REV NO 28028 OF 2024 NBC LIMITED VRS DOXA MBAPILA 0001

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA LABOUR DIVISION AT DAR ES SALAAM REVISION APPLICATION NO. 28028 OF 2024 CASE REFERENCE NO. 202411061000028028 BETWEEN NBC LIMITED (NATIONAL BANK OF COMMERCE LIM ITED..........APPLICANT VERSUS DOXA M BAPILA...................... .................................................. RESPONDENT JUDGEMENT Date of last Order: 12/ 02/2025 Date of Judgement: 25/ 03/2025 MLYAMBINA, 3 . The Respondent was employed by the Applicant on 15th day of February, 2016 as Head of Legal and Company Secretary and she was terminated on 16th July, 2021 for the reasons which will be apparent herein. Dissatisfied by the termination, the Respondent referred the matter to the Commission for Mediation and Arbitration (herein CM A). In her referral form (CMA FI) to the CMA, she prayed for reinstatement and payment of general damages for discrimination, mistreatment, reputation and psychological torture. The Award was delivered on 30th day of September, 2024 and on 3rd day of October 2024 whereby the Arbitrator ordered the Applicant to pay the Respondent a total of Tanzanian Shillings Four Hundred and Fourteen Million Two Hundred and Fifty-Two Thousand, Three Hundred and Seventeen Cents (TZS. 414,252,300.17) being twenty-four (24) month's salary as compensation for unfair termination and severance payment. Such decision aggrieved the Applicant herein. She therefore filed the present application on the following issues: i. Whether or not the Arbitrator properly evaluated the evidence adduced by the Applicant before he reached the conclusion that the termination was unfair. ii. Whether or not the Arbitrator disregards all documentary evidence in support of Applicant's case and relied on mere words of the Respondent which had no any supporting documentary evidence. iii. Whether the Arbitrator erred in law and facts by ordering of payment of 24 month's compensation for unfair termination without justification in law. iv. Whether the Arbitrator dis regarded documentary evidence of the Applicant which proved the case and on the other hand relying on mere words of the Respondent that she did not commit the alleged offence. v. Whether the Arbitrator erred in law and facts in holding that in order for offences of gross insubordination to exist several instructions must be repeatedly explained to an employee and afford ample time to comply. Whether or not the Arbitrator erred in law and facts to the extent that after holding that the termination was unfair, ordering the payment of compensation of twenty (24) month's salary. Whether the Arbitrator erred in law and facts in holding that the Respondent was denied the right to appeal internally contrary with item 3.2.1 of the NBC's Disciplinary, Capability and Grievance Standard. Whether the Arbitrator erred in law and facts in holding that the Respondent neither refused nor unreasonably refused to adhere with the PIP process. Whether the Arbitrator erred in law and facts in holding that it was procedural irregularity for the failure to conduct investigation. Whether the Arbitrator erred in law and facts by correcting the award suo moto/ in her own despite the fact that she was functus officio. Whether the Arbitrator erred in law and facts in holding that the termination letter was written before the recommendation of termination of employment of the Respondent by disciplinary hearing committee. xii. Whether the Arbitrator erred in law and facts in holding that the warding eighteen (18) months salary as compensation instead of twenty-four (24) months salary as compensation was clerical mistake. xiii. Whether the Arbitrator erred in law and facts by ordering payments of compensation of 24 months' salary which is too excessive without justifiable reasons. xiv. Whether the Arbitrator erred in law and facts in not considering appropriate relief to the Respondent if at all the term nation was unfair depending on nature of dispute. In submission in support of the application, the Applicant summarized the above issues into the following: i. Whether the Arbitrator was justified in finding that the Respondent's termination was substantively unfair; ii. Whether the Arbitrator was justified in finding that the Respondent's termination was procedurally unfair; and iii. Whetherthe Arbitrator was justified in awarding 24/18 months salaries as compensation for unfair termination and severance. The application proceeded by way of written submissions. Arguing the application, the Applicant was represented by Gasper Nyika and Samah Salah, learned counsel. On the other hand, Mr. Rahim Mbwambo, learned counsel appeared for the Respondent. To start with the first ground, the Applicant argued that, insubordination has not been defined under the Employment and Labour Relations Act, [Cap 366 RE 2019] (herein ELRA). He stated that, based on case laws, it has been established that gross insubordination occurs where lawful and reasonable order(s)/instruction(s) were issued to an employee, the employee refused to comply with such order(s)/instruction(s) and such disobedience is so serious to warrant termination. The Applicant added that insubordination also occurs where an employee's conduct poses a deliberate and serious challenge to the employer's authority even where no instruction is given. Thus, for such insubordination to constitute misconduct justifying termination, the employee's refusal must be deliberate. The Applicant continued to submit that, there is no requirement that instructions must be repeated, in their view, a single instruction or order is enough to constitute insubordination provided that such instruction/order is lawful and reasonable. It was submitted that in the case at hand, the insubordination originated from the outcome of the 2020 annual review, in which the Respondent's performance was rated Needing Improvement (NI). In terms of Clause 3.3.6 of the Capability Policy (Exhibit D-9), an employee rated NI must among others, be given a three-month 'Performance Improvement Plan ('PIP'). It was further to be submitted that, the Respondent referred a grievance challenging the rating. The grievance was decided on 5th May 2021 where in (Exhibit D3) the performance rate of NI was maintained. On 10 May 2021, the Respondent was notified that the internal grievance procedure was officially closed and if not satisfied, she may refer the matter at CMA in accordance with the relevant laws (Exhibit D5). It was argued that, since the grievance was closed and the performance rate of NI was maintained, the Respondent was required to proceed with PIP. However, the Respondent, failed to do so despite being informed of the conclusion of the grievance internally. It was further submitted that; on 26 May 2021, the Respondent was instructed by her Line Manager to complete a draft PIP for the review and agreement (Exhibit D24) but the instruction was refused. Under the law, if the Respondent was dissatisfied with the Applicant's decision, she had 60 days from 10 May 2021 to refer the matter to CMA. However, nothing stopped her from referring the matter earlier and obtain relevant orders from the CMA to stop the Applicant from implementing the Capability Policy by requiring her to proceed with PIP pending the determination by CMA. The Applicant submitted that, the Respondent took no action until 8th July 2021, the date of the disciplinary hearing, when she filed the dispute at CMA. It was added that; reference to CMA was not an appeal from an internal decision, rather a complaint against the Applicant's decision regarding the PIP process. Thus, the Complaint did not automatically bar the Applicant from proceeding with internal processes. They were of the view that any bar was subject to a specific order to that effect. Since no order was made, the Applicant was justified in requiring the Respondent to comply with the instructions implementing the Capability Policy and/or proceeding with the disciplinary process following non-compliance. Hence, the Respondent's conduct amounted to gross insubordination. In response, Counsel Mbwambo submitted that the Applicant failed to prove the charges as reflected in the charge sheet, exhibit N4. He contended that no several instructions were issued and refused by the Respondent as charged. He therefore supported the Arbitrator's findings that the termination was unjustifiable. It was added that per content of the charge sheet (Exhibit N5), an offence of Insubordination does not stand in the absence of persistent instructions purported issued to the Respondent as such the Arbitrator's holding was justified. In support of his argument, Counsel Mbwambo referred the Court to the case between Samwu obo Lungile Felician v. Commission for Conciliation, Mediation and Arbitration, Case No. JR 2195/14, where it was held: Persistent refused to obey a reasonable instruction is an essential to form an offence of insubordination That, the evidence tendered before the CMA indicate only one instruction was issued which is Exhibit 8 (an email dated May, 26, 2021 at 10:34 am, from Theo bald Sabi (DW1) to the Respondent copied William Lewis). It was further submitted that an email from one Flora Mollel Lupembe dated May,26,2021 at 5:52 PM commanding the Respondent to proceed with the PIP on a cheap reason that an appeal will take a while to conclude does not form an instruction under the law. It was the counsel's submission that the said Flora Mollel was not Senior/superior to the Respondent and the Applicant before the CMA failed to prove how Flora was superior lo the Respondent. In support of his argument, the counsel referred the Court to the case of Rajabu Ismail v. Sincrositewatch Ltd, Revision No. 422/2022, HC Labour Division. Counsel Mbwambo maintained his position that the Respondent did not disobey the instruction but he communicated with his line manager of his intention to appeal and there was no objection to that since he was within time. I have dully considered the rival submissions of the parties. On the first ground, the issue to be determined is; whether the Applicant proved the misconduct levelled against the Respondent. The records herein are loud, the Respondent was charged for gross insubordination. The charge sheet (exhibit N4), indicated that the Respondent was rated Improvement needed by his Manager in respect of the 2020 performance year. That he subsequently raised a grievance against the rating and the grievance authority upheld the initial rating of improvement needed. That, on 26/05/2021 the Respondent was called by the management to attend a PIP discussion meeting which she attended. However, he unreasonably refused to adhere with PIP processes. She was advised and instructed several times to complete the PIP draft for review in order allow for the PIP to formally commence but she refused and failed to comply. The disciplinary hearing committee found her guilty, eventually the Respondent was terminated for gross insubordination as reflected in the termination letter (exhibit N6). As rightly submitted by Counsel Mbwambo, the concept of Gross insubordination is less detailed in our Labour Statutes. Borrowing a leaf from case laws and books; in the Book, titled Comprehensive Issues of Employment and Labour Law, practice for modern Business in Tanzania by Ally Kileo at page 514 Gross insubordination is defined to mean: Higher degree of disregard of lawful and reasonable instructions, where an employee wilfully and intentionally disregards of lawful and reasonable instruction of the employer. From the records of this case, it is undisputed that the Respondent was assessed and her performance was rated Improvement needed. As per Clause 3.3.6 o f the Disciplinary, Capability and Grievance Standard, exhibit D9, the Respondent was supposed to.complete the PIP. The clause provides as follows: This should be evident from previous informal actions and/or during performance feedback where employee shall be informed that he/she has failed to achieve the targets or standards required within the timescales expected and as a consequence formal action is appropriate. All employees that will fail to deliver their performance objectives of the year and end up with PD rating Under Performance (UP) or Improvement Needed (IN) shall automatically be given a first Written warning as a result of unsatisfactory performance during the year. Conjunctionally, a Three (3) months Performance Improvement Plan (PIP) has to be prepared, signed and carried out by line manager together with the employee. PIP should be closely monitored by having weekly and ER Unit will invite the employee to a capability meeting which must be confirmed in writing to the employee. The Respondent appealed against the findings. With the email dated 05/05/2021 (exhibit D3), the Respondent was informed that the grievance committee upheld the decision, improvement needed. Again, the Respondent wished to appeal. With an email dated 10/10/2021, exhibit D4 she was informed that in the light of his role in the Bank as a CMC member, and the grievance was determined at the higher level in the group she was therefore advised to persue the matter before the CMA in terms of ELRA (supra). With the email correspondence, exhibit D5, on 18/05/2021 the Respondent replied that he was still waiting for the signed minutes to persue the second appeal. Then, on 19/05/2021 the Respondent was informed that the minutes were sent by Saviour since 05/05/2021. Again, on 19/05/2021 the Respondent replied that I have seen the email but he challenged that those cannot be minutes that, they do not capture his arguments and they are not signed by her or Saviour. She therefore, demanded the signed minutes to be able to proceed. Thereafter, the Respondent was further informed that the outcome sent captured more on the flow of events and responses as would normally be required and as per the policy it sufficed. The conversation proceeded further as reflected in the email conversation, exhibit D8. On 26/05/2021 the Respondent was again reminded to complete a draft of PIP. She replied that it will defeat the purpose of her appeal. Despite her response, on 27/05/2021 she was reminded again. On 31/05/2021 she insisted of appealing. Aggrieved by the Respondent's conduct, on 05/07/2021 the Applicant served the Respondent with a notice to attend disciplinary hearing together with the charge sheet, exhibit D2. The record reveals further that, despite of being served with the notice to attend disciplinary hearing, on 08/07/2021 the Respondent proceeded with his appeal before the CMA, exhibit D6. On the other hand, the Applicant proceeded with the disciplinary hearing and found the Respondent guilty of the misconduct charged. Eventually, they terminated the Respondent from employment. From the above series of events, the Court's duty is to assess whether the misconduct charged was proved. As analysed, on 10/05/2021, the Applicant notified the Respondent that the internal process was finalised and the Respondent was advised to appeal to the CMA. The Respondent also showed her intention to appeal and when reminded by the Applicant to complete PIP, she insisted that it would defeat the purpose of her appeal. In the circumstances, the Court has to strike a balance of the rights of both parties in the case. As for the Applicant, she could not seat back and wait to see whether the Respondent was appealing or not to proceed with normal business activities with her employee. It was also her view that the appeal could not stop the Respondent to complete the PIP. That, the Respondent should have completed the same regardless the fact that she was appealing or not. On the Respondent's part, she knew, she was within time limit to appeal against the Applicant's decision before the CMA. As per Rule 10(2) o f the Labour Institutions (Mediation and Arbitration) Rules, GN. No. 64 o f2007{herein GN. No. 64 of 2007), the time limit for referring other disputes apart from termination is sixty (60) days from the date when the cause of action arose. The final decision regarding PIP was made by the Applicant on 10/05/2021 and the Respondent referred her application at the CMA on 08/07/2021 which was within 60 days required by the law. Under clause 3.4 of the Disciplinary, capability and Grievance Standard (exhibit D9), which concerns appeals procedure regarding performances it is provided that the appeal procedures applicable will be exactly the same way for the capability procedure. Going back to the appeal procedures, clause 3.2.3 provides as follows: Implementation of Appeals Committee decisions Implementation of disciplinary action will normally be suspended until the result of any appeal is known. On the basis of the above clause, taking also into consideration that the Applicant was the one who advised the Respondent to appeal before the CMA, the Applicant ought to have waited for the appeal result. To the contrary, the Applicant initiated the disciplinary proceedings against the Respondent even before the expiry of the appeal time, under such circumstances, and in the light of clause 3.2.3, it is my findings that the Applicant was wrong to charge and terminate the Respondent before the conclusion of the appeal as required. I therefore join hands with the Arbitrator that the misconduct of gross insubordination was not proved in this case. As much as the instruction was lawful, the same was not unreasonably disobeyed by the Respondent. He had a reasonable ground to disobey the order since the appeal was not finalized yet before the CMA. Coming to the second ground, the Applicant strongly disputed the CMA's finding that no investigation was conducted, and that the Respondent was denied a right to an internal appeal as reflected at page 31 and 32 of the impugned Award. They argued that in terms of Rule 13(1) o f the Employment and Labour Relations (Code o f Good Practice) Rules, GN No. 42 o f 2007 the purpose of investigation is to ascertain whether there are grounds to conduct a disciplinary hearing. In this case, the Applicant successfully showed that there were grounds to proceed with disciplinary hearing as the Respondent's discipline as a senior employee was in question following her conduct. It was argued by the Applicant that, it has been established the process of investigation depends on each institutional internal mechanism but what matters is that the employee must be afforded an opportunity to be heard before termination. That, in this case, the evidence shows that Respondent was afforded an opportunity to be heard. It was further submitted that, in the Applicant's office an appeal is required to be referred to and determined by an impartial senior management. In this case, DW1 and DW2, testified that there was no other Senior Manager available to determine Respondent's appeal. He added that the Respondent could not appeal to the Board because the Board was involved in the matter. In the upshot, she maintained that the procedures were followed in this case. In response, it was Counsel Mbwambo's submission that the Applicant disregarded the proper procedures for terminating an employment mandated under its own policy. Disciplinary Capability and Grievance Standard (Exhibit D9). According to Paragraph 3.1.1 of this policy, it states that: Investigation will be carried out promptly and thoroughly into any matter that is reasonably suspected or believed lo contravene any of NBC's policies or rules or which may otherwise be a disciplinary matter. The Applicant maintained that investigation was not conducted in this case contrary to Rule 13(1) ofGN. No. 42 o f2007. In support of her submission, the Applicant referred the Court to the case of Bati Service Company Ltd v. Victor Israel Urio, Labour Revision No. 720 of 2019. The procedures for termination on the ground of misconduct as it is in this case are provided under Rule 13 o f GN. No. 42 o f 2007. The contested procedure in the application at hand is the Applicant's failure to conduct investigation. In the case at hand, there is no doubt investigation was not conducted. Thus, the provisions stipulated herein were not complied. Looking at other disciplinary procedures, there were dully complied as rightly found by the Arbitrator. However, it is my view that since the reason for termination was not valid, the procedures thereafter are of no value. The reason for termination goes along with its specified procedures. Thus, if the reason is not, there then the alleged followed procedures are immaterial. It is also the Court's position that substantive unfairness attracts heavier penalty that procedural unfairness. This is also the Court position in the case of Sodetra (SPRL) Ltd v. Mezza & Another, Labour Revision No. 207 of 2008, cited with approval in the case of Pangea Minerals Limited v. Gwandu Majali, Civil Appeal No. 504 of 2020, Court of Appeal of Tanzania, it was held by the High Court that: ...a reading o f other sections of the Act gives a distinct impression that the law abhors substantive unfairness more than procedural unfairness, the remedy for the former attracts a heavier penalty than the latter... In line with the above decision, even in the case at hand, in the case at hand, the termination is substantively which attracts heavier punishment but also, some of the procedures were violated as rightly found by the Arbitrator. Turning to the last ground, on the legality of the Award of 24/18 months salaries as compensation and severance the counsel contended that, initially the Arbitrator found that the Respondent was entitled to eighteen months (18) salaries as compensation. However, while computing the amount the Arbitrator used the number 24 as the basis of computation. Letter, the Arbitrator allegedly corrected the Award by correcting a finding on the award of eighteen months (18) with a new finding of twenty-four (24) months, on the premise that it was a clerical error. The counsel argued that from case law, a clerical error must be a minor mistake or inadvertence in writing or copying something on the record, and not a correction of a judicial reasoning or determination which should not go to the root of the Court's decision or affect the substance of the judgement, decree or Court order. In their view, the correction made by the Arbitrator affected the substance of her decision as it corrected a finding/determination of the amount of compensation. That, the Arbitrator ought to have corrected the Award by replacing the number 24 with 18 as eighteen was the finding. Therefore, the correction made was erroneous. It was further submitted that the Award of either 24 or 18 months salaries as compensation was unjustifiable. The counsel also challenged the award of severance pay on the argument that the termination was fair hence, the Respondent was not entitled to such award. In response, Counsel Mwambo argued that the Arbitrator has powers under the law to correct any clerical error after delivering of the award, he supported his position with the case of Bishnu Charan Das v. Dhan Biswal, AIR 1977 ORI 68. He stated that the correction was made on three aspects; names of the Respondent, amount prayed and £ amount granted but the Applicant is disputing only one aspect that's the amount granted. He further referred to number of decisions to justify his position that the correction was properly made. In the impugned Award dated 30/09/2024 at page 35, the Arbitrator stated as follows: .... compensation does not base on salary alone but remuneration. The Commission finds it just to grant eighteen months compensation for unfair termination. In as far as exhibit N6 is concerned the Complainant monthly remuneration was Tshs. 16,343,793.33/= therefore entitled to Tshs. 16,343,793.33 x 24 = 392,251,039.92/=. Thereafter, the Arbitrator made correction on 03/10/2024. The Arbitrator corrected the eighteen months to read as twenty four months. It is the Applicant's argument that the correction was wrongly made. That the Arbitrator interfered the whole findings. In the circumstance of this case, I join hands with Counsel Mbwambo's position that the correction was minor one. It was a clerical error which was rightly corrected by the Arbitrator. Though the Arbitrator wrote eighteen months in words but the calculation was based on 24 months and the amount ordered based on 24 months. During the correction, even the total amount ordered was not interfered. Thus, the Arbitrator's intention was 24 months as corrected and not eighteen months as claimed by the Applicant's counsel. In the case at hand, looking at the CMA FI the Respondent prayed for an order of reinstatement in which in the circumstances of this case she was entitled for the same. However, she did not complain for the Award of compensation as ordered by the Arbitrator then, there is no need to interfere with the same. In the result, I find the present application have no merit. The CMA's decision is hereby upheld. The Applicant is ordered to pay the Respondent the total of Tanzanian Shillings Four Hundred and Fourteen Million Two Hundred and Fifty-Two Thousand, Three Hundred and Seventeen Cents (TZS. 414,252,300.17) It is so ordered. Y. J. MLYAMBINA JUDGE 25/03/2025 Judgement pronounced and dated 25th March, 2025 in the virtual presence of Counsel Miriam Bachuba for the Applicant and Ibrahim Mbwambo for the Respondent. Right of Appeal explained. Y. J. MLYAMBINA JUDGE 25/03/2025