afri bottlers ltd vs gift jacob kasililika 2014 tzhc 2046 31 october 2014

IN THE HIGH COURT OF TANZANIA

AT IRINGA (DC) CIVIL APPEAL NO. 4 OF 2007 (From Iringa District Court Miscellaneous Civil Application No. 5 of 2006) AFRI BOTTLERS LTD ......................APPELLANT

VERSUS GIFT JACOB KA SILILIK A ........... RESPONDENT

JUDGEMENT MADAM SHANGALI, J . The appellant above named, being aggrieved by the decision of the Iringa District Court in Misc. Application No. 5 of 2006 has lodged the instant appeal before this Court. The appeal consists of three grounds as per the Memorandum of Appeal so filed by the appellant in this Court, that: 1. The learned trial Magistrate erred on granting the Respondent a right to various sums of money in a purported application for execution of the decree by the Minister, when there is no decree for money was ever issued capable of execution.

2. The learned Principal District Magistrate made a terrible mistake in his interpretation of the Security of Employment Act, (Cap. 387 R.E. 2002).

3. The trial Court erred on granting to the respondent, orders/reliefs which were not sought for in Chamber summons. Briefly, there was an application before the Iringa District Court which was filed by the respondent in this case seeking for execution of the decision of the Minister for Labour, Youth Development and Sports which upheld the decision of the Labour Conciliation Board, from which the respondent was required to be reinstated into his employment as a plant operator. However, the employer refused to reinstate the respondent and decided to pay him a total of Tshs. 3,402,504/= being a sum of statutory compensation in accordance with section 35 of the Security of Employment Act, sum equal to twelve months’ wages at the rate of wages to which the employee was entitled immediately before the termination of his employment or, as the case may be, his dismissal, one months’ salary payment in lieu of Notice and gratuity payment being 1 months’ salary ,for every year of completed service. Dissatisfied with that approach and the amount reached by the employer the respondent filed application to the Iringa District Court against his former employer, the appellant seeking for the execution of the decision of the Minister for Labour, Youth Development and Sports dated 23/7/2005. The District Court decided in favour of the respondent that as per section 16 of the Employment

Ordinance Cap. 366 the appellant in this case is statutorily bound to pay the respondent (applicant) arrears which includes the days which the respondent was not at work and thus ordered the appellant to pay respondent a sum of T.Shs. 6,251,740/= instead of 3,402,504/ = . By the order of the Court (Hon. Mchome J.) dated 10th August, 2007 parties were ordered to argue the instant appeal by way of written submissions. Parties observed the order and submit their concerns. Mr. Mika T. Mbise learned Counsel appeared for the appellant while Mr. Mushokorwa, learned Counsel appeared for the respondent. $ It is unfortunate that Hon. Mchome, J. who officially retired later on failed to compose the judgement in time until the case file was retrieved from him and placed before me in August, 2014 to compose the judgement. This is the judgement. Parties are highly excused for the inconvenience occasioned. Mr. Mika T. Mbise on the first ground of appeal contends that, there was no decree for money ever issued by the Minister and that decision cannot be abused for being used as a signed blank cheque for the respondent to fill in any amount of money he may wish. A decree must be certain on the rights granted. He cited the case of National Insurance Corporation and Another Versus Sekulu Construction [1986] TLR 157 to support his argument insisting that there was no decree capable

of execution. He went on arguing that there is no evidence on record to prove that the respondent is entitled to T.Shs. 6,251,740/= and in essence the decision of the District Court is a judgment without trial, which should not be left to stand. He contended that, Legally there cannot be a claim in an application for execution of a decree. The claimed sum of T.Shs. 6,251,740/ = being specific ought to have been strictly proved, but was not. On the second ground of appeal the appellant’s counsel contended that the District Court erred in its interpretation of provisions of the Security of Employment Act, Cap 387 R.E. 2002 in the course of its ruling. He argued that the use of proper law was supposed to be done under the circumstances of this case instead of jumping from one law to another. In elaboration he stated that’ the only applicable and relevant laws in this matter are those directly linked to the rights of the parties where an employer refuses to accept back an ex-employee after the decision of the Minister. He cited the case of Pius Sangali & Others Vs. Tanzania Portland Cement Company Ltd. Civil Appeal No. 100 o f 2001 decided on 17/11/2014. On the third ground of appeal, the learned counsel for the appellant submitted to the effect that the trial Court erred in granting reliefs to the respondent which was not sought for in the chamber summons; because the chamber

summons and the ruling are not related. He contended that the advocate for the respondent was wrong to rely on the Court of Appeal case of Paul Solomon Mwaipyana Versus NBC Holding Corporation, Civil Appeal No. 68 of 2001 which was decided on 7/10/2003 instead of the recent and correct decision of the same court in the case of Pius Sangali Versus Tanzania Portland Cejnent Company Ltd. decided on 17/11/2004 in which the Court, unambiguously held that:- “But was the learned judge right in her ruling o f 25/2/2000 that the Appellants were entitled to payment o f arrears fo r five years, a period they were not in employment? To answer that we have to see what the Act provides. In our opinion section 40A o f the Act deals with the situation in which an employer complies with an order o f reinstating an employee whose services were terminated. That subsection provides as follows:- (4) where in the exercise o f its powers under this section a Board or the Minister orders:- (a) Re-instatement of an employee, the employer shall re-instate the employee in his form er employment, and such re­ instatement shall have effect fo r the purpose of the payment of wages, entitlement to severance allowance and other retiring benefits and otherwise in relation to any benefits o f the employment from the date o f the termination o f the employee’s employment or his summary dismissal as the case may

be, but the employer may deduct from any wages due on or after re-instatement, the wages in respect o f the number o f days during which the employee remained absent from work during (and including) the day o f which the termination or the dismissal took effect and the day on which the re­ instatement is ordered by the Board or, in the case o f a further reference to the Minister, the day on which re-instatement is confirmed or ordered by the Minister. Thus it is clear to the learned counsel that the import o f section 40A (a) o f the Act is that the Respondent company is allowed to deduct wages from 13/01/1993, when Appellants were terminated to 04/03/1996 when the Minister rectified the order as directed by BUBESH1, J. the payment o f wages fo r that period o f time is at discretion o f the Respondent and a Court o f Law can not order such payment. We uphold with Mr. Nassor’s submission. I f an employer who complies with an order o f re-instatement o f an employee has the discretion not to pay arrears o f wages fo r the period the employee did not work, we ask. Can an employer who refuses to comply with re-instatement order be required to pay the wages fo r the period the employee was absent from work? In order to answer that question we better see the provisions o f section 40A (5), which govern the second scenario where an employer refuses to comply with the order o f the

Minister. (5) where a re-instatement ... has been ordered under this section and the employer refuses or fails to comply with the order, (a) .... (b) in the case o f an order made by the Minister on further reference to him, within fourteen days o f the order being made by the Minister, the employer shall be liable to pay the employee compensation o f an amount equal to the aggregate of: (i) the statutory compensation computed in accordance with section 35; and (ii) a sum equal to twelve month’s wages at the rate of wages to which the employee was entitled immediately before the termination of his employment... Section 35 provides in part as follows:- The statutory compensation shall be:- (a) such sum o f money as shall be equal to the severance allowance due and payable to the employee on the termination o f his employment: or s (b) the sum o f five hundred shillings, whichever is greater computation o f the severance allowance due and payable is provided by section 5 o f the Severance Allowance Act 1962 (Cap. 487). We do not think that we need to go into details, suffice it is to say 4that severance allowance does not include arrears o f wages fo r the period an employee is absent from work. We are therefore, o f the firm view that the I learned judge erred when she ordered the payment o f arrears o f wages fo r the period the Appellants were not at work, from 13/01/1993 to

28/01/1998. so, we invoke the provisions o f section 4 (2) o f the Appellate Jurisdiction Act, 1979 and we revise the proceedings before BUBESHI, J ” It is the learned Counsel’s argument that the District Court was bound by that decision and should have followed it and dismissed the application with costs. The reply by Mr. Mushokorwa, learned Counsel, pointed to what happened and what should have been done under the circumstances. He argued that the dispute between the parties herein which gave rise to the instant appeal was the failure by the appellant to comply with the decision of the Minister for Labour dated 23/7/2005, which confirmed the decision of the Conciliation Board directing the respondent to be re-instated from 26/11/2002. He added that, that decision has never been successfully challenged todate and therefore the respondent was legally presumed to be at work from 14/01/1998 when he was employed up to 20/01/2006 when his contract of service was lawfully terminated by one month’s salary payment (T.Shs. 157,000/ =) in lieu of Notice. He further stressed that the contract of service between the parties was terminated by payment of one month’s salary in lieu of notice on Friday 20, 2006, as per Annexture A4. In doing so by the appellant, it cannot be said that the appellant exercise the powers under Section 40A (5) of the Security of Employment Act i No. 62 of 1964

when the Respondent was paid one month salary in lieu of notice as evidenced in item (iii) contained in Annexture A4. He went on citing section 40 A (5) of the Security of Employment Act (supra). He argued that, that being the case the contract of service was in effect since the decision of the Board because it ordered the respondent to be re-instated until when the respondent was paid one month’s salary in lieu of notice on 20/01/2006. The learned counsel went on and submitted to the effect that there are several ways of bringing a contract of service to an end, some terminated naturally and without notice such as those of casual employee and those made for fixed period of time (Section 21 o f Cap. 366] and some requires payment of salaries or notice in lieu of salary as the contract of the respondent in this matter was terminated. He argued that, the notice from the appellant does not operate retrospectively because it even refers the relationship between the parties as that of an employer and employee under contract of service. He cited the case of Shipping Line Ltd Ns R 1976 LRT n.61 which cited in approval the case of Kitundu Sisal Estate V. Shingo Mshuti and Others [1970] E.A. 557 where it was held that:- “The notices o f the first three which purported to terminate their employment retrospectively were improper because notice must reach the employee before the period

when it starts to run...” Thus it is the learned Counsel’s contention that the contract of service between the parties in this case lasted up to 20/01/2006 when it was lawfully terminated by payment of one month’s salary in lieu of notice. Regarding to the contention that there was no evidence led to show that following the decision of the Minister, the * respondent went back to his employer, Mr. Mushokorwa replied that there is available evidence because both the decision of the Board and the Minister directed that the respondent be re­ engaged to his employment hence canceling the summary dismissal by the appellant. He argued that the burden lies upon the employer to prove that he offered to re-engage the respondent but respondent refused to accept such an offer. He contended that the submissions by Mr. Mbise are contrary to the provisions of Section 35 (5) of the Employment Act Cap. 366. » He contended that since the appellant opted to remain silent since 26/1/2002 when ordered to re-engaged the respondent up to 20/01 /2006 when the appellant terminated the respondent by payment of one month’s salary in lieu of notice then the appellant is caught by the provisions of Section 16 of the Employment Ordinance Cap.

366. On the concern that, the affidavit set up a totally new civil claims for various sums of money to the tune of Tshs. 6,251,740/= which was not stated in the purported decision of the Minister, the learned Counsel for the respondent submitted that under section 40 A (5) of the Security of Employment Act, 1964 the employer is required to pay the employee, upon refusal to reinstate and/or re-engage him, compensation an amount equal to the aggregate of; (i) statutory compensation (severance allowance); and (ii) twelve month’s wages. Thus under the circumstances, the interpretation of the above provision of law is that payment of sums of moneys calculated at the contract period of a respective employee should be paid to him. In the case at hand according to Mr. Mushokorwa, the contractual period of the respondent runs from 14/01/1998 when he was employed up to 20/01/2006 when his contract of service was terminated by payment of one month’s salary in lieu of notice. Mr. Mushokorwa concluded that by ejusdem generic rule, Section 40 A (5) of Cap. 387 is about money, and consequently, it is a money decree in its nature. He further emphasized that Section 27 (1) (c) of the Security of Employment Act 1964 provide that the decision of the Minister may be enforced as if it were a decree. Mr. Mushokorwa submitted that, armed with the decisions of the Conciliation Board and that of

Minister dated 23/07/2005 the right contract period of the respondent was supposed to be 8 years commencing from 14/01/1998 up to 20/01/2006 when his contract was terminated by one month’s salary in lieu of notice. Therefore the respondent’s contract period was in arrears for 2.58 years. Mr. Mushokorwa further submitted that Section 4 (2) of the Security of Employment Act cap. 387 provide that subject to the provisions of subsection (1) the Act shall be read as one with the Employment Ordinance. Therefore the allegation that he was jumping to the irrelevant laws have no leg to support because the rights of the respondent are traceable in other relevant laws. In rejoinder Mr. Mbise reiterated his earlier submissions and wondered as to why his learned friend deliberately avoided to say anything about the decision of the Court of Appeal in Pius Sangali & Others (Supra). He called upon this court to rely on his submission and the decisions of the Court of Appeal and allow this appeal with costs. Going through the submissions of the parties and the ground of appeal filed by the appellant the most crucial ground is whether the provisions of the Security of Employment Act, Cap. 387 were correctly interpreted and applied to warrant the payments of T.Shs.6,251,704/ = to the respondent being compensation and wage arrears for 8 years. The first and third grounds of appeal can easily be

resolved and answered by looking at section 28 (1) (c) of the Security of Employment Act, Cap 387 R.E 2002 which provides that the decision of the Minister on reference to him under section 27, may be enforced in any court of competent jurisdiction as if it were a decree. This is enough to say such a decision is a decree capable of execution by the court. The decision of the Minister was to the effect of re-instatement of the respondent, but the appellant opt for another option as provided by the law. Then from there the respondent approach the Court to execute that decision of the Minister for Labour which is to the effect of re­ instatement. But since the appellant came with something else which is allowed by the law the Court had to decide on that other option opted by the appellant. Fortunately the law is clear as to what should be done if the appellant had opted for the other option instead of complying with the decision of the Minister for Labour. That being the case the case of National Insurance Corporation and Another Versus Sekulu Construction (supra) cited by the Appellant is distinguishable, in the sense that the decision of the Minister is decree capable of execution in which case the Minister could not order for the amount of compensation because he is only mandated to order for re-instatement and the other option is well taken care of by the law by providing the

employees statutory rights and mode of computation. To that extent the first and third grounds of appeal are devoid of merits and hereby dismissed on the ground that there was a decree capable for execution from the decision of the Minister. $ Now, let us see the legality of the execution of that decree to the extent of T.Shs.6,251,704/= and particularly on whether the court was correct in its decision to order for payments of salaries for the days which the respondent was not at work. Parties speaks the same language that the Appellant in opting for refusal to re-instate the respondent was justifiable under the law as per section 40 A (5) (b) of the Security of Employment Act (supra) save that they are not in agreement as to the Respondent’s entitlements. The decision of the Minister for Labour was final and as to the entitlements of the respondent the law is categorical and thus it cannot be said that it is another civil claim. To be able to determine as to the entitlements of the respondent one has to understand the statutory rights of the respondent, the exact period of his employment and the mode of computation applicable. The respondent was summarily dismissed on 26/11/2002, the Conciliation Board made its decision on 25/7/2003 to the extent that the respondent be re-instated to his employment. That decision was challenged by the appellant to the Minister for Labour,

Youth Development and Sports. On 23/07/2005 the Minister made decision that confirm the decision of the Board to the extent that the Respondent be re-engaged and he be paid all his entitlements because the employer assigned him to work as a driver instead of working as Plant Operator the post which the employee was officially employed. From that date to 20/01/2006 when the Appellant had decided not to re-engage the respondent six (6) months expires. It is from the letter marked as Annexture A4 annexed to the respondent’s affidavit which mark the respondent’s entitlements and the decision of the appellant in refusing to re-engage the respondent and the starting point of all these claims. The applicable law under the circumstances is Section 40 A (5) (b) of the Security of Employment Act as amended by Labour Laws (Miscellaneous Amendments) Act, No. 1 of 1975, which provides that:- “(5) where a re-instatement or re-engagement has been ordered under this section and the employer refuses or fails to comply with the order (a) .... (b) in the case o f an order made by the Minister on further reference to him, within fourteen days o f the order being made by the Minister, the employer shall be liable to pay the employee compensation o f an amount equal to the aggregate of (i) the statutory compensation computed in accordance with section 35; and (ii) a sum equal to twelve month’s wages

at the rate o f wages to which the employee was entitled immediately before the termination o f his employment... ” That provision of the law is clear on the statutory rights of an employee where a re-instatement or re-engagement has been ordered but employer refuses or fails to comply with the order of the Minister within a period of fourteen days of the order. There is no dispute that the appellant failed or refused to comply with the Minister’s order and opted to pay the statutory compensation in accordance with the law. In my considered opinion, the determination of this case should be based on the interpretation of Section 40 A (5) and Section 36 of the Security of Employment Act Cap. 387 read together with S. 5 of the Severance Allowances, Act 1962 and not Section 16 of the Employment Ordinance Cap.

366. Furthermore, in the interpretation of the above stated correct provisions of the law as they were when this matter I arised a terminated or dismissed employee could not claim, and the court of law could not order an employer to pay such an employee arrears of wages for the period which he did not work for. That option was left to the mandate and discretion of the employer to pay or not to pay for such period. It must be noted that, that position of the law has now changed with the introduction of new labour laws under 0 Employment and Labour Relations Act No. 6 of 2004 which came to operation on 5/1/2007 when GN No. 1/2007 was published. At that time the cause of action in the case at hand had already commenced. All in all, I have been thinking aloud to the effect that even if one tends to agree with Mr. Mushokorwa that notice of termination do not operate retrospectively and that the contract of service between the appellant and respondent is presumed to have been lasted up to 20/01/2006, still under the prevailing laws at the time the employer had his statutory rights to pay or not to pay the employer on the days he did not work. The ^ i I respondent did not work for the appellant from 26/11/2002 to 20/1/2006 and that is a naked fact. The truth is that by complying with the requirements of the law and paying the requisite packages to the respondent the appellant was

not terminating the services of the respondent but rather sticking on his dismissal order dated 26/11/2002 and paying the consequences of his refusal to reinstate the respondent. The respondent’s termination from the service was effected from the date of dismissal i.e. 26/ 11 /2002. In my view this mater should not waste more .time of this court because the interpretation and application of the above stated provision of the law as then was, in cases like this has been adequately canvassed upon and the correct position propounded in the cases of Pius Sangali and Others (Supra) which was also quoted with approval in the case of the Managing Director, Tanga Cement Company Limited Vs. Jumanne D. Masangwa and Amos A. Mwalwanda, Civil Appeal No. 127 of 2005, Court of Appeal (unreported). Guided by those two robust $ decisions the main and crucial ground of appeal must be applauded. In that case of the Managing Director, Tanga Cement Company Limited (Supra) the Court of Appeal observed as follows; “In the instant case the appellant failed or refused to comply with the re - instatement order. In such case what is the position? This brings us to Section 40 A (5) which provides:- 40 A (5): Where a re instatement or re -engagement 'has been ordered under this section and the employer refuses or fails to comply with the order - (a) in the case o f an order made by a Board against which no

reference has been made to the Minister, within twenty - eight days o f the order being made; or (b) in case o f the order made by the Minister on a further reference to him, within fourteen days o f the order being made by the Minister, the employer shall be liable to pay the employee compensation o f an amount equal to the aggregate o f - (i) the statutory compensation computed in accordance *with section 36; and (ii) a sum equal to twelve months’ wages at the rate o f wages to which the employee was entitled immediately before the termination o f his employment, or as the case may be, his dismissal, and. such compensation shall be recoverable in the same manner as statutory compensation, the payment o f which has been ordered under section 40. Section 36 provides in part as follows 36: The statutory compensation shall be - (a) Such some o f money as shall be equal to the severance allowance due and payable to the employee on the termination of his employment; or (b) The sum o f five hundred shillings, whichever is greater. Computation o f severance allowance due and payable is provided by Section 5 o f the Severance Allowance Act, 1962. However fo r the purpose o f the case at hand we do not think we need to go into the details therein, suffice it to say that severance allowance does not include arrears o f wages fo r the period an * employee is absent from work. See the

case o f Pius Sangali & Others V Tanzania Portland Cement Company Limited, Civil Appeal No.r 100 o f 2001 (Unreported). With all these in clear light, we are o f the firm view that, the learned judge on first appeal erred when she ordered the payment o f arrears o f wages and fringe benefits fo r the period the respondents were not at w o r k t h a t is, from 11/ 10/1999 to 26 / 5/ 2000 . The respondents are only entitled to what is provided under section 40 A ( 5) . ” From the above reasons and cited cases it is crystal clear that once section 40 A (5) (b) of the Security of Employment Act (supra) comes into play under the circumstances of this case, the employee cannot be paid for the period he was not at work. The respondent is not entitled to wage arrears for the days when he was not at work i.e. from 26/ 11 /2002 to 20/01 /2006. In conclusion the appeal is partly allowed and partly dismissed in the sense that the first and third grounds of appeal are dismissed while the crucial second ground of appeal is allowed. Consequently the decision of the District Court dated 28/12/2006 granting compensation to the respondent at the tune of T.Shs.6,251,740 is hereby quashed and set aside. The respondent is entitled to T.Shs.3,402,504/= only of which he has been already paid. Each side to shoulder its costs. M. S. SHANGALI

JUDGE 31/10/2014 Judgement delivered in the presence of Mr. Onesmo Francis, learned advocate for the respondent and in the absence of the appellant and his advocate. M. S. SHANGALI

JUDGE 31/10/2014