BULYANHULU GOLDMINE LTD V

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA SHINYANGA SUB REGISTRY AT SHINYANGA REVISION APPLICATION NO. 6 OF 2023 (Arising from the Award of the CMA at Shinyanga in Labour Dispute CMA/SHY/ 184/2019 issued on 28th March, 2023) BETWEEN BULYANHULU GOLD MINE LTD …………………………. APPLICANT VERSUS RAJABU YASIN RAJAB………………………….………RESPONDENT JUDGMENT 5th February & 19th April 2024 MASSAM, J.: In this application, the applicant seeks the court's revision of the Award from the Commission for Mediation and Arbitration of Shinyanga (CMA) in Labour Dispute No. CMA/SHY/184/2019 dated 28th day of March, 2023 (Alfred Massay). The application is supported by the affidavit dully sworn by Niakweli Mushi, Human Resource Officer of the applicant in which under the 14th paragraph the grounds for revision are narrated as follows; i) Whether the Respondent cannot sue insurance Company. 1 ii) Whether the Arbitrator was right in holding that the Applicant is entitled to insurance benefits to the respondent. iii) Whether the Arbitrator was right in holding that the applicant is entitled to insurance benefits over, and above amount paid to him. iv) Whether the respondent is entitled to Tshs. 52, 215, 447.53 being balance of insurance benefits. On the other hand, the respondent filed her counter affidavit dully sworn by the respondent himself, in which he disputed the claims while putting the applicant under strict proof thereof. Brief background leading to the party’s dispute is to the effect that, the respondent was employed by the applicant as Mechanical Technician until 23rd September, 2019 when he was terminated from service on the ground of illness named degenerative disc disease. Thereafter as per the Insurance Policy the respondent was supposed to be paid insurance benefits as he sustained permanent partial disability. The respondent alleged that instead of being paid 100% benefits he was paid only 40% benefits that’s why he referred the matter at the CMA claiming for Tshs. 52, 215, 447.53 being a balance for life insurance. 2 At the end of the arbitration, the CMA procured its award in favour of the respondent on the ground that, he was supposed to be paid 100% instead of 40% due to the partial a permanent disability he incurred as per their insurance policy. The Commission ordered the applicant to pay the remaining balance of 60% at the tune of Tshs. 52, 215,447.53 within 14 days from the date the award was delivered. Aggrieved by the CMA Award, the applicant preferred the current application, which was heard by way of written submissions. The applicant was represented by Mr. Imani Mfuru, learned Advocate whereas Mr. Charles Kiteje, Learned Advocate, represented the respondent. I commend both parties for their submissions and they will be considered during the determination of this application. Starting with the 1st ground for revision, Mr. Mfuru submitted that, the arbitrator erred in holding that the respondent cannot sue the insurance company. It was his submission that he is aware that based on the rule of “Privity of contract” that only parties to a contact can sue or be sued, that’s why Hon. Arbitrator ruled out that as the respondent was a privy to the contract, he cannot sue the insurance company. However, he argued that the said rule has exception particularly where a contact is made by two parties for the benefit of a third party. He argued 3 further that the said exception applied to this case as the applicant is paying premium to the insurer, Sanlam Life Insurance Company, ensuring some risks that the respondent may suffer, (See exhibit P2). He supported his argument by citing the case of Ultimate Security Tanzania Limited v. Maxiinsure (Tanzania) Limited, Commercial Appeal No. 2 of 2020 (HC, Commercial at Dar es Salaam, Unreported). It was his further submission that, although the respondent was not party of the contract, he has a third-party beneficiary under insurance policy, thus he was supposed to sue Sanlam Life Insurance Company who paid him initials under the policy. He prayed for this ground to be allowed. Replying to this ground, Mr. Kiteje Submitted that the exemption allowed in rule of “Privy to Contract” does not compel the respondent to sue the insurer, they are only on the effectiveness of the contact if third party wishes to. He was of the view that as the matter was filed at CMA and its competent was never challenged, then the applicant could have prayed to join third party (insurer) for contribution through the third- party procedure under Order 1 Rule 4 of the Civil Procedure Code, Cap 33 R.E 2019. He insisted that as the insurer was not an employer, 4 he could not have been sued at the CMA for enforcement of terminal benefits. Having revisited the records of the trial Commission, this court noted that at the CMA the respondent claimed for “Payment of Tshs. 52, 215, 447.53 being a balance for life insurance”. As per the evidence submitted by the applicant at the CMA via DW1 (Nia kweli Mushi), the applicant entered into a contract with Sanlam Insurance Tanzania Limited who paid life insurance to his employees who sustained occupational ill-health condition, other compensation are paid by the applicant. As per DW1 what the applicant was doing is to pay premium to the insured company on behalf of his employees. On his side, the respondent also admitted being paid 40% of insurance by Sanlam Insurance Company at the tune of 34, 810,299/= he disputed that the said amount was not enough as he was supposed to be paid at the ratio of 100%. The question here is whether Sanlam Life Insurance Company was supposed to be joined as a necessary party by the respondent or not. Based on the evidence submitted at the CMA it is undisputed that applicant was paid premium to Sanlam Insurance Company who has a duty to pay the employee once he attained permanent disability based 5 on the ratio of his disability. However, DW2 who work with (Ndege Insurance Brokers Limited) testified that they provide advisory services to the applicant to make sure the employee is properly paid on the issue relating with the insurance and he is the one that process all the process of life insurance and the Sanlam Insurance only pays what they submitted to them. Thus, based on the evidence submitted at the CMA, this court do agree with the counsel for the respondent that there was no need for the Sanlam Insurance Company to be joined as party to the case. This is due to the fact that the applicant and Ndege Insurance Company where the ones who calculated what is supposed to be paid to the employee and then Sanlam Insurance Company is only given the account of the employee, in order the said amount to be deposited. So, if there is any mistake in the calculation the one who is supposed to make correction or blamed is the applicant herein and no one else. So, according to that this ground is found with no merit. On the 2nd ground for revision, the applicant’s counsel alleged that it was wrong for the Hon. Arbitrator to hold that it is the applicant who is supposed to pay insurance benefits to the respondent. Mr. Mfuru was of the view that as Sanlam Insurance Company was the one who was 6 responsible for paying any alleged benefits owed to the respondent under the policy, it was wrong to order the applicant to pay the same. As it was already determined on the 1st ground of appeal that it was the duty of the applicant and Ndege Insurance to submit the proper report of the amount to be paid to the respondent. Then, the Hon. Arbitrator was correct to order the applicant to pay the said amount as he had a duty to submit another report to the Sanlam Insurance Company as to what is supposed to be paid to the respondent. As the duty of the Sanlam is to pay after the applicant had made all arrangement of what proper amount is to be paid to the respondent. Thus, this ground too is stand dismissed. As for the 3rd and 4th grounds for revision, Mr. Mfuru is challenging the amount to be paid to the respondent at the tune of Tshs. 52, 215, 447.53/=. He submitted that there is no evidence on how that figure was arrived as no salary slip was tendered to justify his salary. More to that the respondent is not entitled to more than the amount already paid by Sanlam Insurance Company. It was his further submission that the only medical proof submitted at the CMA shows that the respondent’s disability is 40%, thus in the absence of the proof that his disability is 100% the respondent is not entitled to be awarded the 7 mentioned amount. Moreover, he argued that Hon Arbitrator relied on the letter dated 22nd May, 2017 which was not tendered and admitted as exhibit at the CMA which is wrong. On his side, Mr. Kiteje replied that at CMA no witness of the applicant challenged the amount of Tshs. 52,215, 447.53 as the remained of 60% and they never state on how they arrive at the figure of Tshs, 34,810,298.4 as 40%. He added that based on Rule 3.2 of the Insurance policy the employee who sustain partial permanent disability and he is unable to gain fully occupation for more than six (6) calendar month, upon the satisfaction of the insurer his benefit shall be calculated as a percentage of benefit payable for permanent total disability which is explained under Rule 9.15. Further as there was no dispute regarding his salary that’s why the respondent did not tender any salary slip at the CMA. Regarding the issue of medical report, Mr. Kiteje submitted that dealing with it will mean an opening of pandora box as the same was never canvass by the Arbitrator at the CMA. He argued further that as before calculating the benefits of the respondent he submitted medical report to the applicant, which is submitted at the insurer, therefore there is no need for the same to be submitted at the CMA. And regarding the 8 letter dated 2nd May, 2017 the same was tendered and admitted collectively with Exhibit P2, thus the allegation of the applicant that it was not admitted as exhibit does not hold water. Having gone through the submission of the counsel for the applicant and respondent regarding these two grounds, the main issue for determination here is whether the respondent is entitled to be paid at the rate of 100% and not 40% which he had already been paid. Mr. Mfuru alleged that the only medical report submitted shows that the applicant’s disability was 40% that’s why he ws paid based on that amount. On his side, Mr. Kiteje did dispute regarding the 40% alleged to prove by Medical Doctor, his reply was only based on whether there was a medical report or not which was not a dispute at all. Mr. Kiteje supported the decision of Hon. Arbitrator which based on Rule 3.2 if an employee is sick for more than six months his insurance will be calculated at the ratio of permanent disability and not partial disability. Having gone through the records of the CMA, I have noted that as per the report of Tanzania Brain and Spine Centre (exhibit P2, Collectively), “the overall partial disability is 40%”. However, in arriving at its decision the Hon. Arbitrator relied on Clause 3.2 which states that: 9 “in the event that an insured member sustains permanent partial disability because of the injury or illness to an extent of being unable to gain fully, follow his/ he own occupation for more than six(6) consecutive calendar months from the date of such incapacity it determined and which, is proved to the satisfaction of insurers will continue for the remainder of the insured member’s life, or if the members has suffered any of the losses of such as are enumerated on the permanent disability scale below, Sanlam life shall pay the benefit which shall be calculated as percentage of the benefits payable for the permanent total disability as expressed on permanent disability scale.(Emphasis is mine). Apart from the cited provision, Hon. Arbitrator also relied on Letter dated 22nd May, 2017 which stated that “your illness is work aggravated condition and the level of disability is partial permanent incapacity”. This letter was challenged by Mr. Mfuru that it was never admitted at the CMA, and it was wrongly relied upon. This court also noted that the same was never tendered and admitted as exhibit despite of the 10 allegation from Mr. Kiteje that it was admitted at exhibit P2 Collectively, thus, it was wrong for the CMA to rely on such document. However, even if the said letter is disregarded by this court still Clause 3.2 of the Sanlam Insurance Policy stated that when the person who is sick for more than six (6) consecutive months, he shall be paid the benefit which shall be calculated as percentage of the benefits payable for the permanent total disability. For that, reasons, this court do agree with counsel for the respondent that he Hon. Arbitrator was correct to order the respondent to be paid the remaining 60% as per Clause 9.15 which states that: “Permanent total disability benefit” shall mean three (3) annual basic salary of each member covered under this policy. Cover will be based on the last declared salary received and specified sums assured declared and underwritten by Sanlam life subject to a maximum benefit of Tshs. 500,000,000 or USD 230,000 or Kshs 23,000,000.” Thus, based on the clauses quoted herein above and the medical report (Exhibit P2 Collectively), the respondent is entitled to be paid 100% as per the Sanlam Insurance Policy (exhibit P2, Collectively). Regarding the amount whether it is 42, 215, 447.52 or 52, 215,447.52, 11 since no one submitted salary slip to prove the salary of the respondent even the Human resource Officer of the applicant (DW1) and taking into consideration that there was no dispute on the salary of the respondent at the CMA. This court upheld the amount of Tshs. 52, 215, 447.52 pleaded by the respondent and awarded by the CMA being the remaining balance of life insurance at the rate of 100%. Subsequently, these grounds too are found with no merit. In the event, this application lacks merit and it is stand dismissed for want of merit. This being a labour case no order as to costs is issued. It is so ordered. DATED at SHINYANGA this 19th day of April, 2024. R.B. Massam JUDGE 19/4/2024 12