CIVIL APPEAL NO 207 OF 2022 INVIOLATA RWELAMIRA ITATIRO VS TIMES RADIO FM LTD

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM fCORAM: LILA. J.A., MAIGE. J.A. And MURUKE. J.A.^ CIVIL APPEAL NO. 207 OF 2022 INVIOLATA RWELAMIRA ITATIRO............................................ APPELLANT VERSUS TIMES RADIO FM L T D .......................................................... RESPONDENT (Appeal from the judgment and decree of the High Court of Tanzania Labour Division at Dar es Salaam) (Mganga, J.) dated the 22nd day of March, 2022 in Labour Revision No. 158 of 2020 JUDGMENT OF THE COURT 17th & 25th March, 2025 MAIGE, J.A.: While in the service of the respondent as a corporate sales marketing manager, the appellant received, on 2nd January, 2017, a mobile phone message inviting her to attend, on the next day, a meeting between all the employees and the respondent's General Manager which she attended. At the end of the meeting, it was resolved as per the minutes in exhibit D2 that; for the reason of economic constraints, there would be 50% salary reduction for each of the employees effective from January, 2017. Initially, it would appear, three possible options to mitigate the constraints were tabled in the meeting for discussion, namely; closure of the respondent's business, retrenchment and salary reduction. The first option, it would appear, was in the course of discussion dropped and the discussion revolved around the two options. The appellant did not agree with the decision to have her salary reduced for the afore said reasons. She, therefore, opted for retrenchment and requested the respondent to initiate retrenchment process in accordance with the law. The respondent, it would appear, treated the said requests as resignation and, on 10th January, 2017 notified the appellant as per exhibit P5 as follows: "Nakiri kupokea barua yako ya tarehe 09.01.2017., ikiwa ni uamuzi uh’ofikia wa kisitisha mkataba wako wa kazi kutokana na kutokukubaiiana na kupunguziwa mshahara kwa asilimia 50% kama hatua ya kuinusuru kampuni katika hali ngumu ya kiuchumi Hi iweze kuendelea kujiendesha, maamuzi yatiyofikiwa katika kikao cha wafanyakazi cha tarehe 03.01.2017." Literally translated, the above statement means: 7 acknowledge receipt o f your letter dated 09.01.2017 expressing your desire to resign for the reason o f your dissatisfaction with the reduction o f your salary as a measure to rescue the respondent from economic hardship so that it can carry out its business as a going concern, the measure which resulted from a resolution at the employees' meeting held on 03.01.2017." Aggrieved, the appellant commenced a referral at the Commission for Mediation and Arbitration (the CMA) complaining that the termination of her service was substantively and procedurally unfair. Having applied the evidence, the CMA established as a point of fact that the appellant's termination was not at the instance of the respondent but rather a voluntary resignation. It, therefore, dismissed the appellant's complaint that her service was unfairly terminated and ordered that she be paid the terminal benefits proposed in exhibit P5 namely; cash in lieu of notice, severance pay for two years and leave arrears. Being unhappy with the decision, the appellant applied for revision to the High Court Labour Division (the Labour Court) faulting the CMA for holding that the termination of her service was not unfair. In determining the application, the Labour Court considered in essence, whether the appellant's termination of service was at the instance of the respondent or at her own instance. Towards that destination, the Labour Court reviewed the respondent's evidence , correctly in our view, as follows: "In resolving the issue o f retrenchment or termination, I have examined evidence o f Rehure Nyaulawa (DW1) and Josephat Mathew Riwa (DW2) and find that their evidence is dear that respondent was facing economic hardship as a result, applicant held a meeting with all employees and gave them three options namely (i) closure o f business, (ii)reduction o f salary by 50% until when the situation becomes normal and (iii) retrenchment o f employees. Both DW1 and DW2 testified that employees opted and agreed to the option o f reduction o f salary by 50%. Evidence o f these witnesses shows that after the meeting, applicant opted for retrenchment, an option that was rejected by all other employees. DW1 testified further that the appiicant handed over her duties and stopped attending at office." In the same way, the Labour Court reviewed the appellant's evidence as follows: "On the other hand, Inviolata Rweiamila Itatiro (PW1), the applicant, stated in her evidence that on J dJanuary 2017 all employees held a meeting and were informed that the company is in economic crisis. She testified that she did not agree with 50% salary reduction as a result she opted for retrenchment She stated further that, retrenchment is the process and that she expected to be notified, and or, consulted to negotiate among other things, retrenchment package, but to her surprise, she was served with termination letter." After having assessed the evidence in totality, the Labour Court Judge held that for not being initiated by the respondent as the law requires, the termination of the appellant's service was not based on operational requirements. To the contrary, the Labour Court opined , it was at the appellant's own initiation and what the respondent did was to accept the same. Having said that, the Labour Court dismissed the application for revision. As that was not enough, it also quashed and set aside the arbitral award. Once again aggrieved, the appellant has preferred a second appeal to the Court on the following grounds: 1. The Labour Court Judge erred in iaw by holding that the appellant's termination was fair as she was the one who initiated her own termination, 2. The Labour Court Judge erred in law by holding that for retrenchment to occur, it must be initiated by the employer white as a matter o f fact, it was the Respondent at the matter at hand who initiated retrenchment as an option. 3. The Labour Court Judge erred in iaw for revising; quashing and setting aside the CMA Award even after he had found in favour o f the respondent At the hearing of the appeal, Mr. Antony Arbogast Mseke, learned advocate, represented the appellant while his learned friend advocate Antipas Seraphin Lakam, appeared for the respondent. Aside from filing a written submission in terms of rule 106 of the Tanzania Court of Appeal Rules, 2009, Mr. Mseke made a brief oral submission in clarification thereof. For the reasons known to himself, the respondent did not timely file any written submission. At the hearing, however, Mr. Lakam submitted orally in opposition to the appeal. In determining the appeal, we find it desirable to start with the last ground which doubts the approach taken by the Labour Court Judge in revising, quashing and setting aside the arbitral award after he had dismissed the application for revision. On this, Mr. Mseke submitted that as what was before the Labour Court was the correctness or otherwise of the decision of the CMA that the appellant was unfairly dismissed, having found the application without merit and dismissed it, it was legally improper for it to quash and set aside the arbitral award in relation to the reliefs which were not in dispute. In refutation, Mr. Lakam submitted that the Labour Court was correct to decide what it did because under section 42 of the ELRA an employee whose service is determined by resignation does not deserve severance allowance. Neither payment of cash in lieu of notice. Terminal benefits, he further submitted, do not arise where the termination is at the employee's instance. In her contention, therefore, being a revisional court, the Labour Court was entitled to address the anomaly. We have closely followed the counsel's debate on the issue and, we are in agreement with Mr. Mseke that because the grant of the terminal benefits was based on what was contained in the termination letter in exhibit D2 and, for the reason that such a decision was not challenged in the revision, it was not in order for the Labour Court to raise and determine the issue in its own motion without affording the parties a right to be heard. For those reasons, therefore, we find this ground of appeal with merit and it is allowed. We now turn to the first ground of appeal which raises two issues namely; whether the termination of the appellant's service was at her own instance or at the instance of the respondent and whether it was fair. Technically, the issue involved here is whether the appellant's termination amounted to dismissal or resignation. Whereas dismissal is a termination of service at the instance of the employer, resignation is a termination of service at the instance of the employee. From the record and the rival submissions, we note that parties are not in dispute that the termination of the appellant's service, if any, was not actual. In this respect, Mr. Mseke submitted that from what transpired in the meeting between the employees and the respondents management, the appellant had either to remain in the service with a deducted salary or being retrenched. He submitted, therefore that, as she opted for retrenchment, it was for the respondent to initiate retrenchment process rather than to treat the invitation to initiate retrenchment process as an act of resignation. Much as he agreed with the opinion of the Labour Court Judge that, for retrenchment to occur, it must be initiated by the employer; it was Mr. Mseke's contention that since it was the respondent who came with the two options for the employees to choose, it was the author of the appellant's retrenchment. In treating the appellant's request for the respondent to initiate the process as voluntary resignation and terminating her service therefor without adhering to the conditions under section 38 (1) and (2) of the ELRA, he submitted, the appellant's service was unfairly terminated and it should have been held so. In rebuttal, Mr. Lakam submitted that, in ascertaining whether the employee intends to resign, the test should be the words and conduct of the employee. In this case, he submitted, the words in the emails in exhibit D3 clearly and unambiguously portray that the appellant intended to resign which, in his view, was correctly accepted by the respondent. The counsel understood it as a principle of law that; where the employee volunteers to be retrenched, the conditions under section 38(1) of the ELRA becomes inapplicable. To him, for such conditions to be followed, the retrenchment must have been initiated by the employer. Mr. Lakam does not agree with Mr. Mseke that the appellant was retrenched but takes it that, she voluntarily resigned. Besides, Mr. Lakam does not agree with Mr. Mseke that the meeting held on 3rd March, 2017 offered the employees choice whether to remain in service at reduced salary or to be retrenched. In his contention, the resolution of the meeting was to maintain all the employees at reduced salaries and avert the intended retrenchment. From the evidence on the record, it would appear apparent to us that, there was no evidence adduced to establish actual dismissal of the appellant. The appellant's email messages in exhibit D3 do not, in our reading, contain any express resignation on the part of the appellant but were mere requests to the respondent to perform its alleged duty to initiate formal retrenchment process as against the appellant in pursuit to what was decided in the meeting. In the same way, the letter in exhibit D2 does not, on its face, constitutes an actual dismissal of the appellant from service but an acceptance of what the respondent treated as the appellant's proposal to be terminated. It is seemingly on that background that, the Labour Court came to a conclusion that as no notice of retrenchment was issued by the respondent, it could not be said that the appellant was actually retrenched so as to be entitled a claim for unfair dismissal. To move forward, we think, it is necessary to inquire into the correctness or otherwise of that proposition. As we understand him, the Labour Court Judge, in the above proposition was talking of actual dismissal. In law, however, dismissal of an employee needs not necessarily be actual. It may be constructive where for the reason of repudiatory breach of contract or creation of intolerable working conditions by the employer, the employee is forced to resign. In that regard, section 36(a)(ii) of the ELRA defines termination of employment for the purpose of unfair dismissal as to include "5 termination by an employee because the employer made continued employment intolerable/ ' In further clarification, rule 7(3) of the Employment and Labour Relations (Code of Good Practice) G.N. No. 42 (the Code of Good Practice) puts it that where the employee resigns as a result of intolerable working condition created by the employer, the resignation "shall be legally regarded as termination by the employer" In this case, the resignation of the appellant from her service emanated from the decision by the respondent to, for the alleged economic constraints, reduce her salary by 50%. In law, that would be a fair reason for termination based on operational requirement in terms of section 37(2) (b) (ii) of the ELRA which, according to rule 23(2) (a) of the Code of Good Practice, includes economic needs that relate to the financial management of the employer. As per section 38 (1) of the ELRA read together with rule 23(6) of the Code of Good Practice, once such a situation is contemplated, the employer is obliged to , as soon as possible, give notice of intention to retrench, disclose all relevant information pertaining thereto and consult the employees through either a recognized trade union in terms of section 67; or any registered trade union if no such recognized trade union exists at the workplace; or in their individual capacities if neither of the trade unions exist at the workplace. As per rule 23(4) of the Code of Good Practice, the purpose behind consultation is to, among others, reach an agreement on the reasons for the intended retrenchment and on any measures to avert or minimize the intended retrenchments. Therefore, in Haider Mwinyinvua & 99 Others v. Deposit Insurance Board (Liquidator of FBME Bank Ltd) and Another (Civil Appeal No. 250 of 2018) [2022] TZCA 99 (7 March 2022, TANZUI), we said: "In our view, it is dear that subsection (1) (a), (b) and (c) above creates three conditions for retrenchment: one, that it imposes on the employer the onus to give notice o f any intention to retrench as soon as it is contemplated. Secondly, it requires the employer to disclose all relevant information on the intended retrenchment for the purpose o f proper consultation. Thirdly, it enjoins the employer to consult prior retrenchment or redundancy on five matters (see subsection (1) ( c) (i) to (v) above) two o f which are relevant for our present purposes. These are the requirements that the consultation process should address any possible measures that can avert or minimize the intended retrenchment and the method o f selection o f the employees to be retrenched (see subsection (1) (c) (ii) and (Hi) above)." It follows, therefore that, mere contemplation of termination of employment on operational requirement does not necessarily mean that the employees will be retrenched at the end of the process. For, through various measures taken as a result of consultation, retrenchments may be avoided or minimized. Besides, in some cases, the employer may fail to justify existence of operational requirement. Thus, as we held in Sharaf Shipping Agency (T) Ltd v. Bacilia Constantine and Others (Civil Appeal No. 56 of 2019) [2022] TZCA 291(17 May 2022, TANZLII) 'retrenchment should be taken as a means o f last resort'. This is because, the law relating to retrenchment is based on the presupposition that employees have a right not to have their contracts of service prematurely terminated without legal justifications. It doesn't matter, in our view, if the premature termination resulting therefrom is actual or constructive. In proper apprehension of the principle, the following persuasive statement of the High Court of Tanzania (Labour Division) as per Rweyemamu, J in Bakari Athuman Mtandika v. Superdoll Trailer Ltd, Lab. Div., DSM, Revision No. 171 of 2013, Labour Court Digest 2014, Part 11, Para. 90 may be pertinent: "What I have gathered from existing jurisprudence, particularly those emanating from opinions o f the ILO Committee o f Experts on Application o f Convention 158 and Recommendation 166 (CEACR); the policy objective o f the law in regulating retrenchment or termination for operational requirement ( which is a no fault termination), starts from the premise that employees have a right not to have their contracts o f employment prematurely terminated unfairly or unjustifiably. Interpreting Article 4,13 and 14 o f the Convention 158, (the Committee) notes that the principle outlined in Article 4 o f the Convention " removes the possibility for the employer to unilaterally end an employment o f indetermined duration by means o f a period o f notice or compensation in lieu thereof. " See CEACR Genera! Survey (GS) 1995 at para. 76. The role o f the Court is to ensure that operational reasons are not used by the employer as pretext to terminate an employee unfairly at the employer's will: thus 'circumventing the employee's right to security o f tenure guaranteed under the parties contract o f employment'. Although Convention 158 has not been ratified by Tanzania; the ELRA (under) Section 37(1), (2) uses a language which incorporates contents o f Article 4,13 and 14 o f Convention 158, as such, Committee opinions on application o f the said Articles, are o f high persuasive value to this Court." [Emphasis is ours)" In our view, what transpired in the meeting as per exhibit D2 as substantiated by the oral testimony of PW1 and DW2 as correctly summarized by the Labour Court, suggests that the respondent had, before convening the meeting, contemplated termination of service on operational requirements. This is evident from the three options tabled for discussions which on the face of them were proposed measures to avert possible retrenchments and mitigate adverse impacts therefrom. Therefore, before deducting the employees' salary as a measure to address the alleged economic constraints, the respondent was expected to consult them in the manner stipulated under section 38 (1) (c) and (d) of the ELRA read together with rule 23(4) of the Code of Good Practice. It is through compliance with those conditions that, the respondent would establish existence of operational requirement and thereby justifying taking measures to mitigate it by, among others, reducing the employees' salaries. As the said mandatory conditions were not followed despite the respondent's contemplation of the intended retrenchment, the reduction of the appellant's salary was tantamount to use the operational reasons as pretext to justify repudiatory breach of the contract of service. Therefore, Mr. Mseke is quite right that, when the appellant refused to remain in service under a half pay, the respondent was obliged to initiate formal retrenchment process that would render her termination of service fair. As that was not done, in effect, the appellant's resignation was not voluntary. She was compelled so to do by the act of the respondent to reduce her salary under the pretext of operational reasons. In our opinion, therefore, the termination of the appellant's service was at the instance of the respondent and was unfair for not adhering to the mandatory conditions under section 38 (1) of the ELRA. In conclusion, therefore, the appeal has merit and it is hereby allowed. As a result, the decision of the Labour Court is set aside and replaced with the decrees that the appellant's service was unfairly terminated and, in terms of section 41 (1) (c) of the ELRA she is hereby awarded twelve moths salaries as compensation for unfair termination of service in addition to the terminal benefits in the termination letter (exhibit D2). DATED at DAR ES SALAAM this 21st day of March, 2025. S. A. LILA JUSTICE OF APPEAL I. 1 MAIGE JUSTICE OF APPEAL Z. G. MURUKE JUSTICE OF APPEAL Judgment delivered this 25th day of March, 2025 in the presence of Mr, Hassan Mwemba, learned counsel for the Appellant and aiso holding brifef for Mr. Richard Magawigwa, learned counsel for the Respondent, is hereby certified as a true copy of the original.