lea associates south asia pvt ltd v burton sospeter 2023 tzhc 20073 14 august 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA IN THE DISTRICT REGISTRY OF TABORA AT TABORA LABOUR REVISION NO. 7 OF 2022 (Originating from Labour Dispute No. CMA/TAB/SKNG/102/2020/20 of the Commission for Mediation and Arbitration) LEA ASSOCIATES SOUTH ASIA PVT LTD.......................... APPLICANT VERSUS BURTON SOSPETER..................................................... RESPONDENT JUDGMENT Date of Last Order: 25/07/2023 Date of Judgment: 14/08/2023 MATUMA, J. The Applicant, a road construction consultant had a consultancy contract with Tanzania Roads Agency (TANROAD) for the road construction project at Tabora - Mpanda. In execution of her contract with TANROAD the Applicant employed the respondent as a Work Inspector (structures) on a fixed term contract of twelve (12) months. That contract was entered between the parties on 1st April, 2018 and the same dully expired. They entered into the 2nd contract of the same nature and conditions which as well expired. They entered the 3rd contract in the yea-r2020 which was to expire in 2021 but this contract was teriTnnated by the Applicant on 25/08/2020 just four months and twenty - five days after its operation. The termination notice did not give any reason but during trial at CMA the applicant disclosed two reasons as to why she decided to terminate such contract. The reasons stated in evidence upon which the issues were previously drafted were; i) That the respondent failed to discharge his duties/poor performance. ii) That the respondent was discovered to have engaged himself into a sub-constructor into the same project hence benefitting twice. At the trial Commission the respondent disputed the two allegations and complained to have been terminated unfairly. He thus asked the trial Commission to award the reliefs for unfair termination. After a full trial, the trial arbitrator found that the Applicant had not established any good cause for terminating the respondent's contract nor followed the procedures for fair termination. The trial commission thus decreed for the respondent against the applicant awarding him; i) Payment of Tshs. 11,016,000/= as the salary lost by the respondent in the remaining period of the contract which was seven months and six days. ii) Payment of Tshs. 1,530,000/= as leave pay for one year. The applicant became aggrieved of such award hence this revision on three legal issues namely; 2 (a) Whether it was proper and appropriate to award salaries for the remaining period of contract, while the applicant had discharged his obligation by paying the one month's salary as per the contract. (b) Whether it was proper and appropriate under the circumstances to order/award a one month's salary as leave allowance while the respondent had worked for four months and twenty -five days only in the contract which was executed on 1st April, 2020. (c) Whether there are instances of illegalities committed by CMA in awarding the sum of Tshs. 12, 546,000/= on the ground that there was no fair reasons and substantive procedure was not followed in termination while the applicant acted in accordance to the requirements of the employment contract which was dully signed by the applicant and the respondent. At the hearing of this application Mr. John Laswai learned advocate represented the applicant while Mr. Kanani Chombala learned advocate represented the respondent. Mr. John Laswai learned advocate arguing in the three issues supra submitted that since the respondent worked for only four months and twenty - five days which is below six months, he was not entitled to reliefs attached to unfair termination in accordance to section 35 of the Employment and Labour Relations Act. He also faulted the trial arbitrator for the ruling that fair termination procedures were not adhered to without due regard to paragraph 7 of the employment contract exhibit Pl which resery^d-the right of either party 3 to terminate the contract after issuing a one-month notice or a one-month salary in lieu of notice. He submitted that prior to the termination, the applicant on 25/08/2020 paid the respondent the salary of August, 2020 and another one-month salary. In that regard the learned advocate argued that the trial Commission intervened the contract in a breach of the principle of sanctity to contract. Mr. Kanani Chombala learned advocate when took the floor argued that the respondent in the contract was not on a probation period but on a fixed term contract which was to expire on April, 2021. In that regard he argued that section 35 of the Employment and Labour Relations Act is not applicable in the circumstances of this case. The learned advocate further argued that one of the issues drawn for determination at the trial commission was whether there were good grounds for termination and whether the procedures for termination were followed. That the applicant raised two reasons for termination which are failure to discharge duties and misconduct by subcontracting but all these were allegations which were not proved. The learned advocate sailed this court to various pages of the trial commission proceedings on the evidence of the applicant in which she admitted categorically that they had no proof to the allegations but they acted on rumors. He further submitted that the applicant's witness (DW1) admitted that they did not conduct any disciplinary hearinq^gaSfrstthe respondent which justifies the ruling that the procedure for fair termination was not followed. Mr. Chombala learned advocate further disputed that the respondent was paid the salary of August and one extra salary. He referred me to exhibit D3 in which the document prepared for payment were not proved to have been effected the stated payments into the respondents account because such documents are not even endorsed by the bank. The learned advocate further argued that the principle of sanctity to contract does not mean that a contract can be terminated without any reason. That is why the applicant in his defense evidence tried to justify the termination by giving the two reasons supra. Having heard the parties for and against this application, I should from the right beginning state that so long as the applicant testified at the trial commission that the termination of the contract was instigated by two reasons herein above named, there is no question that either party had reserved the right to terminate the contract by giving a one month salary to the other party or one month notice and could therefore terminate the contract without any reason. The facts and evidence in this case show that the contract was not terminated by the applicant in the exercise of a reserved right under paragraph 7 of the contract but the same was terminated on the grounds that the respondent had failed to discharge his duties and also it came to the knowledge of the applicant that the respondent was benefitting twice for having subcontracted in the same project^ In that regard, had it not been these two reasons, it is obvious the contract at issue would have not been terminated as it happened in the previous two contracts of 2018 and that of 2019. I therefore agree with Mr. Kanani Chombala learned advocate that the two allegations must have been proved to justify the termination and furthermore the procedures for fair termination must have been adhered to. The question therefore is whether the two allegations which became to be the grounds for termination were sufficiently proved. Starting with the allegation that the respondent failed to discharge his duties, I join hands with the honourable arbitrator and the learned advocate Mr. Chombala that this contract was not the first between the parties. At first the parties executed the contract in 2018 which was successfully executed by both parties. They renewed the contract in 2019 which was as well executed fully. Had the respondent been unable to execute his duties in the contract, reasonably he could have not been extended another one-year contract. The signing of the 3rd contract which is the subject of this case signifies that both parties were satisfactory to each other in the previous two contracts. Therefore, the applicant was duty bound to prove that the respondent failed to discharge his duties in this 3rd contract after starting its operations. DW1 Nirat Rai the applicant's high way engineer, when giving his evidence stated that the respondent failed to discharge his duties. On how the respondent failed to discharge his duties, this witness^stated that it is because they were informed that the respondent was working as a subcontractor in the same project instead^dfworking as a consultant. This is the only evidence which was given by the applicant to the allegation that the respondent had failed to discharge his duties. From this evidence I find that the applicant failed to prove that the respondent indeed failed to discharge his duties. It was expected that the applicant would have explained the duties owed to the respondent and how they were not discharged or poorly discharged. It seems that they terminated him after having been aggrieved with the information that the respondent was as well working as a subcontractor and not because he had failed to discharge his duties. I thus find that the trial commission was just in finding that this ground/reason was not established. As to whether the respondent was engaged in a sub - contract, I would start with the contract itself exhibit Pl. In this exhibit there is no any clause prohibiting the respondent from sub-contracting in the same project for a different duty. Therefore, subcontracting was not an offence in the contract unless proved that such subcontract resulted into the respondent's failure to discharge the principal contract and therefore failure to discharge the duties. What is apparent on record from the Applicant's own evidence is that the project under which the Respondent was employed was donor funded. DW1 in his evidence testified that TANROAD had informed him that such subcontract offends the donor's conditions for the fund donated to the project. Therefore, the respondent was terminated at the instigations of undisclosed TANROAD Officer. Even though, as rightly argued by Mr. Kanani Chombala learned In his evidence in chief DW1 testified that it was their client TANROAD who informed them that the respondent had a subcontract in the same project. During cross examination DW1 admitted that he did not name the person within TANROAD who informed them issues of subcontract nor that person came to give evidence to substantiate such information. He further admitted that they did not even conduct any investigation to ascertain the information but acted on suspicions. With all these it is obvious that the applicant had not proved the allegation which in fact was the main cause for the termination of the contract. Therefore, the conclusion by the trial Commission that there were no good grounds for termination of the contract cannot be faulted. As to whether procedures for fair termination was adhered to, we need not dwell much on the issue. DW1 himself admitted that he did not conduct any disciplinary hearing in the meaning that the respondent was not heard before termination. That can be seen in the evidence of DW1 both during evidence in chief and during cross - examination. In his evidence in chief he testified that having been informed by TANROAD that the respondent was working as a subcontractor they decided to terminate the contract; "We were informed that the complainant was working as a subcontractor in the same project when he supposed to work as a consultant. —. We find that information from our client TAN&0AD so we decided to terminate his employment coptr'act." From this quotation they decided to act on unverified information in total breach of the principles of natural justice on the right to be heard. During cross examination DW1 stated that they acted on the information of a TANROAD guy because they believed what he said. It was expected that such TANROAD guy would have been brought as a witness to prove such allegation but he was not brought. Since the applicant did not substantiate the reasons for termination of the contract and since the contract at hand was a fixed term contract, the honourable arbitrator was right in awarding the respondent the salaries of the remaining period in the contract and one-month salary as a leave pay. That was a direct fore-seeable and reasonable consequence to the employer's wrongful termination of a fixed term contract as it was decided in the case of Good Samaritan Versus Joseph Robert Savari Munthu, Labour Revision no. 116 of 2011 by Rweyemamu, J. With the herein above analysis, the three issues raised by the applicant in this application are without any merits. There was no sufficient evidence that the applicant had paid a one-month salary for August, 2020 and an extra one month salary in lieu of notice. As such the arbitrator erred to rely on the exhibit D3 the money transfer form which was not endorsed either by a transferring bank or the addressee bank. In that regard in addition to the salaries awardedtoThe respondent I grant him an award of one-month salarvJoTAugust, 2020 which he worked unless during execution proceedings the applicant brings evidence to the satisfaction of the court in effect that such salary was really banked into the respondent's account. Save for the alteration of the award as herein above stated this application is hereby dismissed. No orders as to costs. Right of appeal to the Court of Appeal is hereby explained. Judgment delivered in the presence of Ms. Stella Nyakyi holding brief of Mr. John Laswai learned advocate for the applicant and Mr. Kanani 10