REV

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA LABOUR DIVISION AT DAR ES SALAAM REVISION APPLICATION NO. 17464 OF 2024 CASE REFERENCE NO. 202407201000017464 BETWEEN ALLIANCE INSURANCE CORPORRATION L T D ................................... APPLICANT VERSUS ERIC M USH I.................................................................................. RESPONDENT JUDGEMENT Date of last Order: 06/09/2024 Date of Judgement: 23/09/2024 MLYAMBINA. J. The Respondent is an ex-employee of the Applicant. He was employed on 28th day of May 2012 until when he was retrenched on 24th day of September 2020. Aggrieved by the termination, the Respondent referred the matter to the Commission for Mediation and Arbitration (herein CMA). After considering the rival submissions of the parties, the CMA decided in favour of the Respondent. He was Awarded a total of TZS 34,891,176 being 12 months salaries as compensation for the alleged unfair termination. Being dissatisfied by the CMA's decision, the Applicant filed the present application calling for determination of the following issues: i. Whether the learned Arbitrator was correct in law and fact by holding that the Applicant/employer had no reason in terms of Section 37 (1) & (2) o f the Employment and Relation Act [Cap. 366 RE 2019] (herein ELRA) while the Applicant advanced a strong reason that alarmed the whole World on the occurrence of a pandemic disease, scientifically termed as nCOVID-19M which frustrated economic and social aspects globally, Tanzania being inclusive. By not adhering to a principle enunciated in cases of Tanzania Building Works Ltd v. Ally Mgomba & 4 Others, Revision. No. 305 of 2010; and Standard Chartered Bank (T) Ltd v. Justine Tineishemo, Revision No. 184 of 2022; whether the learned Arbitrator was correct in law and facts in holding for Applicant’s non- compliance with procedure. That, whether the learned Arbitrator was correct in law and facts in awarding the Respondent TZS 34,891,176/= without considering the Respondent's conduct in accepting, signing and receiving terminal payments as seen at page 7 of the typed Award dated 10th day of June 2024 which meant for consensus and the same barred the Respondent to re-open and claim for further payments. The matter proceeded by way of written submissions. The Applicant enjoyed the services of Counsel Felix Edward Makene. On the other hand, Counsel Wilson Moses Mafie appeared for the Respondent. To began with the first issue, Counsel Makene was of the submission that; it is an undisputed fact that from late 2019 through 2021, the entire World was severely impacted by the COVID-19 pandemic disease. The global economy experienced a significant downfall, with production across major economic sectors coming almost to zero ground. Numerous industries and business entities were compelled to cease operations. The economic decline not only led to a recession but also severely disrupted the labour market worldwide, Tanzania being inclusive. Counsel Makene was of strong view that due to the above circumstances, the Applicant was unable to sustain operational costs, leaving no viable option but to reduce the workforce. Consequently, retrenchment became an inevitable measure to cut operational expenses as corroborated by the testimony of DW3 at pages 5 and 10 of the typed Award. He stated that the reason for retrenchment is also reflected at page 5 of the typed Award. He was of the strong position that the Arbitrator wrongly disregarded the stated reason. In response, it was Counsel Mafie's submission that the issue of COVID-19 as addressed at length by the Applicant, could be more helpful to the Applicant if it was advanced to the Respondent prior to termination. He stated that in the case at hand, no notice of retrenchment was issued and no relevant information was disclosed prior to termination contrary to Section 38 (1) (a), (b) & (c) o f the ELRA (supra). Counsel Mafie was of reply submission that; from the records of the case at hand, it is the Applicant's strong allegation that the reason for retrenchment was arose from the need of restructuring the business following the COVID-19 pandemic. However, as per the notice of retrenchment (exhibit D2), the reason for retrenchment was Company restructuring. Thus, the stated reason is a genuine reason for retrenchment recognized under Rule 23 (2) (a) o f the Employment and Labour Relations (Code o f Good Practice) Rules, GN. No. 42 o f2007 (herein GN. No. 42/2007) which provides as follows: As a general rule the circumstances that might legitimately form the basis of a termination are- Structural needs that arise from restructuring of the business as a result of a number of business related causes such as the merger of business, a change in the nature of the business, more effective ways of working, a transfer of the business or part of the business. The above provision mentioned some factors which may lead to restructuring. The reason for the restructuring in this case, as reflected in the consultation minutes (exhibit D3,) was that the Applicant decided that some departments and their responsibilities be outsourced from the company. The record is blurred as to which departments were aimed to be affected by the retrenchment exercise. Even during consultation meeting the affected departments were not mentioned. I observed that one of the employees namely Zahara Mussa who attended the consultation meeting as evidenced by the consultation minutes (exhibit D3), posed a question to the Applicant as to what will happen to the affected employees and if they had announced them there or not. The question was lightly answered by the Applicant's representative that the same will be done after the meeting depending on the number of employees who will be affected. It is my view that the answer did not give the clear meaning of effective consultation as per Section 38 (l)(b) o f the ELRA (supra). Section 38 (1) (b) (supra) requires the employer to disclose all relevant information during consultation meeting. In this case, it was expected that the Applicant would have disclosed all the departments intended to be restructured. Such information was not disclosed by the Applicant. In the nature of this case, where retrenchment exercise was done on the same date when consultation meeting was held, it is my view that the Applicant had all the information of the affected employees before the retrenchment. In other words, consultation meeting was done to formalise the retrenchment process but the decision was done before consultation. Be as it is, the Applicant ought to have disclosed all relevant information during consultation meeting. If the COVID-19 pandemic necessitated the restructuring, the business sufficient evidence ought to have been adduced to prove the same. I therefore join hands with the Arbitrator's findings that the termination was unfair in the present case. Coming to the second ground, it was counsel Makene's argument that acceptance of payments is a requisite condition justifying agreement to have been reached. He added that, the Respondent's conduct in receiving, signing and accepting retrenchment package acknowledges and/or embraces agreeing with the procedure being conducted fairly. He was of the view that Had it been not fairly done, the Respondent who is also an advocate would have refused to accept the package. He added that; if the procedures were not followed, the Respondent would have invoked Section 38 (2) o f the ELRA (supra) to refer the dispute to CMA for mediation. In support of his submission, the counsel referred the Court to the case case of Standard Chartered Bank (T) Ltd v. Justine Tineishemo, Revision Application No. 184 of 2022 [2022) TZHCLD 1084 (15 November 2022) [Tanzlii], where Hon. B. E. K Mganga, J. while determining for reasons and procedure relating to retrenchment process, he stated as follows: Having found that Respondent agreed to retrenchment and accepted retrenchment package, all grounds and submissions relating to validity of reason and procedures for termination advanced by the parties becomes irrelevant. On the other hand, Counsel Mafie distinguished the case of Standard Chartered Bank (supra) with the case at hand to the effect that in the case of Standard Chartered Bank (supra) the Court observed that there was agreement signed by both parties unlike in the present case. He added that the testimony of DW1 & DW3 proves that the Respondent was neither consulted nor signed the alleged agreement. Going through the records, it is clear that the Respondent did not sign the alleged retrenchment agreement. As analysed in the first issue, the Respondent did not attend the consultation meeting in the first place. Under such circumstance, he was not bound by anything agreed by the parties therein. As per Section 38 (1) (d) o f the ELRA (supra), the employer is required to consult the following; any trade union recognized in terms of Section 67, any trade union which members in the workplace not represent by a recognised trade union and any employees not represented by a recognized or registered trade union. In this case, the Applicant through his witnesses admitted that there was no recognized trade union in the workplace. Under such circumstances, the Applicant was supposed to consult the Respondent personally as he was the affected employee in the retrenchment process. Failure to do that, vitiated the retrenchment procedures. As regards to the payments made to the Respondent, the same was done through his bank account. Under such circumstance, the Respondent had no option to refuse or not. Thus, this ground lacks merits as there was no retrenchment agreement signed by the Respondent. As rightly argued by Counsel Mafie, the case of Standard Chartered Bank (supra) is distinguishable to the case at hand. In the cited case, the parties reached to an agreement to retrench, whereas, in this case no agreement was reached between the parties herein. Turning to the third issue, it was submitted by Counsel Makene that the Respondent, by virtual of Section 123 o f the Evidence Act [Chapter 6 Revised Edition 2022] (herein TEA) is estopped from denying the facts of truth that he did not agree with the retrenchment process which culminated into receiving and accepting retrenchment package. Thus, awarding him again, is to allow the Respondent to reap twice from the same cause of action, a fact which is not allowed by law. On the other side, the Respondent was of the view that the Award was minimal compared to what he prayed for. That, he prayed to be compensated for five years which amounted to 60 months salaries as general damages. However, he was only awarded 12 months salaries as compensation for unfair termination. In support of his submission, Counsel Mafie referred the Court to the case of Alliance Insurance v. George Mukangala, Consolidated Revision No. 264 & 266 of 2023 [2024] TZHCLD 105 (16 May 2024). Since it has been found that the Respondent's termination was unfair, I find no justifiable reason to fault the Arbitrator's findings. The Respondent was properly awarded compensation for unfair termination as per Section 40(l)(c) o f the ELRA (supra). In the result, I find the present application has no merit. The Applicant did not state any sufficient reason to fault the CMA's Award. Consequently, the CMA's Award is hereby upheld. It is so ordered. Y. J. MLYAMBINA JUDGE 24/09/2024 Judgement pronounced and dated 24th September, 2024 at 14:35 hours in the presence of Counsel Felix Makene for the Applicant and Wilson Mosses Mafie for the Respondent. Right of Appeal explained. JUDGE 24/09/2024