OFF GRID

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA LABOUR DIVISION AT ARUSHA LABOUR REVISION NO 70 OF 2022 Arising from the Award of the Commission for Mediation and Arbitration at Arusha in CMA/ARS/308/19/02/20) OFF-GRID ELECTRIC TANZANIA LIMITED................ APPLICANT VERSUS IDDY HUSSEIN..............................................................................1stRESPONDENT ALLAN KIMBURU........................................................................ 2ndRESPONDENT DAVID MASELE........................................................................... 3rdRESPONDENT WILBERT MGONO...................................................................... 4thRESPONDENT JUDGMENT 22nd April & 27th May, 2024. KIWONDE, J. The applicant, Off-Grid Electric Tanzania Limited, being aggrieved by the decision of the Commission for Mediation and Arbitration (CMA) filed an application for revision praying for this Court to be pleased to call for the records of the proceedings and award of the CMA in Labour Dispute No. cMa/ARS/ARS/308/19/02/20 dated 13th October, 2022 for the purpose of revising, quashing and setting aside the arbitral award. The applicant, in its affidavit, raised six (6) legal issues (grounds) for revision as to the legality and propriety or otherwise, of the Commission: l)To hear and determine the respondents' complaint which it had no jurisdiction. 2) Findings that the applicant did not follow the prevailing procedure for terminating the respondents while neither the party filed the dispute to the Commission to challenge the process of retrenchment when the said process was underway. 3)Commission's finding that the applicant had no valid and fair reason to terminate the respondents while neither party filed a dispute to the Commission to challenge the process of retrenchment when the said process was underway. 4)Commission's award to order the applicant to pay the respondents six months salary each, being compensation while the termination is fair. 5)The Commission's finding to order the applicant to pay the respondents compensation of six months salary each without justifiable reason. 6) The Commission's finding in holding the current applicant liable for unfair termination of the respondents. On 19th February 2024, it was prayed by the counsels that the application be argued by way of filing written submissions, and both sides filed them. In the submissions in-chief, Ms. Kerry Mra, advocate, submitted on the 1st ground that the Commission for Mediation and Arbitration (CMA) had no jurisdiction to entertain the matter before it since the parties had entered into an agreement to end up the employment by way of retrenchment and the respondents received their terminal benefits. If the respondents were aggrieved by the retrenchment, they could complain before the CMA even before accepting their package. The parties are bound by their agreement and referred this court to the decision in the case of Neelkanth Salt Limited versus Siwema Salum Shabani & 9 others, Revision No. 356 of 2022. With respect to the 3rd ground for revision, the counsel said retrenchment is one of the forms of termination of employment under Rule 23(1) of GN No. 42 of 2007, section 4 of the Employment and Labour Relations Act, Cap 366 (R.E 2019). The applicant faced economic hardship that forced him to retrench 200 employees including the respondents herein. Apart from that, the counsel argued that the applicant gave reasons for retrenchment of the respondents as per Exhibit D4, the minutes, and that even DW2 was the secretary to the said meeting whose aim he stated was well elaborated by the evidence of DW1 to DW3 to which the respondents failed to discredit their testimonies. To cement on this, reference was made to the case of Nedry vs Adcock Igram (1988)19 ILJ 85 (LC) quoted with approval in the case of Maineline Carries Ltd versus Delifrids Filbert Libaba and 7 others, labour Revision No. 264 of 2019 he further cited the case of Janeth Mshiu versus Precision Air Service Ltd, Labour Revision No. 588/2019 [2020] TZHCD 428 TanzLii. Reverting to the 2nd ground, the applicant's counsel submitted that the procedures to be adhered to in retrenchment is provided under section 38(1) of the Employment and Labour Relations Act, Cap 366 (R.E 2019) and Rules 23 and 24 of GN No 42 of 2007. The law requires the employer to give notice of retrenchment to the employee, disclose all relevant information of the intended retrenchment and to consult prior to retrenchment either through trade union or the employees. It was further argued that in the CMA award, the Arbitrator ruled out that there were irregularities in the procedures since the consultation meeting of the 3rd respondent was done on a different date from other employees. She cited the case of Ringo R. Moses versus Lucky Spin Ltd (Premier Casino) Revision No. 544 of 2019, High Court. Besides that, the counsel said DW1, before the CMA testified that a letter of the intended retrenchment was issued to all employees as indicated in exhibit D2 which mentioned the date, time and venue for the meeting. She insisted that consultation invitation letter was prepared to all affected employees including the respondents herein, that is, exhibit D3. That the intended meeting was held as per Exhibit D4, the attendance register. Whereas, the evidence of DW2 and DW3 corroborated the fact that they received the consultation meeting notice prior to the scheduled meeting and the presence of the consultation meeting on the office notice board and both, PW1 to Pw3 stated to have received invitation letters collectively through their respective emails. Hence, sufficient notice of the consultation was issued to the employees and that the applicant complied with all the procedures. The court is invited to refer to the case of Brian Celestine and 19 others vs The Salvation Army Tanzania Territory, Civil Appeal No 372 of 2020 TZCA, TanzLii. The counsel submitted that the applicant, also paid the respondents all their terminal benefits including, severance pay, repatriation cost, pending leave, remuneration for work done, golden shake hand, one month salary in lieu of notice and the respondents were also issued termination letters. It was argued that if the respondents were dissatisfied with the process, they would have complained before the CMA before the retrenchment agreement came to an end. She referred to the case of Resolution Insurance Ltd vs Emmanuel Shio & others, Labour Revision No. 642 of 2019 [2020] TZCA 38. The 4% 5°’ and 6,h grounds were jointly argued. The applicants counsel claimed that as per Exhibit D8, the applicant had paid all the terminal benefits to the respondents, hence, the Arbitrator erred In awarding 6 months compensation to the respondents. The applicant proved that she had a valid reason for termination and that the procedure for the termination was adhered to, therefore, the respondents had no any claim. In reply, the counsel for the respondents argued the 1st ground by distinguishing the case of Neelkanth cited by the applicant on reasons that, in that case, none of the reasons for retrenchment were adhered to, as in that case it concerns on termination of employees by agreement while in the current application, the core stone of the referral of the dispute to the CMA was on the validity of the reason and procedure as provided under section 38 of Cap 366 and Rule 23 (1) of GN No 42 of 2007. As to the claim that parties are bound by their agreement, the respondents' counsel stated that, the release agreement signed by the parties is one of the conditions as its refusal would entail losing financial entitlements. Concerning the 3rd ground, he submitted that, despite mere word of DW1 to DW3, the applicant failed to prove the detail of the purported financial constraints which resulted from poor sales, low income from sale and high operational costs as required by law. He is of the view that, the need to prove and justify the validity and fairness of the reason was cemented in the case of Managing Director Sourthern Link vs Khamis M. Mageleka, Labour Div. DSM, Rev No 227 of 2010, 06/05/2011 (2011- 2012) LCCD, Mainle Carries Ltd versus Delifrida Filbert Libaba and 7 others, Labour Revision No. 264 of 2019 and Janeth Mshiu versus Preciion Air Services Limited, Labour Revision No 588/2019 (2020) TZH CLD 428. The counsel contended that, the applicant did not tender any proof to justify the reasons for retrenchment, hence, the case of Janeth Mshiu can not be applied blindly as even the purported agreement by the applicant with the undisclosed reasons were never tendered to justify the said argument. On the 2nd ground, the respondents' counsel stated that the procedures that were expected to be proved are those provided under section 38 (1) of the Employment and Labour Relations Act, 2004 which requires the applicant to disclose all relevant information on the intended retrenchment for proper consultation, issue notice of the contemplated retrenchment and undertaking consultative meetings where the employer failed to disclose all relevant information that could amount to proper consultation. In the minutes of the consultative agreement, the issue of criteria was never answered by the management when the same was raised in the first meeting and they stated the same would be responded in the second meeting but at the second meeting the same was not answered. As a result, they were told that it would be answered in individual consultation which never took place as the respondents were issued with the termination letters and the release agreement, an act which he claimed to be in contravention of section 38 of the Employment and Labour Relation Act. Coming to the 4th and 5th grounds of revision, the counsel for the respondents submitted that the same are not water tight as the CMA rightly awarded the compensation to the respondents, hence, the 6th ground should be answered negatively. In her brief rejoinder, the counsel for the applicant reiterated her submissions in-chief and added on the 3rd ground that, the evidence of DW1 to DW3 sufficiently proved that the reason for retrenchment was due to operational constraints and since the said evidence was not challenged by the respondents, then the same is not discredited. She referred this court to the case of Issa Hassan U K I vs The Republic, Criminal Appeal Nol29 of 2017 which cited with approval the case of Paul Yusuf Nchia vs National Executive Secretary, Chama cha I4apin^uz* & an°ther/ Civil Appeal No 85 of 2005, that failure to cross- examine a witness on a certain matter is deemed to have accepted the said matter and distinguished the cases cited by the counsel for the respondents as the consultation was held as per the dictate of the law. Upon going through the submissions by the parties, relevant labour laws and CMA records, the main issue for determination is whether the application for revision has been merited or otherwise. In this matter, the complaints require this court to consider whether retrenchment procedures were adhered to, to make it lawful. In determining the fairness of termination of employment, section 37(2) (a) (b) and (c) of the Employment and Labour Relations Act, 2004 requires the employer to prove that the reason for termination is valid and fair and the termination is in accordance with fair procedures. The burden of proof lies on the applicant who is the employer. To start with, I find it necessary to determine the validity and fairness of the reasons for retrenchment. The applicant alleged that termination of the respondents was due to operational constraints which forced the applicant to look into its current structure aiming at reducing operational costs. In law, under Rule 23 (1)(2) of the Employment and Labour Relations (Code of Good Practice) G.N No. 42 2007, retrenchment is recognised as one of the reasons which when proved, amounts to a good reason for terminating an employment. The circumstance which can form a basis for termination are such as economic needs that relate to the financial management of the enterprises, the technological needs that refer to the introduction of a new technology as well as structural needs that arise from restructuring of the business. In the present matter, the applicant relied on economic need (operational constraints) as what triggered the retrenchment process. It is on record that apart from stating the said reason, the same was not proved. The law imposes the obligation to the employer to prove both the procedural and substantive part for termination. It is from that angle I find that the applicant failed to prove retrenchment as a valid reason for the termination of the respondents. Also, the procedures for retrenchment are provided for under section 38 of the Employment and Labour Relations Act, 2004 (ELRA) read together with Rules 23 8i 24 of the Employment and Labour Relations (Code of Good Practice) G.N No.42 of 2007. According to the above provision of the law, four principles for the retrenchment are: one, the issuance of notice on the intended retracement, two, disclosure of all relevant information on the intended retrenchment, three, prior consultation with employees on the reasons for retrenchment, measures to minimise the retrenchment, methods to be used in selecting employees to be retrenched, timing and severance pay and four, the notice, disclosure and consultation with trade union or employees not registered by trade union. The applicant averred that all the procedures were adhered to, for he issued a general notice to the employees including the respondents herein, on the process of making organizational and operational changes, followed by an individual notice to all employees who were selected for redundancy. The applicant said it did not end there, there was a consultation meeting convened and the respondents were satisfied with the criteria used to have their position affected and parties signed a separation and a release agreement. This is refuted by the respondents who alleged that they were never served with the general notice on retrenchment and further that the signing of the mutual terminal agreement was a conditional for them to be paid their benefits and other monetary packages. ^ovvever,is evident from exhibits DI and D2 that general notice was lS$ued by the applicant to the employees informing them of the intended consultation meeting to be held at different venues; that is, Mwanza, Dar­ es salaam, Mbeya and Arusha on 8th May,2019 from 10:00am. But when p\A/l was cross-examined, he testified that despite the presence of exhibits DI and D2, there was no any proof of service of the said documents to the respondents. This means that the requirement of issuing notice was not fulfilled by the applicant. The applicant was duty bound to ensure that the documents reached the respondents. Despite good evidence of invitation to the respondents to attend the consultation meetings held as per collective exhibit D3, D4, D5, and D6, failure to issue notice violated the requirement of the law. I agree with the respondents that there was no notice issued to the respondents on the intended retrenchment process and the reasons for it. As a result, there cannot be said with certainty that there was a valid reason for the termination of the employment and the procedures were not complied with, thus, amounting to unfair termination of the employment of the respondents. To that end, all six grounds for revision crumble. For that matter, unfair termination attracts the holding that the pcnondents are entitled to compensation as was rightly awarded by the Commission for Mediation and Arbitration. In the upshot, the application for revision is devoid of merit. It is hereby dismissed. The CMA award of compensation to the respondents was rightly ordered and it is left undisturbed. No order as to cost this being a labour dispute. DATED at ARUSHA this 27th day of May 2024. F. H. KIWONDE JUDGE 27/05/2024