20131108 TZHC Dar es Salaam

IN THE HIGH COURT OF TANZANIA LABOUR DIVISION AT DAR ES SALAAM LABOUR DISPUTE NO 07 OF 2007 DAMAS P. KINEMO ................................. APPLICANT VERSUS TANZANIA REVENUE AUTHORITY ........... RESPONDENT JUDGMENT 21 /8//2013 & 8/11/2013 R. M. RWEYEMAMU, J This is a labour dispute filed by Mr. Kinemo (herein after, the employee) against his employer the Tanzania Revenue Authority (TRA). The employee alleges that he was terminated unfairly, both procedurally and substantively; prays that his termination be nullified; and seeks orders for reinstatement, compensation and further consequential employment benefits. The TRA opposes the claim. Resolution of this dispute has been a long process. Facts leading to that scenario are summarized.chronologically below:- a. On 28/6/2001, the employee was suspended on half pay and subsequently charged with disciplinary offences (facts as per employee's unopposed testimony .by affidavit). b. It appears disciplinary processes stalled when the employee filed a case in the High Court registered as Civil Case No. 225/2002. That case was ultimately dismissed for 1 - """'i ,.., ' non appearance on 8/6/2005 and an application for its restoration dismissed on 29/3/2006. c. Disciplinary process resumed when the employee received a letter from TRA summoning him to a disciplinary committee meeting which took place the next day on 20/7/2006. d. On 12/12/2006, the TRA filed Labour Officer's Report (LOR) in pursuance to requirements of the then law, the Security of Employment Act, 1964 (SEA), expressing intention to summarily dismiss the employee. That intention was put into action on 16/3/2007 when the TRA terminated the employee. e. On 4/9/2007 the employee filed this complaint against the TRA. Initially, TRA raised Preliminary Objection (PO) on ground that the Court lacked jurisdiction to entertain the claim on ground that the cause of action arose in 2001, before the Labour Institutions Act (LIA), 7/ 2004, became operational. The PO was heard and overruled by Samba J., who agreed with the employee in a ruling dated 30/11/2007, that the cause of action arose on 16/3/2007, when the dismissal letter (termination letter) was served on the employee. f. The TRA filed an application for review of that order which was heard by Mandia J., as he then was, who made the following order: "In view of the six observation made above I rule that a decision on the memorandum of review and the Preliminary Objections be shelved. The matter should go to trial on merit and all points of law raised will be answered during the course of trial." Soon thereafter, Mandia J., was elevated to the Court of Appeal and I took over conduct of this case. Trial commenced afresh and the parties filed the statutory Non Settlement Order on 9/8/2012. 2 At the hearing, the employee was represented by Counsel from Noble Attorneys, while the TRA was represented by Ms. Nkane, an Advocate from its Legal Department. Parties consented to hearing without assessors; each party called one witness and made final submissions. The disputed issues as per parties Non Settlement Order were:- (i) Whether this court has jurisdiction to entertain the complaint or not (ii) Whether the procedure followed by the respondent to dismiss the complainant was fair (iii) Whether or not the summary dismissal was lawful (iv) To what reliefs are the parties entitled to. For ease of presenting my decision, I will deal with each issue sequentially, presenting parties' arguments and my observation/decision before proceeding to deal with the next one. The 1st issue is about jurisdiction of this Court. That issue was dealt with by this Court as explained under item (e) above. Given the fact that the two decisions were not appealed and are not appealable, it is my understanding of the law and procedure that this court cannot deliberate the issue at this stage. I therefore recognize and work with that decision which is that, this court has jurisdiction to entertain the dispute. I now turn to the 2nd issue of procedural fairness. The employee's key contention in his testimony and submission was that, disciplinary procedures, governing employment termination prescribed under the Employment and Labour Relations Act, 6/2004 (the Act) read together with the Employment and Labour Relations ( Code of Good Practice), GN 42/2007 (the Code) (which became operational on 5/1/2007) were not adhered to by the TRA. He therefore urged me to find termination procedurally unfair. 3 The TRA's witness made no reference to the issue of termination procedure in his testimony. Counsel for TRA however submitted that all due procedures were followed as per then applicable law, namely the Security of Employment Act, 1964 (SEA), in that after completion of internal disciplinary procedures, the employee TRA duly served Form 1A, (intention to take disciplinary action) to the Labour Officer (LO). According to TRA, the dispute fell under categories of a "contemplated dispute" in terms of Section 9 of the 3rd Schedule to the Act. As such the dispute was to be decided in accordance with procedures prescribed under the SEA. Since procedures under that law were observed, termination was procedurally fair. My decision on the issue is this: According to the earlier decision, which remain un- appealed, the law applicable to this dispute is the Act. As there was uncontested evidence that procedures for fair termination prescribed under the Act read together with Rule 13 (3) of Code were not adhered to, the inescapable conclusion is that termination was procedural unfair as claimed by the employee. I wish to add that, assuming this dispute fell under the category of "contemplated disputes" where the SEA was the applicable law, which I have already said was not the position, it is my considered opinion that even then, the claim of procedural unfairness would have been founded. I am of that opinion because even under the SEA, fundamentals of fair disciplinary enquiry were required to be followed. The charged employee was supposed to be permitted/availed opportunity to enter an effective defence to the charge. Undeniably, that was not done in this case. 4 The next and may be most important issue is: "Whether or not the summary dismissal was lawful'. In plain language, whether there was evidence to prove/establish the alleged misconduct for which the employee was suspended, disciplinary proceedings conducted and ultimately the employee terminated. The employee's misconducts were described in the LO's report of 12/12/2006 and are quoted verbatim immediately below. "A. Kosa la Kwanza: Kukiuka kwa makusudi taratibu za mnada. Aliuza magari kwa kutumia orodha ambayo haikutangazwa katika magazeti, kinyume na maelekezo yaliyoko katika Waraka Elekezi wa ldara namba nane, kuhusu taratibu za mauzo ya bidhaa kwa mnada. The particulars of the above charge had been described slightly differently at the disciplinary proceedings as follows: That, the Complainant did not seek confirmation from the Long Room to see whether there were any declarations (in pipeline) with respect to the items earmarked for sale. As a result, the vehicle imported by Ultimate Security LTD was listed and sold by auction on 8th of December, 1999 while the declaration with respect to the vehicle in question was still being processed at the Long Room until 2nd of February when a release order was issued. But in December letter to LC included allegation B. Kosa la Pili: Kutoa maelezo ya kupotosha llibainika kwamba gari Toyota Hiace ambayo haipitishi risasi yenye Chassis Na. AHT 21YH 63090 14263, kwenye orodha iliyotengeneza alieleza kuwa ni Toyota Hiace ya kawaida yenye Chassis Na. E 32959. Maelezo hayo yalikuwa ya kupotosha kwani Na. E.32959 haikuwa namba halisi ya Chassis ya gari husika bali ilikuwa ni namba ya watengenezaji wa gari hiyo (serial number). In the disciplinary proceedings, the misconduct was described as: That the complainant assigned lot numbers to 268 vehicles without verification of description and quantity as provided for in the Customs Department Instructions Na 8. For that matter a Toyota Hiace Bullet Proof Van with Chassis Na AHT21YH 6309014263 was described in the list as Toyota Hiace Van Chs. 32959. 5 .... , ,, • The issue I have to decide is whether the TRA has established on the required standard that the employee was responsible for the improper sale by auction of an imported vehicle where; (1) proper procedures for auctioning un-cleared vehicles were not followed, important among them, advertisement of the intended auction in a gazette a month before the auction; (2) the sale was done without verification, as a result, auction was conducted when import tax had already been paid; (3) the vehicle, which happened to be a bullet proof, was sold at an undervalued price, (a price lower than that paid for it as tax clearance by the importer). In my'view, the decision regarding the employee's culpability, depend on the answer to the following pertinent questions: (a) Who was responsible/had final say in ensuring that the list containing vehicles authorized for auction had been advertized in the official gazette a month before auction. (The purpose of which was to ensure that, where a vehicle already cleared or in the process of being cleared was included in the list, objections would be registered) (b) Who was responsible to ensure .that the final list of vehicles to be auctioned did not contain cleared goods, goods for which clearance tax had been paid either before advertisement or after advertisement of the auction in the Gazette (c) Whether the wrongful sale of the vehicle in question was due to a misconduct of flouting above prescribed procedures, and whether there was sufficient evidence that the employee was guilty of such misconduct. According to the evidence adduced, there were three key players in the problematic sale. The employee was a warehouse keeper. His immediate supervisor was Regional 6 • Revenue Officer WHARF (RRO) who testified for TRA as DW1. The final decision maker, a person responsible to give a final authority for sale of un- cleared goods like vehicles was the Deputy Commissioner for Customs and Excise (DCCE). On the evidence adduced, it is undisputed that the sale price of the vehicle in dispute was as per procedure, first proposed by the employee, forwarded to and seen by the office of his immediate supervisor RRO, who forwarded it to the DCCE. The latter enhanced the auction price proposed by the employee from 3 million to 4; and approved its auction although the vehicle was not among the list of vehicle whose auction was earlier advertised. It should be noted here that, the advertised list was only known to the DCCE but not to the employee, or the RRO. It was also undisputed that the auction which involved the disputed vehicle was conducted with a number of procedural irregularities. DW1 testified that flouting of procedures was due to an 'order from above' or higher authorities, which required that the auction be conducted for purpose of enhancing revenue collection. According to the employee, it was that flouting of prescribed procedures which led to the improper sale of the vehicle. To a large extent, I agree. The first material irregularity described by the employee to be the source of confusion, was existence of two auction list, 1 and List 2. According to the employee, list 1 had 216 vehicles; it was forwarded directly from Port Authority to DCCE's office contrary to usual procedures. According to the Auditors report, there were a number of discrepancies with that list, yet the DCCE had it advertised in the Gazette. Among them that, the list did 7 " not go through the employee and his OW 1's offices and that, after being advertised, that list was kept in the DCCE's office, without being seen by them until the current dispute arose. Second, list number 2, which was prepared by the Port Authority (PA} and forwarded to the employee on OWs' instructions, had 268 vehicles including the vehicle in dispute. The price on that list was reviewed and approved by OW1 - through his deputy, as per procedure, then forwarded to the OCCE. A procedure not followed in respect of list number 1. Third, when OW 1 asked the PA to prepare a list of vehicles, he did not send them F 43, which would have enabled the port authority to prepare the verification document (WES}; and according to received evidence, without WES, verification of description could not be done as required. Fourth, it was in evidence that the OCCE received the list No. 2, now being the only one who knew contents the advertised list No. 1, he should have verified whether or not list 2 contained same vehicles as were in the advertised list number 1. He did not do that instead authorized auction to proceed. But equally important, due to failure by DW1 to send F 43 to the Port Authority, the manifest Officer could not prepare the verification list- which is necessary before auction. The employee gave two key explanations in defence to the charge which were uncontroverted. First that he failed to make proper verification because OW1 had not availed the requisite F43 to the PA, which would have enabled verification to be done. The second was that the DCCE authorized sale of the vehicles on list Number 2, while knowing that the said list had not been advertised, particularly when he was well aware that it was only himself who was aware of existence of the advertised list. 8 • ln view of what is explained above, I do not agree with TRAs' submission that the employee's failure to ensure that all procedures were adhered to before authorizing auction, led to improper sale of the vehicle in question. At most, all the evidence establishes is that the employee partially contributed to the mishap, but mainly due to his failure to follow procedures despite his superiors' actions and instructions. Why? As noted, it was undisputed that the employee's final boss, the DCCE who knew that all pre-requisite procedures had not been followed in preparation of list 1 of 216, he was the only one with that list, yet he authorized and directed sale of the vehicles in list 2 which had not been advertised and had 268 vehicles, different from those on list 1, a list only known to him. In view of all that, it .is my decision that TRA failed to establish that sale of the vehicle in question was caused by misconduct on the part of the employee. I accordingly find that the employee' termination or dismissal was unlawful in that misconduct was not proved. Given the conclusion I have made above, the next issue for decision is with respect to appropriate remedy the employee is entitled to. After considering special circumstances of this case, namely; that the employee was not entirely blameless; the adduced facts regarding his employment history following his termination to date, the lapse of time since termination and TRA's submissions on the issue I decide as follows: I resist from ordering reinstatement as prayed for by the employee, or re-engagement a remedy also available under section 40 (1) (b) of the Act. Instead, I order that TRA compensate the employee by paying him the equivalent of 12 months' salary, to be calculated at the rate the employee was earning at the time of termination. 9 ,... , t, • • Last, for reasons similar to what I have explained above, I will not award the general damages prayed for. Indeed it may not be too cynical of me to state that in reality, all facts considered, the employee's termination turned out to be a blessing in disguise. In the final result, this claim succeeds, with an order that the TRA pay the employee 12 months' salary as provided for above. Judge 8/11/2013 Date: 8/11/2013 Coram: R.M. Rweyemamu, J. Complainant: - Absent. For complainant: - Absent Respondent: Ms. Sania Nyakunga Advocate for Respondent: C.C. Happy Ms Nyakunga Advocate: I hold brief for Mr . Nkene for the Complainant COURT: Judgment delivered this 8th day of November 2013 in presence of the party indicated above. The parties have a right to appeal this decision. Judge 8/11/2013 10