REV NO 21897 OF 2024 DEVOTHA MUSHI VRS SUN BEAN AUTO LIMITED

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA

LABOUR DIVISION

AT DAR ES SALAAM REVISION APPLICATION NO. 21897 OF 2024 CASE REFERENCE NO. 202409041000021897

BETWEEN DEVOTHA M U SH I............................................................................ APPLICANT

VERSUS SUN BEAM AUTO LIMITED.............................................................. RESPONDENT

JUDGEMENT Date of last Order: 18/ 10/2024 Date of Judgement: 21/ 10/2024 MLYAMBINA J. The Applicant unsuccessfully challenged the termination of her employment contract by the Respondent herein at the Commission for Mediation and Arbitration (herein CMA) in Labour Dispute No. CMA/DSM/TMK/90/2023/45/2023. Her employment was terminated for the reason which will be apparent herein. After considering the evidence of the parties, the CMA found that her termination was fair both substantively and procedurally. Consequently, her dispute at the CMA was dismissed. Being dissatisfied with the CMA's decision, the Applicant filed the present application on the following issues: i. Whether the Honourable Arbitrator erred in issuing an Award in favour o f the Respondent on the grounds o f gross negligence, despite o f the Respondent's failure to tender and admit the relevant policies into evidence to substantiate the alleged negligence. ii. Whether the Honourable Arbitrator erred in fact by ruling that the Applicant's termination was justified, having failed to properly consider the evidence presented before her, including but not limited to the roles and responsibilities of the Applicant's Line Manager in controlling, managing and reviewing entries in the Taiiy system. Hi. Whether the Honourable Arbitrator erred in law and in fact in ruling in favour o f the Respondent without taking

into account the fact that the body that heard the Applicant's Appeal went over and above its legal mandate, by overturning the decision o f the Disciplinary committee, and terminating the Applicant's employment, while, the Applicant's Appeal was filed to challenge only the sanction issued by the Disciplinary Committee. iv. Whether the Honourable Arbitrator was correct in ruling that the Applicant committed misconduct without adequately considering the system's mode o f operation, and the number o f people with access and ability to vary system entries as well as visibility o f said entries. v. Whether the Honourable Arbitrator erred in law and in fact by disregarding the fact that the Disciplinary Committee was improperly constituted. vi. Whether the Honourable Arbitrator erred in law and in fact by failing to take into account the fact that the Applicant was never provided with the investigation report. vii. Whether the appellate authority erred in substituting a lesser punishment with a more severe one, resulting in double punishment for the Applicant. i////'. Whether the Arbitrator erred in law by failing to take into account the fact that the Applicant was charged and terminated for gross negligence in performing her duties, something which falls under poor performance without adherence to the procedural requirements for termination based on poor performance. The

application proceeded by way of written submissions. Before the Court, the Applicant enjoyed the services of Ms. Ernestilla John Bahati & Loveness Denis, learned Counsel. On the other side, the Respondent enjoyed the services of Mr. Haron 0 Oyugi, Angros J. Ntahondi and Thomas Atito, learned Counsel. In their submission in support of the application, the Applicant's counsel abandoned the fourth issue on record. I appreciate the parties' comprehensive submissions on the remaining grounds which will be taken on board in due course of constructing this decision. The first, second and eighth grounds challenges the Arbitrator findings that the termination was fair substantively while the remaining grounds are cantered on the validity of the termination procedures. On such basis, I find the Court is called upon to determine the following issues; whether the Respondent proved the misconduct levelled against the Applicant; whether the Respondent followed procedures in terminating the Applicant and to what reliefs are the parties entitled. To start with the first issue, as to fairness of the reason for termination, the termination letter, exhibit A10 dated 19/04/2023 indicated that the Applicant was terminated due to wilful and gross negligence. It was the Applicant's strong submission that the Arbitrator wrongly concluded that the Applicant committed gross and wilful negligence despite

of clear evidence of a system malfunction that hindered the discovery of the loss and despite of clear evidence. That, even her supervisor, Mr. Bhanu Pratap, failed to capture the discrepancies timely and therefore contributed to the accountant and Cashier entering, deleting and altering contra entries without being noticed immediately. It was further submitted by the Applicant's Counsel that the Arbitrator disregarded the Internal Auditor's evidence, which clearly indicated that the missing TZS 17 million was not the result of the Applicant's actions but rather that of an accountant who deleted the entry. The evidence proves that the Applicant could not have noticed the discrepancy until the system was closed. It the Applicant's further submission that the Arbitrator disregarded exhibit A3 and A6 specifically at page 16, where the Applicant's supervisor explicitly admitted that the system was closed in October 2022. That, the 4 admission corroborates the Applicant's claim that she could not have detected the discrepancy earlier due to the system staying open. He argued that for gross negligence to stand, there must be no contributory negligence. In support of their submission, they cited the case of Twiga Bancorp Limited v. Zuhura Zidadu & Mwajuma Ally, Labour Court at Dares Salaam, Revision No. 206 of 2004, Labour Court Case Digest Part I, 2015. It was submitted by the

Applicant's Counsel that in this case, the malfunction of the system constitutes a contributory factor, rendering the finding of gross negligence unsustainable. The Applicant's immediate reporting of the discrepancy further proves her diligent and responsible actions which contradicts the Arbitrator's finding. In reply, it was the Respondent's counsel submission that the issues relating deletion or alteration were only in reference to City Motors accounts, therefore imputing such allegations to Respondent is misconceived. They stated that the Respondent issue relates to the four false contra entries where TZS 19,546,200 were collected by the Applicant's subordinates but never deposited at the Respondent's bank. It was added that the Applicant was terminated for negligence and not wilful negligence as being alleged by the Applicant. Further, it was added that throughout the disciplinary process there was no evidence presented of what the Applicant calls system malfunction. The dispute at hand emanates from the following saga as stated by the Applicant at paragraph 5 of his opening statement: That, on August 2022 two of the subordinates, Suzan Uronu and Veromica Shangali passed contra entries in the books of City Motors amounting to TZS 17,716,700.00 but the money was not deposited in the bank which was later on deposited. This was discovered after a surprise cash account which

was ordered as a result of dispute in the reconciliation of Mr. Mohanabu Impress account, while verifying the entries of TZS 125,000,000.00 which he had claimed to have given to cashier Suzan Uronu who was on leave at that period; when checking the Complainant discovered that there was a lot of collection (money collected from customers) in City Motors books that was not deposited and she asked Accountant Veronica Shangali to cross check with Suzan Uronu where the money is at since they had no enough fund to pay the labourers at that time. After the surprise cash account done by Charles Kussa (Chief Accountant of City Motors Tanzania Ltd) and report sent to immediately supervisor Bhanu Pratap (General Manager Finance of the group) they were called and asked and she told him to ask the cashier to explain; when the cashier reported back on next Monday the cash was deposited and when asked, Veronica Shangali admitted to have taken the money to assist her brother who was in Russia (This was told to the complainant by Bhanu Pratap after he had a meeting with Veronica Shangali and Suzan Uronu). This entry was not discovered during bank reconciliation as the entry was deleted by Charles Kussa in the system (This was known because the internal audit report differed from the system report). After the money was deposited Bhanu Pratap noticed that there were other gaps between the date of

contra passed in the cash book and the date of which the actual money was deposited in the bank, and he asked Charles Kussa to follow up with group cashiers wanting to know when do they receive cash and deposit the same in the bank and hence it was noticed that there was a delay done with the cashier in depositing money. Bhanu Pratap then closed the system that no alteration could be done nor posting any entry back dated nor deleting entries. That the Complainant went ahead to cross check if the same entries have been passed in Sunbeam Auto Ltd and money not deposited in the bank on time as the case of City Motors, and on Saturday 03/09/2022 she discovered that there were 4 contra entries passed and no money deposited in the bank amounting to TZS 19,546,200.00. after this discovery on Monday she reported the same to Bhanu Pratap who then went and asked for bank reconciliations from Veronica to verify the same. As clearly stated above, the Applicant cross checked the entries after it was discovered that there were missing monies from their fellow company, City Motors. The incident happened on 01/09/2022 and the Applicant discovered the same on 03/09/2022. The case of Twiga Bancorp (T) Ltd v. David Kanyika, Labour Revision No. 346/2013 Dar es Salaam Registry, defined gross negligence to mean: A serious carelessness, a person is gross negligent if he falls far below the ordinary

standard of care that one can expect. It differs from ordinary negligence in terms of degree. In the case at hand as stated, the Applicant was terminated for wilful and gross negligence. Gross negligence that she failed to take charge of her subordinates leading to loss of company money. It was found that the Applicant's subordinate's negligently without her permission passed 4 contra entries amounting to TZS 19,546,200/= as on 01/09/2022 while those have not been deposited in Bank as per the bank statement. It was testified that; the Applicant's duties among others were to review daily book. Thus, there is no doubt that on 01/09/2022 the Applicant reviewed the books and verified the statements contained therein. On 03/09/2022 the Applicant by herself cross checked the documents and discovered the loss claimed in this application. In the circumstances, it is my view that if the Applicant would have diligently done her work on 01/09/2022, the loss would have been discovered on the same date. Nonetheless, it was discovered by the Applicant herself two days later. Therefore, it is my findings that the Applicant was negligent in performing her duties. However, I am of the view that the misconduct committed by the Applicant is not wilful and gross negligence as charged. The word wilful is defined in the Legal Dictionary, 25th Edition, 2015 by S.L. Salwan and U. Narang to mean: A

default or negligence will be considered wilful when in ordinary situations the person making the default or committing negligence could have abstained from committing the same. In this case, the incident was not directly committed by the Applicant herself. It was the conducts committed by her subordinate's which resulted to her termination. There is no evidence in record proving or showing how the Applicant was in the position of preventing her subordinate's from committing the misconducts in question. It is my view that it could have been possible if the Applicant had the duty to authorise all transactions done by her subordinate's. The only way the Applicant could have come to the knowledge of the commitment of the saga at hand is by looking at the Tally system which she failed to do on the date of the transactions, but she noticed by herself after two days. Therefore, under the circumstances of this case, it is my view that the misconduct committed by the Applicant is not wilful and gross negligence as charged. It is my further view that the disciplinary committee was right to punish the Applicant with a final written warning. Such punishment is justifiable in the circumstance of this case. Thus, termination of employment is not the appropriate sanction which amounts to unfair termination. Hence, the Respondent did not consider Rule 12(4) o f GN. No. 42/2007 which provides

that: (a) the seriousness of the misconduct in the light of the nature of the job and the circumstances in which it occurred, health and safety, and the likelihood of repetition; or (b) the circumstances of the employee such as the employee's employment record, length of service, previous disciplinary record and personal circumstances. It is theCourt's findings that the Applicant worked for 9 years andthere is nodisciplinary record against her. By the nature of the job she had and the misconduct committed, it was a contributory negligence. Coming to the second ground; whether the Applicant's termination was fair procedurally. It was submitted by the Applicant's Counsel that the Arbitrator erroneously held that the termination was procedurally fair, despite the fact that the investigation report was neither tendered/admitted as evidence nor furnished to the Applicant contrary to Rule 13 o f Employment and Labour Relations (Code o f Good Practice) Rules, 2007, GN. No. 42 o f2007 (herein GN. No. 42/2007). The Applicant strongly submitted that; it is a must an employee shall be supplied with the investigation report. In support of her position, the Applicant referred the Court to the case of Kibobery Ltd v. John Van Der Voort, Civil Appeal No. 248 of 2021, on page 9 the Court states: The failure to involve the appellant in the investigation that led to the formulation of the

report, coupled with the omission to share a copy thereof with the Respondent, was a serious irregularity. In response, it was the Respondent Counsels' submission that the issue of investigation report is unfounded. That, the Applicant was the one who initiated the investigations, her supervisor and internal audit team just confirmed her allegations of the said loss due to the false four contra entries by her subordinates as evidenced by the appeal form, exhibit D7. They added that the Applicants' subordinates were terminated on the basis of her report. As rightly argued by the parties, the requirement for conducting investigation is provided under Rule 13 (1) supra. As per the case of Kibobery (supra), the employee shall be involved in the investigation process and be supplied with the investigation report. In this case, even though the Applicant was the one who initiated the investigation processes as testified by the Respondent's counsel, it is my view that she was also li supposed to be informed of the findings of the audit committee. The record shows that, prior to the disciplinary hearing, the Applicant was not served with the investigation report. Even before the disciplinary hearing, the investigation report was not presented. On such basis, it is my findings that the referred provision was violated. Again, the Applicant alleges that the appellate committee

wrongly changed the findings of the disciplinary hearing committee. It was the Applicant's submission that; in this case, the appellate body failed to properly consider the grounds of appeal submitted by the Applicant, nor did it provide reasons for its decision as required under Guideline 4(13) and 4(14) o f the Guidelines for Disciplinary, Incapacity and Incompatibility Policy and Procedures, Employment and Labour Relations (Code o f Good Practice) Rules, GN. No. 42 o f2007. In response, it was the Respondent's submission that the disciplinary committee never imposed the sanction of last warning but recommended. Therefore, it was upon the employer to weigh the evidence presented, gravity of the offence, likelihood of repeat visa wsthe sanction prescribed by law when one is found guilty of the said offence. They argued that according to Rule 12 (2)(3)(d) o f GN. 42/2007 gross negligence is a misconduct amounting to termination. Thus, the appellate committee rightly imposed the punishment of termination. Guidelines 4(12), 4(13) and 4(14) (supra), gives a room to an employee to appeal against the findings of the disciplinary committee. The provisions also impose the duty to the appellate committee to consider the grounds of appeal. In the cited provisions, and any other provisions, the appellate committee is not restricted from departing with the disciplinary committee findings.

What is required is the reasons for the decision. The record shows that in the appeal outcome letter (exhibit A9), the Applicant's ground of appeal were responded one after another. In the end, the committee found that the recommendation of final written warning is not appropriate in the circumstances of this case. However, as stated above, termination was not the appropriate sanction in this case. In the result, I find the present application has partly succeeded. The CMA's award is hereby revised and set aside. The Respondent is ordered to pay the Applicant a total of T7S 52,223,076.93 being severance pay for 9 year and six months salaries for unfair termination. Other remedies pleaded in the CMA FI remains not proved. It is so ordered. YJ. MLYAMBINA

JUDGE 21/10/2024 Judgement pronounced and dated 21st October, 2024 at 2:00pm in the presence of Counsel Octavian Kamugisha for the Applicant and Thomas Atito for the Respondent. Y.J. MLYAMBINA

JUDGE 21/10/2024