Judgment Final Magengeli

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA SUB-REGISTRY OF GEITA AT GEITA LABOUR REVISION NO. 32170 OF 2024 (Arising from the Labour Claim No. CMA/GTA/56/2023 in the Commission for Mediation and Arbitration for Geita) CHRISTOPHER SALUM MAGENGERI….………………………………… APPLICANT VERSUS NAMWAHI GENERAL CO. LIMITED…………….……………..….……..RESPONDENT JUDGMENT Date of last order: 20/02/2025 Date of Ruling: 05/03/2025 MWAKAPEJE, J.: This applicant has lodged this application in this court against the award in Labour Dispute No. CMA/GTA/56/2023. The applicant seeks the Court to: (1) be pleased to exercise its revisional jurisdiction and call for the records of the proceedings and the award from the Commission for Mediation and Arbitration in LABOUR DISPUTE NO. CMA/GTA/GTA/56/2023, to satisfy itself as to the correctness, legality or propriety of the Decision made by the arbitrator dated 14 November 2024. (2) be pleased to revise and set aside the Commission for Mediation and Arbitration award dated 14 November 2024 delivered Page 1 of 14 by Hon. SALEHE, B, Arbitrator for being irrational and improperly procured. (3) grant to any other reliefs it may deem fit and proper to grant. This application is supported by the affidavit of the applicant, where in rule 4 there are legal issues which the applicant faults the arbitrator as follows: (1) The honorable arbitrator erred in law and in fact by holding that the Applicant has no claim in accordance with the application, while the Applicant claims outstanding holidays pay from 2009 to 2021 as well as arrears of salary. (2) The honorable arbitrator erred in law and in fact by failing to consider that the Applicant was employed by the respondent from 2009 to 2023. (3) The honorable arbitrator erred in law and fact by failing to award the applicant outstanding holiday pay and salary arrears, which were not paid. A concise history of this application reveals that the applicant and respondent have had a longstanding association since 2009, when the respondent engaged the applicant in various roles within his company. Records indicate that the parties had previously engaged in contractual agreements for a specific period over the years. On 1 October 2022, they entered into another one-year contract for the applicant to serve as an Page 2 of 14 Electrical Supervisor until 30 September 2023. Following this term's conclusion, their relationship soured, with the applicant asserting that his termination was unjust and that he was entitled to accrued leave and salary arrears. However, the CMA dismissed his assertions, noting that his employment contract was for a specified duration and that evidence supported the respondent's payment of all rightful dues to the applicant. As a result, the applicant's allegations against the respondent were deemed unsubstantiated, prompting the current revision application in this Court. The application was argued orally. The applicant appeared in person without legal representation, while Mr. Vianne Mbuya, a learned advocate, appeared for the respondent. In his submission, the applicant argued that although the award determined that his employment contract had ended, he was not paid his terminal benefits, including termination pay. He further stated that for 13 years, he had neither been granted leave nor compensated for it. Before the CMA, he sought payment for leave, severance pay, and medical expenses incurred following a work-related injury, for which he used personal resources for treatment. Additionally, he contended that he was entitled to Page 3 of 14 a certificate of service, which had not been issued. He argued that his termination was unfair and constituted a breach of contract. In reply, counsel for the respondent, Mr. Mbuya, opposed the application and submitted that the CMA had adequately evaluated the evidence before it and correctly determined that the applicant's fixed-term contract had expired. He argued that all termination procedures were duly followed and that there was no unfair termination. Mr. Mbuya noted that the applicant's employment contract, admitted as Exhibit "AP4," was fixed for one year, from 1 October 2022 to 30 September 2023, which the applicant had also acknowledged in his affidavit. On 31 August 2023, the respondent issued a notice of non-renewal, which the applicant received, confirming that the contract would not be renewed upon expiry. He further contended that the applicant was notified on 26 October 2023 that his contract had expired. During employment, the applicant received all entitlements, including leave pay, as indicated in his affidavit. He cited the CMA award, where the applicant confirmed receiving leave payment on 30 May 2023 via his bank account. Mr. Mbuya emphasised that under Rule 4(2)(3) of the Employment and Labour Relations (Code of Good Practice) GN No. 42 of 2007, a fixed-term Page 4 of 14 contract automatically expires at the end of its term unless there is an express provision for renewal. Since the applicant's contract contained no such provision, its expiry did not amount to unfair termination. He supported this position by citing Jacob Joseph Katori v. NAKI Security Co. Ltd, Labour Revision No. 54 of 2021 (High Court Labour Division, Arusha), Msambwe Shante & 64 Others v. Care Sanitation & Supplies, Labour Revision No. 154 of 2010(Unreported), and Jordan University College vs Flavia Joseph (Labour Revision No. 23 of 2019) [2020] TZHCLD 3822 (8 December 2020). Regarding the applicant's claims for leave payments, Mr. Mbuya submitted that these had already been settled, leaving no outstanding entitlement. As for severance pay, medical expenses, and the certificate of service, he argued that these claims had not been raised before the CMA. He concluded that the arbitrator had correctly ruled on the matter since the applicant had been paid for the entire contract period and the termination followed proper legal procedures. He, therefore, prayed for the application to be dismissed. In rejoinder, the applicant argued that despite having a fixed-term contract, he had a reasonable expectation of renewal. He contended that Page 5 of 14 issuing a non-renewal notice suggested an expectation of continuity, and that the type of contract should not have been a justification for termination. He relied on sections 14 and 15 of the Employment and Labour Relations Act to support his position. The applicant further submitted that his contract had a duration of 365 days. Instead of receiving a renewal notice, he was issued a non-renewal notice, which he argued should not have altered the terms of his contract. He maintained that his contract itself had not ended but that the notice had expired. He also pointed out that he was paid notice pay, which, in his view, confirmed that his termination was not solely due to the contract's expiry. He added that his certificate of service was only issued in November 2023, long after his termination, and contended that the non-renewal notice lacked valid reasons. He argued that Clause 3 of the contract had not been adhered to, rendering the termination unjustified. Citing Section 40 of the Employment and Labour Relations Act, he asserted that he was entitled to compensation for unfair termination. The applicant also maintained that he had worked continuously since 2019 without receiving leave allowances for previous years. He also Page 6 of 14 emphasised that from 2009 to 2023, he remained an employee of the respondent and that, apart from the leave payment 2023, his leave claims remained unpaid. He, therefore, prayed for relief. Having considered the rival submissions of the parties, the main issue for determination by this Court is whether the applicant's application is meritorious. Section 37 of the Employment and Labour Relations Act sets out the grounds for unfair termination of an employee. However, Subsection (4) of this section mandates that, in determining whether a termination was unfair, consideration must be given to the Code of Good Practice, which is established under Section 99 of the Act. The said Code, i.e., The Employment and Labour Relations (Code of Good Practice) Rules, GN no. 06 of 2004) particularly Rule 3(2), classifies lawful termination into four distinct categories which are termination by agreement, where both parties mutually agree to end the employment relationship; automatic termination, which occurs when the contract naturally expires or is terminated due to an event specified within the agreement; termination by the employer, which must be based on fair reasons and proper procedures as outlined in the Act; and Page 7 of 14 termination by the employee (resignation), which occurs when an employee voluntarily decides to leave their employment. Furthermore, Rule 3(3) of the Code underscores that the principles governing the termination of an employment contract are primarily determined by its duration. This distinction is of paramount importance, as different categories of employment contracts, namely, fixed-term contracts, indefinite contracts, and contracts for specific tasks, are each subject to distinct legal considerations regarding termination, renewal, and potential claims of unfair dismissal. Understanding these differences is essential in assessing the rights and obligations of both employers and employees in employment disputes. In the present application, when the matter was initially referred to the Commission for Mediation and Arbitration (CMA), the applicant categorically indicated that the dispute at hand pertained to a breach of contract. Specifically, the breached contract was the one executed between him and the respondent, under which he was engaged as an electrical supervisor. The contract in question was entered into on 01/10/2022 and was set to conclude on 30/09/2029. The said agreement on rule 3 provided that: Page 8 of 14 "3. Commencement and Duration The commencement date of this contract of employment is immediately after the date of signing. This is a fixed-term contract for a period of: 1 (One) Year. This contract is not automatically renewable. The Company will notify the Employee of a further period of contractual time on or before the last calendar month prior to the expiry of this contract of employment, should no notification be made, the Employee's contract will end on the expiry of the date specified." It is evident from the express wording of the employment contract between the applicant and the respondent that the nature of the agreement was that of a fixed-term contract. Accordingly, the provisions of Rule 4(2) and (3) of the Code of Good Practice are directly applicable, which state as follows: "4 (2) Where the contract is a fixed term Contract, the contract shall terminate automatically when the agreed period expires, unless the contract provided otherwise. (3) Subject to sub-rule (2), a fixed term contract may be renewed by default if an employee continues to work after the expiry of the fixed term contract and circumstances warrant it." [Emphasis supplied] Given these provisions, a fixed-term contract ceases automatically upon the expiration of the agreed duration unless there is a specific Page 9 of 14 contractual provision allowing for an alternative arrangement. Additionally, under sub-rule (3), a renewal by default may only occur in circumstances where the employee continues to work post-expiry and conditions justify such an extension. Thus, the applicability of these provisions is central to the resolution of the present dispute, particularly in determining whether the alleged breach falls within the legal framework governing fixed-term contracts. In the present application, the applicant provided crucial admissions regarding the duration and nature of his employment contract during his testimony before the CMA. On page 6 of the proceedings, he explicitly affirmed that he entered the employment agreement in 2022, which ended in 2023. He further confirmed that he was on leave in June 2023, and evidence indicated that he was accordingly paid. On 31/09/2023, he was issued with a non-renewal contract notification. Additionally, during cross- examination on page 8, when interrogated about the commencement of his contract, the applicant unambiguously stated that it commenced on 01/10/2022 and was set to expire on 30/09/2023. However, he contended that the contract had not come to an end. Furthermore, when asked about Page 10 of 14 the expiry date of the non-renewal notice, he acknowledged that it was explicitly stated to expire on 30/09/2023. This testimony shows that the contract in question was a fixed-term contract, notwithstanding the applicant's claim of unfair termination. The express terms of the agreement, coupled with the provisions of Rule 4(2) of the Code of Good Practice, make it clear that, unless otherwise provided in the agreement, a fixed-term contract automatically terminates upon the expiration of its agreed period. Consequently, an employee cannot validly claim unfair termination where a fixed-term contract has naturally expired, as reaffirmed in the cases of Mshambwe Shante & 64 Others v. Care Sanitation & Supplies and Jordan University College v. Flavian Joseph (supra), as referenced by Mr. Mbuya. However, it should be noted that while the expiry of a fixed-term contract is not generally considered unfair termination, the circumstances the same may amount to unfair termination would be an unjustified refusal to renew a contract despite a reasonable expectation of renewal; premature termination without valid cause or failure to follow due process or failure to comply with legal requirements related to termination, such as payment of terminal benefits. Page 11 of 14 In this case, there is no evidence to support an unjustified refusal to renew the applicant's contract or any reasonable expectation of renewal. The applicant was formally notified of the non-renewal on 31/08/2023 (Exhibit APS 5) and was instructed to complete any outstanding tasks. Subsequently, on 26/10/2023, he was informed that his contract had expired on 30/09/2023. Furthermore, on 04/11/2023, he was issued a certificate of service. Contrary to the applicant's contention, issuing a non-renewal notice cannot be interpreted as an indication of an expectation of renewal. The employer provided clear and timely communication regarding the contract's expiration, and there is no evidence to suggest that the applicant was led to believe an extension was forthcoming. Additionally, issuing a certificate of service in November 2023 does not imply that the employment contract remained in force or was automatically renewed. It is standard practice for an employer to issue a certificate after the conclusion of an employment relationship, and its timing bears no legal significance on the termination of the contract. Moreover, the agreement in this application was not terminated before its agreed-upon term; instead, it naturally expired on the stipulated date. Page 12 of 14 Regarding the applicant's claim of non-payment of his final salary, the evidence shows he was paid, and he affirmed that on page 9 of the proceedings, though he argued the last payment was for notice rather than salary. The contract did not stipulate any additional payments beyond its expiry, and courts cannot alter agreed contractual terms. This principle was emphasised in Miriam E. Maro vs. Bank of Tanzania, Civil Appeal No. 22 of 2017 [2020] TZCA 1789 (30 September 2020), where it was stated that: "It is the law that parties are bound by the terms of the agreement they freely enter into. We find solace on this stance in the position we took in Unilever Tanzania Ltd v. Benedict Mkasa t/a Bema Enterprises, Civil Appeal No. 41 of 2009 (unreported) in which we relied on a persuasive decision of the supreme court of Nigeria in Osun State Government v. Daiami Nigeria Limited, Sc. 277/2002 to articulate: Strictly speaking, under our laws, once parties have freely agreed on their contractual clauses, it would not be open for the courts to change those clauses which parties have agreed between themselves, it was up to the parties concerned to negotiate and to freely rectify clauses which find to be onerous. It is not the role of the courts to re-draft clauses in agreements but to enforce those clauses where parties are in dispute." Thus, the parties were bound by their contractual terms, and this Court cannot consider the applicant's claims concerning previous unrelated contracts, claims related to severance pay, or medical expenses, as the CMA Page 13 of 14 rightly excluded them, as Mr. Mbuya argued. Therefore, the applicant's claims are without merit. That said and done, I find no justifiable grounds to interfere with the decision and award of the Commission for Mediation and Arbitration, which I hereby uphold. As a result, the Application for Revision is dismissed for lack of merit. Each party to bear their own costs. It is so ordered. Right to appeal explained. DATED at GEITA this 05th day of March 2025. G.V. MWAKAPEJE JUDGE Page 14 of 14