higher education students loan board vs george nyatega 2020 tzhcld 1797 28 august 2020

IN THE HIGH COURT OF TANZANIA

LABOUR DIVISION

AT PAR ES SALAAM LABOUR REVISION NO. 846 OF 2018

BETWEEN HIGHER EDUCATION STUDENT'S LOAN BOARD.......................................................... APPLICANT

VERSUS GEORGE NYATEGA.............................................. RESPONDENT

JUDGEMENT Date of Last Order: 15/06/2020 Date of Judgement: 28/08/2020 Aboud. J. The Applicant filed the present application seeking revision of the award of the Commission for Mediation and Arbitration (herein CMA) which was delivered on 17/09/2019 in Labour Dispute No. CMA/DSM/TEM/311/2017/157/18 by Hon. M. Batenga, Arbitrator. The application was made under the provisions of Sections 91 (1) (a) (b) & 91 (2) (a) (b) and 94 (1) (b) (i) of the Employment and Labour Relations Act [CAP 366 R.E 2019] (herein the Act) and Rules 24 (1), 24 (2) (a) (b) (c) (d) (e) (f), 24 (3) (a) (b) (c) (d) and 28 (1) (a) (b) (c) (d) (e) of the Labour Court Rules, GN No. 106 of i 2007 (herein the Rules). The applicant moved the court on the following grounds:- i. The Honourable Arbitrator erred in law and fact by holding that, the contract entered on 10/10/2014 between the respondent and the Chairman of the Board of Directors of the applicant was valid basing on the handover letter dated 21/03/2016. ii. The Honourable Arbitrator erred in law and fact by awarding gratuity of 30% to the respondent by relying to the unenforceable contract signed on 10th October, 2014 contrary to the valid contract signed between the respondent and Permanent Secretary Ministry of Education, Science and Technology on 1st September, 2014 of which the respondent was entitled to 25% gratuity, which was already given to the

respondent. iii. The Honourable Arbitrator erred in law and fact by awarding the respondent expected income basing on invalid contract signed on 10th October, 2014 contrary to the valid contract signed between the respondent and Permanent Secretary Ministry of Education, Science and Technology on 01st September, 2014 of which the later contract does not provide for the expected income. iv. That the Honourable Arbitrator erred in law and fact by awarding the respondent long service award contrary to Applicant's Staff Services Manual. v. The Honourable Arbitrator improperly awarded the respondent medical cost refund. vi. The Honourable Arbitrator erred in law and fact by awarding the respondent repatriation expenses, subsistence allowances and air ticket. vii. That the Honourable Arbitrator erred in fact by ruling that the respondent was recruited in Shirati-Rorya basing on the fact that it was a place where the respondent usually visited while on his manual leave. viii. That the Honourable Court be pleased to grant costs of this application. ix. That the Honourable Court be pleased to make such any other orders as it may deem fit. Brief background of the dispute can be summarized as follows; the respondent was employed by the applicant as the Executive Director of the respondent's institution. Previously the parties engaged in a contract of four years started from 29/04/2010.

Upon its expiry the parties entered onto another fixed term contract of four years started from 30/03/2014 which is the subject matter of the case at hand. On 23/03/2016 the respondent was terminated from work on the ground of poor working performance. Aggrieved by the applicant's payment of terminal benefits he referred the dispute at the CMA for the interpretation of the contract in question. At the CMA the respondent was awarded with 2,433 USD being return air ticket, Indian rupees 857,177.95 being costs of medical treatment and medication, 17,220 USD for subsistence allowances and half per diem in transit and 3,444 USD being incidental expenses. Dissatisfied by the Arbitrator's award the applicant filed the present application. By leave of the Court the matter proceeded by way of written submission and both parties were represented. Mr. Erigh Rumisha, State Attorney was for the applicant while Mr. Rahim Mbwambo, Learned Counsel was for the respondent. Submitting on the grounds for revision Mr. Erigh Rumisha stated that, the Arbitrator misdirected himself to hold that the contract entered on 10/10/2014 between the parties was valid basing on the handover letter. The learned State Attorney prayed for the court award the respondent basing on the contract dated 01/09/2014 as it was the valid to the parties. To support his argument he cited the case of Univeler Tanzania Ltd vs.

Benedict Mkasa Bema Enterprises, Civ. Appl. No. 41 of 2009, CAT. As regard to award of the gratuity of 30% and expected income to the respondent, Mr. Erigh Rumisha submitted that the arbitrator relied on invalid contract signed on 10th October, 2014 while the valid contract dated 1st September, 2014 the respondent was entitled to 25% gratuity. He further submitted that the respondent wrongly award expected income basing on the said relevant invalid contract, which did not provide the expected income. Mr. Erigh Rumisha contended that under paragraph 16 (2) of the said contract, which was admitted as Exhibit P3, provided a gratuity at the rate of 25%. So he said granting a 30% gratuity instead of the 25% known by the valid contract is against to the principle of free to contract and the principle that parties are freely bound by the terms of the contract, which we humbly request this Honourable Court to rectify and put records straight. He argued it should be noted that, the respondent had already been paid his 25% gratuity as per the 1st September, 2014 contract. On the award of expected income Mr. Erigh Rumisha, Learned State Attorney submitted that the said contract which at the time of termination of the respondent's employment has never been revoked, rescinded or amended did not provide for an expected income as were wrongly awarded by the arbitrator. He therefore concluded

that the matter of an expected income is unfounded and with no bases whatsoever hence vitiate the award. As to the award of long service entitlement he submitted that, according to section 6.18 of the HESLB Staff Service Manual of 2016 the relevant entitlement is meant for staff who served with the company for continuous five years. He argued that the applicant was on a fixed term contract and was paid gratuity on expiration of each contract. Mr. Erigh Rumisha went on to submit that the award of medical fund to the respondent was improper because no evidence was tendered at the CMA to that effect. He further submitted that the Arbitrator erred in fact by ruling that the respondent was recruited from Shirati-Rorya basing on the fact that it was a place where the respondent went for annual leave. As to the award of subsistence and repatriation costs he stated that, the guiding principle in that regard is well articulated in the case of Nicholous Hamis Vs. Tanzania Shoe Company Ltd. and the Tanzania Leather Association Industries, Civ. Appl. No. 62 of 2000 CA (unreported). He argued that the relief in question are payable to employees who were recruited at places other than the place of work or where it is specifically provided in the contract of employment. He therefore prayed for the CMA's award to be revised and set aside. Responding to the application Mr. Mbwambo submitted

that, the issue of which contract is valid was properly determined by the Arbitrator. He stated that the letter dated 21/03/2016 is among the relied document by the Arbitrator to conclude that the binding contract is the one dated 10/10/2014. He further submitted that, the contract alleged to have been signed on 01/09/2014 was never tendered and admitted at the CMA, that the applicant erroneously attached such contract in the affidavit in support of the Revision application. To strengthens his argument he cited the case of Tarmohamed and Another Vs. Lahkani & Co (3) (1958) EA 567 (CA) where the Court of Appeal rejected a document at appellate stage on the ground that it was not tendered at the trial court and the prescribed condition of reception of fresh evidence or new trial was not met by the appellant. As to the claim of gratuity Mr. Mbwambo submitted that, the respondent established and proved at the CMA that he had two years contract with the respondent and according to clause 11.0 of the said contract he is entitled to 30 percent of the accumulative salary for the period of the contract. On payment of expected income Mr. Mbwambo submitted that, the same was provided in the respondent's employment contract (Exhibit P3). In respect of long service award he submitted that, the same is provided in section 6.18 of the Applicant's Staff Service Manual (Exhibit P4). He stated

that, it is clearly provided that the employees are entitled to be paid one month's salary for each five years served. As to medical treatment and travelling expenses he submitted that, the same was awarded as in accordance with the respondent's Policy (Exhibit P7). On payment of air ticket, transportation and subsistence allowances he submitted that, they are statutory entitlement provided under section 43 of the Act as well as under section 7.1, 7.2 and 7.2 of the Applicant's Staff Service Manual. He stated that the respondent tendered leave forms to prove he was being paid leave and transport allowances from Dar es Salaam to Shirati-Rorya in Mara Region. He therefore, prayed for the application to be dismissed. Having gone through and considered the Court's records, labour laws and practice as well as submissions by both parties, it is my view that the issues for determination before the Court are whether the award was properly procured in the context of which the valid contract between the parties was and, what relief are the parties entitled. It is worth to note that at the CMA the respondent did not dispute about his termination. His complaint was only based on the application/interpretation/implementation of an agreement relating to employment. On the first issue the Court has to determine as to what was the valid contract between the parties. The Arbitrator in his

finding found that, the contract entered between the parties on 10/10/2014 was the valid one because the alleged contract entered on 01/09/2014 was not tendered. The law places the duty to the employer to keep particulars of the employee as provided under section 15 (6) of the Act which provides that:- "15 (6) If in any legal proceeding, an employer fails to produce a written contract or the written particulars prescribed in subsection (1) the burden of proving or disproving an alleged term of employment stipulated in subsection (1) shall be on the employer." In the present application it was the duty of the applicant to tender the said contract so as to invite the Court to rely on it. However, from the record the applicant did not produce such contract as rightly found by the Arbitrator. It is inappropriate for the applicant to attach the alleged contract at this revisional level and urges the court to rely on the same while it was not tendered at the trial level. I fully agree with the respondent's submission that the Court should not consider such contract as it was the position in the case of Tarmohamed and Another (supra). I have also carefully examined the contract entered on 10/10/2014 (Exhibit P3). In the relevant contract at clause 1.0 it was specifically indicated that it was entered for a term of two years with 10 effect from 01/09/2014. Under such circumstance it is

my view that the contract commenced on 01/09/2014 however, the parties signed their agreed terms on 10/10/2020. Therefore, it is crystal clear that the contract on record is the valid one because even the applicant did not dispute its validity when it was tendered before the CMA. And in no way the applicant would have changed the instruction of the appointing authority that two years term started from 01/09/2014 as per paragraph 1.0 of the applicant's fixed term employment contract (Exhibit P3). The contract that was entered on 10/10/2014 binds the parties and this matter. Therefore the parties' right and duties are well spelt out in the terms and condition of the relevant contract. On the basis of the discussion above arbitrator's award correctly considered the contract of the employment in this matter which dated 10/10/2014 and retrospectively applied from 01/09/2014. The position in the first issue above is a determinant factor of the rest of the issues in this revision as will be discussed in the hereunder. On the second issue as to parties' relief the applicant is contesting payment of gratuity, long service, medical fund, ii repatriation costs and subsistence allowances. In discussing the relief at hand it has to be borne in mind that parties are governed by the agreed terms of the contract as rightly submitted bythe applicant's State Attorney and, the case of Univeler

Tanzania Ltd. (supra) is of relevance where the Court of Appeal held that, I quote:- "It was stated that the parties are bound by the agreements they freely entered into. No party would therefore be permitted to go outside that agreement for remedy". The principle was also restated in the case of Hotel Sultan Palace Zanzibar vs. Daniel Laizer & Another, Civil. Appl. No. 104 of 2004 (unreported), where it was held that:- "It is elementary that the employer and employee have to be guided by agreed terms governing employment. Otherwise, it would be a chaotic state of affairs if employees or employers were left to freely do as they like regarding the employment in issue." In determining the relief sought, the above position will be considered. As to the payment of gratuity, the contract of 12 employment of the respondent is crystal clear that he is entitled to such relief at the rate of 30% and not 25% as contended by the applicant. This is clearly provided at clause 11.0 of the relevant contract which is to the effect that:- "Upon expiry of this agreement or an earlier determination by the employer, whichever comes first, the employee shall be entitled to gratuity allowance as stipulated in the HESLB staff Service Manual, calculated at the rate of 30% of the cumulative monthly basic salary for the period of the contract." Regarding the impugned award of expected income, I

fully agree with Mr. Mbwambo's submission that arbitrator rightly considered what is in the relevant contract of employment between the parties. From what is in record such payment was a legal right of the respondent as is prescribed in clause 14.0 of the binding contract of the two rivals in this revision. The relevant clause is to the effect that, I quote:- 14.0 - DETERMINATION OF ENGAGEMENT The Employee's employment may be determined pursuant to the provisions of the 13 Higher Education Students' Loans Board Act, Act No. 9 of 2004 (as amended) and in accordance with the Labour Laws applicable in Tanzania. Where the employee's contract is terminated pre-maturely by the employer or by any authority that may be or by operation of the law or for whatever cause howsoever, the Board or its Successor/Assignee shall pay the employee the gratuity stated in clause 11.0 hereinabove for the entire contract period, plus expected income that would have accrued to him from the employment had the employee worked to complete his contract period. In the event the employee terminates his contract otherwise than required by the law, the employee shall compensate the Board to the extent required by the law". (Emphasis added). As to the payment of long service, the Arbitrator awarded the respondent one month salary on the ground that he worked with the applicant for about nine years and six

months; therefore he was entitled for the same as in accordance with clause 6.18 of the HESLB Staff Service Manual (Exhibit P7). For easy of reference I quote the disputed term:- "Clause 6.18 - For the purpose of staff retention and motivation, HESLB staff shall be eligible for Long Service Award depending on the number of years served at the Board in interval of five years, will be eligible for an award of one (1) month current basic salary at the expiry of every interval of five years, will be eligible for an award of one (1) month current basic salary at the expiry of every interval of five years. Staff who have served for ten (10) years shall be paid two months current basic salary and those who served for fifteen (15) years shall be paid three (3) months current basic salary". [Emphasis supplied]. Note according to the revised HESLB staff service manual, 2016 at page 14 Para 3.4 (iv) completion of contract. The applicant argues that, the respondent is not entitled to such payment because upon termination he was on a fixed term contract. In his contention the payment is effected on continuous service employees. I have careful read the quotation of the clause 6.18 of Exhibit P7 and, in my understanding the interval of five years is upon continuation of service. The record reveals that respondent was never in a continuous service of five years. His first contract was fixed

for a period of four years and upon its termination he was paid all of his terminal benefits. Therefore, the fact that the contract was renewed does not automatically warrant him to the payment of long term service payment. This is clearly expressed in the HESLB Revised Staff Service Manual of the 2016 at page 15, paragraph 3.4.1.1 (iv) titled completion of contract, where states:- "3.4.1.1 (iv) Completion of Contract: On satisfactory completion of the contract, an employee may leave the service of the Board in accordance with the terms of the contract. The employee or employer must notify the 16 other party not later than six months before the normal expiry of the contract whether or not on expiry of contract the employee or employer wishes to extend the contract. Terminal benefits payments as per the contract". I fully agree with the Mr. Rumisha that, the respondent did not at any time have a five years interval contract with the applicant to be eligible for long service award. It is my view that the respondent is not entitled to such payment because upon termination of the contract he was on a fixed term contract of service of which even if he hadcompleted service in that contract of two years, hewould havebeen not entitled to the payment of long service allowance. My considered view that, the allowance in question is payable the employee who has worked with the applicant

for the unbreakable period of five years but the respondent at hand did not conceive such qualification. Turning to the payment of medical allowances in my view the Arbitrator wrongly awarded such payment to the respondent. The respondent clearly testified at the CMA that he did not obtain 17 permission from the employer to attend medications to India. The record reveals that the respondent did not follow the required procedures to attend medical treatment in India. He is therefore not entitled to such payment. As to repatriation and subsistence allowances, the position of the law as set under section 43 (1) of the Act; it requires the employer to pay the employee transport allowance and subsistence allowance upon termination of the contract. The relevant provision of the effect that:- "43 - (1) Where an employee's contract of employment is terminated at a place other than where the employee was recruited, the employer shall other:- (a) Transport of the employee and his personal effects to the place of recruitment. (b) Pay for the transportation of the employee to the place of recruitment, or 18 (c) Pay the employee an allowance for transportation to the place of recruitment in accordance with subsection (2) and daily subsistence expenses during the period, if any, between the date of termination of the contract and the date of transporting the employee and his family to the

place of recruitment. (2) An allowance prescribed under subsection (1) (c) shall be equal to at least a bus fare to the bus station nearest to the place of recruitment. (3) For the purposes of this section, "recruit" means the solicitation of any employee for employment by the employer or the employer's agent". The above position is also reflected in section 44 (1) (f) of the 19 Act which provide that> "On termination of employment, an employer shall pay an employee any transport allowance that may be due under section 43". Also, this Court had decided on the issue in the case of Coca Cola Kwanza Ltd. Vs. Kareji Misyangi, Lab. Div. DSM, Rev. No. 238 of 2008 where it was held that:- "the transport and subsistence is to be paid where the employee is necessitated to quit job on employer's accord or at the end of the contract." On the basis of the above position of the law, it is very clear that determinant factor on payment of transport allowance or repatriation allowance and substance allowance for any employee including public servant is a place of recruitment and not place of domicile. Thus, according to the facts and evidence on record, the solicitation of the respondent for employment at the applicant's office was in Dar es Salaam as is reflected in contract of employment between them. In clause 2.0 of the said contract it is clearly stated that, I quote:- "Mr. Nyatega's

place of employment shall be Dar es Salaam". Not only that but also the contract between these parties was entered in Dar es Salaam on 10/10/2014 (Exh.P3) and not at place of domicile of the respondent's as he claims. According to paragraph 1.6 of service manual 2016, for HESLB place of domicile is defined as a place where an officer was born and/or where he has made his permanent home as declared by the staff. Having considered this definition it my view that the respondent was not recruited where he was born, that is in Shirati Rorya, Mara Region. The applicant being an employer proved that respondent was recruited in Dar es Salaam, where he was re-engaged after his second fixed term contract of four years from 29/04/2010 expired. In respondent's last contract of employment of two years with the applicant, it was started very clear that the Minister responsible for education and Vocational Training re-appointed the respondent in his position as Execution Director of the Board and the Minister directed the Board to formalize appropriate re-employment contract 21 between the Board and respondent which was done in Dar es Salaam on 10/10/2014. Therefore, form the above discussion it is undisputed fact that the respondent was recruited at Dar es Salaam as proved by the applicant. In the situation if the respondent had wanted to rebut the application evidence of this he was

supposed to bring evidence disapprove what was testified at the CMA. As correctly argued by the respondents counsel no evident was tendered by the respondent to show that he was recruited in Shirati - Rorya, Mara Region instead arbitrator believed his testimony of leave allowance. With due respect to the arbitrator, place of domicile is different from a place of recruitment. It is very irrational to believe that respondent was recruited from his home place, something which is contrary to the public service employment policy as well as its governing laws including the labour laws of the land. This is clearly reflected even in clause 16.0 of the relevant parties' contract, which provides that:- "This agreement shall be construed in its meaning and effect in accordance with the laws of the United Republic of Tanzania". Therefore the Arbitrator ought to have considered the contract of employment the parties, the revised Staff Service Manual, 2016 for HESLB, particularly paragraphs 7.1 (ii) and 7.2 (iii) and 7.4 which provides for transport allowance to staff of the board on termination of appointment in line with the provision of the laws prescribed above. In other words what contains in the parties employment contract and the relevant staff service manual are not supposed to contradict the provision of the law as to the aspect of transport allowance or repatriation upon termination. In the result I find the present application to have partly succeeded. The award of medical allowance, long services allowance, transport and subsistence allowance to the respondent are hereby revised and set aside. Other allowances to the respondent are upheld as rightly awarded by the Arbitrator. It is so ordered.

JUDGE 28/08/2020 23