yapi merkezi instaat ve sanayi anonim sirketi vs salehe omari mwasha 2022 tzhcld 993 10 october 2022

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA LABOUR DIVISION AT PAR ES SALAAM REVISION NO. 35 OF 2022 (Arising from the decision of the Commission for Mediation and Arbitration at Kibaha, Pwani E. Tibenda; Arbitrator Dated 2F June, 2021 in Ref: CMA/PWN/KBH/152/20/30/20) BETWEEN YAPI MERKEZI INSTAAT VE SANAYI ANONIM SIRKETI......................................................... APPLICANT VERSUS SALEHE OMARI MWASHA........ ............................... RESPONDENT JUDGMENT S, M, MAG HIM BI, J: The application beforehand was lodged under the provisions of Section 91(l)(a) 91(2)(c) 91(4)(a) and 94(l)(b)(i) of the Employment and Labour Relations Act [Cap. 366 R.E. 2019] ("the ELRA"), Rule 24(1), 24(2)(a), (b), (c), (d), (e), (f) and 24(3)(a), (b), (c) (d), 24(11) Kule 28(l)(a), (b), (c), (d) and (e) of The Labour Court Rules GN. No. 1Q6 of 2007 ("the LCR"). The application is supported by an affidavit of; Mr. । Benedict Katare, the applicants Legal Officer deponed on 15th February, 2022. On the other hand, the respondent challenged the application through his counter affidavit dated 07th March, 2022. ; The application emanates from the following background; । the respondent was employed by the applicant on 04th July, 2018 ini the i position of Light Duty Driver in a fixed term contract of one year. After the contract expired, the parties automatically renewed into another term of one year. On 14th May, 2020 the respondent was termirjated 1 from employment on the ground of reduced of work load in other aitears of work of the employer. Aggrieved by the termination, the respondent ! referred the matter to the CMA claiming for unfair termination ^both substantively and procedurally. After considering the evidence of the parties the Arbitrator found that the respondent was unfairly terminated hence, he awarded him twelve (12) month's salaries as compensation for the alleged unfair termination. Aggrieved by the CMA's award/ the I applicant filed the present application on the following grounds:- i. That the trial Arbitrator erred in fact and law by holding !that termination of the respondent's employment was procedurally unfair. I ii. That the trial Arbitrator erred in law and facts for failure to । properly evaluate the evidence put forth before her hence reached unfair conclusion and procure improper award. iii. That the trial Arbitrator erred in law and facts by issuing order of correcting award. 2 iv. That the trial Arbitrator erred in facts and law by issuing drder correcting award without written explanation. The application was argued by way of written submissions. Before i this court the applicant was represented by Mr. Ceasor S. Kajbisa, Learned Counsel whereas the respondent was represented by Mr. Ambakisye Kipamila, personal representative. Arguing in support of the first ground Mr, Kabissa submitted that before jumping into general law regarding termination, the Arbitrator was required to consider the contract entered by parties. He stated that where the said contract is silent regarding termination then the Arbitrator may invoke the general law depending on the circumstance of the case. The counsel stated that in the matter at hand, the Arbitrator erred to invoke the provision of Section 38 of the ELRA while there; was 1 a clause in the employment contract which governs termination. । l It was argued that termination of employment by employer in Tanzania is governed by Rule 8 of the Employment and Labour Relations (Code of Good Practice) Rules, GN 42 of 2007 ("the Code"). He argued that the referred provision provides an option to the employer to comply with one of the requirements provided thereto. He stated that the law does not force the employer to comply with certain requirement rather it 3 insists on the employer to provide reason for termination of employment. It was strongly submitted that the termination ofj the respondent's employment was in accordance with terms of the contract as per clause 10 of the relevant contract. He stated that the procedure adopted by the applicant was by paying the respondent one-month salary in lieu of notice and the respondent conceded to have received I such payment. He added that such kind of termination is allowed in lour laws in terms of section 41(1) of the ELRA. To support his submission, he referred the court to the case of Jordan University Collage Vs. Flavia Joseph, Revision No. 23 of 2013, High Court Labour Division, Morogoro (unreported). He argued that the holding of the Arbitrator tfhat ) the respondent's termination was procedurally unfair was unwarrantable । because the respondent was terminated in accordance with Rule 8(l)(a)(b) of the Code. Coming to the second ground Mr. Kabissa submitted that i according to Section 39 of the ELRA, the burden of proving that the termination was fair is upon the employer who proved in this case that i the respondent's termination was fair as it was testified by the applicant's witness. That at the CMA, the respondent admitted that he i i was informed of reduction of workload in his area of work hence, he accepted to receive one month salary in lieu of notice. It was submitted 4 that the main complaint of the respondent was that he was never i consulted while he conceded to have been informed the reason fot his i termination. । j On the last issue, Mr. Kabissa submitted that in the instant application the Arbitrator did not comply with the requirement of the law .1 as she did not issue a corrected award rather it was untitled written I explanation looking like ruling correcting the award. He argued that Such omission is a material irregularity which warrants this court to remit'the । file back to the CMA to re-issue a corrected award in accordance yvith i Rule 31(1), (2) of GN. 64 of 2007. In alternative, the counsel asked [the i court to proceed to determine the application if the right of the applicant will be adversely affected urging the court to allow the application. In reply, Mr. Kipamila responded to the grounds of revision jointly. i He stated that it is crystal clear in the application at hand the respondent was terminated on the ground of retrenchment thus, the applicant had to follow retrenchment procedures as they are provided under Section 38 of the ELRA. To support his submission, he referred । the court to range of cases including the cases of Samora Boniphace & 2 others Vs. Omega Fish Limited, Revision No. 56 of 2012 [2014] LCCD 1 and Resolution Insurance Ltd vs Emmanuel Shio 5 & Others (Labour Revision 642 of 2019) [2020] TZHCLD 38(29 May 2020). He went on submitting hat the applicant was bound to comply with the retrenchment procedures as they are provided by the law arguing that the applicant did not follow the referred procedures; His conclusion was that this application lacks merit because the Arbitrator properly awarded the respondent. He therefore urged the court to I dismiss the application. . Having considered the rival submissions the parties, Court's ii records and the evidence adduced during trial, I find that the main issues in controversy are whether the applicant was bound to follow the retrenchment procedures provided by the law and what reliefs are the parties entitled. Before going to the merit of the application I must first address the issue raised by Mr. Kabisa's that the Arbitrator failed to title1 the corrected ruling. I find such omission to be only clerical mistake which the applicant would have applied for correction of the same as in accordance with the provision of Rule 33(1) of GN 67 of 2007 which empowers the Arbitrator on his own motion or on application by a party to correct any clerical mistake in the award. So long as the content of 6 the corrected ruling shows that it was correcting clerical errors in the original award I find neither party has been prejudice by the omissiop to title the corrected ruling. Under such circumstance, I see no harnji or injustice that was caused to any of the parties, I will therefore proceed to determine this application. Starting with the first issue, the respondent's termination letter (exhibit AP2) indicates as follows: "With regret, we are writing to inform you the management'^ I decision to terminate your empioyment contract with YAPI; I MERKEZI as of today 14th MAY 2020. The reason for termination is reduced workioad in other arears of work." The term retrenchment also known as operational requirement is defined under section 4 of ELRA to mean: - "requirement based on the economic, technoiogicai, structurai' or simiiar needs of the employer". The circumstances which form basis of termination on the ground of retrenchment are provided under Rule 23 of the Code which is to the effect that:- "Ruie 23 (1) A termination for operational requirements \ (commonly known as retrenchment) means a termination of 7 employment arising from the operational requirements of the\ business. An operational requirement is defined in the Act as a\ i requirement based on the economic, technological, structural i or similar needs of the employer. । (2) As a general rule the circumstances that might legitimately^ form the basis of a termination are- | (a) economic needs that relate to the financial management^ i of the enterprise; * i (b) technological needs that refer to the introduction of new j technology which affects work relationships either by making, I existing jobs redundant or by requiring employees to adapt to i the new technology or a consequential restructuring of the workplace; I (c) structural needs that arise from restructuring of the1 business as a result of a number of business related causes such as the merger of businesses, a change in the nature of the business, more effective ways of working, a transfer of the ■ business or part of the business. I [Emphasis is mine] i In the instant matter, looking at the wording of the termination letter it is crystal clear that the respondent was terminated as a result of 8 the economic constraints of the business. Such reason basically Ifalls under Rule 23(2)(a) of the provision quoted above. Thus, the respondent was terminated on the ground of retrenchment. Therefore, being terminated under the ground of retrenchment the applicant had no any other option than to follow the procedures for retrenchment as they are provided under section 38 of ELRA, Rule 23, 24 and 25 of the Code. As the record indicates, the referred procedures were not followed by the applicant in this case as correctly found by the Arbitrator. I have considered Mr. Kabisa's argument that the respondent's termination was in accordance clause 10 of the employment contract (exhibit API). The relevant clause provides as hereunder:- | i "Either party may terminate this contract by giving the other party 7 (seven) days' notice or 7 (seven days' salary in Heu of notice if termination is during the first month of employment). If termination is after lapse of one month from the date of employment or after probationary period, either Party may terminate this Employment Contract by giving the other 28 (twenty-eight) days' notice in writing or by paying 1 (one) month salary in Heu of such notice." 9 The referred clause further provide as follows:- "The Employer may terminate the Employment on any grounds } or in any other manner permitted under the laws of Tanzania, j I including termination on account of redundancy" I i l The wording of the clause quoted above indicates that the parties agreed to terminate the contract by notice, but the termination musi be i in accordance with the grounds and procedures provided by the lbw. Therefore, it is my view that much as the parties are allowed to enter into their own terms of agreed contract, the terms must be in conformity with the laws of the land. The contract allowed the parties to terminate the same on the ground of redundancy but the procedures to be followed are that provided by the law. Thus, Mr. Kabisa's argument on that aspect is misconceived. There is no provision in the parties' employment contract which allowed them to summarily dismiss the same by only giving notice. That will be contrary to the laws of the land. Regarding the last issue as to parties' reliefs, the Arbitrator awarded the respondent 12 months salaries' as compensation for unfair termination. After examining the records it is revealed that the respondent had a fixed term contract of one year which commenced bn 10 04/07/2018 and agreed to end on 03/07/2019 as it is reflected in the employment contract (exhibit API). Though there is no any dther contract renewing the terms after its expiry the record indicates ithat when the contract expired the parties automatically renewed into another fixed term contract of one year commenced on 04/07/2019; and I was to end on 03/07/2020. The termination letter shows that the । respondent was terminated on 14/05/2020 thus, upon termination the remaining period of the contract was only one month and 20 days. It is trite law that the remedy for unfair termination/breach of a fixed term contract is an award of the salaries for the remaining period of the contract. The respondent's salary per month was TZS. 480,000/= therefore, he is entitled to the sum of TZS. 849,230.77 being one month and twenty days' salary. In the result, I find that the present application is partly meritious. The CMA's award is hereby revised by varying the amount of compensation awarded from that of 12 months' salaries awarded and instead, the applicant is ordered to pay the respondent TZS. 849,230.77 as salaries for the remaining period of contract. Dated at Dar es Salaam this 10^ day of October, 2022. ........ S.MTMAGHIMBI JUDGE ii