Judgement Labour Revsion No

IN THE UNITED REPUBLIC OF TANZANIA JUDICIARY HIGH COURT OF TANZANIA MOSHI SUB-REGISTRY AT MOSHI LABOUR REVISION NO. 06 OF 2023 (C/F Labour Dispute No. CMA/KLM/MOS/ARB/14/2022 in the Commission for Mediation and Arbitration for Moshi at Moshi) SERENGETI BREWERIES LIMITED……….………………..…….APPLICANT VERSUS VALENTINE SARIMBO…..…………………….……...………. RESPONDENT JUDGEMENT Last Order: 25.01.2024 Judgment: 20.03.2024 MONGELLA, J. The applicants have moved this court vide section 91(1) (a), (b (c); section 94 (1) (b) (i) of the Employment and Labour Relations Act, 2004 [Cap 366 R.E 2019] (ELRA) and Rule 24 (1); (2), (a), (b), (c) , (d), (e), (f); (3) (a), (b), (c), (d) and; 28 (1), (c), (d) and (e) of the Labour Court Rules, 2007, GN No. 106 of 2007 seeking for this court to: one, call, examine and revise the proceedings of the Commission for Mediation and Arbitration (CMA) in Labour Dispute No. CMA/KLM/MOS/ARB/14/2022 in order to satisfy itself as to the legality, propriety, rationality, logic and correctness; Two, revise and set aside the CMA award issued on 10.03.2023 on grounds listed in his accompanying affidavit. Page 1 of 26 The applicant’s chamber summons was accompanied by the sworn affidavit of Gwandumi Mwangolombe and contested by the respondent in his own sworn counter affidavit. The facts of the case are to the effect that: the respondent was employed by the applicant in 2012 as shift chemist in the applicant’s branch in Mwanza. He then held various positions in the applicant’s company. In 2019 he became a brewing manager, a post he served in Moshi branch. In 2021, upon arrival of one Alice Tunjilege Kilembe (DW1), his department was assessed and found lacking in performance at diverse sections. Allegedly, he was verbally warned in June 2021 and later placed under the Performance Improvement Plan (PIP) (Exhibit S-1) for a term of three months commencing from July to September 2021. The PIP indicated the gaps and expected performance. Reviews were held monthly. A performance for growth review for the 2nd quarter of October to December was conducted on 10.01.2022 and the respondent’s performance was found lacking as reflected in the internal memo (Exhibit S-3). On 13.01.2022 he was notified to attend a performance capability hearing to be held on 19.01.2022. On the outcome of the meeting (Exhibit S-10), it was recommended that the respondent be terminated from employment. He appealed against the said decision to no avail. His employment was terminated on 02.02.2022 as communicated in the letter for termination (Exhibit S-13). Page 2 of 26 Aggrieved, the respondent filed a complaint at the CMA. The CMA found in his favour, holding that the termination was both substantively and procedurally unfair. He was thus awarded 12 months’ salary as compensation for unfair termination. The applicant, aggrieved by the said holding, filed this application. Under paragraph 15 of his affidavit, he advanced the following issues for determination: a) Whether the Arbitrator was correct in holding that the Applicant had no fair reasons to terminate the Respondent from employment; b) Whether the Arbitrator was correct in holding that the Respondent's termination from employment was procedurally unfair; c) Whether the Arbitrator properly analysed the evidence on record; and d) Whether the Respondent is entitled to compensation of twelve months salaries. The application was argued by written submissions. The applicant was represented by Mr. Thomas Sipemba, learned advocate, while the respondent was represented by Mr. Kanuti M. Magashi, Regional Secretary of TUICO. In his submission in chief, Mr. Sipemba consolidated the 1st and 4th issues. He averred that the Arbitrator ruled that the respondent was Page 3 of 26 unfairly terminated from employment because no investigation report was tendered as evidence to prove that the respondent’s performance ranked below 60% to deserve being placed under Performance Improvement Plan (PIP). Further, that the Arbitrator reasoned that the respondent’s representation at the capability hearing was rejected, but no explanation was given as to why the same was rejected and as such Rule 18 (8) of the Code was not complied with. In addition, he contended that according to Rule 17 (1) (a) , (b), (c), (d), (e|) and (3) of the Employment and Labour Relations Act (Code of Good Practice) Rules G.N 42/2007 (Hereinafter the Code), any employer, arbitrator or judge determining termination on ground of poor work performance must consider: whether the employee failed to meet the standards; whether the employee was aware or could reasonably be expected to be aware of the performance standards; whether the performance standards are reasonable; reasons why the employee failed to meet the standards and; whether the employee was afforded a fair opportunity to meet the performance standards. Further, that the standard of proof is in balance of probabilities. He further contended that according to Rule 18 (3) of the Code, the employer is required to investigate the reasons for unsatisfactory performance by the employee. He alleged that the applicant complied with all the requirements. That, in compliance with section 39 (1) of the ELRA the applicant Page 4 of 26 paraded witnesses to prove that the respondent’s termination was substantively fair. Mr. Sipemba submitted that DW1, Alice Kilembe, testified that when she started to manage the Moshi site in 2021, she found the brewing process with several issues. As she worked on the Root Course Problem (PCPs) to resolve the problems, she found the issues to be: failure to follow brewing processes laid down by the company; poor planning; non availability of beer and machine breakdowns. That the respondent had no plan to meet business demands and was not following up on breakdowns or pushing engineers to maintain machines. Further that, his reports were inaccurate as he paid no attention to details and was frequently absent from work. Mr. Sipemba further submitted that DW1 talked to the respondent on the issues and issued verbal warning. She also advised him on how to manage the brewing department and to follow the procedures. The applicant’s performance however did not improve; hence he was placed on PIP from July to September 2021 to support him in improving areas he was not performing well. That, the applicant identified the gaps in the respondent’s performance and agreed on expected performance as documented in the Performance Improvement Plan tendered and admitted as Exhibit S-1. That the said plan indicated 15 areas requiring improvement and listed 4 expected performance behaviors. Page 5 of 26 Still referring to DW1’s testimony, he contended that the respondent denied siting down for a review by DW1. That, when the review was done on 02.08.2021, the respondent was found being not yet to implement activities that ought to be done in July 2021 and had no plan on how to improve areas allocated in the PIP. That, on 13.09.2021 a second review was done which showed the respondent had started working on the PIP, but he was to improve performance in other areas. That, the 3rd review was held on 01.11.2021 and showed there were gaps that the respondent needed to focus on. That, still, the outcome revealed that he failed to meet demands for production. Mr. Sipemba added that the 2nd quarter review (Exhibit S-3) revealed that the respondent failed to achieve the expected performance or behavior set on the PIP. He referred to Exhibit S4, a total machine down time and Exhibit S5, the brewhouse Water Consumption and beer Downtime arguing that they supported the facts on the 2nd quarter review. Mr. Sipemba averred that afterwards, the respondent was notified to attend a performance capability hearing meeting through a letter (Exhibit S-6). The meeting was conducted on 19.01.2022 at Moshi Site Board Room and outcome of the capability hearing meeting (Exhibit S-10) was communicated to the respondent. That, the committee recommended for his termination which was communicated to him on 02.02.2022 vide a letter (Exhibit S13.). Page 6 of 26 In the premises, he contended that, as acknowledged by the arbitrator in the award, the respondent was aware of the performance standard, his performance gaps and the targets set on the PIP. Thus, production of the investigation report was immaterial. That, the applicant observed the requirement set under Rule 17 of the Code by identifying the respondent’s performance gaps, engaging in discussion with him, setting action plans for the respondent, coaching or training him on improving his performance, affording employees the opportunity to improve and jointly reviewing together the employee progress in implementing actions. He cited the case of Standard Chartered Bank vs. Anitha Rukoijo (Revision Application No. 470 of 2020) [2022] TZHCLD 122 (8 March 2022), requesting this court to be persuaded by the said decision as to what entails an investigation under Rule 17 of the Code. Mr. Sipemba held the view that the respondent was afforded the right to be heard. That, the respondent’s representations at the capability hearing were heard by the committee, thus no breach of Rule 18(8) of the Code was occasioned. He referred the court to the outcome of the capability hearing (Exhibit S-10), which showed both, the line manager and the respondent were given the opportunity to present their case. That, the committee also made its recommendations after hearing both parties leading to the termination of the respondent. He added that the respondent was also able to appeal against the said decision which was denied by Page 7 of 26 the CEO, who accorded reasons behind his denial. On this, he referred to the respondent’s defence as seen in Exhibit S-12. He further alleged that the reasons for poor performance advanced by the applicant were neither rebutted at the capability hearing nor at the CMA. That, all reasons on non-availability of beer were within his control as the brew manager. That, the root cause problem solving was never proved to be done by the respondent before the capability hearing meeting. That, the respondent proved to lack plans to solve the problems of production in his department. In his view, the respondent ought to have presented evidence to show how he generated plans to solve such problems. Further that, the allegations by the respondent that the applicant contributed to unsatisfactory performance were not proved as no evidence was presented to show that he was not supplied with necessary materials for production. Referring the case of Standard Chartered Bank vs Anitha Rukoijo (supra), he contended that, the respondent had the burden to prove his allegations as he fell in the managerial position. Mr. Sipemba insisted that the evidence of DW1 backed with the Performance Improvement Plan (Exhibit S1), the Outcome of the Capability Hearing (Exhibit S10), the 2nd quarter Review from October to December 2021 (Exhibit S6), the Proof of total Machine Downtime (Exhibit S4), the Proof of Water Consumption and Beer Downtime (Exhibit S5); proved that the respondent was terminated for a fair reason. Page 8 of 26 Addressing the 2nd issue, Mr. Sipemba contended that the applicant followed necessary procedures prior to terminating the respondent. Making reference to Rule 17 (3) of the Code, he averred that the proof of work performance is a question of fact to be determined on balance of probabilities. He alleged that the CMA findings to the effect that the respondent ought to have been issued a warning letter prior to being placed under PIP were unfounded because as testified by DW1, the respondent had been warned orally and he was informed prior to being placed on the PIP. Further that, afterwards, his performance was monitored as he was given the opportunity to improve the same. That, still, at the end as Quarter Two Review revealed, his performance was found below standards. Making reference to the case of Finca Microfinance Bank vs. Alex Kamuzelya (Revision Application No. 162 of 2021) [2022] TZHCLD 202 (4 March 2022) TANZLII, he averred that being a senior employee, the respondent had the capacity to judge his own performance standard as per Rule 18 (5) of the Code. In that regard, there was no need for the applicant to submit a letter indicating that the respondent’s working capacity was falling below 60%. He was convinced that the evidence submitted sufficed to show that the applicant made efforts to improve the respondent’s working performance. Concerning the 3rd issue, Mr. Sipemba averred that in compliance with section 39 (1) of the ELRA, the applicant paraded two witnesses Page 9 of 26 to prove her case. That the witnesses also tendered 13 documents which were admitted as exhibits S-1 to S-13. He had the stance that the applicant discharged his burden as required under Rule 9(3) of the Code. He reiterated his arguments as to DW1 working on the Root Cause Problem Solving which led her into finding issues with the brewing department. That, that led to her informing the respondent and his team and advising them to follow the laid-out procedures. Mr. Sipemba further gave the same details as to how the respondent was warned orally and later placed under PIP (Exhibit S1), which showed the gaps that he needed to improve and the expected performance behaviour. Citing the case of Finca Microfinance Bank vs. Alex Kamuzelya (supra), he averred that the court ought to consider the requirement under Rule 17(1) of the Code in determining fairness of reason on poor work performance. Mr. Sipemba alleged that the quarter two review of October to December 2021 revealed that the respondent failed to achieve the expected performance set under the PIP. He highlighted areas the respondent was found to have performed poorly as found under the Internal memo issued on 13.01.2022 (Exhibit S-6). He also made reference to Exhibit S-5 and S-4 which proved some of the poor performances. He also reiterated his explanation on the respondent being called by the capability hearing committee as reflected under Exhibit S-6. That, in the said meeting, the respondent did not demonstrate to have solved any of the Page 10 of 26 performance issues. That, he only raised allegations that were unproved. Mr. Sipemba contended that the arbitrator failed to analyze the entire evidence and according the same the weight it deserved. That, had she done so, the termination would have been found to be fair. He referred the court to the case of Abel Masikiti vs. Republic (Criminal Appeal 24 of 2015) [2015] TZCA 219 TANZLII, as to what entails evaluation of evidence. He finalized his submissions by praying for the CMA proceedings to be quashed and the award set aside. The application did not go unopposed by the respondent. Mr. Magashi, from TUICO trade union reply on his behalf. Addressing the 1st issue, Mr. Magashi fully supported the CMA decision. He averred that the Arbitrator correctly determined the matter both, legally and factually. He challenged the applicant for failure to prove that the standards were reasonable. He contended that it was not proved that the respondent performed below the standards made by the company and prior to being subjected to the PIP. Challenging the testimony of DW1, he argued that DW1 did not specifically state what acts performed by the respondent amounted to poor performance, but generally narrated complaints as to shortage of beer and maintenances. That, DW2 only stated that the respondent was terminated on performance issues but did not prove that the respondent’s performance was indeed poor enough to eventually lead to his termination. Page 11 of 26 He averred further that the applicant failed to prove the validity of the termination as seen under clause 7 of the company policy (exhibit S7). He said that the clause provides for management of poor performance and that for an employee to be kept under the PIP his performance must be below 60%. However, he said, the respondent’s performance was 94% being the first ever performance achieved by the respondent. He challenged the applicant for failure to dispute such evidence. Arguing further, he averred that according to Rule 17 of the Code read together with the company policy, the respondent had not performed below the 60% standard set. He made reference to the case of Bank of Africa vs. Bruce E. Massawe (Rev. Appl. No. 760 of 2019) [2021] TZHCLD 289 TANZLII in which it was held that the employer is to prove that the reason for termination is valid. He also referred to the case of Saint Goban Lodhia Gypsum Industries vs. Andrew Johnson Singano (Revision Application 73 of 2020) [2022] TZHC 893 TANZLII averring that the applicant had the duty to prove that the respondent’s performance was below standards set by the employer. Replying to the 2nd issue, Mr. Magashi contended that for termination to be fair it must also be procedurally fair. He made reference to section 37 (2) (c) of the ELRA to substantiate his stance. He added that termination on poor work performance must comply with Rule 18(4) and (6) of the Code. Referring to the testimony of DW1 and DW2 and the exhibits tendered he Page 12 of 26 contended that the same did not show that the respondent was warned prior to termination after being found to have unsatisfying performance. He alleged that the respondent was also denied the right to representation under Rule 18 (6) of the Code. He further faulted the applicant for not adhering to clause 7.4 of her own Policy (Exhibit S-7) in terminating the respondent. He fortified his argument with the case of Easy Travel and Tours Ltd vs. Andrea Ezekiel Kiwale (Revision 33 of 2019) [2020] TZHC 1082 (4 May 2020) TANZLII. As to the 3rd issue, Mr. Magashi, while referring the court to page 12- 22 of the CMA Award, argued that the Arbitrator evaluated the evidence before her. He had the stance that the court is not to look at the evidence of one side, but to the evidence before it as a whole. He fortified his arguments with the case David Zabron @ Lusumo vs. Republic (Criminal Appeal No. 241 of 2020) [2023] TZCA 17748 TANZLII and a South African decision in S. vs Van der Meyden 1991 FIO SACR 447 (W). He finalized his submissions by stating that the application is without merit and prayed for this court to uphold the CMA Award and dismiss the application. Further, he prayed for the court to order the applicant to pay the respondent a sum of T.shs. 67,932,00/= awarded by the CMA. Rejoining, Mr. Sipemba started with an observation that Mr. Magashi did not reply specifically to their arguments. He addressed the two issues, being; One, that, the trial arbitrator erred in holding that the termination was substantively unfair on reason that the Page 13 of 26 investigation report was not tendered and; two, that, the allegations of unsatisfactory performance against the respondent were heard, but the capability committee did not assign reasons for rejecting the respondent’s presentation. Basically, Mr. Sipemba mostly reiterated his submission in chief. On the first issue, he reiterated that DW1 testified on what transpired upon her transfer to the branch and the issues she noted. That, DW1 reprimanded the respondent orally and he was informed, a fact that he did not dispute. Further that, upon continued failure to perform, DW1 identified the performance gaps and expected performance to be achieved by the respondent. That, the applicant’s placing of the respondent on PIP was a sign of good faith considering that he was a senior officer. Mr. Sipemba further reiterated that the arbitrator misconceived the concept of investigation report as according to the case of Standard Chartered Bank vs. Anitha (supra), in underperformance, the employer follows up on the employee’s performance, holds periodic reviews and involves the employee in the process to give him the chance to improve. He maintained his stance that all these processes were adhered to in the present case. He further made reference to the Outcome of the Capability Hearing Committee alleging that the respondent had the capacity to improve his performance in the listed areas, but blamed his failure on the employer. Page 14 of 26 He contended that Mr. Magashi misconstrued the essence of Rule 17 of the Code as the same underscores the requirements to be considered by the employer before deciding to terminate an employee on ground of poor performance. He alleged that, as seen in the evidence of DW1 and DW2 as well as the tendered exhibits, the applicant did comply with the requirements of the provision. On the other hand, however, he contended that the provision did not have any relevance to the performance of the respondent and there was no proof that his performance was at 94%. In addition, he challenged Mr. Magashi for not pointing out the angles relied on by the arbitrator in his finding that the termination was unfair. On the 2nd issue, Mr. Sipemba reiterated his argument that the applicant had verbally warned the respondent and the information was shared in ways of working. He alleged that such facts were supported by the testimony of DW2 and never denied by the respondent at the capability hearing and before the CMA. That, the Arbitrator erred in failing to note that despite the respondent falling under category requiring immediate termination for under performance, he was still given room to improve. That, there was no demonstrated proof on how the absence of said letter prejudiced the respondent enough to vitiate the whole PIP Process. He challenged the respondent for failure to discharge her burden to prove the prejudice. He further reiterated his argument that the respondent was a senior officer and thus capable of adjudging his Page 15 of 26 own performance as stated in Finca Microfinance Bank vs. Alex Kamuzelya (supra). As to the respondent being denied the right to representation, he contended that such claim was never raised before. That, being raised in submissions, the same was an afterthought. He found the respondent’s argument being misplaced and unworthy of the court’s consideration. He as well found the case of Easy Travel and Tours Ltd vs. Andrea Ezekiel Kiwale (supra), cited by the respondent, being irrelevant. He insisted that the procedure was proved, on balance of probabilities, to have been fair. On the 3rd ground, he alleged that the respondent misconceived his arguments on the said ground as he failed to pinpoint how the arbitrator evaluated the evidence and finally reached a decision that the applicant had failed to prove that the reason for termination was valid. He added that it was submitted that the allegation that the respondent’s performance was 94 % was unreasonable as if it had been so, then why was the respondent placed on a PIP and eventually terminated for poor performance. He further challenged that there was no proof as to the said performance rate. Mr. Sipemba further contended that, had the arbitrator carefully evaluated the evidence, he would have found the termination fair. He challenged the case of David Zabron @ Lusumo vs. Republic (supra) for being irrelevant to the case at hand as in the said case Page 16 of 26 the court underscored the necessity of considering the evidence of both parties, which was not done in this case. Mr. Sipemba finalized his submissions reiterating his prayers for the CMA proceedings to be quashed and the award set aside. I have considered the submissions of both parties. I have also observed the issues raised and discussed by the applicant. I hold the view that the issues raised can be summed up into two main issues being: one, whether the termination was substantively and procedurally fair and; two, whether the respondent was entitled to compensation. In addressing the 1st issue, the question of evaluation of evidence shall also be addressed. Notably, since this is the 1st appellate court, it has the duty and power to evaluate the evidence of the CMA and make its own findings. See, Registered Trustees of Joy in The Harvest vs Hamza K. Sungura (Civil Appeal 149 of 2017) [2021] TZCA 139 TANZLII. As found in the respondent’s termination letter (Exhibit S-13), the respondent was terminated on ground of poor work performance. The underlying question is therefore whether his termination was indeed unfair as found by the CMA. The major arguments by Mr. Sipemba are that, there was no need for investigation report and that the hearing committee did provide reasons as to why they rejected the respondent’s defence. This was his attempt to fault the CMA Award which was centered on the said reasons. Such Page 17 of 26 reasoning by the CMA was founded on two majorly relied provisions of the Code which lay procedures to be observed before an employee is terminated for poor performance. I shall herein reproduce the same for ease of reference: 17.-(1) Any employer, arbitrator or judge who determines whether a termination for poor work performance is fair shall consider- (a) whether or not the employee failed to meet a performance standard. (b) whether the employe was aware, or could reasonably be expected to have been aware, of the required performance standard; (c) whether the performance standards are reasonable; (d) the reasons why the employee failed to meet the standard; and (e) whether the employee was afforded a fair opportunity to meet the performance standard. (2) Although the employer has the managerial prerogative to set performance standards, the standards shall not be unreasonable. (3) Proof of poor work performance is a question of fact to be determined on a balance or probabilities 18.-(1) 'The employer shall investigate the reasons for unsatisfactory fairness performance. This shall reveal the extent to which is caused by the employee (2) The employer shall give appropriate guidance, instruction or training, if necessary, to an employee Page 18 of 26 before terminating the employee for poor work performance. (3) The employee shall be given a reasonable time to improve/ For the purpose or this sub-rule, a reasonable time shall depend on the nature of the job, the extent of the poor performance, status of the employee, length of service. The employee’s past performance record. (4) Where the employee continues to perform unsatisfactorily, the employer shall warn the employee; that employment may be terminated if there is no improvement. (5) An opportunity to improve may be dispensed with if - (a) the employee is a manager or senior employee whose knowledge and experience qualify him to judge whether he is meeting the standards set by the employer; (b) the degree of professional skill that is required is so high that the potential consequences of the smallest departure from that high standard are so serious that even an isolated instance of failure to meet the standard may justify termination. (6) Prior to finalising a decision to terminate the employment of an employee for poor work performance, the employer shall call a meeting with the employee, who shall be allowed to have a fellow employee or trade union representative present to provide assistance. (7) At the meeting, the employer shall outline reasons for action to be taken and allow the employee and/or the representative to make representations, before finalizing a decision. (8) The employer shall consider any representations made and, if these are not accepted, explain why. Page 19 of 26 (9) The outcome of the meeting shall be communicated to the employee in writing, with brief reasons. From the provisions above, it is clear, that the specifications set under Rule 17 and 18 of the Code of Good Practice are mandatory conditions that should be observed in issues of poor performance. The conditions are cumulative. The applicant’s policy (Exhibit S-7) has also provided conditions to be observed in cases of poor performance. These are found under clause 7 and 8 of the same. It is undisputed that the respondent was employed in 2012 and that his job description (Exhibit S-2) entails performance standards he ought to adhere to. Also, being a manager, he clearly understood the standards in which he should perform. The question now is whether the applicant took necessary steps to evaluate his progress and reasons for poor performance. As found in the evidence adduced by the applicant, DW1 met the brewing team after her transfer to Moshi Branch. It is undisputed that the brewing department was managed by the respondent. As testified by DW1, the team was advised to follow brewing process as laid down by the company. Individually, she verbally warned the respondent. He was then placed under the PIP effectively from July to September 2021. Although, he seriously denied being warned but rather being given ways of working; there is however no doubt that the respondent was a brewing manager. As such, as provided under Rule 18(5) of the Code of Good Practice and transcribed Page 20 of 26 under clause 7.6 of the Company Policy (Exhibit S-7), there was no need of placing him under the PIP. Clause 7.6 reads: “7.6 Senior managers may be dispensed from this PIP as their knowledge and experience qualify them to judge whether he/she meets the standards set and agreed by Serengeti Breweries Ltd. In case of a proof of consistent poor performance, the option to separate from the company can be considered without undergoing performance improvement plan.” While it seems that the applicant did the respondent a favour by placing him under the PIP thereby providing for the gaps in his performance and expected performance; there are questions behind the reasons why he was first placed under the PIP. Even if it is ignored that the applicant did not assess the respondent’s performance and found the same under 60%; which is a prerequisite for putting an employee under the PIP, there are still questions on the entire process leading to his termination. This is due to the fact that there is no tangible proof that there was ever any investigation held prior such actions being taken against the respondent. In fact, from the testimony of DW1, it is evident that there was no any investigation held prior to the respondent being placed under the PIP. This is clearly seen at page 5 of the typed proceedings whereby DW1 stated: “There was continued absenteeism of the manager. The first measure I took, I talked to the complainant and gave him a verbal Page 21 of 26 warning. On that particular day he had not repeated to work. I sat down with him and talked about all the issues above and told him as a manager that was not a way to lead a dept and we agreed he would improve on all the issues. It was all verbal.” It is thus clear that, while there were details in the PIP noting the performance gaps, there was no any indication as to any investigation being held addressing the reasons for the respondent’s unsatisfactory performance. This, in my view, is clear violation of Rule 18 (1) of the Code which requires the employer to investigate reasons for unsatisfactory performance and reveal to what extent the same have been occasioned by the employee. The same requirement is also set under clause 8 of the applicant’s policy (Exhibit S-7), which requires investigation to be conducted by line manager prior to placing an employee under PIP. The same states: 8. Initiate Performance Improvement Plan (PIP) “The purpose of the Performance Improvement Plan (PIP) is to help the employee address and, resolve performance issues under line manager's guidance. The Line Manager shall investigate the reasons for unsatisfactory performance. This shall reveal the extent to which is caused by the employee before activating PIP discussion.” In failure to comply with the requirement of Rule 18 (1) of the Code and clause 8 applicant’s company policy, the whole process of Page 22 of 26 assessment of his performance is found wanting. This is because, it is unclear as to whether the reasons for under performance in the said field was sorely caused by him alone or perhaps there were other factors as the ones he stated in his defence at the capability hearing, that hindered his performance. Undoubtedly, there being a provision in regard to assessment, which was ignored, the case of Standard Chartered Bank vs. Anitha Rukoijo (supra) is found to be distinguished from the current circumstances. Assessment was a prerequisite prior to the PIP and was not conducted. Further, despite the fact that the applicant was a senior manager, in absence of a written warning, there are doubts as to how he was found to be in poor performance in the first place. The requirement under Rule 18 (1) of the Code of Good Practice is that, investigation to identify reasons for unsatisfactory performance is mandatory. The wording of this provision in its plain text shows that it was couched in mandatory terms. The provision bears no exception. On the other hand, the other requirements set under Rule 18 have exceptions. Rule 18 (2) states that guidance, instruction or training should be given-if necessary; Rule 18(3) requires an employee to be given reasonable time to improve while Rule 18(5) states that such time to improve may be dispensed with when the employer is a manager or senior employee as addressed in Finca Microfinance Bank vs Alex Kamuzelya (supra). Page 23 of 26 Further, I wish to note that both Rule 18 (5) (a) of the Code of Good Practice and clause 7.6 of the applicant’s Policy (Exhibit S-7) have rather left the employer with the discretion to determine whether or not to give a manager or senior employee room to improve after being found to perform poorly. In this regard, DW1, the line manager to whom the respondent reported, clearly exercised such discretion and thus opted to put the applicant under PIP. It would be reasonably expected that under such circumstances, DW1 would have observed procedures set under the Policy (Exhibit S-7) but such was not the case. A warning was issued verbally which was contrary clause 7.4 of the Applicant’s Policy, which states: “7.4 Employees in the performance league below 60% shall be issued with a warning letter and be placed on PIP.” The verbal warning frustrated the requirement under clause 7.5 for the latter to be active for 6 months. The said clause states: “7.5 The warning letter shall be active for a period of six months. Should the employee performance on league table falls below 60% within six months of the warning letter, option for termination based on performance shall be considered.” By failing to conduct a detailed investigation, the root cause of the alleged poor performance was not identified nor is it certain that all performance gaps were caused by him. Plainly, without such knowledge, the respondent could not work on improving the said Page 24 of 26 areas effectively. Considering that he had been in employment for more than 9 years, in all fairness, the applicant ought to have afforded him opportunity to resolve the cause of the issues as he raised in the capability hearing and consider an alternative to termination. This obligation was well stated in the case of Stanbic Bank T. Ltd vs. Sophia Majamba (Civil Appeal 31 of 2020) [2023] TZCA 197 (24 April 2023) TANZLII: “Notwithstanding that the employee has been warned or counseled, before terminating an employee on the ground of poor work performance, the employer is obliged to give the employee a fair opportunity to the following: (i) consider and, if need be, counter the allegation of incompatibility leveled against him/her, (ii) resolve, eradicate or eliminate the root cause of the incompatibility if possible and (iii) propose an alternative for termination.” In the foregoing, the applicant is found to have failed to discharge his burden to prove that the respondent’s termination was substantively fair. In addition, she ignored not only procedures set under Rule 18 of the Code but also her own procedures transcribed in her Policy (Exhibit S-7). The Hon. Arbitrator was thus correct in holding that the termination was both substantively and procedurally unfair. In regard to compensation, the applicant’s sole reason for such compensation not being offered is because the termination was Page 25 of 26 fair, having found the same unfair, I hereby uphold the order for 12 Month’s compensation issued by the CMA. The application is found to lack merit and hereby dismissed. Considering that this is a labour matter, I make no orders as to costs. Dated and delivered at Moshi on this 20th day of March 2024. X L. M. MONGELLA JUDGE Signed by: L. M. MONGELLA Page 26 of 26