20190920 TZHC Mbeya

4, THE UNITED REPUBLIC OF TANZANIA JUDICIARY IN THE HIGH COURT OF TANZANIA (LABOUR DIVISION) AT MBEYA CONSOLIDATED LABOUR REVISION NO. 17 OF 2017 AND NO:31 OF 2017 (Originating from the Complaint Ref. CMA/MBY/98/201 6 of the Commission for Mediation and Arbitration for Mbeya at Mbeya) MBEYA CEMENT COMPANY LIMITED..........................................APPLICANT VERSUS LUCIA JOHN NKWABI ............................................................ RESPONDENT JUDGEMENT Date of Last Order: 18/07/2019 Date of Judgment: 20/09/2019 MONGELLA, J. In this application, the Applicant is seeking for this Court to call for, examine and revise the proceedings, award and order of the Commission for Mediation and Arbitration for Mbeya in Labour Dispute No. CMA/MBY/98/201 6. The brief facts of the matter are as follows: The Respondent was employed by the Applicant on permanent and pensionable terms as business partner and human resources manager on 15fh December 2014. Her place of recruitment was Mugumu-Serengeti in Page 1 of 15 Mara region. She worked until 20th May 2016 when she issued to the Applicant a two months resignation notice, which was to expire on 18th July 2016. The Respondent claimed to have fallen sick and hospitalized in Mwanza while serving the notice. Upon returning to her workplace she was given a letter by the Applicant accepting her resignation. The letter stated that she would be relieved from all duties with effect from ]st June 2016. The letter also charged her with misconduct to the effect that she had been staying in the company's leased houses and using the company's vehicle without authorization. Following this alleged misconduct the Applicant imposed on her a liability of T.shs. 34,377,116.00. From the liability imposed, the Applicant off set T.shs. 11 ,21 2,000 which was to be paid to the Respondent as her terminal benefits and required the Respondent to pay the remaining balance of 1.shs. 25,586,342/-. This act prompted the Respondent to file a complaint to the Commission for Mediation and Arbitration (Commission). The Commission issued an award which partly favoured the Respondent. The Applicant being dissatisfied with that decision he filed an application in this Court, that is, Application No. 17 of 2017. On the other hand the Respondent also filed an application in this Court, Application No. 31 of 2017. The two applications were consolidated by this Court on 18th September 2018. Parties then argued the application by written submissions. The Applicant through the representation of Mr. Gasper Tiuway, learned Advocate, advanced three grounds for the application to w: (A. Page 2 of 15 That the learned Arbitrator erred in law and fact by finding that the Applicant was not entitled to the relief prayed in his counter claim. It is obvious that the Respondent failed to discharge her duties properly by her acts of staying at the Applicant's resident without authorization. That it was not proper for the learned Arbitrator to hold that the Applicant did not suffer loss as a result of the Respondent's act of staying in the Applicant's resident while in fact the loss fell on the Applicant's company. That it was not proper for the Arbitrator to order the Applicant to pay the Respondent a total amount of T.shs. 12,303,9801-as her right while it was proven that the Respondent voluntarily resigned from employment. Mr. Tiuway argued ground one and two collectively and submitted that the Hon. Arbitrator in his award failed to appreciate the evidence adduced by the Applicant and thereof failed to give correct and right reasons on the award. He referred to page 4 paragraphs 3 and 4 of the award and argued that the Respondent admitted that she was residing at the Applicant's residences without being authorised and without paying rent and that the residences were guarded. He referred to Rule 27(3) (d) of G.N. No. 67 of 2007 which gives power to the Arbitrator to record in summary form the evidence adduced by the parties to a dispute and argued that apart from being empowered as such the ~*A Arbitrator totally ignored the evidence adduced by thApplicant Page 3 of 15 regarding the issue that was before him. He did not say or record anything regarding Exhibit D5 and D6 that proved the counter claim. That the Arbitrator failed to appreciate what the Respondent admitted as it was recorded by the Arbitrator himself at page 4 paragraph 3 and 4 of the award. Mr. Tiuway further submitted that parties are bound by the terms of the contract they have entered and should enjoy the reliefs and entitlements as presented in the employment contract. That the Respondent admitted to have willingly resigned from the employment and by such admission the employment contract between the Applicant and the Respondent came to an end by the Respondent's resignation. In response to these two grounds, Mr. Msegeya, learned Advocate submitted that the Hon. Arbitrator did not hold that the Applicant did not suffer loss, rather, the Arbitrator's reasoning was to the effect that the employer was not in law entitled to order the Respondent to pay T.shs. 24,1 48,956/- as accommodation charges and for the guards, because the Respondent as the employee was not given the opportunity to challenge the cause, the amount and calculation of the debt as required by section 28(2)(b)(c) of the Employment and Labour Relations Act No. 6 of 2004. He further submitted that the Applicant was not supposed to deduct from the Respondent's terminal benefits the alleged liability, for the same arose from the allegedly misconduct of the Respondent and the law is very categorical where an employee commits a misconduct. Mr. Msegeya cited Rule 13(1)(5) of the Employment and Labour Relations (Code of Good Practice), G.N. No. 42 of 2007 which requires the employer to conduct investigation to ascertain whether there are grounds for hearing to be conducted; the evidence in support of the allegations a ainst the Page 4 of 15 employee to be presented at the hearing and the employee to be given a proper opportunity at the hearing to respond to the allegations, question any witness called by the employer and to call witnesses if necessary. Mr. Msegeya argued that at the CMA evidence was led to the effect that the employer had conducted invesfigafion and came up with investigation report. However, there was no any iota of evidence adduced to the effect that the employer conducted hearing to prove the allegations leveled against the Respondent. This would have afforded the Respondent anopportunity to challenge the same. He also cited Article 7 of the Termination of Employment Convention (ILO) No. 158 of 1984 which provides for procedure before termination of an employee. Specifically the Article provides: "The employment of a worker shall not be terminated for reasons related to the worker's conduct or performance before he is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide this opportunity." Mr. Msegeya argued further that since no disciplinary hearing meeting was convened, there was no other platform where the investigation report could be produced. It was therefore erroneous on the part of the Applicant to use the report as evidence at CMA because the CMA is not a disciplinary hearing committee meeting. That, this is as good as no investigation was ever conducted by the employer and that tells why the Hon. Arbitrator disregarded this piece of evidence. Page 5 of 15 Mr. Msegeya also refuted the claim by the Applicant's Advocate that the Respondent admitted to have stayed in the Applicant's residences without authority. He argued that the Respondent stated that she was allowed by the relevant authority to utilize the vacant houses and transport, as seen at page 11 and 12 of the typed proceedings. He concluded by arguing that the Applicant's decision of requiring the Respondent to pay the company a sum of T.shs. 24,148.956/- was unilateral. She was condemned unheard in violation of the principles of natural justice. I have thoroughly gone through the records tendered in the OMA, particularly the letter from the employee marked "MCCL-4." In this letter, the Respondent categorically raised an allegation of misconduct which is "staying in the company's leased houses and using the company vehicle without authorisation." The law is very categorical where the employee has committed misconduct. As cited by Mr. Msegeya, Rule 13 of G. N. 42 of 2007 provides for the procedure to be followed when there is an alleged misconduct. The law requires the employer to formulate formal charges and conduct a hearing against the employee and after according the employee not less than 48 hours of preparation for his/her defence. Mr. Tluway argued that the Applicant's evidence and exhibit D5 and D6 were not considered by the Hon. Arbitrator. The Applicant's witnesses and exhibits as seen in the CMA records, presented about the Respondent's misconduct. However, the records clearly indicate that no hearing was conducted by the Applicant against the Respondent on the alleged misconduct. The first Applicant's witness named Emmanuel Salla, who is the company lawyer, at page 7 of the typed proceedings, Page 6 of 15 admitted that no formal charges were leveled against the Respondent because she did not deny utilizing the facilities. He also stated that there was no need of disciplinary hearing for a resigned employee. I find the reasons advanced for not adhering to the procedures under the law to be rather strange. First, admitting to use the facilities does not mean admitting to have committed a misconduct warranting deductions from ones terminal benefits or being required to repay thereof. Besides, the Respondent on her part alleged to have been authorised to use the said facilities and this is something that would have been cleared out by evidence produced at the disciplinary hearing. The same would have formed the basis of the deductions if it would have been proved in the hearing that she actually was not authorised to use the said facilities. Second, the Respondent issued a notice of resignation which was to expire on 18th July 2016, the Applicant in my view had ample time of two months to conduct the hearing on the alleged misconduct, but opted not to do so. The Applicant's argument that there was no need of disciplinary hearing for a resigned employee would make sense if he had not deducted the Respondent's terminal dues on the allegation of misconduct. Since the Applicant deducted the terminal dues on allegations of misconduct without according the Respondent the right to be heard, I find the same to be unlawful. The letter also raised a claim of costs for utility and transport expenses. Section 28 of the Employment and Labour Relations Act allows the employer to make deductions on the employee's remuneration to reimburse for loss or damage. The provision however, attac es some Page 7 of 15 mandatory conditions to be met before effecting the said deductions. Specifically and of relevance on the matter at hand, Section 28(2) (b) and (C) provides: "28(2) A deduction ... may be made to reimburse an employer for loss or damage only if:- The employer has submitted to the employee, in writing, the cause, the amount and calculation of the debt. The employer has given the employee a reasonable opportunity to challenge the cause, amount or calculation." The Applicant as seen in document "MCCL-4" indicated to the Respondent the costs for utility and transport expenses appearing to be a loss on his part and was to be reimbursed. However, the records are very clear that at no point in time the Applicant gave the Respondent any opportunity to challenge the cause, amount or cqlculation thereof. I thus agree with Mr. Msegeya's argument that the deductions thereof were unilateral and therefore illegal. To this point I find ground one and two in this application devoid of merits and dismiss the same accordingly. Arguing on the third ground Mr. Tluway submitted that the Hon. Arbitrator failed to appreciate what he found in his award that the Respondent resigned from employment and hence she was not entitled to any such amount. In the award, at page 6 paragraph 2 and page 7 paragraph 4 the Arbitrator acknowledged and appreciated that the Respondent resigned from employment by submitting resignation letter to the Applicant. The Arbitrator acknowledged Exhibit D3 and D7 regarding the issue of resignation and yet he awarded some amount to the Respondent AI A Page 8 of 15 as if the Applicant terminated the employment. Mr. Tluway referred to the case of Paul Lihamwika v. Coca Cola Ltd, Revision No. 344 of 2009 (unreported) whereby Wambura ; J. held: "I am at par with the decision in Musyangi's case (supra) which followed the principle laid in section 3(f) of the ILO Convention No. 58184 which intended to protect the employers from paying terminal benefits to employees who decided to terminate their employment abruptly ... decides to terminate his employment and more so for greener pastures he cannot be held to claim any terminal benefits." He argued further that the Applicant wished to pay some amount to the Respondent but due to what the Respondent did before she resigned triggered the Applicant to withdraw his offer and hence required the Respondent to bear the cost of what she enjoyed without the authorization of the Applicant. He lastly prayed for this Court to partly quash the CMA award with respect to the amount awarded to the Respondent and for the Respondent to be ordered to pay the Applicant the amount of T.shs. 25,586,342/- Responding to this •ground, Mr. Msegeya submitted that the Hon. Arbitrator was correct in his decision because the awarded amount was lawful payment due to her from the company. The said amount included June and July salaries to wit: T.shs. 5,291 ,700/- and 3,1 75,020/- respectively, accrued leave but not taken at T.shs. 705,560/- and MBECEF contributions amounting to 2,040,000/-. He distinguished the case of Paul Luhamw!ka (supra) cited by the Applicant's Advocate to the effect that in this case the employee had sought and obtained another employment, while in Page 9 of 15 the case at hand the Respondent was terminated before expiry of the notice. My observation on this ground is as follows: in his submissions, Mr. Tiuway hinted that the Applicant wished to pay some amount to the Respondent upon her resignation. This connotes that the Respondent, though she tendered a resignation letter was entitled to some benefits. This is also reflected in the Applicant's letter marked "MCCL-4." Part of this letter, at page 1 of 4 reads: "Below are the benefits that are due to you and the liabilities that you owe to the Company. Benefits due to you from the Company: Your monthly basic salary for June 2016 TSHS. 5,291,700.00 Your monthly salary up to July 18th 2016 T.SHS. 3,175,020.00 Your accrued leave days (4 days) T.SHS. 705,560.00 Your MBECEF contributions up to 18th June 2016 TSHS. 2,040,000.00 Total benefits for tax TSHS. 11,212,280.00" What I get from Mr. Tluway's submission and the above quotation is that if there were no allegations of misconduct occasioning loss to the Applicant as alleged in the letter marked "MCCL-4" then the Applicant would have no issues in paying the Respondent a total amount of T.shs. 11,212,280.00 as benefits due for her from the Company. This is also further proved from the fact that the Applicant raised a total liability of T.shs. 34,377,116.00, but claimed from the Respondent a total amount of T.shs. 25,586,342.00 as balance after deducting what was rightfully due to her. However, I have already made a finding in ground one and two that the deduction was e&. Page 10 of 15 illegal since it contravened the provisions of the law requiring the Respondent to be accorded a right to be heard in a disciplinary hearing as the same was raised in form of misconduct. The Respondent was also not given the chance to challenge of the cause, the amount and calculation of the utilities claimed by the Applicant to be used by her as required under the law. The case of Paul Lihamwika (supra) cited by Mr. Tiuway is thus not applicable in the situation at hand where the Respondent was to get certain benefits even upon resignation. Mr. Msegeya also proceeded to argue on matters presented by the Respondent in Application No. 31 of 2017. However, it must be noted that the Applicant opted not to respond to the Respondent's submissions with respect to this Application as he filed no rejoinder or submission in reply thereof. Mr. Msegeya submitted that in this application they are faulting the findings of the Hon. Arbitrator in allowing the Applicant to deduct a sum of T.shs. 4,936,460/- from the Respondent's terminal benefits in respect of utilities and transport costs. He argued that if in the first place the Hon. Arbitrator had found that the Applicant was incorrect in deducting the sum of T.shs. 24,148,956/- on the reason that the Respondent was not involved and did not know how the amount was arrived as required under the law, then it follows that it was also incorrect to deduct T.shs. 4,936,460/- because likewise she was also not given the chance to challenge the cause, amount and calculation of the debt. Page 11 of 15 e Mr. Msegeya also submitted that they are faulting the Hon. Arbitrator for not considering the evidence that the Applicant unlawfully terminated the Respondent's employment. He argued that the Respondent had given two months notice for resignation and the employer did not wait for the notice to lapse, that is, on 18/07/2016. The Applicant instead terminated the employment on 01/06/2016 by charging her with misconduct that she had stayed in the company's leased houses and used the company's vehicle without authority. The Applicant then withheld the Respondent's terminal benefits causing a lot of hardship to her. The Applicant also terminated the Respondent while she was sick and hospitalized. Mr. Msegeya argued furf her that the law prohibits employers from terminating employees while on treatment. To this effect he cited the case of Tanzania Bureau of Standards v. Anita Kaveva Maro, Revision No. 35 of 2016 (HO at DSM, Mipawa, J.). He concluded by arguing that it was erroneous for the Applicant to terminate the Respondent's employment before expiry of the notice because in between the employee had opportunity to revoke the notice. Mr. Msegeya prayed for this Court to grant the Respondent the reliefs prayed under paragraph 15(i)(ii)(iii)(iv) and (v) of her affidavit to wit: That this Court confirms and upholds the payment of T.shs. 1 6,503,980/- That this Court orders the Applicant herein to pay the Respondent herein compensation for unfair termination together with damages as prayed in CMA F]. That this Court orders the Applicant herein to pay repatriation costs as prayed in CMA Fl. Page 12 of 15 (iv) That this Court orders the Applicant herein to pay the Respondent herein subsistence allowance from the date of termination to the date of repatriation. have gone through the Applicant's letter "MCCL-4" responding to the Respondent's letter of resignation. Of interest in deferminafion of the arguments advanced by Mr. Msegeya is what is stated at page 1 of 4, paragraph 1, line 3-5. This part reads: "From your letter, you stated your last day to be 18th July 2016. We accept your resignation and you will be relieved from a/- duties and work with effect from 1st June 2016." In my view, the wording in the above paragraph does not entail termination of the employment contract by the Applicant. Being relieved from duties does not mean being terminated from the employment. In calculating the benefits due to the Respondent, the Applicant even included the salary from 1st June 2016 to 18th July 2016, the day which the Respondent had stated in her letter that she will be resigning only that the Applicant unlawfully deducted the same. Thus my finding on this issue is that the Applicant never terminated the Respondent's employment contract, but the Respondent resigned voluntarily. Since the Respondent resigned voluntarily, she is not entitled to the terminal benefits she claims in CMA Fl, being compensation for unfair termination, repatriation, and subsistence allowance. In the award, the Arbitrator ordered the Applicant to pay the Respondent a total amount of T.shs. 12,303,980/-. This was after addinq T.shs. 11, Page 13 of 15 ( 212,250/- due to her from the company as provided under the leffer with ref. No. MCC-C/PF/03/1653 (D4) (marked MCCL-4), and T.shs. 5,291,700/- as one month salary in lieu of notice and deducting T.shs. 4,200,000/- (though at page 8 of the Ruling and as argued by Mr. Msegeya it is written T.shs. 4,936,460/-) as payment for utilities and transport utilized by the Respondent. On one hand Mr. Msegeya challenged this deduction and on the other Mr. Iluway challenged the whole amount awarded. Starting with the amount challenged by Mr. Msegeya, it is my finding that the Hon. Arbitrator erred in deducting the said amount. Having made a finding that the deductions on utilities and transport were unlawful for not according the Respondent a chance to challenge the cause, amount and calculation thereof, I quash the deduction made by the Hon. Arbitrator with regard to utilities and transport. The Applicant claimed from the Respondent a sum of T.shs. 5,291,700/- as one month salary in lieu of notice for having given two months 1 notice instead of three months as provided under the "Terms and Conditions of Hay Grade 12" of the Company. The Respondent on the other hand challenged the three months' notice and argued that the contract provided for one month notice. I havegone through the records of the CMA and found no such "Terms and Conditions of Hay Grade 12" being attached, presented or listed for the CMA or this Court to make reference and ascertain to its contents regarding the notice of termination and if the same was made available to the Respondent to make her bound by it. Following this observation, it is my finding that the Applicant is not entitled to T.shs. 5,291,700/- as payment in lieu of notice. The Respondent Page 14 of 15