REV

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA LABOUR DIVISION AT DAR ES SALAAM REVISION APPLICATION NO. 28068 OF 2023 BETWEEN BIDCO OIL AND SOAP LTD........................................ ................ APPLICANT VERSUS EMMANUEL KIMARIO............................... ........................... RESPONDENT JUDGEMENT Date of last Order: 25/ 04/2024 Date of Judgement: 07/ 05/2024 This application for revision emanates from the Commission for Mediation and Arbitration (herein CMA) in Labour Dispute No. CMA/DSM/KJN/460/20/119 between the parties herein. In the referred dispute, the Respondent herein sued the Applicant for unfair termination of the one year fixed term employment contract which was coming to an end on the 30th day of September, 2019 with a monthly salary of TZS 392,000/=. It was alleged that before the employment contract came to an end, the Applicant and the Respondent agreed to that effect and the Respondent was dully served with the notice of ending the employment contract on 28th day of September, 2019. On the other hand, the Respondent strongly alleged that he was terminated on 4th day of October, 2019 without any justification. After considering the evidence of the parties, the CMA found that the circumstances of the case proves that there was expectation of renewal. Thus, the Respondent was unfairly terminated. Following such findings, the Respondent was awarded a total of TZS 55,096,000/= being 12 month's salary of the expected contract, one month salary in lieu of notice and general damages amounting to TZS 50,000,000/=. Thereafter, the Applicant herein being aggrieved with the CMA's Award, filed the present application on the following grounds: i. That, the CMA erred in law and facts by failure to consider evidences tendered by the Applicant during hearing, the evidences that describe the Applicant right. ii. That, the CMA erred in law and facts by awarding the Respondent 12 months remained salary, payment o f TZS. 392,000/= in lieu o f notice and TZS. 50,0000,00/= as general damages. The application proceeded by way of written submissions. Before the Court both parties were represented by learned counsel. Mr. Emmanuel Julius Mashamba appeared for the Applicant and Mr. Phillip Lincoln Irungu was for the Respondent. On the first ground, Mr. Mashamba argued that the Arbitrator misdirected herself by treating Notice for end of contract (exhibit DJ) as a termination letter without regarding CMA FI, whereby the Respondent sued the Applicant for unfair termination. He stated that the Respondent was served with the notice for ending the contract on 28th September, 2019 and not with the notice of termination as alleged. Thus, to treat it as a notice of termination is a total misconception of law. It was further submitted that, according to clause 2 of the employment contract tendered as D3, the reasonable expectation of renewal of the employment contract is only created by mutual agreement. Mr. Mashamba argued that it is a principle of the law that where the contract is a fixed term, the contract shall terminate automatically when the agreed period expires, unless the contract provided otherwise. He added that; the principles of unfair termination do not apply to specific tasks or fixed term contracts which come to an end on the specified time or completion of a specific task as per Section 36(a) (iii) o f the Employment and Labour Relations Act [Cap 366 R E 2019] read together with Rule 4(4) o f the Employment and Labour Relations (Code o f Good Practice) GN No. 42 o f2007. Mr. Mashamba went on to submit that to prove reasonable expectation, there must be a provision in the fixed term contract which provides so. He stated that; according to the employment contract tendered (exhibit D3), reasonable expectation of renewal is only proved where there is a mutual agreement. Thus, since there was no mutual agreement by the parties and no evidence was tendered by the Respondent to prove the same, no conclusion to unfair termination can be reached by the Arbitrator. He strongly submitted that the Respondent failed to prove the reasonable expectation of renewal. He added that, onus of proving reasonable expectation of renewal according to the law is vested upon the Respondent. To buttress the argument, he cited the case of Ibrahim Mgunga and 3 Others v. African Muslim Agency, Civil Appeal No. 476 of 2020, Court of Appeal of Tanzania (unreported) where the Court held that: ... where an employee challenges the fairness of termination on the grounds of reasonable expectation of renewal of a fixed term contract, in terms o f rule 4(5) o f the Rules, it is employee who assumes the duty to prove the basis of his expectation and this cannot be said to be a shift of the burden of proof... It was further submitted by Mr. Mashamba that, since the Respondent tendered notice of ending the employment contract (Exhibit DI), it was totally wrong for the Arbitrator to reach to the conclusion that there was unfair termination. In support of his submission, He also cited the case of Ibrahim Mgunga (supra) where it was held that: ...the appellants having failed to adduce threshold evidence in support of the proposition that the said letter was a notice of termination of their fixed term employment contract, it is difficult if not impossible for us to reach to the conclusion that their contracts were unfairly terminated ... Mr. Mashamba went on to submit that the Arbitrator also relied on the previous renewal of employment contract as a proof of reasonable expectation of renewal. He contended that it was totally wrong to rely on the previous renewal of employment contract since it is not an absolute factor for an employee to create a reasonable expectation of renewal. He submitted that expectation must arise from the impressions created by the employer as it was held in the case of Ibrahim Mgunga and 3 Others (supra) at page 15 and National Oil (T) Limited v. Jaffery Dotto Msensemi And 3 Others, Revision No. 558 of 2016, in the High Court of Tanzania (unreported) where the Court held that: ... I must say the question of previous renewal of employment contract is not an absolute factor for an employee to create a reasonable expectation, reasonable expectation is only created where the contract of employment explicit elaborate the intention of the employer to renew a fixed term contract when it comes to an end ... To sum up his submission, Mr. Mashamba submitted that where an employee challenges the fairness of termination on the grounds of reasonable expectation of renewal of a fixed term contract, in terms of rule 4(5) o f the Rules, it is employee who assumes the duty to prove the basis of his expectation and this cannot be said to be shifting of the burden of proof. In response, Mr. Irungu submitted that there has been habitual renewal/automatic renewal of contracts in the years when the Respondent was not given the contracts. The years of 2014/2015, 2016/2017, 2017/2018, 2018/2019, there was such a practice, no contracts but the Respondent kept working. He maintained that the practice created reasonable expectation of renewal. He stated that even the last contract of 2015, it is dated 21st October, 2015. It was signed by the Respondent on the 27th October, 2015, and it provided that the duration of the contract was from 1st October, 2015 to 30th September, 2016. According to Mr. Irungu, this shows that the Respondent signed the contract of employment while at work, and that his contract began before the date of signature, as testified by the Respondent. He maintained that the Applicant created impressions by its several conducts to show the contract to be renewed. Mr. Irungul further contended that the case of Ibrahim Mgunga & Others v. African Muslim Agency, Civil Appeal No. 476 of 2020 cited by the Applicant is distinguishable by the facts of this case. In that case the Appellants had their contract that stipulated when they will be conning to an end. Whistly, in this case there is no specific date of termination hence, the Court cannot move with assumptions. He stated that DWl's testimony at page 3 of the Award speaks voluminous. She testified that the Respondent left the office on the 30th September, 2019, but she had no proof of the same. Further, DW1 testified that they had a meeting on the 28th September, 2019 with the Applicant to inform him about his termination and after the meeting they gave him a notice to end the meeting. The minutes and notice were received as exhibit D2 and D1 respectively. Looking at exhibit Dl, the notice is dated 27th September, 2019, while the handwritten minutes are dated 28th September, 2019. Thus, DWl's testimony does not make sense. It was Mr. Irungu's submission that the Respondent proved that the contract was renewed and there was expectation of renewal. Thus, he discharged his onus of proof as required. He stated that by 4th October, 2019 the Respondent was already in another term of employment. To boost his submission, the counsel relied to the case of Asanterabi Mkonyi v. TANESCO (Civil Appeal 53 of 2019) [2022] TZCA 96 [7 March 2022, where his Lordship Ndika, JA at page 12 held that: It occurs to us that when a contract has been rolled over on numerous occasions, the employee can rightly expect a renewal after the effluxion of time of the last contract, all things being equal. We are cognizant that while in terms of rule 4(2) of the Code a fixed term contract terminates automatically when the agreed period expires, in line with rule 4 (3) of the Code the contract may be renewed by default if the employee continues for work after the expiry of the agreed term and if circumstances warrant it. Mr. Irungu continued to submit that in the notice of ending the contract (exhibit D3), the Applicant stated he is terminating the Respondent for reasons of shortage of work. This moves to Section 38 o f the ELRA and Rule 23 and 24 o f GN. No. 42 o f 2007 that requires procedure for retrenchment to be followed. He stated that the Applicant did not follow any of those procedures. In the upshot, Mr. Irungu submitted that the Arbitrator considered all evidence and testimony of the parties. As analysed by the parties and captured from the records, the relationship of the parties herein commenced way back on 01/10/2013, when the Respondent was employed by the Applicant in the position of Information and Communication Technology Assistant, in a one year fixed term contract. The same is reflected in the employment contract (exhibit PI). When the referred contract expired, it was automatically renewed as the Respondent continued to work in the same position and terms as in the referred contract. The record shows that, another written contract was offered to the Respondent on 01/10/2015 and agreed to end on 30/09/2016. The later contract also had similar terms as in exhibit PI. When the later contract expired, no any other written contract was signed by the parties. The Respondent continued to work hence, there was automatic renewal to similar terms in the previous contracts. The parties' employment relationship continued until 30/09/2019 when the Applicant decided not to renew the Respondent's employment contract. Before the CMA and this Court, the Applicant strongly submitted that; before termination, on 27/09/2019 the Respondent was served with a notice of non renewal (exhibit Dl). On his part, the Respondent maintained that he was served with the notice of non renewal and all other documents in relation to his termination on 04/10/2019. He testified that he continued to work until 04/10/2019 when he was unfairly terminated notwithstanding the fact that the documents were prepared on 27/09/2019 and 28/09/2019. I have critically examined the records, even in the referral form (CMA FI), the Respondent indicated that the dispute arose on 28/09/2019. He further indicated that the referred date was the date of his termination. Thus, the alleged 04/10/2019 was not stated anywhere in the CMA FI. Furthermore, in the opening statement, the Respondent stated that he continued to work until 28/09/2019 and not the alleged date. It is the Court's position stated in numerous decisions that parties are bound by their own pleadings. This was stated in the case of Makori Wassaga v. Mwanakombo and Another [1987] T.L.R. 88, the Court stated that: A party is bound by his pleadings and can only succeed according to what he has averred in his plaint and proved in evidence; hence he is not allowed to set up a new case. Again, in the case of Masaka Mussa v. Rogers Andrew Lumenyela & 2 Others, Civil Appeal No. 497 OF 2021, Court of Appeal of Tanzania at Kigoma it was added that: If we may add to what was observed by the Court in the above cited decision, it is also our observation that it is not 10 only the parties who are bound by their pleadings but the Courts are also bound by the said pleadings of the parties. As it is for the parties to suits, who are not allowed to depart from their pleadings and set up new cases, Courts are also bound by the parties' pleadings and they are not allowed to depart from such pleadings and create their own case. In the case at hand, the allegation that the Respondent continued to work until 04/10/2019 was not pleaded in the pleadings. The Respondent came up with such allegation when he was testifying. As it is held in the above cited cases, the allegation should have been pleaded in the CMA FI and reflected in the Respondent's opening statement. Thus, in this case, let alone the fact that there is no proof that the Respondent continued to work until 04/10/2019, such allegation does not form part of the pleadings. The Respondent claimed that he was unfairly terminated because he had reasonable expectation of renewal of his contract. I wish to point out that in employment contracts like any other contracts, parties are only bound by the agreed terms. If the parties agreed a contract to be of a fixed term of a certain period, the parties will remain to that position until agrees otherwise by themselves. The law under Rule 4(3) o f GN. No. 42 o f 2007 recognize renewal of fixed term contract by default when an ii employee continues to work after expiry of the agreed period. Therefore, when the contract is renewed by default, similar terms from their last contract will bind the parties. In the last agreed contract (exhibit D3), the contract commenced on 01/10/2015 and it was agreed to end on 30/09/2019. When the contract was renewed by default similar term bound the parties. Again, at clause 2 of the referred contract it was agreed that the contract may be renewed by mutual agreement between the parties. When the relationship of the parties herein existed both parties had in mind that the renewal will be by agreement of both parties. Therefore, the contract itself did not create unilateral expectation of renewal of the same. Admittedly, previous renewal may be one of the factors which creates reasonable expectation of renewal of the contract as it is provided under Rule 4(5) o f GN. No. 42 o f2007. This is also the Court's position in the case of Asanterabi Mkonyi (supra). However, previous renewal is not an absolute factor to be considered in establishing reasonable expectation. This is the Court's position in the case of National Oil (T) Limited v. Jaffery Dotto Msensemi & 3 Others, Revision No. 558 of 2016, High Court, Labour Division, Dar es Salaam (unreported) where the Court held that: I must say the question of previous renewal of employment contract is not an absolute factor for an employee to create a reasonable expectation, reasonable expectation is only created where the contract of 8 employment explicit elaborate the intention of the employer to renew a fixed term contract when it comes to an end. I subscribe to the above position, additional factors such as duties assigned beyond the expiry of the agreed period or when an employee continues to work after the expiry of the agreed period are circumstances which may also be considered to establish reasonable expectation of renewal. In the case at hand, before the end of the contract, the Respondent was served with the notice of non renewal dated 27/09/2019 (exhibit Dl). The allegation that the Respondent was served with such notice after expiry of the agreed period have no merit and has been determined above. It is the Court's position highlighted in numerous decisions that the contract itself serves as a notice since the parties are aware of the date of commencement and its end. This is the Court position in the case of Tunakopesha Ltd v. Moses Mwasiposya, Labour Revision No. 17 of 2011 (unreported) where it was held that: ... if the contract had indeed been for a fixed specific period, there would have been no need for notice of termination. I have noted Mr. Irungu's submission that there was no clear date of ending the contract in the case at hand. As stated herein above, the contract was renewed to similar terms of one year fixed term contract. Thus, even in absence of another written contract, the duration of the contract was clear to both parties. Therefore, in this case, the Respondent was served with the notice of non renewal of the contract, hence, unfair termination cannot stand in the circumstance. I have also noted that at page 11 and 12 of the impugned decision, the Arbitrator discussed the issue of retrenchment and found that the Applicant had no reason to retrench the Respondent and did not follow the stipulated procedures. In my view, the Arbitrator misdirected himself in that line of discussion and arrived at a wrong conclusion. The dispute before the CMA was not about retrenchment. The issue of retrenchment was suo motto raised by the Arbitrator in the Award and proceeded to determine the same. Moreover, it is my findings that the issue of retrenchment cannot stand in this case because the Respondent's contract was not terminated before its expiry. The Applicant decided not to renew his contract and he stated shortage of work was one of the reasons resulted to his decision. Therefore, since the contract was coming to an end as agreed there was no need of following any stipulated procedures because retrenchment was not the reason for termination. On the basis of the foregoing analysis, it is my view that there was no unfair termination in this case. The Respondent's contract came to an end upon expiry of the agreed period. Turning to the last ground as to; whether the Arbitrator properly warded the Respondent, it was Mr. Mashamba's submission that since the Respondent failed to prove the reasonable expectation of renewal as required by the law, the Arbitrator was wrong to award payment on the twelve (12) remained months salary to the tune of TZS. 4,704,000/= and one month in lieu of notice to the tune of TZS. 392,000/=. On his part, Mr. Irungu maintained that, since the Respondent was unfairly terminated, the Arbitrator properly awarded the Respondent. On the basis of the above analysis, as it is found that there was no unfair termination in this case, I join hands with Mr. Mashamba that the Arbitrator improperly awarded the Respondent. There was no automatic renewal or renewal by default as claimed in this case. Thus, the award of the remaining period of the contract was not appropriate. Regarding the award of one month in lieu of notice, the same is paid as per Section 44 o f the ELRA (supra). The notice pay provided in the relevant provision is paid when the contract is terminated before expiry of the agreed period. The employer may decide to pay the employee instead of serving him/her with notice of termination. In the case at hand, the contract was not terminated before the expiry of the agreed period. The position of the law is clear that fixed term contracts terminate automatically upon expiry of the agreed period. Thus, the contract itself serves as a notice. This is a position of law set under Rule 4(2) GN. 42 o f 2007which provides that: Where the contract is a fixed term contract, the contract shall terminate automatically when the agreed period expires, unless the contract provided otherwise In the premises, it is my view that the Respondent is not entitled to the notice pay. The law is silent on the period of serving an employee with a notice of non renewal of the contract. Notwithstanding the lacuna, it is my view that a notice of non renewal should be served one month before the end of employment contract so as to accord reasonable expectation if any on the part of the employee. In the case at hand, the notice of non renewal was served two days before the end of the employment contract. Since there is no provision regulating the service of such notice, it is my view that the period of two days was not enough to prepare the employee to find another employment or means. Therefore, the Respondent is hereby awarded one month salary in lieu of notice of non renewal of the contract. Turning to the award of general damages, Mr. Mashamba submitted that the amount of TZS 50,000,000/= which was awarded to the Respondent as a general damage is unfound and devoid because the Arbitrator misdirected herself by relying on the reasons of stress and depression and the death of Respondent's mother which are irrelevant and too remote to associate with the end of contract. He added that; the Arbitrator misdirected herself by referring to the case of Good Samaritan v. Joseph Robert Munthu, Labour Revision No. 165 of 2011 (2013) LCCD 1 which is a landmark case on the remedy for unfair termination of the fixed term contract. On the aspect of general damages, Mr. Irungu submitted that the Respondent is entitled to the same because he tendered medical report (exhibit P4), proceedings of the traffic case that shows he had an accident and lost his mother. This was caused by a depression/ stress that was a 17 result of the unfair termination of employment by the Applicant. The medical report (exhibit P4), showed the Respondent started visiting Sinza Hospital as from 11th October, 2019 being just a few days after termination. The doctors analysis/diagnosis showed that he visited the hospital due to "multiple illness which make him unable to attempt his normal daily activities, he is suffering from severe headache, commonly known as migraine for unknown causes precipitated by stress and depression state.. Mr. Irungu went on to submit that the Respondent continued to visit the hospital for check up until 23rd December, 2020 when the medical report was issued. The Respondent bad state of mind and depression made him encounter an accident that led to the loss of life of his mother. As such, he suffered damages that can never be recovered in monetary terms. Due to such proof, the Respondent was able to prove the damages suffered as caused by the Applicant. In support of his position, Mr. Irungu cited the case of Good Samaritan (supra) where it was held that: where an employer terminated a fixed term contract, the loss of salary by an employee of the remaining period of unexpired term is a direct foreseeable and reasonable consequence of the employer's wrongful... He further cited the Court of Appeal of Tanzania case of Mbeya Urban Water & Sewage Authority v. Lilian Sifael, Civil Appeal No. 300 of 2022 [2024] TZCA 64 [20th February, 2024], where Ndika, JA at page 19 - 20, stated that the appellate Court cannot intervene on the general damages since they are in the discretion of the Court or tribunal. Further the Court reduced the damages of the Employee since he did not give any proof on the damages. Unlike it is in the Court of Appeal case, the Respondent in this case proved the damages and the extent the suffered. As such, it was the view of Mr. Irungu that the CMA rightly exercised its discretion on awarding him TZS 50,000,000.00 as he suffered extremely. He stated that the Award of the damages was after denying the Respondent prayer of TZS 125,640,000 to a reduced figure of TZS 50,000,000.00. I have considered the submissions of the parties, as was decided in the case of Mbeya Urban Water (supra) in some special circumstances the Court may award general damages in labour matters apart from the remedies stipulated by the law. In awarding general damages, the claimant must prove that he suffered extremely loss as a result of termination of the employment contract. It is my view that general damages may be awarded where the termination employment involves breach of fundamental rights such as the right not to be discriminated against on the grounds or pregnancy or pregnancy-related grounds or other forms of discrimination as provided under Section 7 o f the ELRA (supra). In the case at hand, it is found that there was no unfair termination. Therefore, even the general damages awarded thereto were improper. As much as the Court sympathize with the Respondent on the loss of his mother but it is not proved how such loss which occurred on 14/03/2020 is connected with the Respondent's termination of contract on 30/09/2019. Awarding general damages to the circumstances of this case will defeat the existence of Section 14 o f the ELRA which recognise fixed term contract. On such basis, the award of general damages is hereby quashed and set aside. In the result, for the reasons stated hereunder, it is my view that the present application has merit. It is the findings of this Court that there was no unfair termination in this case. Thus, the Arbitrator's Award is hereby quashed and set aside save for the award of one month salary in lieu of notice which is hereby confirmed. It is so ordered. JUDGE 07/05/2024 Judgement pronounced and dated 7th May, 2024 in the presence of Counsel Emmanuel Mashamba for the Applicant and the Respondent in person. Right of Appeal explained.