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THE UNITED REPUBLIC OF TANZANIA JUDICIARY IN THE HIGH COURT OF TANZANIA (LABOUR DIVISION) MBEYA SUB – REGISTRY AT MBEYA LABOUR REVISION NO 25918 OF 2023 (Originating from award by Hon. Joshua Mwaisengela in CMA/MBY/Mby/38/2021 Commission for Mediation and Arbitration (CMA) Mbeya at Mbeya) HJF MEDICAL RESEARCH INTERNATIONAL INC…….APPLICANT VERSUS FELISTER JOHN LUHEMEJA…………….……………... RESPONDENT JUDGMENT Date: 3 June 2024 & 30 August 2024 SINDA, J.: This judgment is for the application for revision filed in this court by the applicant against the award issued by the Commission for Mediation and Arbitration (the CMA) in Labor Dispute No CMA/MBY/Mby/38/2021 issued by the Hon. Arbitrator Joshua Mwaisengela on 10 October 2023. The application was supported by an affidavit sworn by Stanley Manjoli and 1 Juvenalis J. Ngowi and opposed by the counter affidavit sworn by Felister John Luhemeja. The background of the matter is that the respondent was employed by the applicant on a fixed term employment contract but was renewed several times. The last contract was a fixed term contract of one year which was executed in 2018 and came to an end on 22 September 2019. At the end of the employment contract, the applicant issued the respondent with a notice that her employment contract will not be renewed. The respondent thought that there was a reasonable expectation for her employment contract to be renewed. She then filed a labor complaint at the CMA against the applicant alleging non-renewal of her fixed term employment contract and breach of contract while there was reasonable expectation to renewal her employment contract. She claimed for TZS 513,605,006.52/=. At the end of the hearing, the CMA found that the respondent proved her allegation that there was a reasonable expectation for her employment contract to be renewed. The applicant was ordered to pay the respondent a total amount of TZS 255,811,316.46/=. 2 The applicant dissatisfied with the award issued by the CMA and filed the present application praying this court to revise and set aside the award of the Hon. Arbitrator. The applicant, being aggrieved with the decision of the CMA, made this application for revision on the following grounds: a) Whether there was sufficient evidence to establish that the respondent had a reasonable expectation for the renewal of her fixed term employment contract. b) Whether the Arbitrator erred in law and fact in considering matters that were irrelevant and hence reached a wrongfully conclusion. c) Whether the award and reliefs granted by the arbitrator are justified in law. At the hearing of the application, the applicant was represented by Mr. Juvenalis Ngowi, learned counsel while the respondent was represented by Mr. Isaya Z. Mwanry, learned counsel. The application was argued by way of written submission. Submitting on the first issue, Mr. Ngowi submitted that through the hearing at the CMA, there was no dispute that the respondent was employed under a fixed term contract of one year that commenced on 23 September 2018 and expired on 22 September 2019. This was proved by 3 the employment contract (Exhibit D1). He submitted further that since the contract was a fixed term contract, the termination was automatically. He referred to rule 4 (2) of the Employment and Labor Relation (Code of Good Practice) G.N No. 42 of 2007 (the Code of Good Practice) and the case of National Oil (T) Limited vs. Jaffer Dotto Msensem and 3 Others, Revision Application No. 558 of 2016 (unreported). He further submitted that it is an established principle that an employee who claims to have reasonable expectation for renewal of employment contract has legally duty to prove his allegation. He referred to the case of Ibrahim Mgunda and 3 Others vs. African Muslim Agency, Civil Appeal No. 476 of 2020, CAT at Kigoma. Mr. Ngowi contended that the arbitrator wrongly interpreted Exhibit D1 that the respondent contract although was for one year, it was to come to an end when the Water Reed Southern Highland HIV program in Mbeya Tanzania ends. He stated that the said paragraph meant that in the event that the water Reed Southern Highland HIV program is terminated at the earliest, the employment could also be terminated. He stated further that the Hon. Arbitrator on the information forwarded from one Joseph Chintowa via emails as the basis of expectation of renewal that, they were going to be there for another 5 years as the 4 applicant was awarded a new Cooperative Agreement (CA). He found that was misconception. The said email was received as exhibit PW6. He stated that reviewing the said email was forwarded way back in 22 and 23 May 2018 before the respondent issued with employment contract on 22 and 23 September of 2018. So, it was illogical to rely on that email. Also, the words in the email are vague and ambiguous and cannot relate to future contracts. He added that the email did not make reference to the respondent contract that it will be renewable. Also, the allegation that the applicant won the CA was not proved. Mr. Ngowi further submitted that another reason relied by the Hon. Arbitrator is an information shared via Email by one Erick Black with information of renewing employment contract of the HR which was tendered as exhibit PE7. The email does not state that it amended the respondent employment contract. It was just communication to renew the employment contract within HR department. It was subject to approval. Since, the respondent employment contract was not renewed, the respondent cannot claim that the email created reasonable expectation of renewal. He submitted that respondent is bound by employment contract not internal email communication that did not amend the employment contract. He referred to the case of Joseph E Mbilizi vs. Kobwa 5 Mohamed Lyeselo Msukuma and 2 Others Civil Appeal NO 227 of 2019 CAT at Tabora page 12 to 13. Mr. Ngowi contended that the other reason relied upon by the Hon. Arbitrator is the allegation of previous renewal of the respondent’s employment contract that created reasonable expectation for the renewal employment contract. He submitted that the previous renewal of employment contract by itself does not create reasonable expectation to renewal. He referred the case of National Oil Tanzania (T) limited and Ibrahim s/o Mgunda and 3 Others (supra). Mr. Ngowi argued that in this case as proved by exhibit D1, the respondent employment contract was a fixed term contract of one year only and did not provide for renewal upon expiration of the contract. It is a position of law that a notice of non-renewal extinguishes any expectation for renewal of employment contract. He referred to the case of Paul James Lutome & 3 Others vs. Bollore Transport & Logistics Tanzania Ltd, Revision No. 347 of 2019, (HC labour division) at Dar es salaam. He averred that the disciplinary hearing recommendation cannot change the facts that the respondent contract was a fixed term contract and came to an end after expiration of fixed period. 6 On the second issue of whether the Hon. Arbitrator erred in law and fact in considering matters that were irrelevant hence reached wrongfully conclusion. Mr. Ngowi submitted that the Hon. Arbitrator focused on addressing the issue of disciplinary hearing that were conducted against the respondent and that the appellant failed to prove that he had valid reason and followed a fair procedure to terminate the respondent. He submitted that it was irrelevant as the dispute before the Hon. Arbitrator was about non-renewal of respondent employment contract. He argued that it is a position of law that where a fixed term of contract expires, the employer is not required to state the reasons of non-renewal or follow the procedures for termination of employment contract. He referred to the case of Rosamistika Siwema (Adminitratrix of the Estate of Joseph Mandango vs. Add International Tanzania, Revision No. 498 of 209 page 11. And Board of Trustees of the Medical Stores Department vs. Robert Njau, Revision No. 621 of 2019 (HC Labor Division at Dar es salaam) On the issue of whether the award and relief granted by the arbitrator are justified in law. Mr. Ngowi submitted that it was not disputed that the respondent was under one-year fixed term contract that expired without any renewal. He added that further there was no any evidence to prove 7 that her employment contract or applicant conduct created a reasonable expectation of renewal of her fixed term contract. He submitted that the respondent was not entitled to any payment or compensation as awarded by the Hon. Arbitrator. In reply to the submission, regarding the first issue he submitted that the records reveal that there was reasonable expectation to renewal the respondent employment contract. He stated that the criterial that can be observed to determine reasonable expectation to renew of employment contract including an approach involving evaluation of all the surrounding circumstances, significance or otherwise of contractual stipulation, agreements, undertaking by the employment, or practice or custom to renewal or re-employment, the availability of post, the purpose of or reason for concluding the fixed term contract, inconsistent conduct, failure to give reasonable notice and nature of the employer business. He referred to the case of AsanteRabi Mkonyi vs. Tanesco (2022) CAT CLR which referred the case of SA in Dierks vs. University of South Africa (1999) 20 ILJ 1227 and the case of Teveal M. Ngalami vs. Kampuni ya Simu (TTCL) (2022) CAT LRT 690. He added that the CAT also insisted that reasonable expectation should be looked in objective basis by taking consideration of all surrounding 8 factor. He referred to the case of Medecins Sans Frontiers (MSF) Belgium vs Vengainhopi and Eleven Others, Civil Appeal No. SC 278/2016 cited in the case of Mgunga & 3 Others vs. African Muslim Agency, Civil Appeal No. 476 of 2020, CAT at Kigoma page 15 He submitted that there was reasonable expectation to renewal because of previous renewals. He further submitted that the approach involving the evaluation of all the surrounding circumstances that termination of the respondent employment was due to the comment on disciplinary hearing proceedings and allegation furthered by the applicant. He submitted that exhibit D4 suffice to conclude that the surrounding circumstances for failure to renewal respondent employment was the outcome of disciplinary hearing for the offence of insubordination, gross negligence and gloss dishonest but was not proved. So, there was no valid reason to terminate respondent employment. He further submitted that if we assume the reason was established to the required standard still the respondent has no previous disciplinary record and the allegation was weak to justify termination. He referred to rule 12 (2) and (4) (b) of the Code of Good Practice to cement his argument. Also, Mr. Mwanri submitted that the procedure of her termination was adhered as required by laws as the applicant failed to serve and tender 9 investigation report to the complainant. He referred to the case of Kibobery Limited vs. John Vander Voort, Civil Appeal No. 248 of 2021, CAT at Moshi at page 9. Also, he stated that respondent was denied to put forward her mitigation factor contrary to requirement provided under rule 13 (7) of the Rules and the recommendation was unlawful because the committee was supposed to recommend on whether the contract be terminated or not but not to recommend her contract not be renewed. He referred the case of Tanzania International Container Terminal Service Ltd vs. Shababi kagere, Misc. Application no. 188 of 2013 cited the principle from the case of NBC Co Ltd Mwanza vs. Juata B Kyaluzi Revision no. 79 of 2009. Mr. Mwanri submitted that there was an employer undertaking or practice or custom in regard to renewal or re-employment. He submitted that the offer letter of employment (PW1) which was the first document issued by the applicant to the respondent, contains a clause that there shall be renewal or extension of contract depending on the availability of the project which raised the legitimate expectation to the respondent on renewal. 10 Mr. Mwanri further argued that the email of Amina Ramadhani (PW7) requiring renewal of employment contract of the respondent. This act created reasonable expectation to the respondent. Further, he stated an email from Dr. Chitowal (acting country Director by then) assuring respondent and others are there to stay for next five years also created reasonable expectation of renewal. On the second issue on whether Hon. Arbitrator erred in law and fact in considering the matter that were irrelevant and hence reached a wrongful conclusion. Mr. Mwanri submitted that it is unquestionable that this labour dispute emanated from suspension of the respondent, the purported investigation, institution of the charge sheet with three offences placed to the respondent into disciplinary hearing and CMA form which was amended the nature of dispute was termination and failure to renew contract while there was a reasonable expectation to renewal. He referred to section 36 (a) (iii) of the Employment and Labour Relation Act [Cap 366 R.E 2019], Rule 3 (1) (c) of Employment and Labour Relations (code of Good Practice) Rules, G.N No. 42 of 2007 and Rule 4 (4) of GN No. 2007. He insisted that failure to renew a fixed term contract that have reasonable expectation of renewal is an issue of termination of contract. 11 On issue of relief, he maintained the CMA position of relief that was correct awarded. He prayed the court to quash revision. In rejoinder, the applicant counsel submitted that the argument by the respondent counsel that the letter of offer was not revoked and that letter of offer stated how the contract will be renewed, he stated the letter of offer ceased to operate after the respondent was issued with the employment contract. On other facts the applicant reiterated his submission in chief. I have gone through the CMA records and submission made by the parties. First of all, from the records it was not disputed that respondent and the applicant entered into a fixed term contract. Secondly, it was undisputed as argued by the parties that there was a disciplinary hearing against the respondent. Although there was a disciplinary hearing against the respondent, her employment was not terminated. She served her contract of one year until the agreed period ended. The main issue is whether the respondent had reasonable expectation for renewal of the fixed term contract after expiration. It is a settled position of law that a fixed term contract terminates automatically unless the employment contract provided otherwise. This 12 was provided under Rule 4 (2) of the Code of Good Practice which states that: “Where the contract is a fixed term contract, the contract shall terminate automatically when the agreed period expires, unless the contract provides otherwise” Also, Rule 4 (4) (supra) states that “…the failure to renewal a fixed term contract in circumstance where the employee reasonably expects a renewal of contract may be considered to be an unfair termination.” In the case of Asanterabi Mkonyi vs. TANESCO (supra) the court stated that unfair termination of employment as defined under section 37 of Employment and Labour Relations Act (ELRA) does not apply to fixed term contracts unless the employee establishes existence of reasonable expectation for renewal under section 36 (a) (ii) the ELRA read together with Rule 4 (4) of the Employment and Labor Relations Going through the above authority, it is clear that an employer may be held liable for unfair termination if he fails to renew a fixed term contract where there was a reasonable expectation of renewal. The term reasonable expectation of renewal depends on the circumstances of each case. However, some common considerations have 13 been developed to help standardize the factors. In the case of Asanterabi Mkonyi (supra) and Ibrahim Mgunga & 3 Others vs. African Muslim Agency, Civil Appeal No. 476 of 2020 (unreported) adopted the following factors from South Africa in the case of Dierks vs. University of South Africa (1999) 20IU 1227: - "A number of criteria have been identified as considerations which have influenced the findings of past judgments of the Industrial and Labor Appeals Courts. These include an approach involving the evaluation of all the surrounding circumstances, the significance or otherwise of the contractual stipulation agreements, undertakings by the employer or practice or custom in regard to renewal or re-employment, the availability of the post, the purpose o f or reason for concluding the fixed term contract, inconsistent conduct, failure to give reasonable notice and nature of the employer's business". Where an employee challenges the fairness of termination on the grounds of reasonable expectation of renewal of a fixed term contract, in terms of rule 4 (5) of the Rules, the burden of proof that there was a reasonable expectation to renew an employment contract lies on the employee. This was also provided in case of Ibrahim Mgunga & 3 Others vs. African Muslim Agency (supra). 14 In the case at hand the question is whether or not, the Hon. Arbitrator was correct to find that the respondent established enough evidence showing that she had a reasonable expectation of renewal of her fixed- term employment contracts. The respondent during hearing stated that on 07 June 2013, she was given a letter of offer (Exhibit PW1) which stipulated that there would be a renewal of the employment contract depending on the availability of funds from CA. On 15 June 2013, she was given the first employment contract. It is my opinion that the said letter offer ceased to operate at the time the respondent was given her first employment contract on 15 June 2013. Also, the respondent submitted that her contract of employment was renewed several times so that gave her assurance that her contract of employment will be renewed. It is true that previous renewal of employment contract is among one of the factors for reasonable expectation to renew employment contract. However, in the case of National Oil Tanzania (T) Limited vs Jaffery Dotto Msensem and 3 Others (Supra) the court held that: “I must say the question of previous renewal of employment contract is not an absolute factor for any employee to create a reasonable 15 expectation, reasonable expectation is only created where the contract of employment explicit elaborate the intention of the employer to renewal a fixed term of contract when it come to an end” Also, the respondent relied on email from the Country Director Dr. Joseph Chintowa (Exhibit PW6), that their CA was successfully and email from Amina Ramadhani (PW7) on renewal of contracts. Those emails created a legitimate expectation that her contract would be renewed but the same was followed by a notice from the applicant that the respondent employment will not be renewed (Exhibit D4). In the case of Ibrahim s/o Mgunga and 3 others vs African Muslim Agency, Civil Appeal No. 476 of 2020 (CAT at Kigoma) the court stated that “…. did the appellants in the instant case lead evidence establishing the basis of existence of a reasonable expectation of renewal of their contracts and therefore the conclusion that, by issuing them with a notice of non- renewal, the respondent had unfairly terminated their contracts? We thought it necessary to pose the foregoing rhetorical question because of putting emphasis on the position which we have already taken. Having demonstrated that the appellants had subjectively created their own expectations that their fixed-term contracts were going to be renewed, we are with respect in agreement with Mr. Kagashe in his submissions that this appeal has no merit” 16 In the line of the above case, I find that the respondent expectation that her employment will be renewed was not reasonable because the last conduct of the applicant proved that he had no intention to renewal the respondent contract by issuing her with a notice for non-renewal her employment contract. The respondent has failed to lead evidence that there was a reasonable expectation to renewal her employment contract. In that regard, I quash and set aside the decision of the Hon. Arbitrator. I find that the respondent’s employment was for a fixed term which came to an end automatically after the expiry of 12 months. Right to appeal explained DATED at MBEYA on this 30 day of August 2024. A. A. SINDA JUDGE 17