teddy syprian mallya vs efc tanzania mfc limited 2020 tzhcld 25 11 september 2020

IN THE HIGH COURT OF TANZANIA LABOUR DIVISION AT PAR ES SALAAM LABOUR REVISION NO. 952 OF 2018 BETWEEN TEDDY SYPRIAN MALLYA.......................................APPLICANT VERSUS EFC TANZANIA M.F.C LIMITED.......................... RESPONDENT JUDGEMENT Date of Last Order: 28/08/2020 Date of Judgement: 11/09/2020 Aboud, J, The application was made under the provision of section 91 (1) (a), 91 (2) (a) (b) (c) and section 94 (1) (b) of the Employment and Labour Relations Act No. 6 of 2004 (to be referred as The Act), Rule 24 (1), 24 (2) (a) (b) (c) (d) and (f), Rule 24 (3) (a) (b) (c) (d) and 28 (1) (a) (b) (c) and (e) of the Labour Court Rules GN No. 106 of 2007 (herein referred as the Labour Court Rules). The applicant calls upon the Court to examine the record, revise the proceedings and set aside the Arbitration award issued by Hon. i Mwalongo, A. Arbitrator of the Commission for Mediation and Arbitration (CMA) in Labour Dispute No. CMA/DSM/KIN/R.07/16 delivered on 29/10/2018. The respondent challenged the application through the counter affidavit of Ahmed Hassan, Applicant's Principal Officer. Brief facts of the matter are that; the applicant was employed by the respondent on a permanent base contract since 20/10/2011 in the position of a Branch Manager. Later on the applicant was promoted to the position of Credit Risk Manager. On 23/12/2015 the applicant was terminated from employment on the ground of misconduct namely, abuse of office, gross insubordination (refusing to sign suspension letter, notice to attend disciplinary hearing and refusing to report at work), gross dishonest (falsifying document), failure to manage one financial personal affairs, gross negligence, theft (taking Tshs. 500,000/= and not paying the auctioneers) and fraud. The disciplinary hearing was conducted ex-parte and the applicant was found guilty of the alleged misconducts. On 23/12/2015 the applicant was terminated from work. Dissatisfied by the respondent's decision the applicant referred the dispute at CMA. 2 The CMA award was delivered in favour if the respondent where it was found that the applicant's termination was both substantively and procedurally fair. Aggrieved by the CMA's award the applicant filed the present application. The matter proceeded by way of written submissions. The applicant was represented by Kassim Said Masimbo, Trade Union Representative while the respondent enjoyed the services of Dominic Fumbuka, Learned Counsel. Arguing in support of the application Mr. Masimbo raised a preliminary objection that the respondent's counter affidavit is defective as the deponent verified facts not within his personal knowledge. He stated that, the deponent produced hearsay and falsely information as he stated that the source of his information is Ms. Nancy Kassanga while the said person and Mr. Ahmed Mussa never appeared at the CMA's proceedings. Mr. Masimbo argued that the counter affidavit in question is in contravention with Order XIX Rule 1 of the Civil Procedure Code [CAP 33 RE 2019] (to be referred as CAP 33 RE 2019). He therefore prayed for the same to be struck 3 out. To buttress his argument he cited the case of Edna Sylvister Ndile Vs. STD Chartered Bank, Misc. Appl. No. 166 of 3013 (unreported). As to the merit of the application Mr. Masimbo submitted that, the Arbitrator's award has material irregularities for considering the unilateral testimony of Godfrey Msemakweli (DW1) whose evidence was not cross examined by the applicant's representative contrary to Rule 13 (5) of GN. 42. He added that DW1 disappeared intentionally and deliberately intended the CMA to rely on the testimony to which its veracity and genuiness was never been tasted. To support his submission he cited the case of Elia Kasalile and 20 others Vs. the Institute of Social Work, Civ. Appl. No. 145 of 2016. Mr. Masimbo went on to submit that the Arbitrator deliberately ignored the testimony and document tendered by Stella James (DW2) where in examination in chief she testified that, the applicant was never been served with the charge sheet, the Notice of Disciplinary hearing as well as the disciplinary hearing records. Mr. Masimbo further submitted that the allegations against the applicant were not proved at all. As to termination procedures he 4 submitted that the applicant was condemned unheard while she was attending medical treatment. Mr. Masimbo went on to argue that the Hon. Arbitrator ignored the applicant's final submission in his award. He concluded that the applicant's termination was based on invalid reasons and unfair procedures as stipulated under section 37 of the Act. He therefore prayed for the CMA's award to be revised and set aside. Responding to the application Mr. Fumbuka submitted that, the applicant's preliminary objection is nothing but illusion as it reiterates the factual based arguments which do not dispose this matter to its finality. To strengthen his argument he cited the case of Mukisa Biscuit Manufacturing Co. Ltd. Vs. West End Distributions Ltd (1969) EA 696. He therefore stated that, the said objection is good as a mere kick of a dying horse. He argued the Court to disregard and overrule the same for lack of merit. Turning to the merit of the application he submitted that, the Arbitrator rightly found the applicant's termination was both substantively and procedurally fair. He stated that they prayed for another date to brought DW1 for cross examination, unfortunately 5 the Arbitrator decided to proceed with the matter. He added that each party had a right to choose number of witness to testify in their favour. He therefore submitted that the Arbitrator observed the mandatory requirement of the law to wit Rule 25 of the Labour Institutions (Mediation and Arbitration Guidelines) Rules 2007, GN 67 of 2007. Mr. Fumbuka went on to submit that the applicant was duty bound to act with honesty and care when attending customers but she failed to do so, thus the Arbitrator correctly found the respondent had valid reason to terminate her. As to the termination procedures Mr. Fumbuka submitted that the applicant was dully notified to attend disciplinary hearing but she refused to do so. He stated that, the respondent made all efforts to notify the applicant but were in vain. Mr. Fumbuka contended that, the applicant denied herself the right to be heard. He therefore prayed for the application to be dismissed as it is frivolous and vexatious. In rejoinder the applicant reiterated his submission in chief. 6 Having careful considered parties' submission, Court records as well as relevant labour laws and practice I find it worth to first determine the preliminary objection raised by the applicant before embarking to the merit of the application as required by legal principles. The applicant raised an objection that, the respondent's counter affidavit is defective because the deponent verified facts not within his personal knowledge hence in contravention with Order XIX Rule 1 of Cap 33 RE. 2019. It should be noted that Labour Court as a specialized High Court Division has its own format of affidavit provided under Rule 24 (3) of The Labour Court Rules. Therefore, any other formats provided in any other laws will not be applicable in labour Court. The allegation that the deponent verified facts not within his personal knowledge, in my view is a matter of fact and evidence to be proved, hence it is not a pure point of law. It is a well established principle that a preliminary objection should be based on a pure point, the principle which was established in the case of Mukisa Biscuits Manufacturing Co. Ltd. Vs. West End Distributors 7 Ltd. (1969) EA 696. Therefore, the Court will not belabour much on the objection and the same is hereby overruled. As to the merit of the application I find the issues for determination are, whether the respondent had valid reason to terminate the applicant and if he followed the procedures and, lastly is to what relief are the parties entitled. In determining the first relevant issue the court will consider that, the record reveals the arbitrator relied on the evidence of DW1, which the applicant is contesting to have improperly legal considered. So I asked myself if the Arbitrator was correct to rely on DW1 testimony. The procedure of examining witnesses at the Arbitration stage is provided under Rule 25 of GN. 67 of 2007, where a witness should first be examined in chief, then cross examined if the adverse party desires so and thereafter be re-examine. In this application, DW1 was not cross examined despite the fact that the Arbitrator adjourned the matter several times to allow the respondent to bring his witness for cross examination. 8 Under the circumstances it is my view had it been that arbitrator solely relied on the evidence of DW1 it amount to violation of the right to be heard as the applicant was not afforded with an opportunity to test the veracity of the evidence of such witness. However, in that was not the case because the evidence of DW1 was corroborated with the testimony of DW2 who was properly examined at the CMA. Therefore, I observed that the arbitrator's ruling did not depend on the unilateral evidence of DW1 as claimed by the applicant. On the issue as to whether the respondent had valid reason to terminate the applicant and if he followed the procedures, it is trite law that employers are required to terminate employees on fair and valid reasons; this is the legal position provided under section 37 of the Act. It should be noted that in any dispute concerning unfair termination of an employee it is the employer's duty to prove that such termination is fair; this is in accordance with section 39 of the Act. 9 In the application at hand the applicant was terminated for seven misconducts as reflected in the termination letter (Exhibit D12) namely:- i. Abuse of office (Intervention of Auction Procedures). ii. Gross Insubordination (by refusing to sign the suspension letter, notice to attend the disciplinary hearing and not reporting to work after the date of suspension was over) iii. Non- disclosure of Vital Information (Failure to disclose and pay loan for DCB Commercial Bank PLC). iv. Gross Dishonest (by falsifying Documents- Provision for forging documents to get advantage of Excuse Duty (ED) and sick leave privileges). v. Failure to mage one's personal financial affairs (Bad debt with DCB Commercial Bank Pic which could result into running the company reputation. vi. Gross negligence. vii. Theft (By taking Tzs 500,000/= and not paying the auctioneers). viii. Fraud (By not adhering to auction procedure to sell property). 10 The record reveals the disciplinary hearing proceeded ex-parte due to the reason that, the applicant refused to attend the said hearing. It is an established principle that even if the law under Rule 13 (6) of GN. 42 of 2007 permits the employer to proceed with disciplinary hearing in the absence of the employee, the employer still has the duty to tender evidence to prove the allegations against the employee as if the employee was present. In this application following the allegations against the applicant, she was suspended from duty as evidenced by suspension letter (Exhibit D5). The purpose of suspension is to conduct investigation and the employee may only be suspended if his/her presence may affect the investigation process. This is in accordance with Rule 27 (3) of GN. 42 of 2007 which is to the effect that:- "Rule 27 (3) - The reasons for suspension are the following (a) The employee's presence at work may obstruct the investigation; and/or (b) The employees' ongoing performance of work duties may present a problem whilst the investigation takes place;" ii On the basis of the above provision and under the circumstances of this case the employer was expected to come up with a concrete investigation report to prove the alleged misconducts against the applicant. The record reveals further that, in the notice to attend Disciplinary hearing (Exhibit DIO) the respondent only mentioned the allegation of misconduct that is to fraudulently deal with the customer's file. The applicant was not served with any charge sheet. Other allegations/misconducts as reflected above were not included in the relevant notice. At the disciplinary hearing there was no any evidence tendered to prove the alleged applicant's misconducts. The disciplinary minutes (Exhibit Dll) tendered does not reflect if all allegations levied against the applicant were proved. Furthermore, there is no any investigation report tendered to prove the misconducts in question, therefore it is crystal clear that the respondent did not conduct any investigation as required by the law. Under such circumstances it is my view that, the employer failed to establish the validity of the reason to terminate the applicant and 12 he did not follow the stipulated procedures in terminating her as required by section 37 (1) (2) of the Act, which is to the effect that:- "Section 37 (1) - It shall be unlawful for an employer to terminate the employment of an employee unfairly:- (2) - A termination of employment by an employer is unfair if the employer fails to prove (a) that the reasons for the termination is valid; (b) that the reason is a fair reason:- (i) related to the employee's conduct, capacity or compatibility, or (ii) based on the operational requirements of the employer, and (c) that the employment was terminated in accordance with a fair procedure". 13 The Arbitrator also in his decision did not consider the provision of Section 37 (4) which clearly states that in deciding whether a termination by an employer is fair, an employer, arbitrator or Labour Court shall take into account any Code of Good Practice published under Section 99 of the Act, to wit GN. No. 42 of 2007. It is my view that the respondent wrongly conducted ex-parte disciplinary hearing against the applicant on the basis of the allegations which the applicant was never notified of the same. That means she was not given opportunity to be heard and defend herself by the employer as required in law. The right to be heard is a constitutional right as rightly submitted by the applicant's counsel. This is also a position in a chain decisions by the Court and Highest Court of the Land, the Court of Appeal. In the case of Mbeya - Rukwa Auto parts and Transport Ltd. vs. Jestina Mwakyoma [2003] TLR no. 251, it was held that:- "In this country natural justice is not merely a principle of common law; it has become a fundamental constitutional right. Article 13 (6) 14 (a) includes the right to be heard amongst the attributes of the equality before the law, and declares in part:- (a) wakati haki na wajibu wa mtu yeyote vinahitaji kufanyiwa uamuzi na Mahakama au chombo kinginecho kinachohusika, basi mtu huyo atakuwa na haki ya kupewa fursa ya kusikilizwa kwa ukamilifu". Also, in case of Abbas Sherally & another vs. Abdul S.H.M Fazalboy, Civil Application No. 33 of 2002, the Court held that: - "The right of a party to be heard before adverse action or decision is taken against such a party has been stated and emphasized by the courts in numerous decisions. That right is so basic that a decision which is arrived at in violation of it will be nullified, even if the same decision would have been reached had the party been heard, because 15 the violation is considered to be a breach of natural justice". "It has long been settled that a decision affecting the individuals rights which is arrived at by a procedure which offended against principles of natural justice, is outside jurisdiction of decision-making authority." On the basis of the above discussion, I have no hesitation to say that the applicant was condemned unheard by the respondent. Hence the applicant employment termination was based on unfair procedures from beginning at the level of disciplinary hearing. On the last issue as to parties' reliefs at the CMA, the applicant prayed for severance pay, salary for the month of November and December, 2015, and compensation of 24 months salaries as well as certificate of service. On the basis of the above discussion where it is proved that the termination was unfair both substantively and procedurally, then the applicant is entitled to compensation as provided in law. The applicant prayed for 24 months compensation, however the Court 16 finds no advanced justifiable reasons to award her the same. That being said, applicant is therefore entitled to only twelve (12) months salaries compensation as per section 40 (1) (c) of the Act, which provides as fol lows:- "S. 40 (1) If an arbitrator or Labour Court finds a termination is unfair, the arbitrator or Court may order the employer:- (c) to pay compensation to the employee of not less than twelve months' remuneration". It is also on the record that, the applicant started to work with the respondent from 20/09/2011 to 23/12/2015 when she was unfairly terminated. That being the situation it is clear the applicant has completed 12 months continuous service with the respondent and, is therefore entitled to four years severance pay at the calculation provided under Section 42 of the Act which is to the effect that:- "S. 42 (1) For the purposes of this section, "severance pay" means an amount at least equal to 7 days' basic wage for each 17 completed year of continuous service with that employer up to a maximum of ten years. (2) An employer shall pay severance pay on termination of employment if:- (a) the employee has completed 12 months continuous service with an employer; and (b) subject to the provisions of subsection (3), the employer terminates the employment. (3) the provisions of subsection (2) shall not apply:- (a) to a fair termination on grounds of misconduct; (b) to an employee who is terminated on grounds of capacity compatibility or operational requirements of the employer but who unreasonably refuses to accept alternative 18 employment with that employer or any other employer". As to the claim of payment of salary for the month of November and December 2015, the applicant is entitled to the same because the respondent did not tender any record to prove if such payment was effected accordingly. The applicant is also entitled to a certificate of service as prayed. Certificate of service to terminated employee is a legal entitlement as is provided under section 44 (2) of the Act. The relevant provision states that:- "S. 44 (2) on termination, the employer shall issue to an employee a prescribed certificate of service". In the result I find the present application has merit. The respondent terminated the applicant's employment on the basis of both unfair reasons and procedures. Therefore the Arbitrator's award is hereby revised and set aside. The respondent is ordered to pay the applicant compensation of twelve (12) months salaries, four years severance pay at the calculation provided under Section 42 of the 19 Act, salaries for the months of November and December, 2015 as well as a certificate of service. It is so ordered. I.D. Aboud JUDGE 11/09/2020 20