [2021 TZCA 485] Tanzlii which discussed what amounts to unfair labour practices. 5 I That the working relationship must be unbearable to the extent that the employee could not fulfil his obligation to work, and the situation is likely to continue for a period that justified termination. Concerning the issues of broken chairs, he submitted that the same is a fabricated fact as the said chairs are of a best quality. That, the Applicant was employed by the 1st Respondent but the two Respondents are owned by one and the same person. That, after the Applicant was employed, the 1st Respondent found that she could not work in two capacities and decided to move her to the other company where she will deal only with legal issues. That, even the Applicant's salary was paid by the 2nd Respondent throughout. Mr Rwegasira contended further that, the Respondents did not in any way create intolerable working conditions to the Applicant, rather the Applicant's resignation came after considering that her contract was about to expire and the chances for renewal was very slim. Mr Rwegasira argued further that

the Applicant did not follow any mechanism of dispute resolution before resigning as stated in the case of Foschini Group vs Commission for Conciliation, Mediation and Arbitration (2008) 29ILJ 1515 (LC) which requires that resignation from work be the last option, after exhausting other means of dispute resolution mechanism. 6 | Responding to the second ground, Counsel for the Respondents stated that the contention that the Arbitrator erred in ignoring evidence adduced by the Applicant during hearing at the CMA was incorrect. That the Applicant was accorded the right to be heard and adduced her evidence which could not convince the arbitrator to rule in her favour. Responding to the third ground, Mr Rwegasira was of the view that the third ground is a replication of the first ground of appeal and reiterated his submission thereof. He thus urged the Court to dismiss the Application. In rejoinder, Mr Godian reiterated his submissions in chief. He added that, it was irrelevant that the owner of the two Respondents is one as being forced to work for two different companies contravened the principles governing companies as enunciated in the famous case of Solomon vs Solomon which clearly distinguished the individual shareholders and companies. Thus, a person being a shareholder in two different companies does no give him power to instruct the employers to work in both of his

companies, unless the contract of employment so specifies. He urged the Court to provide remedies craved in the Application. I have carefully considered the CMA records, the affidavit for and against the application and the rival submissions by the parties. The issue for determination is whether the Application herein has merits. 7 | In this Application, the Applicant claims that she was constructively and not actively terminated. In Tanzania, the law recognises constructive termination as one form of termination of an employment contract. Section 36(a)(ii) of the Employment and Labour Relations Act, Cap .366 R.E 2019 states that: "For the purpose of this Sub- Part- fa)" termination of employment"includes (i) N/A (ii) a termination by an employee because the employer made continued employment intolerable for the emp/oyee ..." Again, Rule 7(1) of the Employment and Labour Relations (Code of Good Practice) G.N No. 42 of 2007 provides that: - " Where the employer makes an employment intolerable which may result to resignation of the employee, that resignation amounts to a forced resignation or constructive termination. ” In the CMA, the Arbitrator found that there was no constructive termination on the basis that there was no proof of the existence of intolerable conditions maliciously imposed to the Applicant by the Respondents. Before the CMA, the Applicant advanced various

reasons which she termed as conducts maliciously imposed to her by the Respondents, making her working environment intolerable. The said conditions are that: she was forced to work for two different companies and being subjected to unhealthy and 8 | I' unsafe working environment by being provided with broken chairs to sit on and being placed to work in the board room where the security guards used to close the room on several occasions; thus, making it difficult for her to enter and work on time. The question is whether the said conditions amount to intolerable conditions as per the law. The Court of Appeal of Tanzania addressed five factors to be considered when determining whether there was constructive termination of employment while dealing with the case of Kobil Tanzania Limited (Supra). These are: l) Did the employee intend to bring the employment relationship to an end? ii) Had the working relationship become so unbearable objectively speaking that the employee could not fulfil his obligation to work? iii) Did the employer create an intolerable situation? iv) Was the intolerable situation likely to continue for a period that justified termination of the relationship by the employee? v) Was the termination of the employment contract the only reasonable option open to the employee? Applying the above principles to this Application, it behoves me to test the reasons

advanced by the Applicant in relation to the above factors for the claim of constructive termination of her employment contract. 91 I will start with the claim that the Applicant was forced to work for two companies after she was transferred to the second Respondent. In determining this issue, I have carefully examined the wording of Exhibit Pl, which is the Employment Contract between the Applicant and the 1st Respondent. There is no dispute that the Applicant was employed by the 1st Respondent both as legal Counsel and Human Resources Officer (HR). For reasons best known to the 1st Respondent, the Applicant was by virtual of Exhibit P2 transferred to work for the 2nd Respondent. This transfer included a re assignment of duties. She was to work for the 2nd Respondent in the capacity of Legal Counsel only. She was further directed to hand over the HR duties, files and records to one Mr Zuberi Mkaku. For clarity, I find it useful to quote the relevant paragraph in Exhibit P2. It stated: "Except for pending and on-going specific assignments, which must be completed, please hand over in writing all your HR Duties, files and records to Mr Zuberi Mkakatu as soon as possible," The above quoted paragraph, in my interpretation, required the Applicant to relinquish her duties as a HR Officer in the 1st Respondent's Office. Those duties were forthwith going to be undertaken by the said

Mr Zuberi Mkakatu, with the exception of pending and on-going specific assignments. The letter did not specify what was going to happen with legal issues pertaining to the 1st Respondent. At the CMA, the Respondents did not proffer evidence to 10 | P ag e dispute the Applicant's assertion that, despite the transfer, she continued working as legal Counsel for both the 1st and 2nd Respondents. I do not have reasons to doubt that she did. Both witnesses for the Respondents attested to that fact. Exhibit P3, emails from the Applicant also vindicate her on the same. What that means is, she was made to work for two employers on the same terms and conditions she had agreed with one employer. There is no indication that the Applicant consented to either the transfer, reduction of responsibilities or both. Second issue to determine is whether the Applicant was subjected to unbearable working conditions. To decide on this issue, I had to revisit the evidence given at the trial. It was alleged by the Applicant and confirmed by the Respondents that the transfer entailed office movements; that is, from an office given to her at the 1st Respondent's premises to those of the 2nd Respondent. Both witnesses for the Respondents attributed this movement to a foreign expert who was given the office originally occupied by the Applicant. She was asked to share an office with other people but she

declined the same on grounds of professionalism. Being a practicing advocate, she deemed it inappropriate to share an office with HR persons lest she compromised confidentiality of documents and clients. In this Court's view, the argument made that the two companies are owned by the same person or persons is no justification for making an employee of one company to work ii । for the other unless the employee consents to it. Furthermore, the two companies had different shareholders and directors, with the exception of the MD, Samweli S. Lerna, who was the majority shareholder in both companies. In that regard, the actions by the Respondents had a bearing on the ultimate decision of the Applicant to resign. With regard to the issue that the Applicant was subjected to hard and unsafe working environment, there is overwhelming evidence that after moving from the premises given to her by the 1st Respondent, she was forced to sit in a board room where her physical health was compromised. The fact that she was sitting in poor facilities was confirmed by DW2 in his evidence. In her evidence, the Applicant informed the learned Arbitrator that she could not share an office with other employees for professional grounds. She decided to use the board room where there were broken chairs for her to sit on and that the security guards were locking the room making her working environment much

difficult as it was not possible for her to enter timely and perform her duties. In Exhibit P4, the Applicant did inform the 2nd Respondent on the conditions of the mini board room on the second floor where she was relocated, she also alluded to the fact that she was made to bear a number of intolerable working conditions. Her complaints were DOt addressed 8S TO response was made to her letter and no evidence to the contrary was given 12 | by the Respondents, other than attributing the same to self infliction by the Applicant. In my founded view, the second principle, which requires this Court to ascertain as to whether the said conditions were so unbearable that the Applicant could not fulfil her obligation to work, is vindicated by the evidence on record. As per the wordings of exhibit P4, the Applicant stated in that letter that, the chair and table given to her were not recommended office furniture as far as office ergonomics in Health and safety is concerned. This complaint went on unheard. Furthermore, the Applicant's letter signalled the frustration she was in. It would be expected that the employer would have responded to the complaint or addressed it. At the trial, both DW1 and DW2 testified that the premises had enough space and rooms. Why the Applicant was not given a room for herself, as legal counsel, begs questions. This brings me to the third principle on

constructive termination; namely, the employer created the said unbearable environment. With regard to the first principle as to whether the employee intended to bring the employment relationship to an end, this is obvious when one reads the complaint letter (Exhibit P4) and the resignation letter (Exhibit P5). And with relation to the 5th principle as to whether termination of employment contract was the only reasonable option open to the employee, I bear no hesitation to 13 | agree with the Applicant that resignation was the natural consequence of the conditions she was put in by her employers. The law has placed a burden of proof on the person who alleges existence of any facts. This is provided for under section 110 of the Tanzania Evidence Act, Cap. 6 R.E 2019 which states that: "Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist". Again, section 60(2) of the Labour Institutions Act, Cap. 300 [re 2019] provides that: ”60(2) In any civil proceedings concerning a contravention of a labour iaw- (a) the person who alleges that a right or protection conferred by any labour law has been contravened shall prove the facts of the conduct said to constitute the contravention unless the provisions of subsection (l)(b) apply; and (b) the party who is alleged to have

engaged in the conduct in question shall then prove that the conduct does not constitute a contravention." It is true that the Applicant, at the CMA had a duty to prove that she was subjected to intolerable working conditions. In this Court's view, that duty was sufficiently made. She proved that although she was employed by the 1st Respondent, she was transferred at the sole discretion of the 1st Respondent 14 | p ,5p to the 2nd Respondent. That despite the transfer, she was in effect working for the two Respondents although she received no remuneration from the other company. She also proved that the transfer also entailed working in unconducive environment. Exhibit P4, is a letter to that effect. When her complaints went unattended, she was forced to resign. This she did through Exhibit P5 whose contents also point to unbearable working conditions as the ground for terminating her services. Exhibit P5 was written on 03/08/2022 and the next day, that is on 4/8/2022, the 2nd Respondent, as per exhibit P6, wrote a letter to the Applicant rejecting the Applicant's resignation on the grounds she stated in her letter. Exhibit P6 referred to the Applicant's resignation as being on "unfounded, unrealistic and fabricated basis." The letter, however, was silent on the complaint letter earlier written by the Applicant. Instead of asking her to report back on duty, she was asked

to 'conduct a proper handover' of the company belongings. This, to me, is indicative that Respondents predicted the resignation. Once the accusation of constructive termination was sufficiently laid down by the Applicant, the Respondents had a duty, under section 60(2)(b) of the Labour Institutions Act, Cap. 300 [RE 2019], to prove that the conditions alleged by the Applicant were insufficient and could be tolerated. This onus, in my view, was casually done. The persons called to testify for the Respondents, had scanty or no knowledge of most of the complaints mads. 15 | DW1, for example, was merely a consultant. He could not be said to be a senior officer of the Respondents to be able to address the serious accusations laid. DW2, in my view, had an interest to serve, being a co-counsel to the Applicant and a shareholder/director of the 2nd Respondent. Furthermore, he vindicated most of the adverse claims made by the Applicant. Thus, the Applicants claims went unopposed, contrary to what was concluded by the learned Arbitrator. From the foregoing, I find it difficult to agree with the reasoning of the CMA Arbitrator regarding substantiation of the Applicant. The evidence laid down by the Applicant fall squarely on the Court of Appeal decision in Kobil Tanzania Limited case above stated. I hereby find and decide that the Applicant's employment was constructively terminated by

the Respondent owing to the unbearable working conditions she was subjected to. Having so found, the next question for consideration is what remedy is available to the Applicant. At the CMA, the Applicant craved for the following reliefs: a) Payment of her two months' salary amounting to TZS 5,804,800/=; b) Payment of one month's salary in lieu of leave amounting to TZS 2,902, 400/=; 16 | P g <• c) Payment of one month's salary in lieu of notice amounting to TZS 2,902, 400/=; and d) Payment of compensation for unfair labour practice, amounting to TZS 150,000,000/=. The total claims, as per the CMA Form 1, was TZS 161,609,600. The CMA Arbitrator dismissed all the claims but awarded TZS 5,804,800/= constituting the two months salary which remained in the Applicant's service before she resigned. There was no contestation that the Applicant did not take her annual leave which was due having worked for more than the 9 months stipulated in her contract of employment. The Applicant testified that she had requested leave but was not allowed to take it. The witnesses for the Respondents were not in a position to tell whether such requests were made. The testimony of DW1 and DW2 that the Applicant did not apply for leave cannot be substantiated as the Applicant was not duty bound to request leave from either of them. Her contract specified that she reported directly to the Managing

Director who did not testify to the contrary. I therefore hold that she was entitled to leave pay. Regarding compensation for unfair practice, the Applicant did not provide the basis for the amount craved. With regard to payment of the two months salary, I agree with the quantum of compensation awarded to the Applicant 17 | given that the Applicant was under a fixed term contract. Section 14(1) of the Employment and Labour Relations Act provides as follows: 'J4 contract with an employee shall be of the following types- a) a contract for an unspecified period of time; b) a contract for a specified period of time for professionals and managerial cadre; and c) a contract for a specific task. "(Emphasis added) Rule 11 of the Employment and Labour Relations (General) Regulations, G.N No. 47 of 2017, provides that "a contract for a specified period referred to under section 14(l)(b) ofthe Act, shall not be for a period ofless than twe/ve months. "There is no doubt that the Applicant is in the professional category and the contract of one year complied with the law. In Joakim Mwanikwa vs Golden Tulip Hotel, Revision No. 268 of 2013, Labour Division at Par es Salaam (Unreported) it was held, inter alia, that: 'Section 40 of the ELRA gives direction of the court to decide which amount to be paid as compensation and such discretionary powers should not be applied suo moto, but only when

the complainant has indicated in CMA F.l the amount he claims as compensation. When an employer terminates a fixed term contract, the loss of salary by the employee for the remaining period of the employment contract of the unexpired term is a direct foreseeable and reasonable consequence of the employer's action, added) 18 | P . / e From the above, the payment of the two remaining months is justified, not because the Respondents had voluntarily agreed, but because the law allows such payment in case of unfair termination. The claim of 150 million compensation for unfair labour practice appears to me to be on the high side. This claim, from the evidence does not fall on the specific damages category. It is general damages, which should be paid at the discretion of the Court. Labour laws do not generally sanction exorbitant damages against employers. The Court of Appeal decision in Anthony Nqoo and Another vs Kitinda Kimaro, Civil Appeal No, 25 of 2014 (unreported), observed: "The law is settled that general damages are awarded by the trial judge after consideration and deliberation on the evidence on record able to justify the award. The judge has discretion in the award of general damages." Having determined that the Applicant was unfairly terminated through constructive termination, the Court feels that the Respondents ought to compensate the Applicant but not to the extent

arbitrarily set by the Applicant. Section 40 of the Employment and Labour Relations Act, Cap. 366 somehow provides guidance on the extent of compensation to be paid to an employee whose employment has been unfairly short-circuited. Section 40(1) provides: 19 | '"If an arbitrator or Labour Court finds a termination is unfair, the arbitrator or Court may order the employer - a) to reinstate the employee from the date the employee was terminated without loss of remuneration during the period that the employee was absent from work due to the unfair termination; or b) to re-engage the employee on any terms that the arbitrator or Court may decide; or c) to pay compensation to the employee ofnot less than twelve months remuneration. ''(Emphasis added) I am aware that the Applicant was serving a fixed term contract which was to expire two months later at the time she was constructively terminated. There is nothing on record to suggest that her contract was not going to be renewed for at least another one year. I also have taken into consideration that the Applicant offered services to two different legal entities for a salary of one. In that regard, I consider compensation of 12 (twelve) months salary to be fair in the circumstances of this case. That is in addition to the two months salary remaining in her initial contract. I also direct that the Respondents compensate the notice

period which amounts to one month salary. In the upshot and considering the above discussion, the Application has merit and succeeds as above indicated. The Respondents shall compensate the Applicant for unfairly terminating her contract to the tUOQ Of TZS 46,438,400/= consisting of: 20 ( P. ;u a) Payment of her two remaining months' salary amounting to TZS 5,804,800/=; b) Payment of one month's salary in lieu of leave amounting to TZS 2,902, 400/=; c) Payment of one month's salary in lieu of notice amounting to TZS 2,902, 400/=; and d) Payment of compensation for unfair labour practice, amounting to TZS 34,828,800/=. The Applicant is also entitled to issuance of a certificate of service. This being a labour dispute, I direct that each of the parties shall bear their own costs. this 19th davof Ju|y 2024 ' Y.B. Masara

JUDGE •eal explained to the parties. 21 |