CIVIL APPEAL NO 366 OF 2021 BRUCE E

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM ( CORAM; MWANDAMBO. 3.A.. MAIGE, J.A. And KHAMIS, J.A.l CIVIL APPEAL NO. 366 OF 2021 BRUCE E. MASSAWE.............................................. .............. APPELLANT VERSUS BANK OF AFRICA (T) LIMITED.............................................RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Labour Division at Dar es Salaam) fltemba. 3.^ dated the 23rd day of July, 2021 in Revision No. 760 of 2019 JUDGMENT OF THE COURT 7th August, & 25th September, 2024 MWANDAMBO, J.A.: The appellant, Bruce Massawe, was aggrieved by the decision of the High Court (Labour Division) henceforth, the Labour Court sitting at Dar es Salaam which reversed the award of the Commission for Mediation and Arbitration (the CMA) Dar es Salaam Zone. That decision arose from an award in labour dispute CMA/DSM/KIN/R. 839/17/883 on unfair termination of employment contract. He has appealed against that decision faulting the Labour Court, allegedly for rendering an unjust decision. The facts from which the appeal has emanated are common cause. They arise from an employment contract between the respondent and the appellant dating back from 1 August, 2004 whereby, the appellant was employed as a Corporate Relation Officer and thereafter rose to the post of Business Support Manager before being promoted to the post of Credit Risk and Monitoring Manager in 2014. That was the last post the appellant held with his erstwhile employer before he was terminated on 12 July, 2017. His was an aftermath of events involving alleged unsatisfactory performance raised by the respondent between 2015 and 2017 resulting in him being placed under a Personal Improvement Program (PIP) which commenced on 12 May 2016. The PIP saw the appellant's improvement from 48% to 58% which the respondent claimed that it was still unsatisfactory compared to the expected of not less than 75% score considered to be good performance consistent with its Human Resource Manual (the Manual). As the appellant's performance had not yet significantly improved under the PIP, the respondent found herself unable to stomach it anymore resulting into a decision to terminate the employment. Before doing so, the appellant was subjected to a disciplinary hearing on the allegations. The letter terminating the employment after the disciplinary hearing cited three violations on which the appellant had been found guilty of. First; willful negligence in the performance of work (section 1.5). Secondly; serious or repeated act of insubordination in the performance of work contrary to section 2.6. Thirdly; disregard/failure to conduct business professionally, ethically, competently and with high integrity as per the business practice contrary to business ethics set out in section 6.6 of the Manual. Dissatisfied, the appellant preferred a labour dispute before the CMA challenging the fairness of the termination both procedurally and substantively. From that dispute, the appellant sought reinstatement and general damages in the sum of TZS 400,000,000.00. The appellant faulted procedural fairness on the termination on two fronts, namely; failure to comply or follow a fair procedure and violation of rules of natural justice. On the substantive unfairness, he challenged it on the grounds, (1) poor work performance if any, was attributable to the respondent's own action or inaction and failure to meet its responsibilities, (2) failure to give 3 adequate weight to his past record (3) termination was not an appropriate remedy and, (4) he did not commit any act of insubordination. It is significant that, Form CMA 1 through which the appellant preferred the labour dispute before the CMA said nothing in relation to contravention of business ethics; an offence under section 6.6 of the Manual. After the hearing, the CMA found the termination unfair both procedurally and substantively. Consequently, it ordered the appellants unconditional reinstatement with payment of outstanding remuneration calculated at TZS 156,377,494.00 as of the date of delivery of the award. On revision, the Labour Court reversed the CMA award having found that, although the appellant's termination was procedu rally unfair, it was substantively fair. In the end, the Labour Court quashed the order for reinstatement and payment of outstanding remuneration and substituted it with an order for compensation equivalent to 12 month's salaries in pursuance of section 40 (1) (c) of the ELRA, hence the instant appeal. Initially, the appellant, preferred five grounds of appeal through Mr. Evans Robson Nzowa, learned advocate. At the hearing, Mr. Nzowa abandoned the 2nd and 4th grounds. Earlier on, the learned advocate had abandoned the 5th ground in the written submissions. The remaining 1st and 3rd grounds, renumbered as 1st and 2nd raise the following complaints: 1. Error in holding that the termination was substantively fair despite a finding that the respondent did not conduct investigation. 2. Erroneous hoiding that the standard set by the respondent was reasonable. Mr. Nzowa made a few oral arguments by way of emphasis on the written submissions which he stood by. The substance of the counsel's submissions in ground one was predicated upon rule 18 (1) read together with rule 17 (d) of the Employment and Labour Relations (Code of Good Practice) Rules, GN. No. 42 of 2007 (henceforth, "the Rules"). It was argued that, contrary to the requirements therein, the respondent did not conduct any investigation in relation to the alleged poor work performance and thus there could not have been a valid reason for termination. That was so because, he argued, the purpose of the investigation was to ascertain the reason for the alleged poor work performance and the extent of the employer's contribution. His further submission was that, in so far as poor work performance was concerned, the proper procedure was to conduct an investigation and not a disciplinary hearing as the respondent did. According to him, this vitiated the whole process. Regarding the 2nd ground, Mr. Nzowa faulted the High Court for sustaining the respondent's argument that, due to the nature and sensitivity of the appellant's duties in the banking industry, 100% score was an unreasonable standard as against 58% scored after the appraisal following his placement under PIP. Counsel argued that, 100% was an unreasonable standard contrary to the holding of the High Court which failed to consider it in the light of rule 17 (1) of the Rules. It was further argued that, the appellant's score of 58% was satisfactory considering the job description in exhibit D3 and lack of training coupled with shortage of staff compared with the workload the appellant was expected to shoulder. When Guideline 6 (4) of the Guidelines under the Code of Good Practice was put to him, counsel contended that, the Labour Court should have considered that appellant was placed in new the post without any prior training in the post and that would possibly be the cause of poor performance. Further, the failure to tender the appraisal forms and the Manual in evidence rendered the reason for termination unfair. On whether, reinstatement was viable, Mr. Nzowa conceded that under the circumstances, compensation could have been an appropriate remedy in lieu of reinstatement as ordered by the CMA. With the foregoing, the Court was urged to allow the appeal. The respondent was represented by Mr. Karoli Tarimo, learned advocate. Like the appellant's counsel, Mr. Tarimo sought to stand by the written submissions in reply lodged earlier on but had a few aspects to reinforce his standpoint. Before doing that, Mr. Tarimo drew our attention to rule 25 (1) of the Labour Institutions (Mediation and Arbitration Guidelines) Rules, GN. No. 67 of 2007 ("the CMA Rules"). It was his contention that, the record of appeal in his possession did not appear to indicate that the Arbitrator appended his signature after the end of each witness's testimony contrary to rule 25 (1) of the CMA Rules. He reinforced his submission with the Court's decision in Joseph Elisha v. Tanzania Postal Bank (Civil Appeal No. 157 of 2019) [2021] TZCA 518, 24 September, 2021 (TANZLII). However, Mr. Tarimo was candid that, his concerns were subject to confirmation with the original record. Mr. Nzowa shared a similar view with Mr. Tarimo regarding the alleged omission albeit with reservation. Be it as it may, having examined the original record, we satisfied ourselves of substantial compliance with rule 25 (1) of the CMA Rules. That being the case, the invitation to hold that the proceedings before the CMA were a nullity warranting taking the path the Court took in Joseph Elisha (supra) does not arise. On the merits of the appeal, Mr. Tarimo urged that, much as there was a failure to conduct investigation, that was merely a procedural irregularity and not a ground for testing the fairness of the reason for termination. Counsel argued that, the grounds for termination based on poor work performance are set out under rule 17 (1) of the Code of Good Practice whereas investigation falls under rule 18 providing for the procedure which has nothing to do with reason for termination. Under the circumstances, it was urged that, the High Court rightly held, the termination substantively fair, hence, the award of compensation of 12 months' salaries. He relied on the Court's decision in Pangea Minerals Limited v. Joseph Mgalisha Bufambuza, Civil Appeal No. 282 of 2021 [2021] TZCA 7471 (4 August 2023; TANZLII) to argue that, since the termination was substantively fair but merely procedurally unfair, compensation was an appropriate remedy instead of reinstatement. According to the learned advocate, by the appellant's own evidence, 8 working environment with the respondent was not conducive for reinstatement. On the failure to tender the Manual and appraisal forms, counsel argued that it was inconsequential considering that the appellant admitted his failure to perform in some of the appraisals. On the other hand, it was contended that, failure to tender the manual did not derogate from the fact that the appellant did not meet the standard set by the respondent. He thus urged the Court to dismiss the appeal. Having considered the rival submissions both written and oral, in the light of the complaints against the impugned judgment, we think it will be convenient to combine our discussion on both grounds because they boil down to one and the same issue; whether the Labour Court's finding that the appellant's termination was substantively fair was correct. Before we turn to that discussion, we wish to point out that although the appellant was terminated on three grounds as alluded to earlier on, his challenge before the CMA was premised on two of the said grounds. We note that, the CMA's award is grounded, largely on poor work performance. Poor work performance is one of the reasons for termination of employment contract but governed by the procedure set out under rules 17 and 18 of the Code of Good Practice quite distinct from the procedure applicable in cases involving termination on misconduct. The latter must be preceded by a disciplinary hearing. From our reading of the Rules, whenever the employer considers to terminate an employee on the alleged poor work performance, he must observe the steps enumerated under rule 17(1) thereof. Apparently, these are the same tests an arbitrator or a Judge must consider in determining whether or not the termination on poor work performance was fair. The steps must be followed by a procedure prescribed under rule 18 which entails, amongst others, investigation behind unsatisfactory performance to ascertain the extent to which it is caused by the employer. Both the Labour Court and the CMA concurred on the respondent's failure to conduct investigation as a result of which there is no issue between the parties. All the same, we do not agree with Mr. Nzowa, that failure to conduct investigation had a bearing on the substantive fairness of the termination since, rule 18 of the Code of Good Practice provides, does as it that, investigation falls under procedural fairness of the termination. In the scheme of things, logic and common-sense dictate that, the reason must 10 have been established by the employer before investigation is conducted for the sole purpose of ascertaining the employer's contribution to the employee's poor performance. Indeed, the appellant's complaint underlying the 1st ground of appeal is premised on the failure to conduct investigation which has nothing to do with substantive fairness of the termination, rather, its procedural fairness as already said. Since the appellant's complaint in the first ground was predicated on substantive fairness of the termination for the respondent's failure to conduct investigation, there is no merit in the complaint and we dismiss it. Be it as it may, we shall determine whether the decision of the High Court holding as it did that, the appellant's termination was substantively fair was legally sound. In view of the limited challenge against concurrent findings of fact by High Court and the CMA brought about by section 57 of the Act, our preoccupation in this appeal is to see whether, the Labour Court correctly applied the law to the evidence adduced by the parties during the arbitration on the basis of which the CMA found the termination substantively and procedurally unfair. 11 In holding that the termination on poor work performance was fair, the learned Judge took into account evidence of the respondent's concerns on the appellant's underperformance which led to him being placed under PIP between 22 April 2016 and 15 February 2017 despite which, the appellant's performance did not improve. The learned Judge also took into account the appellant's evidence that he failed to discharge some of the duties. For ease of reference, we shall have the Labour Court speak for itself: "According to [the] testimony by DW1, the respondent was Credit Risk and Maintaining Manager. Among his roles, he was supposed to go through the credits issued to customers and verify on several aspects including Bank security, default charges and asses if the credit is risky. Due to sensitive nature o f this duty in the banking industry a standard performance o f 100% is reasonable. Based on evidence on record, poor performance was not contributed by the employer. The respondent knew what the applicant expected from him. He maintained poor performance despite being warned and being given opportunity to improve and even after being given an assistant as he requested. Therefore, the applicant had 12 valid and fair reason to terminate the respondent..."[at page 82 o f the record]. Although the learned judge did not make reference to the Rules, she must have had in mind rule 17(1) which lists factors to be taken into account by an arbitrator or a judge in determining the substantive fairness of the termination, that is to say; (1) whether the employee failed to meet a performance standard (2) whether the employee was aware of the standard or could reasonably be expected to have been aware of the required performance standard (3) whether the performance standards are reasonable (4) the reason behind the employee's failure to meet the standard and (5) whether the employee was afforded a fair opportunity to meet the performance standard. There is no dispute whatsoever that, the respondent had raised concerns against the appellant's poor work performance in 2015 which resulted into placing the appellant under PIP. It is equally not in dispute that, the performance appraisal that followed resulted in 58% score. Apparently, the appellant never disputed the appraisal. Conversely, by his own evidence, he admitted poor performance to a certain extent but attributed the failure to perform some of his duties to being overburdened 13 by a lot of work without an assistant and spending most of the work time in meetings. The Labour court had regard to the evidence of the respondent on the reason based on poor work performance particularly from DW1 who stated that the appellant had exhibited poor work performance since 2015. As a result, through exhibit D4, the appellant was asked to give explanation on his poor performance. While accepting that the appellant had not undergone special training in the new post, it was the respondent's case through DW1 that, that was unnecessary since he was promoted on merit and that, invariably persons on those positions did not require any special training to perform. At any rate, evidence through DW1 and other witnesses of the respondent upon which the Labour Court relied in reversing the CMA findings shows that the appellant's PIP was extended to allow time for improvement but he could only achieve 58% score from 48% which was considered to be an unsatisfactory performance. It is common cause that through exhibit D4, the appellant was warned that, if he did not improve his performance, he could be terminated from employment. According to DW1, DW2 and DW3, performance appraisals were done after six months and that the last appraisal concerning the appellant was 14 up to December 2016. However, there was evidence which was hardiy controverted that, in some areas the appellant rated himself 'O ' particularly in the submission of monthly and quarterly reports and convening meetings involving his portfolio. For instance, DW1 stated in her evidence at page 123 of the record that, the appellant delayed submission of reports for November and December 2016 as late as March 2017. DW2 had similar version as evident at page 133 of the record. On the whole, we are satisfied that the Labour Court correctly directed its mind to the evidence and rightly found that the appellant's termination was upon a fair reason weighed in the light of the provisions of rule 17 of the Rules. While the respondent had a duty to prove that the appellant's termination was fair both substantively and procedurally, the law requires that such proof be on balance of probabilities. The respondent proved failure to meet employment work standard through self-appraisals as per exhibit D4, 'failure to submit reports/ conduct meetings as required of him in the job set out in exhibit D3. Besides, the appellant was aware of the required performance standard through exhibit D3. As to whether the standard was reasonable, we do not share the argument by Mr. Nzowa in this regard considering exhibit D3 as well as Guideline No. 6 (4) of the 15 schedule to the Code of Good Practice considering that, the appellant was a manager whose knowledge and experience placed him in a position to judge whether he met the standard set by the employer. At any rate, as alluded to earlier on, the appellant was afforded a fair opportunity to meet the performance standard through the PIP yet, he could not achieve the expected standard. There was an argument put forward on the respondent's failure to produce in evidence the Human Resource manual and the appraisal forms and that such failure was fatal to the respondent's case. That argument appears attractive but we are of the considered opinion that it is not tenable. The fact that the appellant's performance was unsatisfactory was not seriously disputed. As alluded to earlier, despite extension of time under the PIP, the appellant only scored 58% but what is more, is the fact that he could not submit reports as required of him in the job description which could not be made good by the non-tendering of the appraisal reports or the manual. The upshot of the foregoing is that, the appellant has not made out a case warranting us taking a different conclusion from the Labour Court on 16 the fairness of the reason for termination. Like the Labour Court, we are satisfied that the appellant was terminated upon a fair reason based on poor work performance. Consequently, we find no merit in the appeal and dismiss it. DATED at DAR ES SALAAM this 23rd day of September, 2024. L. J. S. MWANDAMBO JUSTICE OF APPEAL I. J. MAIGE JUSTICE OF APPEAL A. S. KHAMIS JUSTICE OF APPEAL The Judgment delivered this 25th day of September, 2024 in the presence of Mr. Alfred Swai, learned counsel holding brief for Mr. Evans Robson Nzowa, learned counsel for the appellant and Mr. Victoria Gregory, learned counsel for the respondent who appeared in person; is hereby certified as a true copy of the original.