CIVIL APPEAL NO 281 OF 2022 RICHARD NKOMO VERSUS HODI HOTEL MANAGEMENT CO LTD ta MOUNT MERU HOTEL

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA fCORAM: MKUYE. 3.A.. RUMANYIKA. J.A And MPEMU, 3A j ) CIVIL APPEAL NO. 281 OF 2022 RICHARD NKOMO.............. ...... ........ ............... .........................APPELLANT VERSUS HODI (HOTEL MANAGEMENT) CO.LTD t/a MOUNT MERU HOTEL..................... ...................... ........RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Labour Division, at Arusha) (Philip, 3.) dated the 8th day of February, 2022 in Labour Revision No. 102 of 2020 JUDGMENT OF THE COURT 12th February & 4th March, 2025 MPEMU. J.A.: The appellant, who is a Zimbabwean by nationality, filed a labour complaint in the Commission for Mediation and Arbitration (the CMA) for Arusha inviting its intervention for unjustifiable and illegal rescission of the contract of employment (the contract) by the respondent. Initially, the appellant was employed as a general manager through a renewable contract, for the first time in July 2012. On 29th July, 2018, the duo entered into a twenty-four months contract effective from 1st July, 2018 on a monthly salary of USD 20,000.00. payable to the appellant. Almost a year later, that is, on 31st July, 2019, the respondent rescinded the contract for want of a valid residence permit on the appellant's side. The appellant rushed to the CMA contending breach of the contract and claimed a total of USD 2,333,974.67 comprising of one month salary, four months' salary in lieu of notice, leave and public holidays, repatriation costs, bonus, damages for breach of contract and the remaining unpaid monthly salaries. The CMA arbitrated the dispute and, in the end, dismissed the complaint on the ground stated at page 1237 of the record of appeal reading this way: "I am equally not in disregard o f the testimony by the complainant that he later received the residence and work permit (exhibit P6 collectively) issued on 29h July 2019 but according to the unshaken evidence by DW2, the said documents were neither in the hands o f the complainant nor the respondent until 5th August, 2019, This means, at the time the rescission letter was issued, the respondent had not received the permits and not served to the complainant Therefore, it was proper to rescind the contract first and wait for the proper authority to issue the permits." [Emphasis supplied] That decision of the CMA which was issued on 26th October, 2020, disturbed the appellant thus, invited the High Court to revise it. He raised eleven areas of revision which basically hinged on breach of the contract by the respondent, its illegalities and improper evaluation of the evidence by the arbitrator. Heeding to the revisional invitation, the High Court (Phillip J.) dismissed the revisional complaint because the respondent did not breach the contract. The learned High Court Judge made the following concluding remarks in the labour complaint before her: '!'According to his own testimony, he admitted that he had no residence permit but had a speciai pass only. At the end o f the day, they informed him that the speciai pass does not give him right to work in Tanzania. That is the right position o f the law.... In the upshot, though I have taken a different approach and reasoning in the determination of this matter, I find myself ending in the same conclusion reached by the arbitrator that the respondent did not commit any. breach o f the appiicant's employment contract. This application is dismissed." [Emphasis supplied] Moreover, as he did in respect of the award of the CMA, the appellant was also aggrieved by the decision of the High Court refusing to set aside that award. He is now before us on the following grounds of appeal: 1. That, the honourable Judge o f the High Court erred in law in holding that the legal duty to apply for residence permit is not on the employer contrary to, inter alia, section 10 (1) o f the Non-Citizens (Employment Regulations) Act o f 2015. 2. That, the honourable Judge o f the High Court erred in law in failing to properly construe and apply section 30 (1) and section 32 (5) of the Immigration Act, Cap. 54 RE 2016. 3. That, the honourable Judge o f the High Court erred in law and failed to properly construe and distinguish between work permits issued under the Non-Citizens (Employment Regulation) Act of 2015 and residence permits issued under the Immigration Act, Cap. 54 RE 2016. 4. That, the honourable Judge o f the High Court erred in law and failed to uphold the sanctity o f contract enshrined in section 37 (1) of the Law o f Contract Act, Cap. 433. 5. That, the honourable Judge o f the High Court erred in law and erroneously applied rescission o f contract. 6. That, the honourable Judge o f the High Court erred in law and failed to uphold the right to fair labour practice as a fundamental right 7. That, the honourable Judge o f the High Court erred in iaw in not ruling in favour o f the appellant having overruled the award that there are no illegalities. 8. That, the honourable Judge of the High Court erred in law by failing to award the appellant salaries for the remainder o f the employment contract, damages and basic statutory terminal benefits those provided under section 44 of the Employment and Labour Relations Act, 2004. In all eight grounds of appeal, the main thrust is in respect of the complaint of the appellant that the respondent had breached the contract and that it had a duty to ensure the appellant is in requisite possession of a residence permit. For that matter, our focus will be on two issues. One, whether the High Court Judge was justified to base rescission of the contract on want of a residence permit and two, whether the respondent (employer) had the responsibility of applying for the residence permit and not the appellant (employee). On 12th February, 2025 we heard the parties in this appeal through Mr. Meinrad Menino D'Souza assisted by Mr. Mnyiwala Mapembe, both learned advocates representing the appellant and Mr. Paschal Kamala, also learned advocate who was for the respondent. Parties also stood by their lengthy written submissions they had filed and also, they clarified orally at the hearing. We will therefore pick some key points from the lengthy written submissions and the subsequent oral clarifications which we find of assistance in the determination of the grounds of appeal as condensed in the two issues we raised above. Mr. D'Souza came forcefully in support of the appeal by arguing that, during rescission of the contract, the appellant had a special pass which allowed him to work with the respondent. As to the residence permit, it was submitted in the written submissions from pages 5 through 12 that, the employer is the one responsible to apply for the residence permit in terms of section 10 (1) of the Non-Citizen (Employment Regulations) Act, 2015 (The Non-Citizens Act), the respondent's Human Resource Policies and Procedure Manual of July, 2013 (the HR Manual) (exhibit D4) and also as testified by DW2 during cross examination. He also cited to us the High Court case of HJF Medical Research International Inc. v. Mergita Ebba, Labour Revision No. 257 of 2021 (unreported) persuasively that, it was the responsibility of the respondent to apply for residence permit on behalf of the appellant. Mr. D'Souza's argument was therefore that, as the appellant had a special pass and the fact that the duty to apply for residence permit was on the respondent, then rescission of the contract constituted breach and it was wrong for both the CMA and the High Court not to hold so. Mr. D'Souza's concern was also on the right to be heard blaming the respondent to rescind the contract without a disciplinary hearing. He thought, that should have preceded the issuance of a rescission letter and was the only forum within which the appellant would have been heard. He added that, the respondent did not perceive the necessity of the disciplinary hearing because it wanted, at any cost, to do away with the appellant, the reason why there was an immediate filling of the vacancy left by the appellant. He thus faulted the learned Judge to proceed blessing the rescission of the contract in absence of a disciplinary hearing. Mr. D'souza also submitted on sanctity of contract under section 37 (1) of the Law of Contract Act. Cap. 433 and rescission of the contract. The main complaint appears to be that, despite the lack of residence permit, the contract of employment was to be terminated in the manner prescribed in the contract itself and not through rescission for want of a residence permit. He cited to us a South African case of Discovery Health Limited v. Commission of Conciliation, Mediation and Arbitration and Another, Case No. JR 2877/66 rhttD^/www.saflii.ora/1) where the contract of employment did not terminate despite lack of a residence permit. He thus argued that, parties have to be guided by the agreed terms of the contract. He finally concluded that, labour Laws do not permit rescission of contract save for termination in terms of Regulation 3(1) (a) and (2) of the Employment and Labour Relations (Code of Good Practice) GN. No. 42 of 2007. Mr. Kamala's time to submit came. Clarifying on his written submissions, the learned counsel commenced by looking at exhibit P4 in twofold. First, is the immigration status of the appellant and, second, is the legality of the contract. Submitting on the former, the learned counsel stated that, at the time the rescission letter was issued, the appellant had no residence permit. He drew our attention to page 633 of the record of appeal in which the appellant admitted to have no residence permit. As to the legality of the contract, Mr. Kamala's reply finds us landing at pages 1633 to 1636 of the record of appeal under his guidance that, some contracts were renewed before they expired and that the appellant kept his employment record for himself, instead of the Human Resource Manager, as such, it was doubtful if the appellant submitted such contracts to the Immigration Department or to the Labour Commissioner. That notwithstanding, the contract (exhibit P3) was illegal for want of a residence permit. Regarding the disciplinary hearing, his argument was that, as the appellant left the country to Zimbabwe immediately after rescission of the contract, it was not practicable to hold the said proceedings. Again, he added, upon his return, the appellant immediately rushed to the CMA for the instant labour dispute. Mr. Kamala ended by arguing that, there was no breach of contract because the contract was illegal for want of a residence permit. He consequently, urged us to dismiss the appeal. In rejoinder, Mr. D'Souza stated that, according to the employment laws, the employer is responsible for keeping all employment records of employees. As to illegality of the contact, his rejoinder was that, the respondent did not cross appeal, as such he is estopped from submitting on it. We have duly considered the record of appeal, the written and oral submissions of both counsel in the determination of the appeal. Before we venture on the two issues we have just raised above, we find it appropriate at the onset to state that, at the time of the rescission of the contract on 31st July, 2019, the employment record of the appellant appearing at page 700 of the record of appeal in exhibit P4, lacked a residence permit. We note further in exhibit P4 that, the employment contract of the duo, executed on 1st July, 2018 appearing at page 694 of the record of appeal, exhibit P3 was rescinded by the respondent on the ground that, the appellant had no residence permit. As seen at page 633 of the record of appeal, the appellant conceded to lack a residence permit at that time. The record of appeal bears out revelation as follows: "...Yes, I negotiated terms with the departing shareholders. I received the letter o f rescission of the contract on 31/7/2019 after the takeover. Yes, by then I had the work permit in my file. The residence permit was not in the fife. I got the residence permit on 2nd or 3rd o f August Yes, I said in my evidence in during that I reported to the HR that there was a problem with immigration. That was on 0/08/2019. On the 2nd August, I got a text message that the residence permit was in place [Emphasis supplied] Again, Mr. D'Souza also submitted to the effect that, towards the rescission of the contract, the appellant had no residence permit. He had a special pass (exhibit P5) appearing at page 701 of the record of appeal which, according to Mr. D'Souza, permitted him to work in Tanzania, particularly with the respondent. This now being the case, one would ask the reason for parties partying ways. It essentially takes us to the first issue we fore raised, that is, whether the High Court Judge was justified to base rescission of the contract on want of a residence permit. The appellant was and is a Zimbabwean by nationality. For that matter, his employment was governed by two legislations; one is the Immigration Act, Cap. 58 of which, its section 30 provides, we quote: "30 (1) No person shall engage in paid employment under an employer resident In Tanzania except under the permit issued in accordance with the provisions o f the Non-Citizens (Employment Regulations) Act. (2) No person shall, for gain or reward engage in any prescribed trade, business, professional or other occupation except in accordance with the terms of an appropriate permit issued in accordance with Non-Citizens (Employment Regulations) Act. (3) No person shall commence any course o f the study at an educational institution in Tanzania unless he is the holder o f a valid appropriate permit issued in accordance with this Act." The other law is the Non-Citizens (Employment Regulation) Act No. 1 of 2015 which states in section 9 (1) (a) that: 1. A non-citizen shall not engage in any occupation for reward, profit or non-profit unless he- a) Has a valid work permit that allows him to engage in occupation specified in a valid work permit In the provisions of the two legislations we have just fore quoted, a non­ citizen is permitted to work in Tanzania if he is in possession of a valid residence permit and a work permit. In Zorica Vijapi v. Wilderness Trail - Karama Lodge (Civil Appeal No. 320 of 2020) [2023] TZCA 17567 (29 August 2023; TanzLII), at page 10 of the judgment, we said the following: "Apart from the foregoing, the record shows that during the period she used to work with the respondent, the appellant had not secured a residence permit to enable her engage in gainful employment. She had only paid for the residence permit on l$ h March, 2016 through Standard Chartered Bank (exhibit E-12) and further admitted by the appellant that she had no residence permit. As such, she was living in the country illegally and she engaged in a paid employment illegally Seeking guidance on the above legal principles, with respect, Mr. D'Souza's argument that, a special permit allowed the appellant towork is without any legal backing. The said special permit neither had any bearing on the employment contract nor was it backed by any legal principle to authorize the appellant to work in Tanzania. The learned High Court Judge therefore properly construed the relevance of residence and work permits within the meaning of the Immigration Act and the Non-Citizens Act. What she meant, and which we also agree, is that, a person may be issued with a work permit if he possesses a valid residence permit. We do not find any difficulties to her interpretation. This one is settled and it permits us now to explore the rescission of the contract. Mr. D'Souza appears to have difficulties on rescission of the contract basing on want of a residence permit. If we understood him clearly, he meant that, in a contract between the appellant and the respondent, the criteria for having residence permit is alien in the terms of that contract. We think this is what prompted the learned counsel to fault the learned High Court Judge for failing to uphold principles of sanctity of contract within the meaning of section 37 (1) of the Law of Contract Act, Cap. 433. In other words, Mr. D'Souza seems to suggest that the contract between the duo may only be rescinded on the express terms other than the absence of the residence permit as blessed by the High Court, if we go further, he thought, the employment laws should also have been in place, the reason we find him faulting the leaned High Court Judge for ignoring the disciplinary hearing when termination of employment contract is called to question. Here, it seems, Mr. D'Souza invited us to examine breach of the contract and perhaps, who is at fault. Mr. Kamala, on the other hand, is contented on the High Court's action. In him, rescission of the contract was rightly arrived at basing on operation of the law (want of a residence permit) and therefore, the issue of breach of contract would not have arisen. That being the case, the alleged disciplinary hearing remains of no relevance. This is our understanding from the counsels oral and written submissions regarding rescission of the contract. Our starting point, we think, should be in exhibit P4 which is the rescission letter seen at page 700 of the record of appeal. For ease of reference, we find it appropriate to reproduce the relevant portion as hereunder: "RESCISSION OF EMPLOYMENT CONTRACT BY OPERA TION OF THE LA W. Kindly refer to the above captioned matter. Pursuant to handover o f the business and affairs of Hodi (Hotel Management) Company Limited ("the Company') from Southern Africa Enterprise 14 Development Fund (SAEDF) to Blue Jewel Company Limited C'BJL') on 3(fh July 2019,1 wish to notify you that following our review o f your employment record we have noted that, a valid residence permit for your employment contract has not yet been issued. As you may be aware under the existing Labour and Immigration laws in the United Republic o f Tanzania, a foreigner cannot engage in work without valid documents such as Work Permit and Resident Permit We wish to notify you further that, it is not only a criminal offence for the company and its directors to enter into any employment relation with a foreigner without possession o f such stated document but also it makes any employment agreement entered, illegal. In the absence o f such mandatory documents, this renders any employment agreement illegal and/or contrary to the laws. As the Company is legally established and registered in the United Republic o f Tanzania, it is duty and legally bound to respect and implement the laws. For the aforementioned reasons, in compliance o f the law, your employment agreement is rescinded with immediate effect Should valid documents be obtained as required by the laws, the company may, at its discretion, consider you for re-engagement. Yours Sgd. DIRECTOR" From the wordings of the rescission letter, it seems to us that, rescission of the contract was by operation of the law, basing on want of residence permit. To narrow down the discussion, the laws referred to in the rescission letter are those related to residence and work permits. We mentioned them above, but worthy repeating to mention as, the Immigration Act, which is in respect of the administration of residence permits and the Non-Citizens Act dealing with the administration of work permits. To say the least, the rescission letter has nothing to do with laws relating to sanctity of the contract as to require the import of the Law of Contract Act. We are saying so because, we find the rescission of contract is not allied to the breach of the contract by either of the parties. It is simply the laws which requires a non-citizen to possess both the residence and work permits prior to an engagement in, and throughout, the employment. The learned High Court Judge therefore properly arrived at a finding that, the respondent did not breach the contract. Guided by the foregoing analysis, it is our finding that, the complaint of the appellant that he was not heard basing on failure of the respondent to hold a disciplinary hearing is misplaced. The learned High Court Judge dismissed that complaint at page 2262 through 2263 of the record of appeal in the following words: "With regard to Mr. D'souza's concern that the applicant was not accorded his right to be heard and no disciplinary hearing was conducted, I join hands with Mr. Kamaia that the applicant was heard. As alluded earlier in this ruling, the applicants testimony revealed that before being served with the letter for recession of this employment contract he had a meeting with the respondents' officers and was informed that the residence permit was lacking in his employment records. He had an opportunity to air his views on the matter. According to his own testimony, he admitted that he had no residence permit but a specialpass only. At the end o f the day, they informed him that the special pass does not give him right to work in Tanzania. That is the right position o f the law. In my considered view, there was no need of conducting a disciplinary hearing because there was nothing which would have attracted such an action. What happened was lack o f legal documents in the applicant's employment records for the applicant to continue working with the respondent." Since the complaint of the appellant on the right to be heard is pegged on non-holding of the disciplinary hearing, and since the rescission of the contract did not require the holding of a disciplinary hearing as rightly observed by the learned Judge, then what is important, in our view, was to communicate the rescission letter to the appellant. J. Beatson in Ason's Law of Contract, 27th Edition, 1998 stated at page 248 of the book that: "Rescission■ , however, is not merely a judicial remedy. The party misled can therefore rescind without seeking the assistance o f a Court, and any property transferred under the contract will revest in the party who has so rescinded the contract. As a normal rufe, rescission must be communicated to the other party/' [Emphasis ours] On that note, we also find that, the complaint on the right to be heard basing on failure to hold a disciplinary hearing is misplaced. The rescission letter communicated to the appellant was the deserving right properly exercised by the respondent to the appellant. Regarding justification to rescind the contract, we said above that, for the contract to exist, the appellant ought to have a valid residence and work permits. He had none of them. In it therefore, the respondent was, as of right, justified to rescind the contract. At common law, Chris Turner, Contract Law, Hodder and Stoughton, 2003, at page 127 of the book stated that: "Rescission is often an appropriate remedy in the contracts made as the result o f an innocent misrepresentation. ” Unlike in the foregoing excerpt, we note that, in the instant rescission of the contract, there is no misrepresentation. We may however add that, since the appellant had no any work and residence permit with him and since such two documents are crucial and relevant in employment contracts for non­ citizens, then the appropriate remedy open to the respondent was to rescind the contract. We hold therefore that, both the CMA and the High Court properly found that the respondent rightly rescinded the contract on the basis that, the appellant lacked the residence permit. The other question which the appellant invited us to determine is whether the respondent (employer) had the responsibility of applying for the residence permit of the appellant (employee). We think this should not detain us unnecessarily because whether, it is the appellant or the respondent who is responsible, the fact is that, the appellant had no residence permit and that the contract was rescinded on that basis. That notwithstanding, Mr. D' Souza relied on exhibit D4, the HR Manual, the evidence of DW2 and section 10 (1) 19 of the Non- Citizens Act that, the employer was responsible to apply for the residence permit. Mr. Kamala resisted that argument on account that, section 10 (1) of the Non- Citizens Act is in respect of work permit while the permit subject to rescission of the contract is a residence permit. He also reiterated that, the HR Manual simply facilitates, but the responsibility lies with the appellant. We think Mr. Kamala is correct. Our interpretation of section 10 (1) of the Non- Citizens Act is that, it relates to work permit. This is not the same as residence permit. Even if it was, our reading of clause 1.3 of the HR Manual and the evidence of DW2, as correctly submitted by Mr. Kamala, is more of a facilitative role. Otherwise, the responsibility for applying for a residence permit lies with the appellant as we held in Zorica Vijapi v. Wilderness Trail - Karama Lodge (supra). We note also in the case of John Robert Maitland v. Republic (Criminal Appeal No. 179 of 2011) [2012] TZCA 43 4 June 2012; TanzLII, in which the discussion around hinged on whether or not Mr. Maitland's presence in Tanzania was lawful, the Court found that, the appellant, whose visa had expired, failed to discharge the burden of proof under section 30 of the Immigration Act, that his presence in Tanzania was lawful. The appellant herein too has failed to prove that he had a valid residence permit which permitted him to stay and therefore work with the respondent. Having said so, we are unable to fault the concurrent findings of both the CMA and the High Court that, rescission of the contract between the respondent (employer) and the appellant (employee) basing on want of a residence permit on the part of the appellant was justified and in accordance with the law. The respondent did not therefore breach the contract of employment. The end of this all constrains us to dismiss the appeal, which we hereby do, with no order as to costs. DATED at ARUSHA this 3rd day of March, 2025. R. K. MKUYE JUSTICE OF APPEAL S. M. RUMANYIKA JUSTICE OF APPEAL G. J. MDEMU JUSTICE OF APPEAL The Judgment delivered this 4th day of March, 2025 in the presence of Ms. Anna Ngoti, learned counsel for the Appellant, also holding brief for Mr. Pascal Kamala, learned counsel for the Respondent; via video conference from High Court Ar certified as a true copy of the original.