Letshego Rling

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA IN THE SUB-REGISTRY OF MWANZA AT MWANZA LABOUR REVISION NO. 489 OF 2024 (Arising from Commission for Mediation and Arbitration for Mwanza in CMA/MZA/NYAM/151/2022/67/2022) LETSHEGO FAIDIKA (T) LTD (FORMALY LETSHEGO BANK (T) LTD) ………………………………….…... APPLICANT VERSUS FRANK LUBEYA …………………………………………………………...…. RESPONDENT RULING 4th October & 15 th November, 2024 CHUMA, J. The applicant in this matter is seeking the indulgence of this court to revise the decision of the Commission for Mediation and Arbitration for Mwanza (hereinafter CMA) which ordered restitution of the respondent’s employment. Briefly counted from the record, the respondent has been the employee of the applicant since 16.12.2014. He started in the position of Bank Teller and 1.12.2016 his position was changed to Relationship Officer until on 16.6.2022 when his employment was terminated by the applicant for violation of section 4.26 of the applicant’s Business Lending Policy of 2020 and 2021 (hereinafter the BLP) together with sections 14:20 Credit Policy of 2020 and 14:33 of the Credit Policy, 2021. The termination did not delight the 1 respondent, he filed complaint No. CMA/MZA/NYAM/151/2022/67/2022 before the CMA. The CMA’s award favored the respondent that, he was unfairly terminated based on reason and procedure. The applicant preferred this application against the award of the CMA. The application is supported by the affidavit of Hezron Maliyasa, the principal officer of the applicant whereas it is contested by the counter affidavit of Frank Lubeya, the respondent herein. According to paragraph 12 of the affidavit, the application is based on five legal issues; 1. That Arbitrator erred in law and fact by holding that the respondent was in poor performance while he committed gross misconduct. 2. That Arbitrator misdirected himself by holding that the Applicant did not abide by procedures for termination of employment. 3. That Arbitrator erred in law by relying upon the People Risk Policy (Exh P10) while the same is not in the list of documents that are used by the applicant in her operations. 4. That Arbitrator erred in law and fact by relying upon documentary evidence that was not in the custody of the applicant. 5. That Arbitrator erred in law and facts for failure to evaluate evidence on the record hence to an erroneous decision. The application was disposed of by way of written submissions. Messrs. Innocent Michael and Paul Dotto Bija both learned advocates timely filed the submissions for the applicant and respondent respectively. 2 The counsel for the applicant abandoned two legal points and maintained the 1st, 2nd and 4th points. He submitted on the first point that the respondent’s termination was caused by gross misconduct and not poor performance as was found and observed by the Trial Arbitrator. He was terminated for breach of applicant business policies which are; one, Section 4.26 of the Business Lending Policy of 2020 and 2021 requiring written evidence on monitoring and follow-up activities that should be done within a month after disbursement and ongoing. Thus, should that reason be done monthly? Two, Section 14.20 of the Credit Policy of 2020 reading together with Section 14.33 of the Credit Policy of 2021, which requires the steps in arrears management to be preceded by the Past Due Notice issued to customers who are a subject of the arrears in that given context to remind the customers in arrears to repay the loan and most importantly these Past Due Notice and Demand Letter are pre-stages of loan recovery procedures in conformity with the Law of Mortgage. The, issuing of Past Due notices and regular visits to customers after loan disbursement are core duties of a Relation Officer featured in the Relation Officer’s Job Description (ExD.7). He submitted further that, the trial arbitrator on page 24 of the Award erred by putting reliance on Exh P10 (People Risk Policy) which is unknown to 3 the applicant and is not in the list of policies used by the Applicant’s bank. That, relying on this policy the arbitrator came to the wrong conclusion that the respondent was in a poor performance and not gross misconduct. That, the list of policies that are used by the Applicant was tendered and admitted as EX-D1. That, during cross-examination the respondent failed to explain where he had come across the documents which are unknown to the respondent. On the second point, it was submitted that the applicant abided with all procedures put in place by the Employment and Labour Relations Act No. 6 of 2004 (hereinafter the Act) and the Employment and Labour Relations (Code of Good Practice) Rules, GN No. 42, 2007 (the code). The applicant after having been informed about the misconduct of the respondent, the respondent was suspended for some time to let an investigation be conducted. The investigation was conducted by DW2. Who consulted the respondent? That, the investigation report was shared with the respondent. According to the investigation report (Ex- DW 3), the respondent had not performed post-disbursement visits regularly, and he did not issue past-due notes and/or Demand Notices to customers in arrears. After investigation, the respondent was charged with breaching the two above- 4 mentioned employment policies of the applicant. The respondent was given a notice to show, and afterward, he was served with a charge sheet and notification to attend the hearing. That, during the hearing he was informed and afforded all rights. That, the hearing committee found him guilty of the offences which he was charged with. That, the right to appeal was explained to him. Mr. Michael went further submitting that, the trial arbitrator erred in concluding that, the investigation was maliciously conducted and the respondent was not involved in the process. On the fourth point, it was submitted that, the during investigation the investigator did not find a Past Due Notice and Demand Notice issued to some customers by the respondent. After investigation, the respondent was given a report and later a notification to attend a Disciplinary Hearing. He was informed to bring evidence and witness. However, during the Hearing, he could not tender any convincing evidence, a fact which implied that he did not have any. That, during a hearing before the committee, the Respondent Tender Exhibits P2 and P13 purported to be Follow-up forms and Past Due Notice of the Applicant’s Bank. That, during cross-examination the respondent failed to give a clear explanation on how he had obtained them. Exhibits P2 and P13 are unknown to the applicant. That, bank documents are not public 5 documents, and their access is limited. If these documents were in existence, the respondent could have tendered them during an investigation and later in a Disciplinary hearing. He prayed for the application to be allowed. In response, it was submitted that the alleged Section 4.26 of the Business Lending policy of 2020-2021 was not breached by the Respondent. That, the provision does not concern monitoring as submitted by the Applicant, rather it is the provision dealing with decision making. Section 4.26.3, 4.26.3, 4.26.5, and 4.26.8 of the Business Lending policy requires the Respondent as Relationship Officer to collect written evidence by visiting client business premises depending on the report of credit analyst or as decided by the credit committee and or depending on the risk classification and the monitoring requirement for each class. That, the Respondent submitted all the required reports to the Applicant as testified on page 61 That, there were no claims from the Credit Committee and Credit Analyst alleging the Respondent's failure to conduct follow-up under the Applicant’s Policy. That, DW3 one Neema Balozi tendered Credit Policy of 2021 (Exhibits D6) on Page 41 and testified that, the Respondent Violated Section 4.33 of the Credit Policy of 2021 and not Section 14.33 as submitted for the Applicant. That, the Applicant’s Affidavit pointed out Credit Policy No. 14.26 of 2021 6 something which does not relate with the Applicant’s submission who submitted by pointing out Section 14.20 of the Credit Policy of 2020. Therefore, the submissions and the affidavit differ in evidence on record. That, the Respondent violated duties in the Job Description something which roots and fits to be allegations of performance and not misconduct, at the same time the Applicant has failed to put a clear allegation which is termed to be misconduct committed by the Respondent in his submission. That, the Job description was tendered and admitted by DW3 as Exhibits D8 not D7 as submitted for the applicant. Exhibits P10 tendered by the applicant is the Applicant’s Policy which came into operation in December, 2021 up to December, 2022. It contains the logo and signature of the Chief Executive Officer. That, the Applicant cannot avoid or prohibit the Respondent from using this document as exhibit. That, DW2 one Bhoke Richard Mantango on Page 30 of CMA Proceeding testified that the Respondent was investigated for performance of the loan that is to say, the Respondent was investigated on his performance and not misconduct as submitted by the Applicant. Further, DW3 on Page 50 Line of CMA Proceeding testified that the Respondent was investigated for poor performance and not gross misconduct. 7 Regarding the second legal issue, it was replied that the Applicant did not comply or abide by the procedure for termination provided under the Act and the Code. Rule 27(2) of the code requires an employee suspended to be given a written letter of the suspension setting out the reason for the suspension and terms of the suspension. The same requirement is provided by Section 4.37 of the Code of Conduct (COC) Policy (Exhibit P6). That, as testified by DW3, on page 45 of CMA Proceeding, the suspension letter of the respondent had no reasons. Also, DW2 testified on page 29 that, she only took all the documents which were under the custody of the Respondent without being handed over by the Respondent. On the last point he submitted that Exhibit P2 was a letter dated 24th May, 2021 concerning retrenchment, it was not a Follow-up form as submitted. Exhibit P13 (Past Due Notice) was the Applicant’s document which had the Logo, stamp, signature of the branch manager, and the custodian (respondent) signature. Exhibit P13 was not tendered during the investigation because the Respondent was not involved. That, if exhibits P2 and P13 were fabricated, the Applicant could have commenced criminal litigation against the Respondent. he prayed for the application to be dismissed. 8 In rejoinder, Mr. Michael reiterated his submission in chief with the addition that, on pages 41 and 42 of typed proceedings, Credit Policy of 2020 and 2021 were admitted as Exhibit D6, and the witness who tendered the same, clarified on typing errors in respect of the said sections to the effect that, there was a typing error instead of 4.33 it was written 14.33. That suspension letter contains reasons for suspension which is to allow the investigation to be conducted against the respondent and possibly to avoid obstruction of investigation. That, during investigation, the respondent was consulted and the report was given to him. He maintained his standing that, exhibits P10 and P13 purported to be follow-up forms and Past Due Notice of the Applicant’s Bank were fabricated to fill the gaps in his testimony. From the above contentious arguments for the parties, the issue for determination is whether this application is or not meritable. This being the second court to determine the matter in controversy, it takes a form of rehearing. I, therefore, have the mandate to re-appraise, re-assess, and re- analyse the evidence on the record. See the case of Paulina Samson Ndawavya Vs. Theresia Thomas Madaha, Civil Appeal No. 45 of 2017 (unreported). 9 On the first legal issue, the applicant faults the CMA to have decided that the applicant was on poor performance rather not committing Gross Misconduct. I will therefore reevaluate the evidence on record to see whether the respondent committed Gross Misconduct, whether it formed a basis for his termination, and whether the reason for termination was valid. According to Rule 8(1) (d) of the Code and S. 37(2) (a) and (b) of the Act, there must be a valid reason for termination of employment, the reason must be fair and shall relate to the employee’s conduct, capacity, or capability. A suspension letter served to the respondent revealed the offence alleged to have been committed being Misconduct. According to the investigation report (exhibit D2), the respondent was investigated non- performing loan due to a lack of post disbursement customer follow-ups, Past Due Notice (PDN), and Demand Letter. As per the Charge and notification to attend the Disciplinary hearing (exhibit D4), the respondent was charged with breaching the applicant’s Policies; the charge reads; “You are being charged for breaching the following policies; 1. Section 4:26 of the Business Lending Policy of 2020 and 2021 which requires written evidence of the monitoring and follow-up activities should be done within a month after disbursement and should be monthly basis. 10 2. Section 14:20 of the Credit Policy of 2020 and section 14:33 of the Credit Policy of 2021 require the steps in arrears Management-Past Due Notices (PDN) to be issued to customers in arrears. The Policy requires 1st PDN to be issued to customers in arrears on the 14th day, the 2nd PDN on the 28th day, and 3rd in 35 days. It also requires a Demand Letter (DL) to be issued after 60 days in arrears. Particulars of the Charges; 1. You did not perform post-disbursement visits regularly. 12 (70.5%) out of 17 customers were not visited within 30 days of the disbursement in their business premises and regularly. 2. That you did not keep follow-up forms in the respective client file. 6 (35.3%) out of 17 selected client follow-up forms were not kept in the client's file. 3. That you did not issue Post Due Notices and Demand Notices to the customers in Arrears. 6 (35.3% out of 17 clients in Arrears were not issued PDNs and not kept in client files...” These charges are also stated in the Hearing Form (exhibit D5). Further, according to the termination letter (exhibit D9), The respondent was terminated for the reason of having breached the above-mentioned Applicant’s policies. Therefore, without any further ado, I am of the firm conclusion that the reason for termination being Gross Misconduct as stated 11 by Mr. Michael is an afterthought. It does not feature in CMA records. The respondent was suspended for alleged Misconduct and later on, investigated, charged, heard, and terminated for the reason of breaching the applicant’s policies. The CMA award is to the effect that, the respondent was on poor performance, Again, I will re-evaluate the evidence on record to see whether the respondent performed poorly and whether he breached the applicant’s policies. Starting with post-disbursement visits and follow-ups, it was alleged and concluded that 70.5% out of 17 customers were not visited within 30 days of the disbursement in their business premises and regularly. I will scrutinize the report of all 12 customers in line with the investigation report. According to Investigation Report on page 6 tells that, Kelvin Joseph Mroni, had no post disbursement and follow-up evidence seen from July to December, 2020 and January to December, 2021; Martha P. Malyawere had no follow-up evidence seen from March to December, 2021; Geofrey Josiah Mushema, had no follow-up seen from November to December, 2020 and January to December, of unspecified year; Diplomat Secondary School, had no post disbursement follow-up from October to December, 2020 and January to December, 2021; Patrick M. Nyaswe, had no follow- 12 up evidence seen from June to December of unspecified year; Paul Ngwelle Dotto, had no follow-up for November and December, 2021; Mtana Cargo Express Services, had no follow-up for April to December of unspecified year; Frajoma Investment Company, had no follow-up for November and December, 2020 as well as January to December, 2021; Kulwa M. Maundu, had no post disbursement and follow-up evidence seen; Raymond Jumanne Kanyoni, had no post disbursement and follow-up evidence seen for September to December, 2020 and January and February of unspecified year; John Sebastian Kimario had no follow-up seen from for November to December, 2020 and January and February, 2021; and Lastly, Martha Gasper Shija had no follow-up evidence seen for June, July, August, October November and December of unspecified year. Having examined the investigation report concerning these 12 customers, I have noted several factors; one, only 4 out of 12 (Kelvin, Diplomat, Kulwa, and Raymond) had no post-disbursement follow-up evidence. Two; the years for some monthly follow-ups stated in the investigation were not specified; three, in all 12 customers there was no report of absence of follow-ups report from January to March, 2022 which were three months before the investigation, in other words, soon before investigation the respondent mad follow-up; four, three out of 12 customers 13 (Kulwa, Raymond and John) fully paid their loan they had no pending loan balance and their loan was on closed status. Five; at the time the respondent is alleged to have made no follow-up to customers, that is from 2020 to May, 2021, the applicant applause the respondent while refusing his voluntary application for retrenchment as per Exhibit P2 which partly read; “…management has not approved your application due to your skills/qualification, experience, and integrity concerning the job requirement and the overall Letshego Bank (T) Limited Business Directions…” (Emphasis Added) This comment made by the applicant toward the respondent’s performance led this court to believe the evidence of the respondent that, all follow-up records were present in the client’s file bearing in mind that. First; there was no handover of filed before the suspension of the respondent. Second; DW1 testified on page 13 of the proceedings that, the supervisor of the bank handled over the file to DW2 (investigation Officer) under his instruction whereas the latter (DW2) testified on page 29 of the proceedings that he took the files himself no one handled the files to him. Therefore, the chain of storage and handover of the client’s files under the respondent to the investigator was uncertain. Therefore, the allegations under Section 4:26 of the Business Lending Policy of 2020 and 2021, requiring follow-up and 14 record keeping were unfounded and maliciously framed against the respondent With regards to Post Due Notices and Demand Notices to the customers in Arrears. It was alleged that 6 (35.3%) out of 17 clients in Arrears were not issued PDNs and Demand Notices contrary to section 14:20 of the Credit Policy of 2020 and section 14:33 of the Credit Policy of 2021. I have read the investigation report regarding this allegation. It tells that; Sharifu Tinkasimile Saidi was not issued with 14 PDNs; Martha P. Malyawere was late given PDNs instead of October and November, they were issued in February and March; Diplomat Secondary School was not issued with 14 days and 28 days PDNs; Kulwa M. Maundu was not issued with 14, 28 and 35 days PDNs; Suzana Gervas Ball was not issued with 35 days PDN; and Martha Gasper Shija was not issued with 28 days’ notice. I have also noted several factors in this allegation; one, as I have pointed out herein above, at the time of investigation, the loan advanced to Kulwa M. Maundu had a closed status, therefore the client had no pending debt to the applicant. Raising the issue of PDNs to this client was therefore an afterthought. Two, steps of arrears Management as explained by the 15 investigation report and section 4:33 of the Landing Policy (Exhibit D6) involve other officers and it has steps as follows; i. The first PDN is issued on 14 days of arrears by the Relation Officer upon approval by the Branch Arreas Committee (BAC) ii. On 15 days of default, the copy of the First PDN is served to the Guarantor (if any) based on the decision of BAC. The responsible officers are the Relationship Officer and Senior Relationship Office (SRO) or Branch Manager (BM) in visit and BAC; iii. The second PDN is issued after 24 days of default upon the decision of BAC and the responsible officers are RO SRO/BM and BAC. iv. The 3rd PDN is issued after 35 days and the 1st 7 days Demand Letter (on 42 days). The responsible officers are the RO/BAC/Head Office Arrears Committee (HOAC) and the Recovery Unit (if needed). v. The 60 days Demand Letter is issued after 60 days of default (49 days of the 1st demand letter) and the officers responsible are HOAC/Risk/recovery/Business/ Brant Manager or ROs. 16 Therefore, no PDN is issued by the Relationship Officer on his own accord there Must be an approval for the 1st PDN by BAC and other PDNs, and Demand Letters are served upon consensus of more than one officer of the applicant. Three, although the Branch Manager was one of the officials responsible for issuing PDN and Demand Letters, the recommendations rendered in the investigation report were only to take measures against the respondent. Therefore, the report was biased. Four; from records, the Branch manager (DW1) was the one who reported the respondent although he was also responsible for the task, he did not tell or prove if he had taken any measures to warn the respondent on non-issuance of the said PDN, and DL to clients; Five, several PDNs were tendered by the Respondent and admitted as Exhibit P13 which includes 35 days DPN and 7 days Demand Letter to Diplomat Secondary School. Six, allegations under section 14:20 of the Credit Policy of 2020 and section 14:33 of the Credit Policy of 2021 are non-existence because Exhibit D6 (Credit Policy) had no such provisions. It was clarified by DW3 on page 42 of the CMA proceedings that the sections were erroneously written in the Charge as 14.33 instead of 4.33 but I find this explanation to be flimsy because the sections have been repeatedly written in the charge, Investigation Report, Hearing Form (proceedings); Termination Letter and Submissions for the applicant filed in this application. The same sections were 17 stated by DW2 who was the investigation officer. In my view, the applicant was not certain as to which provision(s) form the basis of the allegations against the respondent. In the totality of all these, I am of the considered view that, the respondent neither committed gross Misconduct nor was under poor Performance. There was no valid reason for termination of employment. The termination of the respondent was therefore unfair based on reason. On the second legal point, the applicant contends that the Arbitrator misdirected himself by holding that the Applicant did not abide by procedures for termination of employment. It is cardinal law under s. 39 of the Employment and Labour Relations Act Cap 366 R.E 2019 (the Act) and Rule 9(3) of the Code that, the burden to prove regarding termination of employment lies upon the employer. It was the submission for the applicant that, the procedures were followed by the applicant. The respondent faulted the procedure adopted by the applicant on suspension and investigation. He was of the view that the suspension letter did not mention the reason for suspension and the investigation did not involve the respondent. I have carefully read the CMA records to see whether procedures were followed by the applicant. I agree 18 with the applicant that the suspension letter specified the reason for the suspension to be non-obstruction of the ongoing investigation against him. However, I am of considered view that, the investigation was tainted with fouls. Firstly; for the reasons stated above there were no valid allegations against the respondent that triggered the investigation, as I have said the Branch Manager who reported the respondent was also responsible for the process of issuing PDNs and DLs to defaulters. Secondly; it is uncertain as to where the investigator got the client’s files investigated. DW1 testified that he was given them by the Supervisor but the investigator denied them and said he took them himself; Thirdly, the investigation exercise did not fully involve the respondent. According to DW2, who was the investigator assigned the duty to inform the respondent on the said investigation on 11.4.2022 to the Branch Manager (DW1) who was the complainant? According to the respondent, he was phoned by DW3 to go to the Mwanza Branch for Zoom Call. That he was not told the reason and details for the said Zoom meeting. Fourthly, the respondent was investigated, charged, heard, and terminated based on improper provisions in section 14.20 of the Credit Policy of 2020 and section 14.33 of the Credit Policy of 2021 instead of 4:20 and 4.33. Five, the investigation started on 22.3.2022 and ended on 14.4.2022, the respondent was consulted on 11.4.2024 three days before the investigation report was 19 rendered, this entails that, the investigator consulted the respondent as a matter of formality only. Therefore, the procedure for termination was not followed either. The last point will not detain me for long. The applicant contends that Exhibits P2 (reply to the application for retrenchment) and P13 (Past Due Notices) were not the applicant’s documents they were fabricated by the respondent. In my view this contention is baseless due to the following reasons; one, it is undisputed that the respondent applied for retrenchment but the applicant refused his application. The dispute escalated to the CMA vide CMA/MZA/NYAM/299/2021. Saying that the respondent fabricated exhibit P2 is baseless. Two; the PDNS (exhibit P13) are stamped with the applicant’s common seal, and were signed not only by the respondent but also by the Credit supervisor (Msimamizi wa Mikopo) and the one who received the said Notice the applicant was supposed to prove forgery on a standard higher than on balance of probabilities. See the case of Gabriel Mathias Michael & Another Vs. Halima Feruzi & 2 Others, Civil Appeal No. 28 of 2020, City Coffee Ltd Vs. the Registered Trustee of Iloilo Coffee Group, Civil Appeal No. 94 of 2018 (both unreported). 20 Thus, said and done, the application is barren of merit. I proceed to dismiss it and maintain the award of the Commission for Mediation and Arbitration in CMA/MZA/NYAM/151/2022/67/2022. Owing to the nature of this matter, I desist from making an order for cost. It is so ordered. Right of Appeal is fully explained to the parties. DATED at MWANZA this 15th day of October, 2024. W. M. CHUMA JUDGE 21 Ruling delivered in court before Mr. Innocent Michael advocate for the applicant and Mr. Dotto Bija advocate respondent this 15th day of November, 2024. W.M. CHUMA JUDGE 22