20041117 TZCA Dar es Salaam

I .. / '·· // ·. . J HlGH CO!JJT AJ!_USIIA L1BRAR~ c\ Da1e _JJ_: IN THE COURT OF APPEAL OF TANZANIA ,- '2oo.f \/1,-:;, 1,~vz_~ \. ·- AT DAR ES SALAAM (CORAM: RAMADHANI, J.A.; NSEKELA, J.A.; And KAJI, J. A.) CIVIL APPEAL NO. 100 OF 2001 BETvVEEN PIUS SANGALI & OTHERS ... APPELLANTS AND TANZANIA PORTLAND CEMENT CO. LTD. RESPONDENT (Appeal from the decision of the High Court of Tanzania at Dar es Salaam) (Bubeshi, J.) dated the 27 th day of February, 2001 m Misc. Civil Cause No. 16 of 1996 JUDGMENT OF THE COURT RAMADHANI, J. A.: The appellants, Pius Sangali and sixteen others, were employees of the respondent, Tanzania Portland Cement Co. Ltd. While on duty on 07/05/1991, they were,-suspected of having attempted to steal some bags of cement, and, so, they were charged but were acquitted. Nevertheless, the respondent, on 13/01/1993, terminated their employment under section 39 (2) the Security of Employment Act, 1964 (here_inafter referred to as the Act). The appellants went to the Conciliation Board which, on 29/11/1993, ordered their reinstatement. The respondent's reference to the 2 Minister for Labour was unsuccessful and the reinstatement order was confirmed. The respondent were not deterred but challenged the Minister's decision in the High Court where BUBESHI, J. ruled that the Minister used a wrong section of the Act. The Minister had used section 26(2) instead of section 40A (1) of the Act. So, the matter went back to the Minister who, on 04/03/1996, rectified the error and confirmed the decision of the Conciliation Board. The respondent went back to the High Court, Misc. Civil Cause No. 16 of J-996, for prerogative orders, which was also dismissed by BUBESHI, J. on 09/10/1997. The respondent lodged a notice of· appeal in this Court on 20/10/1997. While the appeal was pending, the respondent on 28/01/1998, opted to pay the appellants their terminal benefits under section 40A (5)(b) of the Act instead of reinstating them. The appellants were dissatisfied with the quantum and, so, they filed in the High Court a claim for shs 118,453,013/85, being arrears of pay and other allowances from 13/01/1993, when they were .., .) terminated, to May 1998, when they were act'ually paid. BUBESHI, J. I granted the claim on 12/06/~998, and on 10/07/1998, a garnishee order was issued attaching the respondent's account with the I National Bank of Commerce ( 1997), Kawe Branch. However, on 24/09/1998, upon the application by the respondent, BUBESHI, J. raised the garnishee order pending investigation on the quantum. The appellants sought BUBESHI, J. to review her order of raising the garnishee but that was reject~d because there was a pending appeal b¥ the respondent in this Court against 'her earlier ruling of 09/10/1997, in which she upheld the Minister's order. However, that · notice of appeal was struck out on 10/11/1999. So, BUBESHI, J. went ahead with the application for review and on 25/02/2000 she ruled that the appellants were entitled to the arrears from the date their employment was terminated, 13/01/1993, to the date the respondent opted to compensate therp instead of reinstating them, that is, 28/12/1998, a period of five years. She also ordered I the appellants to prove their claim for shs 118,453,023/85. 4 I I BUBESHI, J., after hearing the appellants' evidence, as she had ordered, said on, 27/02/2001: It is not in dispute that this court gave its decision regarding the Minister's order on 9/10/97. In my view • this is the period that the applicants should consider to be the cut off date and not earlier. The respondents could not have exercised that option while the matter was still pending in court. So, the period at issue is between 9/10/97 and the date when the option to pay was exercised and the amounts actually paid, that is, 28/1/98, a period of 4 months. This ruling of BUBESHI, J. is different I from the one she had given a ""' earlier, on 25/02/2000, where she said that the period for which. year the appellants were entitled to payment of arrears was five years. This has aggrieved the appellants and hence this appeal being canvassed by Mr. Rutabingwa, learned advocate, while the respondent was represented by Mr. Nassar, learned counsel. . . There were four grounds of appeal: First, that the ruling of 27 /2/01 is wrong as it contradicts the earlier ruling of 25/2/2000. Two, that the i learned judge erred in holding that the respondent could not exercise the option to pay off the appellants instead of reinstating them 5 before the court confirmed the Minister's order on 9/10/97. Three, that since the respondent failed to come up with an alternative figure, then the claim of shs 118,455,023/85 should have been granted. Lastly, that allowa·nces were already granted on 25/2/2000 and, as they were not challenged, the learned judge erred rn disallowing them on the gro~nd that they were not statutory. We might as well point out here that we agree with the appellants that once the learned judge ruled on 25/02/2000 that the appellants "were entitled to the payment of arrears of five years, from 13/1/93 to 28/1/98, she could not then on 27 /2/01 reduce the period to four · months without there being an application for review. The learned judge was functus officii. So, ·we allow the first ground of appeal. But was the leaned judge right in her ruling of 25/2/2000 that the appellants were entitled to payment of arrears for five years, a period they were not in employment? To answer that we have to see what the Act provides. In our opinion section 40A of the Act, provides for two scenarios: One, section 40A (4) deals with the situation in which 6 I I an employer complies with an order of rei;nstating an employee I I ' whose services were terminatdd. That subsection provides as follows: I ,,I, i ( 4) Where in the exerdise of its powe·rs under this section a Board or the Minister orders:- ! · (a) re-instatement: of an employee, the employer shall re-instate the employee in his former employment, and such :reinstatement shall have effect for the pu;rpose of the payment of wages, entitlement to severance allowance and: other retiring benefits, and otherwise in r~lation to any benefits of the I employment, from the d~te of the 1 · termination of the employee'$ employment or his summary dismissal, as 'the case may be, but the employer may deduct from any wages due on ori after re- " instatement, the wages ii) respect of the number :Qf days during which the :1 • employee re'11ained absent from work during (andi including) the day on which the te'rmination or the dismissal I ' took effect and the day on! which· the re- instatement is: ordered by the Board or, in the case of :a further reference to the Minister, the day on : which re- instatement ·is confirmed qr order~d by the Minister;', (emphasis provided). I i r • • It is abundantly clear to us trat the import qf section 40A ( 4) ~a) of . ' . I ! . . . ' ' the. Act is that the responde?t company is allowed ~o deduct. wag~s . ·. ' . . • from 13/01/1993, when appTjlants were terrinated, to 04/03/1996, when.·the Minister rectified tlie order as directed by BUBESHI, J. The I . .. . .· . . . . ;1 . . . . . . 7 payment of wages for that period of time is at the discretion of the respondent, and a court of law cannot order such payment. We uphold with Mr. Nassor's submission. If an employer who complies, with an order of re-instatement of an employee has the discretion not to pay arrears of wages for the period the employee did not work, we ask: Can an employer who refuses to comply with a re-instatement order be required to pay the wages for the period the employee was absent from work? In order to answer that question we better see the provisions of section 40A (5) which govern the second scenario where an employer refuses to · comply with the order of the Minister: (5) Where a reinstatement ... has been ordered under this section and the employer refuses or fails to comply with the order- . (a) ... I (b) in the case of an order made by the Minister on further reference to him, within fourteen days of the order being made by the Minister, the employer shall be liable to pay the employee compensation of an amount equal to the aggregate of- (i) the statutory compensation computed · in accordance with section 35; and (ii) a sum equal to twelve months' wages at the rate of wages to which the employee was 8 entitled immediately before the termination of I his employment ... Section 35 provides in part as follows: The statutory compensation shall be - (a) such sum of money as shall b:e equal to the severance allowance due and payable to the employee on the termination of his employment; or (b) the sum of five hundred shillings, whichever is greater: I I I Computation of the severance allowance due and payable is provided QY section 5 of the Severance Allowance Act, 1962 (Cap 487). We do not think that we need to go into those det~ils, suffice it is to say. that severance allowance does not include arrears of wages for the period an employee is absent from work. ' . We are, therefore, of the firm view that the learned· judge erred when she ordered the payment of arrears of wages for the period the appellants were not at work, from 13/01/19~3, to 28/01/1998. So, we invoke the provisions of section 4 (2) of the Appellate Jurisdiction Act, 1979, and we revise the proceedings before BUBESHI, J. That section provides as follows: 9 For all purposes of and incidental to the hearing and determination of any appeal in the exercise of the jurisdiction conferred upon it by this Act, the Court of Appeal shall, in addition to any other power, authority and jurisdiction conferred by this Act, have the power of revision and the power, authority and jurisdiction vested in the Court from which the appeal is brought. We, therefore, quash the order of 25/02/2000. It follows from what we have decided above that we agree with Mr. Nassar that ground three of appeal that as the claim of shs. 118,455,023/85 was not disputed by the respondent then it was admitted, and that it should have been granted, is also dismissed. Mr. Rutabingwa's argument in ground four of appeal that the payment of allowances was already decided upon by the learned judge on 25/2/2000, is not true. She ruled that the app~llants had to prove their claims and when they came to do so, she declined to grant allowances. She said in her ruling of 27/02/2001:. Allowances by their very nature are non statutory, )I they are given because the employee is at the ··place of work and producing. J We agree with her and Mr. Nassor's submission. We dismiss this ~ ------ - - ground. Ground two of appeal has exercised our minds a great deal. The appellants claimed that the learned judge erred in holding that the respondent could not exercise the option to pay off the appellants instead of reinstating them before 9/10/97 when the court confirmed the Minister's order. BUBESHI, J., on 27/02/2001, said: The respondents could not have exercised that option while the matter was still pending in court. Was the learned Judge correct? To appreciate that we have to look at ·· section 40A (5) (b) of the Act: (5) Where a reinstatement ... has been ordered under this section and the employer refuses or fails to comply with the order- (a) ... (b) in the case of an order made by the Minister on further reference to him, within fourteen days of the order being made by the Minister, the employer shall be liable to pay the employee compensation ... ( emphasis is provided) 11 It is obvious to us that this subsection comes into play when an employer has refused or failed to reinstate an employee. As the fourteen days start to run from the date of the Minister's order, then the employer must refuse to reinstate within that time. If he does not do so, and if the fourteen days elapse then he is taken to have failed -- - - - ----- -- --- -- ----- - ---- -- - . -· -----~------ ----- - - - - - - ~ - - - - - - - - - - - to "comply with the _Qf-Q~f' i:lnd the employer becomes "liable to pay --------------- --~ the employee". From our construction of that subsection we cannot agree with the - - - - ---·· -- - ----- - - ______ .,. - -· t - learned judge that while the m~tter wa?_io_,courtJ:b.e respondent could not have exercised the option to reinstate or not to reinstate. · The provisions of the law as given in section 40A (5) are unambiguous and need no interpolations. After the elapse of fourteen days the respondent was deemed to have failed to comply with the order and was liable to compensate the appellants. In· fact in this case the respondent made the decision to pay compensation while the matter was in this Court pending appeal and before the notice of appeal was struck out. 12 It is also obvious to us that the fourteen days: do not take into account the possibility of a reference to the High Court for I prerogative orders, as was the case in this rmatter. It is most I ' unfortunate that Parliament in its wisdom did not 1consider that such I orders as reinstatement of an employee by the Minister could come to court for prerogative orders and, so, did not provide for that possibility. I Likewise, we cannot agree with Mr. Rutabingwa that the respondent I - shauld have deposited in the High Court within Jourteen days the i I I I amount of compensation in order to comply with t~at subsection. The · clear words of the provision are that after the elapse of fourteen days ------------- ••. ------- - .. . ----- -1 -- . . .. - I liability - to compensate -- -- - accrues and not that--- compensation_ - - -- ------ --------------------------- - ---- r - has to be --- paid within that period of time, and, so, there is ino need to deposit anything. But to be fair to the learned judge she was cbnfronted with the I payment of arrears of wages. She posed this question: 13 Are the applicants entitled to arrears of pay during the period when the respondent had not exercised his option to pay them off? BUBESHI, J. was of the opinion that the respondent could only have exercised the option to pay on 09/10/1997 when the High Court dismissed the application for prerogative order and thus confirmed the Minister's order, as it were. As the decision to pay off the appellants was taken on 28/01/1998, that is, four months later, the learned judge was of the opinion that: As it is, [the respondent] has to suffer the consequence because he kept the applicants in suspense. They did "if. not know whether they will be taken back or not. They are entitled to receive salaries for those four months ... But from what we have said above the decision to pay compensation · is made by the statute after the expiry of fourteen days. So, there is no question of an employee being in a limbo. So, ground two succeeds. However, for the avoidance of doubts, that success does not benefit the appellants in any way. The aim of ground two was to quash the payment of arrears for just four months and to reinstate the payment of arrears for five years· which we have already decided to have ·been illegal. 14 In the end result the appeal is dismissed with costs. The appellants are only entitled to what is provided under section 40A (5). We order that parties should appear before the Deputy Registrar, Court of ' Appeal, to determine whether or not every appellant has been I properly compensated under section 40A (5) of the ,Act. DATED at DAR ES SALAAM this 17TH day of November, 2004. A. S. L. RAMADHANI JUSTICE OF APPEAL H. R. NSEKELA JUSTICE OF APPEAL S. N. KAJI JUSTICE OF APPEAL I certify that this is a true copy of the original; (SA~RA) SENIOR DEPUTY REGISTRAR