republic vs baraka simon mathias 2023 tzhc 23434 12 december 2023

UNITED REPUBLIC OF TANZANIA IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA LABOUR DIVISION AT IRINGA LABOUR REVISION NO. 03 OF 2023 {Originating from Labour Dispute No, CMA/IR/ARB/46/2021 in the Commission for Mediation and Arbitration at Iringa) BETWEEN SYNGENTA AGRO AG............. APPLICANT AND FIKIRINI POLE MKANGWA....................... RESPONDENT JUDGMENT Date of Last Order: 04.1'0.20,23 Date of Judgment: 13.10.2023 A.E. Mwipopo, J. Syngenta Agro AG, the applicant, employed Fikirini Pole Mkangwa, the respondent, as a field officer for a six months fixed term contract on 19.05.2015. Through a letter dated 17.11.2015, the respondent's employment contract was extended to 31.01.2017. The respondent’s employment contract was further extended to 31.03.2017. Also, he was informed by the employer through a letter dated 26.01.2017 that he would receive a new employment contract from 01.04.2017 with updated terms of employment, including increased salary and incentives. On 29.03.2017, the i respondent was informed through a letter dated 29.03.2017 that his employment was extended further to 31.03.2018, meaning there was no new contract with updated terms given to him as stated in the letter dated 26.01.2017. In July 2018, the applicant gave the respondent a new one year employment contract in the Technical Zone Lead South position. The new contract was starting from 01.07.2018 to 31.06.2019. The employer extended the respondent contract to 30.09.2019 through a letter dated 31.05.2019. The respondent contract was renewed by default as he continued to work without contract from 01/10/2019 to 31/08/2020 was given, and he signed a new employment contract on 27.08.2020 for the position of sales representative commencing from 01.09.2020 to 31.08.2022. The respondents salary was revised and increased from 01.04.2021 onward by a letter from the employer dated 12.04.2021, which stated that the terms and conditions of the contract remain the same as per the employment contract. On 29.07.2022, the employer gave the respondent notice of non-renewal of the fixed term contract expected to expire on 31.08.2022. The employer, on 26.08.2022, served the respondent with a letter informing him that he would be paid two months' salaries as part of three months’ notice for non-renewal of contract as per employment contract. 2 The respondent was aggrieved by the non-renewal of his employment contract and referred the dispute for breach of contract to the Commission for Mediation and Arbitration (CMA). The mediation failed, and the Commission proceeded with arbitration. After hearing both sides, the Arbitrator held in the decision that there was a breach of contract of employment, and the respondent had reasonable expectations for renewal of his employment contract. The Commission awarded the respondent to be paid by the applicant a sum of 50,486,256/= shillings, being 24 months' salary compensation for the breach terms of the employment contract. The applicant was unsatisfied with the CMA award and filed the present application for revision. The application was filed by Notice of Application and Chamber Summons supported with the affidavit sworn by Paschalina Makombe, Principal Officer of the applicant. The applicant is praying for the Court to revise and set aside the Commission for Mediation and Arbitration award in a labour dispute No. CMA/IR/ARB/46/2021 dated 20.01.2023, delivered by Hon. A. Msiiri,.Arbitrator. Conversely, the respondent opposed the application by filing a notice of opposition accompanied by the applicant's counter affidavit. 3 The applicant has a total of six (6) grounds for revision (legal issues) as found in paragraphs 10 (a), (b), (c), (d), (e), and (f) of the applicant's affidavit. The said grounds of revision are as follows:- 1. That, the Arbitrator erred in law and facts by holding that the respondent had a legitimate expectation of renewal ofthe employment contract without ascertaining the contract terms and evidence in record. 2. That, the Arbitrator erred in law and facts by holding that there is a legitimate expectation of renewal of employment contract while the respondent was given a notice of non-renewal of the contract before expiry of the same according to the contract terms. 3. That, the Arbitrator erred in law and facts by holding that there was a breach of contract, while the contract was a fixed term contract that automatically terminates with lapse of time and the respondent exited immediately on the last day of the contract. 4. That, the Arbitrator erroneously held that the applicant terminated the respondent's employment contract without reasonable cause on the wrong assumption that the contract was repetitive while the contract was a fixed term con tract which expired at the specific time agreed and not on a reasonable cause. 5. That, the Arbitrator failed to interpret and appreciate the evidence on record, hence applying wrong principles oflaw, leading to an erroneous award. 6. That, the Arbitrator wrongly calculated and awarded unnecessary reliefs to the respondent without legaljustification. 4 At the hearing, the applicant was represented by Advocate Ridhiwani Mbaga, whereas Mr. Ignas Charaji, Personal Representative, represented the respondent. The Court invited both parties to make their submission. Mr. Ridhiwani Mbaga, Advocate, submitted on all grounds of revision. He said on the breach of employment contract terms that the employment contract provided that each party may terminate the contract by issuing three months7 notice or Upon payment of three months7 salary. The applicant issued one month's notice of termination and paid two months' salary. In his decision, the Arbitrator did not state the implication of giving one month's notice of termination and payment of two months' salary in lieu of notice to the respondent. Exhibit SGA4 is a notice of termination of employment contract. Thus, the applicant properly terminated the employment of the respondent in accordance with the terms of the contract. The counsel said on the Arbitrator's holding that there was a legitimate expectation of renewal that the applicant gave the respondent notice of non­ renewal before the expiry of the fixed term of the contract. As there was the notice of termination and payment of salary in lieu of notice, there was no expectation for the renewal of the employment. If there was an expectation for renewal of the employment contract, there is a question about the status of the termination notice and salaries paid in lieu of the notice. The Arbitrator 5 misdirected himself to hold there was a reasonable expectation for renewal in the presence of notice for termination. Regarding the arbitrators holding that there was a breach of the contract term, the counsel said the employment contract was a fixed term contract which automatically expires with the lapse of time. The respondent did not continue to work after the expiry of the fixed term. The respondent employment contract (exhibit SGA3) in paragraph 17 provides how to terminate the contract. The employment contract expired, and as a result, there could not be a breach of contract. On the Arbitrator's holding that the contract was repetitive and hence was renewed automatically, the applicant said that the last employment contract (exhibit SG3) was on 01/09/2020 and was expected to end on 31/08/2022. The respondent in the last employment contract was employed as a sales representative. The respondent was employed as a field expert in the previous contract before the last one. The respondent was employed in different positions on each employment contract. For that reason, it is not correct to say the previous contract was renewed automatically. It was the first time the respondent was employed as a sales representative. The respondent was working in a different position before his contract renewal. Therefore, it could not be said that the contract was automatically renewed. 6 Regarding the issue of the Arbitrator applying the wrong principle and failing to interpret and appreciate the evidence on record, the applicant said the CMA Award shows on page 7 the Arbitrator discussing the remedy to the employee where the employer has breached a fixed term contract. The Arbitrator held that the remedy is the payment of the salaries for the remaining period of the contract as compensation for breach of contract. The employment contract automatically expired. There was no need to award him compensation for the remaining period of the contract as if a new employment contract was entered between them. On the award of shillings 386,268,376/= given as compensation for the breach of contract to the respondent, the counsel for the applicant said that the respondent prayed to be compensated for 24 months' salaries for the breach of contract. The Arbitrator did not provide the grounds for awarding the said amount. The award given by the Arbitrator is unlawful and was not justified. In his reply, Mr. Ignas Charaji, Personal Representative for the respondent, admitted that the respondents employment contract was for a fixed term. He said the employer terminated the employment contract contrary to the terms of the contract. The employment contract provides that each party may terminate the agreement by issuing three months' notice or giving three months' salaries in lieu of notice. The procedure for termination 7 of the contract was breached as the applicant issued one month's salary and paid two months' salary in lieu of notice. No amendment was made to the employment contract as provided by the law. The respondent's employment contract was renewed more than five times. What was changing was the duration of the employment contract. Renewal of the contract and promotion during employment does not mean that the employee has entered into a new contract. The Arbitrator adequately held that there was a continuation of the employment contract. On the remedies awarded by the Arbitrator, the personal representative said that the respondent prayed for the payment of two years' salaries as compensation for the breach of contract in his CMA form No. 1. There was an error on the party of the Arbitrator who awarded the respondent with 300 million as compensation in the decision. The trial Arbitrator found the mistake and corrected the award. He cited two years' salary compensation to the respondent. Thus, the trial Arbitrator has already rectified the error in the award, and the applicant has to pay the respondent 24 months' salary as compensation for the breach of contract. The Arbitrator correctly decided the case, arid this revision has no merits. In his rejoinder, the counsel for the applicant said that the respondent's employment contract was renewable at first after the respondent applied for renewal. The last employment contract was a new and different contract. The 8 terms and duties of the respondent in the final contract were different. Thus, the last contract was different from the previous contracts. Having heard submissions from both sides, the dispute is centred on whether the applicant breached the respondent's employment contract terms as the CMA held it. There is no dispute that the applicant employed the respondent for fixed term contracts between 2015 and 2022. Some contracts were renewed on similar terms, and others were renewed on different terms. After the last contract ended, the applicant did not renew the respondent's employment contract. The Arbitrator held there was a breach of terms of the employment contract as the applicant gave one month’s notice of termination and two months' salaries to the respondent instead of three months' notice of termination or payment of three months' salary in lieu of notice of termination. The Arbitrator further held that there was a reasonable expectation for the respondent's employment contract renewal as the previous employment contracts were renewed repetitively. Section 36 (a) of the Employment and Labour Relations Act, Cap. 366, R.E. 2019, (ELRA), defines termination of employment. The section reads as fol lows:- "36 (a) "termination of employment" includes- (i) a lawful termination of employment under the common law; 9 (ii) a termination by an employee because the employer made continued employment intolerable for the employee; (Hi) a failure to renew a fixed term contract oh the same or similar terms if there was a reasonable expectation of renewal; (iv ) a failure to allow an employee to resume work after taking maternity leave granted under this Act or any agreed maternity leave; and (v) a failure to re-employ an employee if the employer has terminated the employment ofseveral employees for the same or similar reasons and has offered to re-employ one or more of them; " The same is provided by rule 3 (1) (a), (b), (c), (d) and (e) of the Employment and Labour Relations (Code of Good Practice) Rules, G.N. No. 42 of 2007. According to rule 3 (2) of the G.N. No. 42 of 2007, a lawful termination of employment under the common law includes termination of employment by agreement, automatic termination, termination of employment by the employee, or determination of employment by the employee. Rule 4 of the G.N. No. 42 of 2007, provides a substantial explanation on termination of employment contract. The rule provides as follows hereunder:- "4 - (1) an employer and employee shall agree to terminate the contract in accordance to the agreement. io (2) Where the contract is a fixed term contract, the contract shall terminate automatically when the agreed period expires, unless the contract provided otherwise. (3) Subject to sub-rule (2), a fixed term contract may be renewed by default if an employee continues to work after the expiry of the fixed term contract and circumstances warrants it. (4) Subject to sub-rule (3), the failure to renew a fixed-term contract in circumstances where the employee reasonably expects a renewal of the contract may be considered to be an unfair termination. (5) Where fixed term contract is not renewed and the employee claims a reasonable expectation of renewal, the employee shall demonstrate that there is an objective basis for the expectation, such as previous renewals, employer’s undertakings to renew. (6) The provision of this rule shall not apply where- (a) the size of the employer mayjustify a departure: (b) the nature of the employment business may require strict adherence to rules than may normally be the case; or (c) collective misconduct may justify a departure from the ordinary procedure rules provided that the employees are given a fair opportunity to make representations/' From above cited rule, the employer and employee may agree on the termination of the employment contract, meaning the contract of employment may provide on how the employment is terminated. According to rule 4 (2), the fixed term contract terminates automatically when the agreed period expires, except where the contract provided otherwise. Another exception is provided in rule 4 (3) of the G.N. No. 42 of 2007, where the employee continue ii to work after expiry of the period of contract. The Rules further provides in rule 4 (4) that failure to renew a fixed-term contract in circumstances where the employee reasonably expects a renewal of the contract may be considered an unfair termination. Thus, the fixed term contract terminates automatically when the agreed period expires, except where the contract provided otherwise or where the employee has a reasonable expectation for renewal of the contract. The same was stated in Dar Es Salaam Baptist Sec. School vs. Enock Ogala, Revision No. 53 of 2009, High Court Labour Division, at Dar Es Salaam, (Unreported), where it was held that:- where the contract is a fixed term contract, the contract shall terminate automatically when the agreed period expires, unless the contract provided otherwise or there was no expectation of renewal, the contract would have expired automatically with no need to write a termination letter." In the present dispute, the respondent signed the last employment contract 27.08.2020 for the sales representative position. The contract commenced on 01.09.2020 and ended on 31.08.2022. The contract states in paragraph 17 that either party can give three months' notice to terminate the agreement or pay three months’ salary in lieu of notice. The question is, are the parties to the employment contract required to issue three months’ notice or spend three months' salary in lieu of notice in every termination of the employment? This is not what the contract says. 12 The G.N. No. 42 of 2007 provides in rule 8 (2) that where an employer has employed an employee on a fixed term contract, the employer may only terminate the contract before the expiry of the contract period if the employee materially breaches the contract. Thus, it is only before the expiry of the employment contract that the employer may terminate the employment contract and not after its expiry. Paragraph 17 of the employment contract provides that each party may terminate the employment contract upon issuing three months' notice or payment of 3 months' salaries in lieu of notice. The contract refers to the procedure for termination of the employment contract when the employer or employee wants to terminate the contract. The paragraph 17 was refer! ng to termination of employment contract by employer or employee, and not automatic termination upon expiry of the agreed contract period, The Employment and Labour Relations (Code of Good Practice) Rules, 2007, provides in rule 4 (2) and (3) that the fixed term contract terminates automatically when the agreed period expires, except where the contract provided otherwise or where the employee has a reasonable expectation for renewal of the contract. Thus, the fixed term employment contract terminates automatically when the agreed period expires. The only exception to automatic termination of employment upon expiry of the agreed period of the contract is where the contract itself provides otherwise or where the 13 employee has a reasonable expectation for renewal. The present employment contract is silent on the automatic renewal of the contract after the agreed period has expired. Thus, the first exception is not applicable. On the employee's reasonable expectation for renewal; the CMA held that there was a reasonable expectation for renewal as the fixed term was renewed on several occasions. The applicant was of the view that each contract was a new contract as some of the conditions of contracts changed; including the position of the respondent. As a result; the Arbitrator erred in holding that there was a reasonable expectation for renewal. On his side; the respondent said that the contract was repetitive despite the change of terms of the contract and the position of the respondent. He was of the view there was a reasonable expectation for renewal of his contract as the Commission held it. Rule 4 (3) of the G.N. No. 42 of 2007 provides that a fixed term contract may be renewed by default if an employee continues to work after the expiry of the fixed term contract and circumstances warrants It. There is no evidence on record to show that the respondent continued to work after the expiry of the fixed term contract. The CMA was wrong to hold that there was a reasonable expectation for renewal as the respondent's employment contract was repetitive. This Court in the case of National Oil Tanzania Ltd vs. Jaffar Dotto Msemisemi and 3 Others, Revision No. 558 of 2016; High Court Labour 14 Division at Dar es Salaam, (unreported), held that the previous renewal of employment contract is not an absolute factor for an employee to create a reasonable expectation that the fixed term contract would have been renewed. I subscribe to this position. The record shows that the respondent was employed by the applicant for the field officer post for six month fixed term on 19.05.2015. Before the expiry of the six months employment contract, the employer extended the contract to 31.01.2017. The employer extended the contract further to 31.03.2018. From 31.03.2018 to 30.06.2018, the respondent continued to work as if the contract was automatically renewed by default. The same happened between 01/10/2019 to 31/08/2020 where he continue to work without a contract The applicant issued a new one year employment contract to the respondent in the position of Technical Zone Lead South from 01.07.2018 to 31.06.2019. The applicant’s salary was increased for the first time in the new contract. The employer extended the respondent contract to 30.09.2019 through a letter dated 31.05.2019. The contract was renewed by default from 01/10/2019 to 31/08/2020 where he continue to work without signing a contract. The respondent was given, and he signed another new employment contract on 27.08.2020 for the position of sales representative commencing from 01.09.2020 to 31.08.2022. The new contract had increased salary. The respondent’s salary was revised and increased further 15 from 01.04.2021 onward by a letter from the employer dated 12.04.2021, which stated that the terms and conditions of the contract remain the same as per the employment contract. Thus, I'm satisfied that the employment contracts were not repetitive as the position, terms, and salary differed. Further, the employer gave the respondent a new employment contract before the expiry of each current contract. The respondent, throughout his employment, was working after signing employment. The only time the respondent’s employment was renewed by default was from 31.03.2018 to 30.06.2018 after the respondent continued to work even though the contract had already expired. The record shows that from 01.07.2018, the respondent continued to work after signing a contract. Thus, the contract was not renewed by default, and the respondent signed a new employment contract each time the contract expired. As the employment contract expired automatically and in the absence of the reasonable expectation for renewal, it was wrong for the Arbitrator to hold that there was a breach of contract. Although the applicant issued a notice of non-renewal of the employment contract and the letter titled the end of employment contract, the same was to remind the respondent that the applicant will not renew the employment contract after it expires on 31.08.2022. Even without reminding the employee of the expiry date of the period of the contract, still the contract had to terminate automatically upon 16 expiry of the agreed contract period. The employer was not supposed to issue notice or pay salaries in lieu of notice of termination. There is no breach of contract or reasonable expectation for renewal of respondent's employment contract. Therefore, the revision has merits and is allowed. The commission award is quashed, and its orders are set aside. As this is a labour matter, no order is given as to the costs of the suit. It so ordered accordingly. 17