REV NO 4066OF 2024 BARRYDISMAS CHALE VRS KCB BANK TANZANIA LIMITED

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA LABOUR DIVISION AT DAR ES SALAAM REVISION APPLICATION NO. 4066 OF 2024 CASE REFERENCE NO. 202402281000004066 BETWEEN BARRY D1SMASS CHALE...........................................................APPLICANT VERSUS KCB BANK TANZANIA LIMITED................................ ........ RESPONDENT JUDGEMENT Date of last Order: 07/ 05/2024 Date of Judgement: 22/ 05/2024 MLYAMBINA. J. The Applicant was employed by the Respondent in the position of Director of Corporate Banking as reflected in the employment contract (exhibit Kl) on 17th November, 2014. He was placed under the probation period of six months (6) whereby, on 27th July 2015 the Boord of Directors of the Respondent approved his confirmation of the permanent employment contract (exhibit K2). It was alleged that; after confirmation, the Applicant worked as the Director of Corporate Banking of the Respondent up to 1st April 2022 when his employment contract was terminated on the ground of poor performance for the year 2021, as evidenced by the termination letter (exhibit K13). As per the Termination Letter, it was stated that the Applicant's Balanced Score Card for the year 2021 was 2.58 rated as Partially Met targets. It was further stated that the Applicant's poor performance based mainly on the five (5) areas of the business of the Respondent namely; Balance Sheet, Business Profitability, Driving Efficiency, Customer Growth and Process Improvement. The record shows that, the above five (5) areas of poor performance for the year 2021 were raised against the Applicant through a notice to show cause letter dated 21st March 2022 (exhibit K10). The Applicant replied thereto with a letter dated 22nd March 2022 (exhibit K10), where he disputed all the allegation of poor performance on the pointed areas. He indicated the source and factors which contributed for failure to meet the targets set. Notwithstanding his defense, the Applicant was summoned before the disciplinary hearing Committee. The latter found the allegation levelled against him were proved hence, they proposed for his termination of employment. Aggrieved by the termination, the Applicant referred the matter to the Commission for Mediation and Arbitration (herein CMA) challenging the alleged unfair termination both substantively and procedurally. After considering the rival submissions of the parties, on 8th December 2023 the CMA dismissed the application for lack of merit. Again, dissatisfied by the CMA's decision, the Applicant filed the present application on the following grounds: i. The Honourable Arbitrator erred in law and fact by failure to consider the impact of Covid 19 in the Applicant's performance for 2021. ii. The Honourable Arbitrator erred in law and fact by failure to find that the Respondent conducts acts had predetermined the termination of Applicant's employment and prejudices to terminate the Applicant's employment. iii. The Honourable Arbitrator erred in law and fact by failure to find that the Respondent did not attend the Applicant's letter of 10th November 2021. iv. The Honourable Arbitrator erred in law and fact by failure to find that the Respondent did not tender evidence on the how the misconducts were done, but merely mentioned score rates. v. The Honourable Arbitrator erred in law and fact by failure to find that the performance standards were not certain Respondent did not tender evidence on the how the misconducts were done, but merely mentioned score rates. In the alternative, using the uncertain forgets, the performance was vi. The Honourable Arbitrator erred In law and fact by failure to find that the Head of Human Resources had no mandate to terminate the employment of the Applicant. vii. The honourable arbitrator erred in law and fact by failure to properly analyse and consider evidences as a result came to the wrong findings that, the termination of the employment was both substantively and procedural fair. The application was argued orally. In the conduct of the matter at hand, the Applicant enjoyed the service of Mr. Frank Mwalongo, learned Counsel. On the other hand, Ms. Regina Kiumba, learned Counsel represented the Respondent. I have dully considered the rival submissions of the parties which will be taken on board in due course of constructing this judgement. After going through the CMA's and Court records as well as relevant laws, I find the Court is called upon to determine the following issues: One, whether the Respondent had valid reason to terminate the Applicant. Two, whether the Respondent followed procedures in terminating the Applicant and, Three, what reliefs are the parties entitled to. To start with the first issue; it is the requirement of the law which has also been highlighted in numerous decisions; that, it is the duty of 4 the employer to prove the validity of the reason for termination and following the required procedures. This is pursuant to Section 37 o f the Employment and Labour Relations Act [Cap 366 Revised Edition 2019] (herein ELRA). As the record speaks, the Applicant was terminated on the ground of poor performance, as it is reflected in the termination letter (exhibit K13). The termination letter highlighted the following areas where the target set was not met namely; balance sheet, business profitability, driving efficiency, customer growth and process improvement. With a letter date 10th November, 2021, the reply to show cause letter (exhibit K10), the Applicant stated the reasons for failure to meet the required standards. The reasons are also restated by the Applicant in his submission before the Court. The Applicant alleges that the Respondent did not tender sufficient evidence to prove his poor performance. As rightly submitted by both counsel factors to consider to determine fairness of the reason of poor performance are provided under Rule 17(1) o f the Employment and Labour Relations (Code o f Good Practice) GN. No. 42 o f 2007 (herein GN. No. 42 o f2007) which provides as follows: 17.-(1) Any employer, arbitrator or judge who determines whether a termination for poor work performance is fair shall consider: a) whether or not the employee failed to meet a performance standard; b) whether the employee was aware, or could reasonably be expected to have been aware, of the required performance standard. c) whether the performance standards are reasonable. d) the reasons why the employee failed to meet the standard; and the performance standard. In the matter at hand, the record shows that, in due course of the Applicant's employment, it was a normal procedure and requirement that when the year begins, the Applicant had to fill Individual Balance Score Card which sets the goal to be achieved in the particular year. The Applicant was terminated for poor performance for the year 2021. As per the Individual Balanced Scorecard of the year 2021 (exhibit K7 collectively) the goals were set. It is also undisputed in the relevant document the Applicant's final rating was 2.58. Thereafter, the Applicant was issued with a notice of unsatisfactory performance (exhibit K8) where the Applicant responded thereto. The Applicant was further served with the letter of the year 2021 final performance rating (exhibit K9) where the Applicant's final rating was maintained 2.58, which means partially meets targets. Then, the Applicant was issued with the notice to show cause for unsatisfactory performance (exhibit K10) and he responded thereto. Through exhibit K10, the Applicant did not dispute the fact that he underperformed but responded on each reason on how he failed to meet the agreed standard. Similarly, during disciplinary hearing, the Applicant also did not dispute the findings that he underperformed. Before the Court, the Applicant challenges the CMA's Award for Arbitrator's failure to consider the reasons for his unsatisfactory performance. It was Ms. Kiumba's submission that it is the rating that caused termination of the Applicant for poor performance. Up until that rating is reached or concluded, it involves the participation of the Applicant and the Respondent. That participation is done through exhibit K7 (A balance score card sign off) whereby targets are discussed, listed, rated and both parties sign it off. She stated that; by signing that balance score card, the Applicant who was the employee agreed to the workplan (target) to be accomplished by him for that year (2021). In the balance scorecard, everything was identified or put down and the rates were also included therein and the Applicant signed it off and agreed to the targets mentioned or put therein for that particular year. She added that the Applicant by signing that score card, he agreed to what was stated in the score card and he had the duty to deliver all what were stated therein. On the basis of the foregoing analysis, I join hands with Ms. Kiumba's argument that the Applicant was supposed to accomplish the targets indicated in the balanced scorecards. Since it is proved that the targes set were not met by the Applicant. Hence, he had valid reason to terminate the Applicant's employment on the ground of poor performance in line with the requirements provided under Rule 17 (supra). Thus, in the first issue, I confirm the Arbitrator's findings that there was valid reason to terminate the Applicant's employment in this case. Turning to the second issue as to whether the termination procedures were followed, the procedures for terminating an employee on the ground of poor performance are clearly stated under Rule 17 and 18 o f the GN. No. 42 o f 2007 of which I find no relevance to reproduce. It was Mr. Mwalongo's strong position that the Respondent ignored the reasons addressed by the Applicant and without conducting any investigation thereof and even without placing him under Performance Improvement Plan (PIP), unfairly proceeded with performance hearing and unlawfully terminated his employment on 1st April 2022. Through exhibit K10, the Applicant stated the following reasons for failure to perform as required. Balance Sheet, it was submitted that; as on 30th November 2021 which was the cutoff date for appraisal, achievement under this area was at 90% and the same closed at 93% as on December 2021, which was partially met as per KCB Appraisal Scales. It was further stated that, factors which contributed included writing offs of non- performing loans done by the Respondent in the year 2021 including writing off of loan of TZS 8.3 billion under Oelina Enterprises, TZS 1.2 Billion under Kilimanjaro Oil and TZS 670 Million under Jazira and also the Covid 19 - Corona pandemic was an adverse impact in demand for new loans. Regarding the second area of Business Profitability, it was clearly stated by Mr. Mwalongo that the target for off balance sheet item for the year 2021 was mainly based on continuation of providing loan facilities to contractors doing Rural Electrification Authority (REA) Projects. That, the request was made to KCB GROUP CREDIT to accept . ...jca Trade Insurance Cover as additional support to the contractors who fell short of tangible securities but the request was declined and fact which made the contractors to move the business to other banks mainly Mwanga Community Bank where by the annual revenue target to KCB Bank from REA Project was TZS 1.9 Billion. Mr. Mwalongo added that; this area was affected by reduced international trade activities as affected by Covid 19 and due to pregnancy complication of the Trade Sales Manager who worked only for 5 months for the year 2021 and out of the 5 months of which 3 months she worked half days. In respect of the area of customer growth, the allegation of poor management of customer relationship and complaints from customers, it was stated by Mr. Mwalongo that; the referred scorecard had two components. One was on customer retention in which the score was exceeded as the retention was 99%. The not met score was on the "customer complaints" where the measure demands zero customer complaints and it was stated that the customer complaints happened and none was ignored by the Corporate Team. It was strongly submitted by Mr. Mwalongo that the Employer and the Arbitrator not attending the impact of Covid 19 as put by the 10 Applicant which made them fail to comprehend the state of performance of the Applicant, as a result failed to substantiate the alleged unsatisfactory performance of the Applicant. Mr. Mwalongo further contended that the Respondent's proposed exit strategy for consideration. Thus, it confirms the suspicion that the decision to terminate the Applicant was made even before the disciplinary hearing. It was also challenged that the Applicant was terminated by the Head of Human resource who had no mandate to terminate him. Mr. Mwalongo argued that; investigation under Rule 18 (1) o f GN. No. 42 o f 2007 is mandatory and it was not done. Hence, makes the termination procedurally unfair. In response, Ms. Kiumba conceded that it is true that Rule 18 (1) (supra) makes it mandatory for the employer to make investigation. She said, on the part of the Respondent through Exhibit K8 which is the notice of unsatisfactory performance together with Exhibit K12, K9, all these were tendered before CMA showing that the allegations of unsatisfactory performance were true. Ms. Kiumba added that, all these documents were issued to the Applicants before hearing by the Performance Hearing Committee. li Therefore, he had time to look unto them, go through them and prepare for hearing. Mr. Mwalongo also submitted that Guideline 6(1) o f the Guidelines for Disciplinary, Incapacity and Incompatibility Policy and Procedures, GN. No. 42 o f2007was violated. The provision provides as follows: In cases of alleged poor work performance by an employee, a Manager should consult the employee to identify and analyze the problem. The employee shall be given an opportunity to account for the poor work performance. The position as to whether the above quoted provision will be jointly determined with the allegation of violation of Rule 18 (supra). As rightly submitted by both counsel. Rule 18 (1) (supra), directs the employer to conduct investigation on an instance or allegation of unsatisfactory performance. The provision is to the following effect: The employer shall investigate the reasons for unsatisfactory performance. The employee shall reveal the extent to which is caused by the employee. This Court in the case of St. Goban Lodhia Gypsum Industries v. Andrew Johnson Singano, Revision No. 73 of 2020, High Court of Tanzania Labour Division at Arusha, p. 11 held that: The import of Rule 18 (1) (supra) makes it mandatory for the employer to conduct investigation where there are issues of unsatisfactory performance. That position was confirmed by the Court of Appeal of Tanzania in Civil Appeal No. 147 of 2021 between Tanzania Breweries ltd v. Leo Kobelo, p. 23 second paragraph. Rule 18 (1) (supra) requires the employer to investigate the reasons of poor performance. Looking at the case at hand, there is no proof that investigation was conducted before reaching to the decision of terminating the Applicant. It is my view that basing on the nature of the reasons stated by the Applicant in exhibit K10, the Respondent was obliged to conduct thorough investigation to disprove the Applicant assertion that neither of the stated reasons contributed to his failure to meet the required standards. In absence of proof of any investigation, it is my view that the stipulated procedure was violated. Similarly, Guideline 6(1) (supra) demands the employer to analyse the problem which hinders the performance of the employee in question. It is my view that, the problem and causes identified for unsatisfactory performance can all be analysed in one document, that is the investigation report. Furthermore, taking into the nature of the employment the Applicant had, his reasons advanced in exhibit K10 should have been addressed and disproved so as to prove that the decision reached is fair. As regards to the remaining termination procedures, I find no relevance to dwell on the same because they are not disputed and they were all adhered in the present application. In the result, the application at hand has partly succeeded. Consequently, the CMA's Award is hereby quashed and set aside. The Respondent is ordered to pay the Applicant a total of TZS 53,045,607/= being compensation of 3 months' remuneration in terms of Section 40(l)(c) o f the ELRA (supra). It is so ordered. Y. 3. MLYAMBINA JUDGE 22/05/2024 Judgement pronounced and dated 22nd May, 2024 in the presence of Counsel Emmanuel Kessy and Violeth Mtale for the Applicant and Eliezer Abel Msuya for the Respondent. Y. J. M LYAM BINA JUDGE 0/ 22/05/2024