Eston Banda and Anor v Attorney General (Appeal 42 of 2016) [2019] ZMSC 351 (22 February 2019)

IN THE SUPREME COURT FOR ZAMBIA APPEAL No. 42/2016 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: ESTON BANDA OF ZAfyj COURT OF JUDICIARY EDWARD DALITSO ZULU —urt . Ji Box 5006' AND 1st APPELLANT 2nd APPELLANT ATTORNEY GENERAL RESPONDENT CORAM: Hamaundu, Kajimanga and Kabuka, JJS, on the 6th November, 2018 and 22nd February, 2019. FOR THE APPELLANT: Mr. B. Sitali, Messrs Butler & Co. FOR THE RESPONDENT: Ms. D. M. Shamabobo, Mrs. L. Chibowa, Senior State Advocates. JUDGMENT KABUKA, JS, delivered the Judgment of the Court. r J2 Cases referred to: 1. Swarp Spinning Mills v Sebastian Chileshe and 30 Others, SCZ Judgment No. 6 of 2002. 2. Zinka Shilling Bob v Attorney General (1991) ZR (SC). 3. C & S Investments, Ace Car Hire Limited, Sunday Maluba v Attorney General (2004) ZR 216. 4. Contract Haulage Limited v Mumbuwa Kamayoyo (1982) ZR 13 (SC). 5. Mumba (Musonda Gerald) v Maamba Collieries Ltd (1989) ZR (SC). 6. Tom Chilambuka v Mercy Touch International, Appeal No. 171 /2012. 7. Care International Zambia Limited v Misheck Tembo Appeal No.57/2016. 8. Zambia Privatisation Agency v James Matale (1996) ZR (SC). 9. Elizabeth Sokoni Mwenya v CFB Medical Centre Limited, SCZ Appeal No. 009/2015. Legislation and Other Works referred to: 1. Industrial Relations Act, Chapter 269 of the Laws of Zambia, S.85 (5). 2. Jefferson, M, Principles of Employment Law, (2000) 4th Edition, Cavendish Publishing Limited, Sydney, Australia. 3. W. S. Mwenda, Employment Law in Zambia: Cases and Materials, (2011) Revised Edition, UNZA Press, Zambia at page 136. Introduction 1. In a judgment delivered on the 9th of December, 2015 the Industrial Relations Court (IRC) found that the respondent properly terminated the appellants’ employment by invoking a termination clause provided in their respective contracts of employment. The court also found that the appellants were paid all the terminal benefits to which they were entitled on < ' J3 termination. The appellants have now appealed that judgment to this Court. Background 2. The appellants were both employed by the Ministry of Community Development Mother and Child Health (“the Ministry”) and were specifically engaged to work for the Expanded Food Security Pack Programme (“EFSP”). The 1st appellant was employed on 1st February, 2013 as Finance and Administration Manager, on a 21 months’ fixed term contract which was to expire on 31st October, 2014. The 2nd appellant was also employed as Programme Manager on a 24 months’ contract, from 1st November, 2012 to 1st November, 2014. 3. In terms of their said contracts the appellants were, amongst other entitlements, to be paid gratuity upon submission of satisfactory end of contract reports. 4. About five months before their contracts were to come to an end by effluxion of time, however, the Permanent Secretary in the Ministry wrote the appellants letters dated 30th May, 2014, J4 terminating their contracts of employment with immediate effect. The terminations were stated to have been effected pursuant to clause 8.1 (a) of the appellants’ contracts. This clause provided for termination without notice or any compensation or gratuity, on grounds of misconduct which was specified as, indiscipline, insubordination, misuse of EFSP property, drinking or being in a drunken state while on duty or theft. 5. The appellants were in the same letters also advised that they would be paid one month’s salary in lieu of notice. In terms of their contracts, however, payment in lieu of notice fell under a different termination clause, 8.1 (b). 6. In view of the confusion created by referring to two separate termination clauses as the basis for ending their contracts of employment, the 1st appellant wrote the respondent a letter dated 2nd June, 2014 seeking clarification. 7. In that letter the 1st appellant denied being guilty of any of the J5 misconduct which would entitle the respondent to terminate his employment under clause 8.1 (a). He accordingly demanded reversal of the alleged dismissal and proposed an amicable separation with full payment of all his entitlements, including gratuity. 8. Upon receiving the 1st appellant’s letter and realising the error made, the Permanent Secretary in the Ministry wrote both appellants individual letters dated 6th June, 2014 clarifying that their contracts were infact terminated under clause 8.1 (b) and not 8.1 (a), as initially advised. The letters further advised the appellants that, as their contracts had not ended successfully due to the terminations, they were only entitled to payment of leave days up to the date of termination, plus one month’s salary in lieu of notice. 9. That response was not well received by the appellants who then proceeded to retain counsel. On 15th May, 2015 the appellants’ counsel wrote a letter of demand to the Permanent Secretary, seeking payment of the appellants’ leave days and one month’s salary in lieu of notice. J6 10. In his reply to the letter of demand, the Permanent Secretary made an undertaking to process the payments in issue for both appellants on condition that they availed themselves at their former workplace and made such request. Pleadings before the Industrial Relations Court 11. It is that response, apparently, which compelled the appellants to go and file a notice of complaint before the IRC, seeking the following relief: (i) damages for wrongful and unfair termination of their contracts of employment; (ii) a declaration that they had not engaged in any of the acts specified under clause 8.1. (a); (iii) alternatively, if their contracts were found to have been terminated under clause 8.1 (b), payment of a month’s salary in lieu of notice; (iv) payment of gratuity which they would have earned had their contracts not been unlawfully terminated; (v) leave days; (vi) damages for distress and anxiety to which the appellants had been subjected; and (vii) an order that their contracts had not been terminated on account of any misconduct on their part but solely as a decision of the respondent. e • J7 12. In their affidavit in support of the notice of complaint, which was sworn by the 1st appellant, the appellants’ contentions were materially, as captured in the summary of the background facts. 13. In reaction to the notice of complaint, the respondent filed an answer, denying the appellants’ claims. The respondent maintained that the appellants’ employment was properly terminated pursuant to a termination clause embodied in their respective contracts of employment. No affidavit in opposition was filed by the respondent in support of the answer. 14. The record shows, the parties thereafter, agreed to dispense with a formal hearing of the matter and to proceed further by filing written submissions on which they wholly relied. Arguments and Submissions before the trial Court 15. In their submissions, the appellants maintained that they had not misconducted themselves in any of the ways J8 specified under clause 8.1 (a). It was their further submission that, even if they had, the proper way of proceeding against them was for the respondent to formally charge them with appropriate disciplinary offences. 16. The appellants also questioned the respondent’s clarification that their termination had been effected pursuant to clause 8.1 (b), when the respondent had not paid them the one month’s salary in lieu of notice required for a proper termination under that clause. Their submission was that, the failure to pay them the one month’s salary, at the time their contracts were terminated or within a reasonable time thereafter, effectively rendered the said terminations illegal and unlawful. 17. On the term of contract which entitled them to payment of gratuity at 25% of the annual basic salary, the appellants argued that, as their contracts were terminated abruptly, they were denied the opportunity to prepare the required end of year contract reports. And, as the respondent had refused J9 to pay them by reason of that failure, the appellants submitted that, the said refusal constituted ‘the height of malafides’ which according to them, appeared to be motivated by a desire to avoid paying such gratuity, considering they had barely five months to the end of their contracts. 18. The appellants further argued that, the traumatic fashion in which their contracts were terminated was not only distressful, but also oppressive for they were denied their gratuity as a result. They were also not paid their one month’s salary in lieu of notice and their accrued leave days. That the termination had further made it difficult for them to find gainful employment elsewhere, as they had no explanation to give would be employers on the reason for loss of their previous jobs. 19. The appellants’ submission was that, the manner of termination of their contracts, warranted damages for mental distress and anxiety, and for the difficulty in finding new J10 employment. The case of Swarp Spinning Mills v Sebastian Chileshe and 30 Others1 was relied upon for the submission. 20. In answer to the appellants’ submissions, the respondent argued that, clause 8.1 (a) was referred to inadvertently. The submission was that, the clause used to terminate the appellants’ employment was actually, 8.1 (b), as evidenced by the appellants’ termination letters in issue which clearly stated that they would be paid one month’s salary in lieu of notice. 21. The respondent further submitted that, the citing of a wrong clause did not invalidate its intention to terminate the appellants’ contracts by payment in lieu of notice. The cases of Shilling Bob Zinka v Attorney General2 and C & S Investments, Ace Car Hire Limited, Sunday Maluba v Attorney General3 were cited as authority for the proposition that, where power is given for taking a particular action and it is properly exercised, reference to a wrong section of the law JI 1 to support the exercise of such power does not invalidate the action taken. In line with that holding, the respondent submitted that, the appellants were not entitled to damages for wrongful or unfair termination or for distress and anxiety, as the mode of termination used was provided for in their contracts of employment. 22. On the claim for gratuity, the respondent maintained that the appellants’ contracts were very clear that, ‘submission of a satisfactory end of contract report’, was a condition precedent to payment of gratuity. That the contracts were also clear, that during the period before they came to an end, either party retained the right to terminate by invoking the termination clause, 8.1 (b). 23. The respondent’s submission in conclusion was that, other than their entitlement to one months’ salary and accrued leave days, the appellants had failed to prove all their other claims. J12 Consideration of the matter by the trial court and decision 24. After considering the relevant facts and submissions, the trial court found that, the main issue requiring its determination was the mode of terminating the appellants’ contracts of employment: i.e. whether the same was done pursuant to clause 8.1 (a) or 8.1 (b). The finding of the trial court was that, the appellants were not charged with any offence under clause 8.1 (a) despite their termination letters indicating that the terminations were made pursuant to the said clause. 25. The trial court further took into account the respondent’s follow-up written clarification, that the appellants’ terminations were effected under clause 8.1 (b) and not 8.1 (a). Relying on the cases of Contract Haulage Limited v Mumbuwa Kamayoyo4 and Gerald Musonda Mumba v Maamba Collieries Limited5 where we held that, it is the giving of notice or payment in lieu of notice that terminates the contract, the court came to the conclusion that, despite citing the wrong provision in terminating their contracts, the appellants’ terminations were nonetheless properly effected J13 pursuant to the termination clause 8.1 (b) and as such, could not be said to be wrongful, unlawful or unfair. 26. The trial court went on to find that, as the wrongful termination claim had failed, the claim for damages for distress and anxiety which was anchored on its success, was equally unsustainable. 27. On the claim for gratuity, the finding was that the appellants’ contracts required a satisfactory end of contract report to be completed and rendered before gratuity could be paid. Having considered that the respondent had a right to lawfully terminate the appellants’ contracts before they came to an end, as it did, the trial court found the appellants were not entitled to payment of gratuity. 28. The trial court did not agree with the respondent’s argument that the appellants should have gone to its premises to claim their one month’s salary in lieu of notice. It reasoned that the payment was due when the respondent invoked the termination clause or within a reasonable time soon J14 thereafter. As the respondent only made the payment on 17th July, 2015 after the notice of complaint had already been filed into court, the finding was that, the appellants were entitled to interest, for the period they were kept out of their monies. 29. The declaratoiy order sought by the appellants, that they were not terminated on account of misconduct under clause 8.1(a) was declined, as the court considered that, the letters of 6th June, 2014 had sufficiently clarified that the appellants were terminated pursuant to clause 8.1 (b). Judgment was accordingly entered in favour of the appellants, on the successful claims of one month’s salary in lieu of notice, accrued leave days, plus interest. The respondent was also ordered to meet 50% of the appellants’ costs. The grounds of appeal to this Court 30. Dissatisfied with those findings, the appellants have now appealed to this Court, on the following grounds: 1. that the court below misdirected itself in law and fact when it held that the appellants’ claim that their termination was wrongful was premised on clause 8.1 (a), when the appellants had claimed that if their termination was held to J15 have been effected in accordance with clause 8.1 (b), then their termination was still unlawful because they were not paid one month’s salary in lieu of notice upon termination. 2. Having found that the appellants were not paid their one month’s salary in lieu of notice at the time of termination, it was a contradiction for the court below to have concluded that the termination of the appellants’ contracts were neither unfair nor wrongful. 3. The court below erred in law in failing to do substantial justice when it failed to apply the principle that the respondent having decided to terminate the appellants’ contracts of employment for no reason, could not use the same termination as a reason to deny paying them gratuity ostensibly because the contracts had not been completed, especially considering that there was only 5 months remaining on the contracts to be completed. Arguments presented on appeal 31. In heads of argument filed in support of the grounds of appeal, counsel for the appellants in ground one argued that, contrary to what the trial court stated, the appellants’ complaint shows that it was not only premised on clause 8.1 (a), as in the alternative, clause 8.1 (b) was also relied upon. It was the appellants’ contention in this regard that, had the trial J16 court properly addressed itself to these facts, it would have allowed the claim for damages for wrongful termination which the appellants were seeking, on the basis of the respondent’s failure to pay them the one month’s salary in lieu of notice. 32. The argument in ground one was stretched to ground two and the contention here, was that, the finding that the termination of their contracts of employment was lawful, was the reason the court below did not award the appellants’ damages for distress and mental suffering. 33. Counsel urged us to find that, the termination was infact unlawful and award damages for distress and mental suffering on the grounds that the appellants’ contracts of employment were inflicted in a traumatic fashion. The case of Swarp Spinning Mills1 was again relied upon to support the submission that, where termination is inflicted in a traumatic fashion which causes undue distress or mental suffering, departure from awarding the normal measure of damages equivalent to the notice period, will be justified. J17 34. In ground three, the appellants argued that, the respondent having decided to terminate their contracts of employment for no reason, could not use the same termination as a reason to deny paying them gratuity, ostensibly on the basis that the employment contracts had not been completed. 35. The appellants’ submission in conclusion was that, a party should not be allowed to profit from its own default. That the trial court had in that regard, failed in its mandate to do substantial justice by holding that the appellants were not entitled to gratuity as their contracts were not completed, when it was the respondent, that had rendered it impossible for them to complete, by prematurely terminating their said contracts. 36. In written arguments filed with leave of the court at the hearing of the appeal, the learned State advocate in response to ground one, proceeded with two arguments. 37. The first argument was that, the appellants were urging the trial court below to find that they had not committed the acts J18 specified under clause 8.1(a) to warrant their dismissal. It is for that reason they claimed their dismissal was wrongful. 38. The second argument, which was in the alternative was that, in the event the trial court held the termination was in accordance with clause 8.1 (b), then the appellants in terms of that clause were entitled to payment of a month’s salary in lieu of notice which at the time of presenting the notice of complaint in the court below had not been paid to them. 39. The submission on ground one was that, based on the manner the notice of complaint was presented, it being not in dispute that the appellants were subsequently paid the month’s salary in lieu of notice, the trial court cannot be faulted for having found that the appellants were lawfully terminated by payment of a month’s salary in lieu of notice as provided in clause 8.1 (b) of their contracts of employment. 40. On ground two, the respondent argued that, as the appellants did not deny that they were eventually paid the one month’s salary in lieu of notice, the late payment of the money did not render the termination unlawful, as it was premised on a J19 termination clause embodied in the appellant’s respective contracts of employment. The case of Kamayoyo4 was cited as authority for the submission that, the employer can terminate the contract of employment at any time as long as it is done in accordance with the terms of the contract. 41. Further, and in any event, that having acknowledged the late payment, the trial court below proceeded to award interest at 15% p.a. on the amounts due, as compensation for the period the appellants were kept out of the said monies until payment in full. 42. The submission on the point was that, should this court find that the termination was unlawful, it should order a month’s salary as damages. That the part of the appeal relating to claims for distress and anxiety should be dismissed, as there was no evidence of special circumstances disclosed in the trial court below to warrant such an award. The case of Tom Chilambuka v Mercy Touch International6 was relied on, where we held that, unless the dismissal is effected in a J20 traumatic manner, the normal measure of damages is the salary equivalent to the notice period. 43. Finally, on ground three, the respondent’s submission was that the trial court was on firm ground when it found that in terms of the contract, gratuity was only payable on completion of the contract and submission of the end of contract report. That the appellants who were terminated before completion of contracts, did not meet the criteria for payment of gratuity and cannot claim that there was denial of substantial justice on that account. Consideration of the matter by this Court and decision 44. We have considered the evidence on record, heads of argument and submissions by counsel from which we find that grounds one and two are interrelated. We will for that reason, deal with them together. 45. The issue raised in grounds one and two is whether the respondent’s failure to pay a month’s salary in lieu of notice on termination of the appellants’ contracts of employment J21 rendered the termination unlawful as argued by themselves, and the trial court erred when it found the said termination was neither unfair nor wrongful. 46. We note that the terms, 'wrongfur, ‘unlawful3, and ‘unfair3 termination of employment have, persistently been used interchangeably in the arguments and submissions. Needless to re-iterate that, these terms do not refer to one and the same thing. 47. According to Michael Jefferson, author of Principles of Employment Law, (2000) 4th Edition, Cavendish Publishing Limited, Sydney, Australia, ‘wrongful3 dismissal looks to the form of the dismissal. It refers to a situation where an employer dismisses an employee without notice or with insufficient notice. This is contrasted with ‘unfair3 dismissal which is said to concentrate both on procedure and substance. 48. Halsbuiy’s, Laws of England, Volume 41, 5th Edition, at paragraph 722, also provides that “...dismissal may at J22 common law either be lawful or wrongful; and a dismissal, whether lawful or wrongful, may be challenged as being unfair by statute.” 49. The above excerpts only go to underscore the fact that, there are only two broad categories for dismissal by an employer of an employee, it is either wrongful or unfair. "Wrongful’ refers to a dismissal in breach of a relevant term embodied in a contract of employment, which relates to the expiration of the term for which the employee is engaged; whilst ‘unfair’, as stated at paragraph 757 of Halsbury’s Laws of England, refers to a dismissal in breach of a statutory provision, where an employee has a statutory right not to be dismissed. 50. Hence, as Michael Jefferson, further observes, ‘a loose reference to the term ‘unlawful’ to mean ‘unfair’ is strictly speaking, in employment parlance, incorrect and is bound to cause confusion.’ The learned author, Judge W. S. Mwenda clarifies on the two broad categories, in her book Employment Law in Zambia: Cases and Materials, (2011), revised edition, UNZA Press, Zambia at page 136. She opines that, in our J23 jurisdiction, a dismissal is either wrongful or unfair, and that wrongful dismissal looks at the form of the dismissal, whilst unfair dismissal is a creation of statute. 51. Ina recent decision of this Court, Care International Zambia Limited v Misheck Tembo7, we did re-iterate the legal position that, the mode of an employee’s dismissal or exit from employment will determine what relief, if at all, they would be entitled to, and the need for trial courts to avoid the careless and cavalier use of legal terms or expressions without regard to their proper meaning. 52. Against that backdrop, we now return to grounds one and two of the appeal. The record shows that it is not an issue in dispute that the respondent, in letters addressed to the appellants of 6th June, 2014, did clarify that termination of the appellants’ contracts was effected by payment of a month’s salary in lieu of notice pursuant to clause 8.1 (b). 53. The real contention of the appellants is that the one month’s salary in lieu of notice was not paid at the time it ought to J24 have been paid, or within a reasonable time thereafter. This contention clearly relates to ‘form’ and could only have rendered the termination wrongful and not unlawful, as suggested in ground one of the appeal. 54. This Court has in a plethora of cases, including the case of Zambia Privatisation Agency v James Matale8, held that, payment in lieu of notice was a proper and a lawful way of terminating an employment contract. That, it is the actual ‘notice’ or in its absence ‘payment’ equivalent to the ‘notice period’ which terminates the employment. The trial court was alive to that position of the law and relied on the case of Gerald Musonda Mumba5 to the same effect. 55. In that regard, the record of appeal in casu, also shows the appellants’ contracts were summarily terminated on 30th May, 2014 without notice, on the basis that, the appellants would instead be paid a month’s salary. The record further shows, that payment was only effected over a year later, on 17th July, 2015. J25 56. The respondent having thus, failed, to make the payment in lieu of notice in terms provided by the contract or within reasonable time, thereafter, the termination was clearly made in breach clause 8.1 (b) and thus, wrongful. 57. As we have again held previously, the general measure of damages for such breach where there is nothing extra­ ordinary that would take a case out of the realm of Kamayoyo4, is an amount equivalent to the notice period provided in the contract or in the absence of such provision, a reasonable period. 58. As repeatedly noted elsewhere in this judgment, once the respondent had invoked the termination clause for payment in lieu of notice, which it was entitled to do under clause 8.1 (b), it should have paid the one month’s salary immediately or within a reasonable period of time, thereafter. 59. The failure to do so as correctly found by the trial court, did not change the reality of the situation, that their contracts were infact terminated, albeit, contraiy to the termination clause and thus, wrongfully. J26 60. On the particular facts of this case, such transgression would attract a month’s salary in damages, being the monetary equivalent of the notice period provided by the appellants’ contracts. As the one month’s salary was subsequently paid, the trial judge cannot be faulted when he found that the damages claimed for wrongful dismissal, could be adequately recompensed by payment of interest for the period the appellants were kept out of the said payment. Grounds one and two of the appeal fail for those reasons. 61. Coming to ground three, the appellants in this ground contend that, having terminated their contracts of employment for no reason, barely five months to their expiry by effluxion of time, the respondent could not rely on its own failure to allow them complete the contracts as the basis for denying them gratuity. The appellants argue that, by proceeding that way, the trial court departed from its mandate of doing substantial justice to their case. A < J27 62. As already acknowledged earlier in this judgment, the fact that the appellants were only five months away from completing their contracts was not an issue in contention. There is also no dispute that clause 8.1 (b) allowed for termination of the contracts by either party, at any time. What this means is that, although the appellants only had five months left before the end of their fixed term contract, the contract could still be lawfully terminated by either party giving the other, a month’s notice or payment in lieu of such payment. 63. The appellants had contended that their contracts were terminated by the respondent as it simply did not want to pay them gratuity. That may very well be so, but if indeed there was any bad faith on the part of the respondent as alleged, the matter having been commenced before a court with a mandate to do substantial justice, the appellants ought to have adduced evidence in support of their said allegation. 64. The record shows no such evidence was placed before the trial court, suggesting that in denying the appellants gratuity, the respondent acted in bad faith on the basis of which the court If ♦ J28 could have invoked its powers to delve behind the termination purportedly effected under clause 8. 1 (b) and ascertain the real reason. We echoed that settled position of the law in a recent decision of this Court Elizabeth Sokoni Mwenya v CFB Medical Centre Limited9, where we said that: “a claimant always bears the burden of establishing his/her case. This requires that the complainant proves any allegation made, by adducing evidence to support such allegation, to the required standard. A perusal of the record of appeal in this matter discloses that, unlike in the Zambia Postal Services Corporation case on which she sought to rely, where the complainants led evidence on the real reasons for their termination, there was no evidence, at all, led by the appellant to support her allegation that her termination was prompted by some other reason...” 65. We accordingly, affirm the trial court’s finding that the appellants are not entitled to payment of gratuity, by reason that their employment contracts were properly terminated before they could earn the right to be so entitled. Ground three equally fails. J29 Conclusion 66. All the three grounds of appeal having been unsuccessful, the appeal is hereby dismissed. The matter having emanated from the IRC, costs will be borne by the respective parties, both here and in the court below. Appeal dismissed. E. M. HAMAUNDU SUPREME COURT JUDGE C. KAJIMANGA SUPREME COURT JUDGE J. K. KABUKA SUPREME COURT JUDGE