20140905 TZHC Dar es Salaam

,, IN THE HIGH COURT OF TANZANIA LABOUR DIVISION AT DAR ES SALAAM REVISION NO. 55 OF 2013 ....... ' r NATIONAL BANK OF COMMERCE ............................. :...,,. :.❖/APPCIC~NT VERSUS ~-~i·•·;;;:, --,· ' 3·,.J.,-c;· j-~, ( ALIAMIN MBEO .........·...........................................,., ......... RE.SBONDENT ·= :~. . J,. -~,.,.,..,,,-:- ·l "- , (OR/GINAUCMAIMZA/101/201.?,1t- "~--.• I , -~-~J !. ,. ~ ,. .; .,. ;.~ 1 ... .. ~ ~ JUDGEMENT ,;.,."!·•, .<Y.,. -:• ... ,., !~ - ... '· .~ i. !, .... 27/8/2014 & 1019/2014 ~r::: :..~~-~;"~, ,.;:::/ . r-tJ;:~-;;_ ~:.:.\ ~--- R.M. RWEYEMAMU,J:- t!i,.,' =;:,, ' ': -~ ,... J ..:~} ..,"'<I "1':I ,.;;, I :!:_ff~• t ~l.:-. ~~ . After hearing the parties' argument~.Jn tpjs matter, I am of the view that the key ,:-~ ·~1~11(-,.H~ issue for decision is whether or r.i:cii the CMA ..Arbitrator properly exercised discretion in . : :C''t awarding remedy to the respg_ndint;..}~tdifferently, the issue is whether or not, following a finding of unfair termin 9jfotf •,h ~ ...(; t~l~ A$_Q.itf~tor has powers to award compensation of more than t,.~I. )i,.. .... • • 12 months' s~lf!fYr-UA.Q$'~:~..e.ctj,~h 40 (1) (c) of the Employment and Labour Relation Act ~~-·.s,~J '·~\., . ·•;":'~:- . (ELRA), 6/2004. ~\. 'j_ -~~-•i_•.I,. )·,,. :\:·t:.~ ~-.,"j !'• - • _.... J, ~ • . :~- -· ., --F~o.r th.~Heason, I requested both parties, fortunately represented by Counsel Mr. G. _Tesha \:ind Mr. E. Nzoa (for the applicant and respondent respectively), to address me on factors which would justify interference with the Arbitrator's exercise of discretion in awarding appropriate remedy. Before considering their submissions, I find it best to commerce with brief background facts giving rise to the issue, 1 - . The parties had an employment relationship which ended on 19/03/2012 when the respondent was terminated. The respondent appealed that termination decision to the Commission for Mediation and Arbitration (CMA). In the claim, the respondent alleged that his termination was (substantively and procedurally.unfair) i.e., it was for an invalid reason and conducted using an improper procedure. As remedy, the applicant prayed for an order of compensation in the sum equivalent to 100 months salary- appa , tly (!/fl1i;, ,, riod e~ual t) to the time remaining to his official retirement ag~. : r. The Arbitrator accepted the unfair termination c ·~'plicant do not object ·· the finding. What is objected is the Arbitrator's e'" iscretion when he ordered compensation in a sum equal to 35 . s' · uently, this application is on grounds among others that:i JI, .Jf~ . "7. That the Honorable Arbitrat 1i!t~!OO to award reason~ble compensation to the respondent after denies all g_ in support of the claimed compensation. J;acts and law in holding that the respondent was entitled mpensation for ·unlawful termination without reasonable that the order for payment of 35 month~' salary be reversed and ths compensation which will be fair and just on the circumstance of this aring of the application, Mr. Tesha adopted the above grounds and added that the decision was in error because; in the dispute referral form the respondent had sought_ relief of reinstatement but at the hearing, he changed that prayer and in its stead, prayed ·for compensation· equal to 55 months' salary. There was no basis to grant compensation in a sum equal to 35 months' salary instead of the usual 12 months. [2] In response, Mr. Nzowa submitted that the award was proper under circumstances of the case which were explained thus; the respondent was charged with a disciplinary offence on 2-3-2012, acquitted but terminated on 13/3/2012 for a misconduct he had been acquitted & of; the respondent was a branch manager and the employer's conduct was unjustified; · compensation of 12 months is the minimum under the law an9 the Arbitrator's use of . .gi.'., discretion to award 35 months was proper, considering peculiar circ tan~"" of the case. ~v (ii- Following my request, Counsels addressed me would justify interference with the Arbitrator's exercise of discre · 'rfe agreed on basic principles but differed on their applicability to the facfs· e. First, they both accepted that the court has powers, under sectio (c) of the ELRA read together with rule 28 (1) (a) to {d) of the Labour ~ourt Ru .106/2007 to revise any CMA orders which include an order to grant award. , · icability of factors enunciated by the CAT in SELCOM MENT (T) AND GAMING BOARD OF TANZANIA (2006) TLR as grounds o interfere in the trial court's exercise of discretion. The factors we d on a misunderstanding of the law or evidence before that court, or (ii) Upon an inference that particular facts existed or did not exist, or (iii) Upon the ground that there has been a change in circumstances which would have justified the court to vary the order; and (iv) An order given contrary to the cardinal principles of natural justice." [3] Applying the principles to this case, Counsel for the applicant submitted that interference is justified in this 9ase because of a) the exercise was based on improper understanding of the law, the arbitrator relied on rule 32 (1) of GN 67/2007 instead of 32 (5) of the GN 67/2007 b) The arbitrator awarded what was not claimed -the_ respondent/~mployee had claimed reinstatement. He changed at hearing (taking applicant by surprise); declining reinstatement and claiming 55 months as co ns,ijli5~.. c ) cp~ice of ~) compensation award must be reasonable that is, it must be . u · ed b r, · sonable grounds "otherwise one day an arbitrator will award 200 salaries ba : etion and this will · kill employers' business which will then turn into punishment to government". Mr ..Nzoa for the respondent ar because factors for interferenc{@ff~lniz , · o not exist in this case; b) the Arbitrator properly exercise dis tion u~ ircumstances of the case that is,· termination was both subs · tively · !f§ib·edurally unfair; conduct of the employer respondent deserved adequate compensation. · light of the law and decided as follows:- ► "1ld1.·~t:Ji'1S discretion to award or not to award any of the remedies "i;~tion 40 (1) (a) or (b) or (c) following a finding of unfair termination. pra remedy of reinstatement is awarded where termination is adjudged u~n ~~)" it~fth procedurally and substantively. ► The arbitrator cannot order reinstatement where the employee does not wish to be reinstated or continued employment is deemed intolerable. ► In my view, if the arbitrator has discretion to award or not to award any remedy, then such arbitrator may award compensation under Section 40 (1) (c ), which is [4] more or less than 12 months, ·provided he has justifiable grounds for doing so, grounds such as those enumerated under rule 32 (5) (a) to (D of the GN 67/2007. ► · In the Referral form, the respondent had prayed for reinstatement, a fit remedy given that termination was unfair both procedurally and substantively. ► Interference with exercise of discretion is justified becau.§~ b~Sf§ for granting . .,(j/' ~- compensation equal to 35 months salary was not stated'. ~'(\ ~ \i"::,; ~ ; . . . \., ~ . In the end result, I quash the Arbitrator's award or compens~~(ll-, order th'~tef,Jhe respondent be reinstated in terms of seqtion 40 (1) (a) of the ELRA: ti;t~~of termination to the date of this decision. efJ , ~ .!}> Date: 10/9/2014 ~ ···rtll Coram: Hon. R. M. Rweyeman:u.1 For Applicant: Mr. Godfrey$]' s For .Respondent: Pr~ . CC: Ms. Ka Court: •1"•!,._ Tfie ma t•-tr·~ d,~ , . judgment · Orde~ Judg · ~ead in open court in presence of parties indicated above. RightdfEA e plained. R. M. Rweyemamu JUDGE 10/912014 (SJ ii IN THE HIGH COURT OF TANZANIA LABOUR DIVISION AT OAR ES SALAAM REVISION NO 346 OF 2013 TWIGA BANCORP (T) LTD ............................................................ APPLICANT VERSUS DAVID KANYIKA ................................................................... RESPONDENT (Original/CMA/DSM/KIN/712/11/878) JUDGEMENT 29/04/2014 & 05/9/2014 R.M. RWEYEMAMU J.: The parties in this case had an employment relationship from· 11/8/1986 to 15/9/2011, when the respondent was terminated. He successfully appealed the applica~t/employer's decision to the Commission for Mediation and Arbitration (CMA). In the· claim, the respondent alleged that, termination was unfair, and that the employer's choice of ,, :' ..sanction.for the alleged misconduct was inappropriate. In the now impugned decision dated 7/11/2012, the CMA decided and ordered that; a) the respondent's termination was for an' ( invalid reason (substantively unfair); b) that termination followed proper procedures c) the respondent be reinstated with effect from the date of termination in accordance with Section 40 (1) (a) and (c) of the Employment and Labour Relations Act. 6 of 2004 (ELRA). Aggrieved, the applicant applied for revision of the decision, faulting the Arbitrator for what appears to me, to be basically two grounds. The first is misapprehension of evidence leading to improper/irrational conclusion that termination was unfair; and two, improper exercise of discretion in choice of remedy. It may be fair to reproduce below the relevant grounds of the applicant's supporting affidavit: 1 "8. That having been seriously aggrieved by the whole of the said award, basing on above events and facts which establish several legal issue the applicant seek revision of the said award on the following grounds; (a) That the Honourable immensely failed to reasonably asses the applicant' evidence in compa'rison with the respondent's evidence and erroneously • concluded that although there was reasons and procedure was followed, the ,, respondent was not guilty of the offence charged with as miss posting was not disciplinary offence. (b) That Honourable Arbitrator erred in facts and law in join hand with the, appJ~cant . that there was gross negligence on the side of the Respondent on one hand and orders the Applicant to reinstate the Respondent,on other hand. (c) The Arbitrator erred in facts and law in concluding the gross negligence of the Respondent of authorizing miss posting transaction could not cause loss while the evidence presented shows clearly the act of authorizing missposted transaction caused a loss of Tanzania shillings seven hundred and eight million, four hundred' and eighty thousand (708,480,000/=). (d) The Arbitrator erred in facts and law in holding that there was no evidence which I shows that mi9ss posting is disciplinary offence, by failing to realize that the Respondent was terminated on the ground of gross negligence ·contrary to rule 12.9(p) of the respondent staff regulation and scheme of service Manual 2008 (Revised and Merged) of the Applicant, which occasion a huge loss to the Applicant which is disciplinary offence according· to the Applicants policy. (e) . That the arbitrator totally failed to analyze the evidence brought by the parties hence reached on erroneous conclusion in his findi~gs. (ij The arbitrator erred in law and fact in ordering the Applicant to reinstate the Respondent while joining hands with the Applicant that the proper procedure was followed to terminate the respondent from the employment and there was reasons for termination ' 2 In this Court, the applicant was represented by Ms. Susan Ndombo Advocate while the respondent appeared in person and hearing was by way of written submission. Before • evaluating the parties' arguments, I find it useful to commence by stating, albeit briefly, facts which are common cause in this case. The respondent was employed by the applicant and was working as an accountant. ' He was terminated on 15/9/2011. One of his key functions as an accountant was to verify and authorize bank transactions posted by his subordinates. Between the period of ' December 2010 and May 2011 (a period of 6 months), the respondent authorised 1& transactions of money transfers which were posted into an unauthorised account. The total sum so misposted amounted to Tshs. 704,480,000/=. The misposted amount was subsequently withdrawn by a third party and as a result, the applicant suffered a loss equal ' to the misposted amount. The respondent was charged with a disciplinary offence of . causing a loss by gross negligence, hence his termination. ,;:,. ',,._. On those facts, the CMA Arbitrator decided that termination was for an invalid reason; that the employer failed to prove negligence in that the alleged offence was a normal and ordinary mistake, in the banking industry; I quote part of the Arbitrator decision to make the point obvious; "tume imetafakari na kuona kuwa kosa alilofanya mlalamikaji ni la kiuhasibu na k~tika· utendaji wa benki haswa kwa nafasi ya mlalamikaji inaweza kutokea kutokana na wingi wa kazi, na pia kosa hilo linapotokea halisababishi hasara moja kwa moja kwani linarekebishika kwa sababu hela zinakuwa bado zipo katika vitabu na mfumo wa benki. (Assuming it is not withdrawn by a 3rd party) Pia hamna ushahidi ulioonyesha kosa hilo la misposting lipo katika kanuni za utendaji bora wa benki hiyo na adhabu yake ni nini, hivyo .ni dhahiri si kosa ambalo linaweza kusababisha hasara moja kwa moja. Kwa ushahidi wa DW2 alisema misposting ni 3 kitendo cha kawaida hivyo mwajiri alitakiwa kumweka mlalarnikaji katika nafasi sawa '\ - kama ilivyokuwa kw? wengine kipindi cha nyuma kwa mujibu wa kanuni ya 12(5) ya kanuni. l .I Japokuwa mlalamikiwa alifuata utaratibu wa kuachisha kazi kwa kiasi kikubwa kwa mujibu wa sheria lakini katika shauri hili jambo hilo halina mashiko kwani utaratibu huo sahihi ulifuatwa kwa mtu ambaye hana hatia." ' I ' Now; the issue for decision by this court is whether the Arbitrator's decision was, on the evidence adduced, rational and legal. Submitting in support of the application, Ms. Ndomb? Advocate for applicant explained that, .gross negligence is a conscious and voluntary disregard of the need to use' reasonable care. The respondent was terminated on reasons of gross negligence. He had a :duty to cross check his subordinates· work before authorizing the transactions and he ignored such duty as a result the applicant suffered loss. She submitted further that; in this I. case the· respondent was negligent 18 times in a short span of time (6 months), which .. · proves gross negligence; and that due to such a negligence, the applicant suffered loss of a sum equal to Tsh: 704,480,0_00/= · The respondent supported the Arbitrator's decision; arguing that the employer dia~ not prove any negligence; thus termination was unfair. Elaborating he added that the testimonie•s of OW 1, DW2 and PW 1 do not establish at all that the respondent committed any disciplinary offence in violation of the applicant's policy and or in violation of any law. . . . Further, ·the witness agreed in their testimonies that misposting is not an offence but is something expected to occur in. the ordinary course of business especially when the work assigned to an employee is ·voluminous as was the position here. ' I 4 .. - , In rejoinder the applicant's advocate submitted that the respondent was terminated on gross negligence and not misposting because he breached the duty imposed on him to counter checks his subordinates' works. !n my understanding of general principles of law on negligence, liability arises where:- -,., • ~ . There is a duty of-care, and a person breaches that duty as a result of which, the other person suffers loss or injury/ damage. • A person acts negligently, when he fails to exercise that degree of care which a reasonable man/person of ordinary prudence, would exercise under the same circumstances . • • Negligence is the opposite of diligence or being careful. • Gross negligence means serious carelessness. A person is grossly negligent if he falls far below the ordinary standard of care that one can expect. It differs from ordinary negligence in terms of degree. Applying such principles, it is clear that the respondent was' grossly negligent; why! He was mandated to check and verify his subordinate's postings before authorising the transactions to proceed to the next level. This was a responsibility to be done diligently. Failure to perform his duty with required diligence led to a huge loss. The Arbitrator's decision that misposting was not gross negligence was improper in. law and in fact. Were it to be correct, one would wonder if there would have been reason to employ the respondent; the subordinates could have sufficiently done the work. The logical conclusion is that banks employ such offic_ers as the respondent, to oversee subordinates 5 . , i • ,, -• so a~Jo deter losses resulting from misposting. In this case, despite the respondent's i- i presence, the action in\ended to be deterred occurred 18 times over a short period of time.' That in deed was proof of gross negligence. _May be it is useful to add by way of passing, that if this Court were to find the respondent's behaviour acceptable in banking industry, (in other words treat the "gross negligent respondent with kid gloves" to quote words used by Dingake, J., in the case of Molato v. • Barnetts Furnishers 2003 (1} BLR 25 (IC) at page 3} it would thereby spell a wrong message that an attitude to work similar to that reflected by the respondent is acceptable, in the end, . such a stance would serve to thwart employment opportunities in the banking industry. Before concluding, I wish to poin·t out that, even if termination was found to have been for an invalid reason (substantively-unfair), which is not the position here, it would still have been an improper use of discretion, for the CMA to award both reinstatement under section 40 (1} (a} and compensation under section 40 (1) (c) of the ELRA. The Arbitrator's powers following a finding of unfair termination, is to award the remedies in the alternative not concurrently. I, In view of the above, I quash and set aside all of the CMA decision and award, conclude that the respondent's termination was fair (was for a valid reason) and in the final result, find this application merited and grant it. .M. Rweyemamu JUDGE 05/09/2014 ·6 . ' . ) Date: 05/09/2014 Coram: Hon. R. M. Rweyemamu, J Applicant: For Applicants: Absent Respor.ident: For Respondent: Present in person. CC: Happy ,, Court: This case is for judgement. Judgement delivered today this 05/09/2014 in presence of respondent. RIA Explained. R.M. Rweyemamu JUDGE 05/09/2014 :_, ,· 7