Ivan Lister v Africa Personnel Services Zambia Limited (2022/HP/0354) [2024] ZMHC 313 (5 August 2024)

IN THE HIGH COURT FOR ZAMBIA 2022/HP/0354 AT THE PRINCIPAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: IVAN LISTER AND PLAINTIFF AFRICA PERSONNEL SERVICES ZAMBIA LIMITED DEFENDANT Before the Honourable Mrs. Justice R. Chibbabbuka on the 5 th day of August, 2025. For the Plaintiff: Mr. M. Nkole, Messrs. Kaumbu Mwondela Legal Practitioners For the Defendant: Mr. K. M Sikazwe, Messrs. Jacques and Partners Legal Practitioners RULING Cases referred to: 1. 2. 3. 4. 5. Firstpost Homes Limited v Johnson {1995) 4 ALL ER 355 L 'Estrange v Graucob Limited {1934) 2 KB 394 Home and Overseas Insurance Co. Limited vs Mentor Insurance Co. (U. K.) Ltd (in liquidation) (1989) 3 All E. R. 74 Brink Limited v Asu-Saleh (No . 1) {1995) 4 ALL ER 65 Colgate Palmolive (Z) Inc vs Abel Shemu Chika and Others Appeal No. 181 of 2 005 - Legislation referred to: 1. The Rules of the Supreme Court of England 1965 (the white book) 1999 edition 2. The Employment Code Act No. 3 of 2019 3 . The Employment Code (Exemption) Regulation, 2 020 Statutory Instrument No. 48 of 2020 Other works referred to: Halsbury 's Laws of England, (4 th ed) Butterworths {1974) Vol 9 Chitty on contracts, (33 rd ed) Sweet & Maxwell (2018) Vol I Rl 1.0 INTRODUCTION This is a ruling in the defendant's application to raise preliminary issues filed on 8 th April, 2024 , pursuant to Orders 14A, and 33 Rule 3 of the Rules of the Supreme Court of England, 1999 edition. The defendant's summons raises the following questions: 1. Whether there was a valid written contract entered into between the plaintiff and the defendant; 2 . Whether the plaintiff is eligible to gratuity at law. 2.0 The Defendant's Affidavit in Support In support of the application, the defendant filed an affidavit of even date as the summons and deposed to by one Geoffrey Sakulanda, the Country Director in the defendant company. He deposes that the plaintiff initiated this matter via writ of - summons claiming inter alia an order that he is entitled to payment of gratuity in accordance with his contract of employment with the defendant in the sum of $59,692.75 , and interest. The parties never executed a contract of employment as the same was meant for Zambian employees only. The plaintiff being a South African national who worked in Zambia as an expatriate employee was and is not entitled to gratuity. 2.1 The Defendant's Skeleton Arguments in Support The defendant filed skeleton arguments wherein counsel referred to Orders 14A Rule 1 and 2, and 33 Rule 3 of the Rules of the Supreme Court of England as the provisions of the law that clothe the courts with the jurisdiction to deal with the preliminary issues raised . To further buttress the arguments , counsel relied on the case ofFirstpost Home Limited vs Johnson 1 wherein the court stated that; "the word signed is to be given its ordinary meaning and it means the document being signed by or on behalf of each party obviously so as to authenticate the document. Where the buyer's name had been typed at the top of the letter as addressee and he had not otherwise signed the letter, the signature requirement was not ratified and no valid contract existed. " Counsel further referred to the case of L'Estrange vs Graucob Limited 1 wherein it was held that: R2 " a signed document containing contractual terms binds the parties that have signed , in the absence of fraud whether read or not. " Counsel argued it is the signing of a contract between the parties that binds them to the terms of that contract. The contract in casu was only executed by the plaintiff and not the defendant which in turn means that the terms of the said contract have never been binding on the defendant . Counsel argued that the foregoing makes the said contract null and void . Counsel referred to Section 13 7 (1} of the Employment Code Act which provides as follows : "The Minister may, by statutory instrument, make regulations for carrying out or giving effect to the provisions of this Act". That Regulation 3 of the Employment Code (Exemption} Regulations, 2020 Statutory Instrument No. 48 of 2020 provides that; "A p erson, class of persons, trade, industry or undertaking listed in the Schedule, an Expatriate employee is exempted from section 54 (1} (b} and (c} and 73 of the Employment Code Act." That the plaintiff is a South African national who resides in the North West Province of the Republic of South Africa and is an expatriate who worked for the defendant company which facts are not in contention. However, in light of the Employment Code (Exemption} Regulations he is not entitled to gratuity as he is exempted from it. Counsel prayed for the dismissal of this action with costs. 3.0 The Plaintiff's Affidavit in Opposition In opposing the application , the plaintiff filed an affidavit in opposition on 21 st May, 2024 wherein the plaintiff deposed that his matter is not suitable for disposal e preliminarily. The question of whether or not there was a signed contract or one by implication between the parties is a matter for trial and examination of witnesses. 3.1 The Plaintiff's Skeleton Arguments The plaintiff filed skeleton arguments wherein counsel referred to Order 14A/ 2/ 5 which deals with suitable questions of law or construction . That the editorial note 14A/ 0/ 2 provides that Order 14A should be read together with Order 14 of the White Book on Summary Judgement . As regards the nature of Order 14 proceedings, the court was referred to the case of Home and Overseas Insurance Co. Limited vs Mentor Insurance Co. (U. K.) Ltd (in liquidation) 3 for the argument that the purpose of Order R3 14 is to enable a Plaintiff to obtain a quick judgement where there is plainly no defence to the claim, and that Order 14 proceedings should not be allowed to become, in effect, an immediate trial of an action. Counsel referred to the case of Brink Limited vs Asu Saleh4 for the argument that Order 14 is only intended to apply to cases where there is no substantial dispute as to the facts or the law. That to have a matter summarily determined, the applicant must show that there is an issue or a question in the dispute which ought to be tried or that there ought for some other reason to be a trial of the claim. That there are serious triable issues in this matter and hence the same is not a proper case to be determined summarily under Order 14A or Order 33. The question of whether terms of the impugned contract were applicable through the relationship of the parties is one to be determined through the trial of the matter rather than summarily. In the event the court finds that there were no written terms of engagement between the parties, the court would still need to establish the applicable contractual terms that subsisted between the parties. Further the applicability and terms of any contract may only properly be tested through examination and cross examination of witnesses during trial. That from the defence filed, the court will note that there are zero facts in agreement between the parties. It is a pre-requisite for the launching of applications under Order 14A and 33 of the Rules of the Supreme Court of England, 1999 edition that there ought to not be a substantial dispute as regards the facts or law that is subject to interpretation. Counsel argued that in terms of the exemption regulations, an expatriate employee is not entitled to the statutory gratuity. However, the wording of the exemption does not proscribe the entitlement to gratuity for expatriate employees under the law of contract. e This is clear from the plain language used in the regulations. That the court will note from the pleadings that the plaintiff is not claiming gratuity entitlement from the Statute but rather as a matter of contract. Counsel argued that this matter is not suitable for summary determination under Order 14A and Order 33 of the Rules of the Supreme Court as the matter has triable issues. Counsel prayed for the dismissal of the application with costs. 4.0 At the Hearing Both parties relied on the documents filed in support and in opposing the application. R4 5.0 Decision of the Court I am indebted to counsel for the arguments which I have taken into consideration. This application has been made pursuant to Orders 14A, and 33 Rule 3 of the Rules of the Supreme Court of England. Order 14A provides as follows: "The Court may upon the application of a party or of its own motion determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings where it appears to the court that:- (a) Such question is suitable for determination without a full trial of the action, and (b) such determination will finally determine (subject only to any possible appeal) the entire cause or matter or any claim or issue therein." Order 33 Rule 3 of the Rules of the Supreme Court of England gives the court powers to try questions and issues summarily. The defendant has raised two preliminary issues , which the plaintiff argues cannot be preliminarily determined at this stage as they require to be proved at a trial on evidence. Below are the issues raised, and this court's holding. Whether there was a valid written contract entered into between the plaintiff and the defendant; The defendant firstly queries whether there exists a valid written contract between the parties to this action . This question by the defendant stems from the fact that the contract exhibited by the plaintiff as his basis upon which he is entitled to the reliefs he is seeking is unsigned. The defendant argues that since it did not execute any written contract with the plaintiff, the terms of the exhibited contract are not binding on it, and e that this court should in fact declare the said contract null and void. The simplest definition for a contract is the one given by the authors of the Halsbury's Laws of England at para 201, page 80 which is "a promise or set of promises which the law will enforce." Another definition of a contract is offered by the authors of Chitty on contracts at para 1-019 , page 17. They define a contract as: "an agreement giving rise to obligations which are enforced or recognised by law." It is clear that the set of promises or agreement must be enforceable. The defendant argues that the contract the plaintiff intends to rely on at trial is unenforceable and RS hence no binding legal relations exist between the parties. I have carefully perused the court record and indeed note that the contract of employment relied on by the plaintiff in bringing this action , which has been exhibited at pages 19 to 26 of the plaintiffs supplementary bundle of documents is indeed unsigned by either party to this action. Does the fact that it is unsigned make it unenforceable? My finding is that it does not. This is so because while signing a contract is the most common way to demonstrate agreement, unsigned contracts can be valid and enforceable depending on the intention of the parties to be bound by the terms of the said contracts, and performance . The authors of the Halsbury's Laws of England at para 263, page 141 state the following : "Where there is an informal agreement which expressly requires or envisages the subsequent execution of a formal contract, the legal effect of that prior informal agreement depends on the intention of the parties; they may have entered into a binding provisional agreement whilst envisaging its subsequent replacement by a more formal one, or they may evince an intention only to be bound on the execution of the formal contract, the prior informal agreement being of no legal effect. " The same authors state the following , at para 285 , page 163,: "Even where the assent of the parties to an agreement is signified in some manner other than a document containing or referring to its terms, it is still possible for the terms contained in a document to become part of the agreement between those parties. That document may even be the terms of another contract between the parties, or of a draft agreement between them ..... . All that is required is a clear intention on the part of all parties to the agreement that the terms contained in that one document be incorporated in their agreement. " e From the above, it is clear that a draft agreement may be binding on the parties if it is established that the parties intended to be bound by it. In casu, it is not in contention that the plaintiff was employed by the defendant, as acknowledged by the defendant's counsel under paragraph 9 of the Skeleton Arguments. What is in contention is whether the contract the plaintiff is relying on can be enforced. Based on the reproduced authorities , the unsigned contract of employment may be legally binding on the parties if it is shown, by production of evidence, that the parties intended for its terms to be incorporated into the agreement the defendant engaged the plaintiff on. Based on the preceding, I agree with the plaintiffs counsel that the first question is not suitable for determination at this preliminary stage. R6 Whether the plaintiff is eligible to gratuity at law. The second questions raised by the defendant relates to whether the plaintiff is entitled to gratuity at law. The defendant's contention is essentially that since the plaintiff is an expatriate employee, he falls within the bracket of employees exempted from a payment of gratuity. I must state that should it be found that the plaintiff is not legally entitled to gratuity, then any determinations made in relation to the first issue become irrelevant. This is because the remedies the plaintiff is seeking relate only to the payment of gratuity and/ or severance pay. To answer the second question, it is imperative to define the term gratuity. Section 3 of the Employment Code Act defines gratuity as follows: "A payment made to an employee in respect of a person's service on the expiry of a long-term contract of employment based on basic pay earnings that have accrued to the employee during the term of service" The provision that provides for the payment of gratuity under our laws is Section 73 (1) of the Employment Code Act, which provides that: "An employer shall, at the end of a long-term contract period, pay an employee gratuity at a rate of not less than twenty five percent of the employee's basic pay earned during the contract period." Based on the above provision, employers are under an obligation to pay gratuity at the end of a long-term contract, whether the same is inserted in a contract or not. There are however persons exempted from receiving gratuity at the end of a long-term contract as per Regulation 3 of the Employment Code (Exemption) Regulations, 2020. The salient provisions of Regulation 3 of the Employment Code (Exemption) Regulations which are of - relevance to this application are in relation to Sections 54 and 73 of the Employment Code Act. The regulation provides as follows: " A person, class of persons, trade, industry or undertaking listed in the schedule is exempted from the provisions specified in the schedule. Section Exemption 54 (1) (b) and (c) (i)Expatriate employee; (i) Expatriate employee;" The above regulation exempts expatriate employees from receiving a payment of gratuity at the end of their long-term contracts. This means that employers are not obligated to offer gratuity to an expatriate employee. The question for this court to ponder is whether R7 an employer can ignore the regulations and still offer an expatriate employee gratuity? I am of the view that non-adherence to the regulations by an employer by offering an expatriate employee gratuity does not amount to an illegality and hence employers are at liberty to do so . I believe that an employer can offer better conditions than those stipulated in the law to attract and retain employees. What is prohibited is an employer offering less or worse conditions than provided by law. My view stems from the fact that parties to a contract have the right to freely and voluntarily contract, provided no laws are broken. The Supreme Court in the case of Colgate Palmolive (Z) Inc vs Abel Shemu Chika and Others Appeal5 held as follows : "If there is one thing more than another which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracts and that contracts when entered into freely and voluntarily, shall be sacred and shall be enforced by the Courts of justice .... " Based on the above , where an employer freely and voluntarily offers an expatriate employee gratuity, knowing fully well that he is not obligated to at law, he binds himself and in m y opinion the same is enforceable. It will be unjust and contrary to equity for an employer to lure an employee into accepting an offer of employment with a term that he will be paid gratuity only for the employer to later seek to hide behind the regulations to avoid liability. My answer to the defendant's second question is that the plaintiff will be entitled to gratuity should the contract he is relying on in making his claim be found to be enforceable. Premised on the above , the defendant's application is dismissed with costs to the plaintiff to be taxed in default of agreement. Leave to appeal is here 1: y"'"gnrrrted,J/e; - - __ t')c- ZAn ,,~ -., J; l""' ~r. ~ HJG 1) ... ,-.,, · ii,$•. . RE ~ . . j l ~ '\ r-- Dated at Lusaka th s ......... .... ..... day of .... . . · . i ..... .. ........ .. .. ... ... . 2025 W1 •• I I , .. ~4',AA. -:r• P. O . Box 50067, LUSAKA R. H Chibbabbuka HIGH COURT JUDGE R8