REV NO 14106 OF 2024 EXIM BANK TANZANIA LIMITED VRS HUMPHREY MAHEMBE

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA LABOUR DIVISION AT DAR ES SALAAM REVISION APPLICATION NO. 14106 OF 2024 CASE REFERENCE NO. 202406141000014106 BETWEEN EXIM BANK (TANZANIA) LIM ITED..............................................APPLICANT VERSUS HUMPHREY M AHEM BE......................................................... RESPONDENT JUDGEMENT Date of last Order: 08/ 07/2024 Date of Judgement: 25/ 07/2024 MLYAMBINA, J. Before the dispute at hand arose, the Respondent was the employee of the Applicant. He worked as a relations Manager with a monthly salary of TZS 4,333,333/=. He was terminated from employment from 01//10/2021 on the grounds of misconduct which will be apparent hereunder. Aggrieved by the termination, the Respondent referred the matter to the Commission for Mediation and Arbitration (herein CMA) which was registered as Labour Dispute No. CMA/OSM/ILA/469/21/216/21. After considering the evidence of the parties, on 22/11/2023 Hon. Chacha, B. Arbitrator, delivered an Award in favour of the Respondent. It was found that the Respondent was unfairly terminated both substantively and procedurally. He was therefore awarded a total of TZS 213,600,000/= being 48 months salaries for the alleged unfair termination. Being dissatisfied by the CMA's Award, the Applicant preferred the present application on the following grounds: i. The legality of the finding that the termination was without valid reasons. ii. The legality of the finding that termination was procedurally unfair. in. The legality of the Award of 48 months salaries as compensation. The application proceeded by way of written submissions. Before the Court, the Applicant was represented by counsel Gaspar Nyika and Samah Salah. On the other hand, Mr. Peter Ngowi, learned counsel appeared for the Respondent. As regards to the first ground, Gaspar Nyika, the Applicant's counsel argued that Section 37(2)(a)(b) (/) o f the Employment and Labour Relations Act [Cap 300 Revised Edition 2019] read together with Rule 12(3)(a) of the Employment and Labour Relations (Code o f Good Practice) Rules, GN. No. 42 o f2007considers gross dishonesty as a valid reason for termination. They stated that the Respondent was terminated on gross dishonesty for failure to declare his financial liabilities with other banks, the fact which was also admitted by the Respondent as reflected in exhibits D3, D5, D6, D9. It was argued that dishonesty of employees in banking industry is considered as a grave misconduct suffices for termination. In support of their submission, Counsel Gaspar Nyika referred the Court to the case of Charles Mwita Siaga v. National Microfinance Bank Pic, Civil Appeal No. 112 of 2017. It was further submitted that, from case laws, dishonesty is any conduct involving deception, it includes withholding information or making false statements and entails lack of integrity or straightforwardness. Based on his admission, the Respondent was not straight forward on his financial liabilities. Thus, the Respondent committed a grave misconduct of gross dishonesty. Counsel Gaspar Nyika was of the view that weakness in the manner the charges were framed, does not affect the validity of the reason for termination. That, if any it goes to the procedural issue. Therefore, the Arbitrator was not justified to hold that there was no valid reason for termination. In reply, Mr. Ngowi insisted that the Applicant had no valid reason to terminate the Respondent. That, the Respondent was terminated with different offence from the one he was charged with. I have considered the rival submissions of the parties. The termination letter (exhibit D9) indicates that the Respondent was terminated on the grounds of gross dishonesty as per Rules 12(3)(a) o f the Employment and Labour Relations (Code o f Good Practice) Rules, 2007. The charge sheet (exhibit D5 collectively) served to the Respondent had only one charge. For easy of reference, I hereunder quote the particulars of the relevant charge: That you have outstanding financial obligations with National Bank of Commerce and Ultimate Finance Limited that you are in default on your loan agreements. Furthermore, the loan you had obtained from a microfinance was granted in advantage of your employment status with Exim Bank (T) limited. This behaviour demonstrates a lack of integrity on your part, and it is not acceptable for a banker. Management is concerned that you abused your banking profession. These acts are against the Bank's Code of Conduct and amounts to gross dishonesty on your part as per Employment and Labour Relations (Code o f Good Practice) Rules, 2007, number 12 (3) (a). As clearly stated above, the Respondent was charged on dishonesty for failure to disclose his financial liability with National Microfinance Bank and Ultimate Finance Limited (herein NBC). To start with the loan obtained from NBC, it is undisputed fact that the same was obtained by the Respondent while he was her employee. Therefore, if the Respondent had any obligation to disclose the acquired loan (if any), it must be at the time of commencement of the employment with the Applicant. It was DWl's testimony that at the commencement of employment the Respondent signed the Applicant's Code of Conduct and Declaration of Financial Obligation which was tendered before the CMA as exhibit D1 collectively. From the relevant document, the Respondent did not declare his financial liability with NBC. He is therefore liable for withholding such crucial information to the Applicant. However, as clearly quoted above and reflected in the disciplinary minutes, the Respondent was not charged with dishonesty on failure to disclose his financial obligation with NBC through exhibit Dl. He was charged for failure to discharge his financial liability with NBC and Ultimate Finance Limited. Therefore, the Applicant's testimony before the CMA is quite different with the charge and testimony adduced during disciplinary hearing. In his testimony and submission before the Court, the Applicant considers the Respondent's failure to disclose his financial liability with NBC and Ultimate Finance Limited as a conduct which amounts to gross dishonesty. It is my view that the Applicant's claim would have legal stance if there is a specific provision in the Applicant's Code of Conduct (exhibit D l) to that effect. To the contrary, there is no specific provision prohibiting the Applicant's employees from applying loans from institutions other than the Applicant. Similarly, there is also no specific provision requiring an employee to declare his financial obligation with other institution during his employment. Therefore, I join hands with the Arbitrator that the Applicant had no justifiable reason to terminate the Respondent. Coming to the second ground concerning the termination procedures, it was argued that the Arbitrator was not justified to find the termination was procedurally unfair. It was further argued that at page 22 and 23 of the Award, the procedure was substantially followed except for mitigation and delay in giving result of hearing. The Applicant urged the Court to take a stance that procedures should be adhered to the basics of fair hearing as it is the position in the case of Tatu Mohamed v. A3 Institute of Professional Studies, Revision No. 308 of 2019. Mr. Ngowi for the Respondent pleaded the Court to find that the termination procedures were not followed. The termination procedures on the ground of misconduct are provided under Rule 13 o f GN. No. 42 o f2007. Considering the nature of the dispute at hand, I find no relevance to reproduce and discuss one procedure after another. The Applicant only pleads the Court to fault the Arbitrator's findings on two procedures. First, the Applicant's failure to afford the Respondent with a chance to mitigate. Second, the Applicant's failure to serve the Respondent disciplinary hearing results. To begin with the first alleged violated procedure, it is the law's requirement under Rule 13(7) o f GN No. 42 o f 2007 that where the results in the employee being found guilty of the allegations under consideration, the employee shall be given the opportunity to put forward any mitigating factors before a decision is made on the sanction to be imposed. The disciplinary hearing minutes (exhibit D6) as reflected at page 4, clearly indicates that after the Respondent was informed to have been found guilty of the misconduct charged, he was afforded the chance to mitigate and opted not to do so. Thus, the Applicant cannot be blamed as such. On the allegation that the hearing outcome was delayed, it is a settled position that the employee must be served with the hearing results within five working days as provided under Rule 13(8) o f GN. No. 42 o f 2007 read together with Guideline 4(9) o f the Guidelines for Disciplinary, Incapacity and Incompatibility Policy and Procedures. As per exhibit D7, the Respondent was duly informed that the hearing outcome will be delayed due to unavailability of committee members. Thus, the delay was justified. Turning to the last ground, the Applicant urged the Court to reduce the Award from 48 months salaries to 12 months salaries. On his part, the Respondent pleaded the Court to uphold the Award of 48 months. It is my view that, since the CMA found that the Respondent's termination was unfairly substantively, the Award of 12 months as provided under Section 40 (l)(c) o f Employment and Labour Relations Act, Cap 366 Revised Edition 2019 is justifiable because the Applicant's fault was on failure to properly frame the charge sheet against the Respondent. In the result, I find the present application to have partly succeeded. The Award of 48 months is hereby reduced to 12month salaries. The Applicant is hereby ordered to pay the Respondent a total of TZS 53,400,000/= as compensation for unfair termination. It is so ordered. Y. J. MLYAMBINA JUDGE 25/07/2024 Judgement pronounced and dated 25th July, 2024 in the presence of Counsel Antonia Agapiti for the Applicant and Peter Ngowi for the Respondent. Right of appeal explained. \V - Y. J. MLVRMBINA JUDGE 25/07/2024