Matyabano Nyirenda v Indo Zambia Bank Limited (2021/HP/0603) [2025] ZMHC 136 (31 December 2025)

11 IN THE IDGH. COURT FOR Z AT THE PRINCIPAL REGIST HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN ~ 1 OEC 2025 GISTRY-7' Sia00!)67Tw\\.! 2021/HP/0603 MATYABANO NYIRENDA PLAINTIFF AND INDO ZAMBIA BANK LIMITED DEFENDANT Before the Honourable Lady Justice C. M . Lombe in open Court For the Plaintiff: Mr B. Mwelwa, together with-Mr. B. Phiri of Messrs Linus Eyaa and J''"· Partners F'or the Defendant: Mr. M M ukupa of M essrs Isaac and Partners JUDGMENT CASES REFERRED TO: Indo Zambia Bank Limited v. Mushauka Muhanga (2009) ZR 266 2 Houghton v Trafalger Insurance Co. Ltd [1954] QB 247 James Mankwa Zulu and Others v Chilanga Cement, (Appeal No. 12 of 2004) 4 Moobola v Muweza (1990 - 1992) Z. R. 38 5 Stanbic Bank Zambia Limited v Savenda Management Services Limited (CAZ/ 08/040/2016) 6 Liverpool City Council v Irwin [1977] AC 239 7 Levy Mwale v Zambia National Broadcasting Corporation (2020/CCZ/0012) 8 Rosemary Ngorima v Zambia Consolidated Copper Mines (SCZ Appeal NO.149) 9 Maamba Collieries Limited v Douglas Siakalonga and others Appeal 51 (2004) 10 Development Bank of Zambia v Dominic Mambo Galaunia Farms Limited (1995) ZMSC 13 11 McQueen Zenzo Zaza v ZESCO Limited - (2018/ CCZ/006) 12 Dickson Zulu and Others v Zambia State Insurance Corporation Limited (Appeal No. 203 of 2008) 13 Anderson Mwale and 2 Others v Zambia Open University (2021/CCZ/001) 14 Galaunia Farms Limited v National Milling Company Limited and Another (2004) Z. R.1 15 Holmes Limited v Buildwell Construction Company Ltd (1973) ZR 16 Khalid Mohamed v Attorney General (1982) Z. R 66 17 Care International Zambia v Misheck Tembo (Selected Judgement No. 56 of 2018) (Appeal No. 57 /2016) 18 Hastings O'Brian Gondwe v BP (Zambia) Limited(S. C. Z. Judgment 1 of 1997) 19 Association of British Travel Agents Ltd v British Airways Pk [2002] 2 All E. R. 204 20 Zambia National Commercial Bank v Evans Hampopwe (SCZ Appeal No. 188/ 2008) 21 Lucas Hamaatowe and Others v Zambia Postal Services Corporation (2022/CCZ/0015) J2 I p ,I g ~ LEGISLATION REFERRED TO: 1. Employment Code Act No. 3 of2019 2. The Constitution of Zambia (Amendment) Act No. 2 of2016 OTHER MATERIALS REFERRED TO: 1. Chitty on Contracts, Vol 1 2. Phipson on Evidence (17th Edition) Sweet &amp; Maxwell (2010) 1 INTRODUCTION 1.1 This is a contractual employment dispute arising from the Plaintiffs retirement and payment of terminal/separation benefits after twenty-four (24) years of service with the Defendant bank. 1.2 The Plaintiff contends that: (i) his separation package was wrongly computed on basic pay instead of gross pay (inclusive of allowances and other regular benefits attached to his salary); (ii) the Defendant unlawfully deducted a "mortgage protection fee" from his terminal benefits; and (iii) having given three (3) months' notice of retirement with an anticipated last working day of 31st December 2017, the Defendant unilaterally caused him to stop working about one and a half months earlier, removed him from payroll, and did not pay him salary for the remainder of the notice period. 1. 3 The Defendant denies liability and maintains that: (i) terminal benefits were properly computed on the Plaintiffs basic pay; (ii) mortgage protection was always part of the Plaintiff's conditions of service; and (iii) the Plaintiff accepted payment and ceased employment, thereby concluding the matter in accordance with contract. J3 1Pa)!I.! 1.4 It is common ground that the Employment Code Act, 2019 does not apply to the events in issue, as it was enacted after the relevant period. 2 PLEADINGS 2.1 STATEMENT OF CLAIM 2.2 The Plaintiff took out a Writ of Summons and Statement of Claim seeking the following reliefs - t. An Order that the Defendant pay the balance of the Plaintiff's retirement benefits in the amount ofZMWl,536,915.44; tt. An Order that the Defendant pay to the Plaintiff the amount of ZMW87,892. 00 being his salary for the months ending J(Jh November 2017 and 3P1 December 2017,· m. An Order that the Defendant pay to the Plaintiff his Salary from January 2018 to the date of fall payment of his retirement benefits at the rate of ZMW43, 946. 00 per month; iv. An Order that the Defendant pay back the Plaintiff the amount of ZMW4,157. 78, being a refund on the mortgage protection wrongfully deducted from his benefits; Interest on all amounts found due; Costs,· and v. vi. vtt. Any other relief the court may deem fit. J4 I P age 2.3 The Plaintiff in his statement of claim dated 28th May 2021, stated that he was a retiree and former employee of the Defendant Bank. It was stated that he was employed by the Defendant on 9th March 1993, and was eventually appointed Branch Manager at the Defendant's Solwezi branch. It was further stated that as Branch Manager, the Plaintiff was categorised under Management Staff designation MS 10 concerning his terms and conditions of service. 2.4 It was stated that the Plaintiff worked for 24 years, 10 months and 10 days for the Defendant from the date of his engagement to 10th November 2017. Further, it was stated that following the Defendant's Terms and Conditions of Service for Management Staff in MS-6 to MS-11 ("the Terms and Conditions"), the Plaintiffs retirement benefits were supposed to have been calculated based on his monthly pay inclusive of all allowances. 2.5 The Plaintiff stated that he realised when he received his retirement benefits that the calculation was based on his basic pay and did not take into account his allowances and other monthly payments. It was further stated that the Plaintiff was paid ZMWI ,828,050.01 as opposed to ZMW3,364,965.45. 2.6 It was stated that the difference between what he was paid and what he ought to have been paid came about as a result of the Plaintiffs allowances not being taken into account at the time his retirement benefits were calculated and therefore underpaid in the sum of ZMWl,536,915.44. JS I P a g c 2. 7 It was further stated that the Plaintiff gave 3 months' notice to retire in accordance with the Terms and Conditions on 30th September 2017, and was supposed to officially stop work on the 31 st December 2017. 2.8 It was also stated that rather than allowing the Plaintiff to work until the end of his three months' notice period, he was advised that his last day of work would be 10th November 2017, Aas a result, he was deprived of his earnings for the months ending 30th November 2017 and 31 st December 2017, amounting to ZMW87,892.00. 2.9 The Plaintiff stated that despite disputing the Defendant's calculations in writing on 14th November 2017 and engaging Counsel to demand the balance of his benefits, these efforts proved futile. It was stated that to date the Plaintiff had not been paid his retirement benefits in full and ought to have been maintained on the payroll from the date of retirement, being January 2018 to the date of full payment of his retirement benefits, at the rate of ZMW43,946.00 per month. 2.10 It was also stated that at the time the Plaintiff was paid his retirement benefits, the Defendant wrongfully deducted the amount of ZMW4,157.78 as mortgage protection because the Mortgage protection policy was only introduced after the Plaintiff had given 3 months' notice to retire and therefore not applicable to him. J6J l' agl! 2.11 DEFENDANT'S DEFENCE 2.12 In Defence of the action, the Defendant filed its Memorandum of Appearance and Defence on 14th June 2021 wherein it was stated that the Plaintiffs retirement benefits were properly calculated as per clause 22.1 of the Terms and Conditions which took effect from 1st January 2013 and expressly provided for 3 months' pay for each completed year of continuous service. 2.13 It was stated that clause 22.1 did not provide for monthly pay inclusive of all allowances. It was further statedthat the Plaintiff acknowledged the correctness of his retirement benefits calculation and accepted the payment of ZMWl,828,050.01 in writing freely as full and final settlement of all his dues. 2.14 It was also stated that the Plaintiff was provided a calculation upon being availed his retirement benefits, which he confirmed as having understood the basis of the calculation and accepted them to be correct and further agreed not to have any further claims against the Defendant. 2.15 The Defendant stated that the Plaintiff freely stopped working on 10th November 2017 and accepted his dues without issue on his last day of work. It was stated that the amount of ZMW4,157.78 was correctly deducted from the Plaintiffs dues as mortgage protection on the ground that the policy of mortgage protection still applied to the Plaintiff under his active employment before retirement. J7 1 pa g C 2.16 PLAINTIFF'S REPLY 2.17 In the Plaintiff's Reply dated 13th July 2021, it was statedthat the that Clause 22.1 of the terms and Conditions provided for 3 months' pay when calculating one's retirement benefits, the said terms and conditions did not expressly state that the same was to be calculated on 3 months' basic pay but 3 months' full pay inclusive of all allowances. 2.18 The Plaintiff further maintained that he never accepted the payment of ZMWl ,828,050.01 as full and final payments of his retirement benefits and that his objection was made in writing dated 14th Nove1nber 2017. It was stated that, even if the Plaintiff accepted the payment, he did so on the belief that it was correct. 2.19 It was also stated that the Plaintiff only stopped work on 10th November 201 7, because he was instructed to by the Defendant, believing that the remaining months of his notice period would be considered when his retirement benefits were paid out. 2.20 It was stated space that the mortgage protection amounting to ZMW4,157.78 was incorrectly deducted from the Plaintiff's dues as the policy was placed in force after he had already given retirement notice. J8 1 p :I g ~ 3 TRIAL 3.1 Matyabano Nyirenda, (PWl) the Plaintiff, was the sole witness in his case. He testified on oath that he filed a witness statement dated 14th December 2021 , which was admitted into evidence, as his evidence in chief. He stated that he was employed by the Defendant on 9t h March 1993 and rose through the ranks to become the Defendant's Branch Manager at its Solwezi branch. He testified that as Branch Manager, he was under the designation of MS 10 under the Terms and Conditions, which appeared on pages 2 -17 of the Plaintiffs Bundle of Documents. 3.2 It was his testimony that on 30th September 2017, he handed in his 3 months' notice to retire, of which reference was made to page 18 of the Plaintiff's Bundle of Documents for the said notice. PWl stated that the notice was acknowledged by the Defendant as per the letter appearing at page 19 of the Plaintiffs Bundle of Documents. PWl further stated that he ought to have continued working up until the 31 st of December 2017. 3 .3 PWl testified that on 25t h October 2017, the Defendant wrote to him accepting his retirement and indicated that his last working day would be 10th November 2017 as per page 20 of the Plaintiffs Bundle of Documents. PWl further testified that he received his last salary, the end of October 2017, and exhibited his pay slip as at page 21 of the Plaintiffs Bundle of Documents. PWI stated that on 8t h November 2017, the Defendant wrote to him confirming J9 1 pa g C payment of ZMWl,828,050.01 as his total retirement benefit. This was evidenced as per pages 22-23 of the Plaintiffs Bundle of Documents. 3.4 It was PWl 's testimony that he worked for 24 years, 10 months and 10 days for the Defendant from the date of his employment to the 10th of November 2017. PWI stated that in accordance with the Terms and Conditions, his retirement benefits ought to have been calculated on his monthly pay, which was inclusive of all allowances. It was PWl 's further testimony that upon receiving his retirement benefits, he noticed that the amount was less than it should have been and with the aid of his pay slip, PWI discovered that his retirement benefits were calculated based on his basic pay, which did not include allowances. The Court was referred to pages 30-31 of the PlaintifPs Bundle of Documents. 3.5 PWl testified that ZMW 1,828,050.01 was paid to him as opposed to ZMW 3,256,965.45 and therefore was underpaid the amount of ZMW 1,490,094.25. PWl further testified that he was denied his salary from 11 th November 201 7 to 31 st December 201 7. 3.6 It was also PWl's testimony that he challenged the underpayment of his retirement benefits and stated that he ought to have been maintained on the payroll until the same was done. PWl testified that at the time of being paid his retirement benefits, the Defendant wrongly deducted ZMW4,147.78 as a mortgage HO I P a g --· protection, which policy had only been introduced after PWl had given notice to retire. PWl stated that he suffered a loss as a result of the Defendant underpaying my benefits. 3. 7 When cross-examined, PWl confirmed that he had been employed by the Defendant for 25 years and 10 months and was conversant with the conditions of service for the job grade he held. PWl stated that retirement could be exercised following working for over 20 years or reaching the age of 55 by giving 3 months' notice prior to the date. PWl also stated that the Defendant had the same obligation. 3.8 PWl confirmed that at the time he gave notice, he had already qualified for retirement in terms of clause 27. l(a) having worked for continuous service of more than 20 years. PWl stated that mortgage protection was insurance against a mortgage. PWl further stated that the insurance was annual and paid at the beginning of the year, and paid by the Defendant. PWl also stated that the payment by the Defendant was for the mutual benefit of the parties, and the payment was recovered by deductions from members of staff. PWl stated that the deductions were loans and would be recovered over a period of time, dependent on the insurance amount. PWl stated that he was unable to state when his mortgage insurance premium was being deducted. Jll JP agc: 3.9 When asked about the outcome of an employee, who separated from the bank without full recovery of his premiums, PWl stated that outstanding amounts would be recovered from his benefits. PWl further confirmed that the Defendant, recovered mortgage protection premiums from him and stated that the Defendant should have not deducted the amounts, as the loan was wrongly opened because, at the time of the insurance payment, he had already given notice that he was retiring, and therefore there was no loan or mortgage to be protected. 3.10 PWl confirmed that he had a mortgage at the time he was leaving employment, which was to be deducted from his benefits. He confirmed that he conditions of service at clause 27(1)(a) provided for payment of 3 months ' salary for each year served. PWI further confirmed being paid a retirement package when leaving the Bank, and based on his basic pay, the same was not correct. When referred to paragraph 10 of his witness statement and readout, PWl confirmed that what he was paid was based on his basic pay. 3 .11 When re-examined, PWI clarified that his stance on the premiums in that there should have been no deductions made at all. 3.12 The Defendant equally called one witness, Christopher Wakung'uma (DWI). He testified on oath that he filed a witness statement dated 19th April 2022, which was admitted into evidence, as his evidence in chief. J12 1Pagt 3 .13 DWI confirmed that the Plaintiff was employed by the Defendant on 9th March 1993 and rose through the ranks to become the Defendant's Branch Manager at its Solwezi branch. DWI testified that at the time of the Plaintiff's employment as Branch Manager, he was employed subject to the Terms and Conditions at pages 8 to 20 of the Defendant's Bundle of Documents. 3.14 DWI further testified that on 30th September 2017, the Plaintiff gave the Defendant his three months' notice of retirement for the position of Branch Manager, which was acknowledged by the Defendant. DWI also testified that the Defendant was informed that pending the consideration of his request to be retired, his delegation would be withdrawn with immediate effect, as per letter dated 30th September 2017 at page 3 of the Defendant's Bundle of Documents. 3.15 It was DWl's testimony that on 25th October 2017, the Defendant informed the Plaintiff that his intention to retire was accepted in accordance with clause 27 of the conditions of service. Furthermore, DWI testified that the Defendant provided the Plaintiff with a computation of his normal retirement package in accordance with the Defendant's Terms and Conditions of Service, which included the following: t. All leave days at the time of retirement. 1131 p a g C tt. 3 months' pay for each completed year of continuous service amounting to Kl, 828,050.01. 3.16 It was DWl's further testimony that regarding the Mortgage protection fee amounting to ZMW4,157.78, the same was correctly deducted from the Plaintiff's dues as mortgage protection on the ground that the policy of mortgage protection applied to the Plaintiff under his active employment before retirement. 3.17 DWI testified that on 14th November 2017, the Defendant received a letter from the Plaintiff, in which it was requested to recalculate both leave days and benefits according to the provisions of the law. The Court was referred to page 6 of the Defendant's Bundle of Documents for the said letter. 3.18 DWl stated that by letter dated 2l5t November 2017, the Defendant explained to the Plaintiff that Clause 27 of the conditions of Service was very instructive in respect of the notice and his circumstances, and further, the Defendant, with clarity, advised the Plaintiff that it had complied with the Terms and Conditions. 3.19 It was further stated by DWl that upon retirement, payments were made to the Plaintiff based on the Plaintiffs basic pay and denied owing any salaries. DWl testified that as the Plaintiff had already JI4 I Pa g l' attained the retirement age, he was duly retired without serving the notice period and therefore could not claim two months' salary. 3.20 When cross-examined, DWI confirmed he was aware of the time the Plaintiff retired in 2017. DWI confirmed that the applicable conditions of service were those appearing at page 2 of the Plaintiffs Bundle of Documents. He further confirmed that the Plaintiffs retirement was calculated based on his basic pay. He stated that clause 27.l(a) referred to 3 months' pay and not basic pay. DWI disagree that the Plaintiff was underpaid. 3.2I When referred to clause 27.l(b) at page 12 of the Plaintiffs Bundle of Documents, DWI confirmed that an employee can retire willingly if he was prepared to pay 3 months' salary in lieu of notice. DWI confirmed that the Defendant authored its' Terms and Conditions of Service. 3 .22 DWI confirmed that where an employee was not paid in full, he would remain on the payroll, however, the Plaintiff was paid in full and did not reject the payment. DWI, when referred to page 23 of the Plaintiff's Bundle of Documents, confumed that the provision for name, signature and date was unsigned as to acknowledging receipt. JlS I P a g c 3.23 When referred to page 24 of the Plaintiff's Bundle of Documents. DWI confirmed that through the said letter exhibited thereon, the Plaintiff was challenging the calculations. DWI stated that he could not recall the specific date the Mortgage Protection Policy was introduced. 3 .24 Nothing was asked in re-examination. 3 .25 Clarification was sought by the Court regarding clause 2 7 .1 (a) and 27.l(b). According to DWI, 3 months' pay was basic pay and 3 months' salary was full pay inclusive of allowances. 3 .26 DWI further stated that within the Terms and Conditions of Service, there was no definition, but clarity could be found in the Employment Code Act, adding that there was no ambiguity he could see. 4 SUBMISSIONS 4.1 The gist of the Plaintiff's submissions was firstly that the Plaintiff's retirement benefits ought to have been calculated on his full monthly pay inclusive of all allowances, and not merely on basic pay. It was argued that the relevant clause in the terms and conditions of service (Clause 27.1) did not define the term "three months' pay", and that the use of inconsistent terminology- "three months' pay" in one part and "three months' salary" in another created ambiguity. J16 I P a g l' 4.2 It was submitted that during cross-examination, DWI admitted that the Defendant had calculated benefits using basic pay and also confirmed that no definitions were provided for the terms "pay" and "salary. " It was submitted that, in the face of such ambiguity, the contra proferentem rule ought to apply, and the contract be construed against the Defendant who had authored it. Reference was made to the case of Indo-Zambia Bank Limited v Mushauka Muhanga (2009) Z. R 266C1 > and the English case of Houghton v Trafalgar Insurance Company Limited [1954) QB 247c2 > to illustrate this principle. 4.3 Further, it was contended that the term "salary" should be interpreted in accordance with the case of James Mankwa Zulu and Others v Chilanga Cement Appeal No. 12 of 2004c3>, where it was held that salary includes allowances paid periodically. It was argued that the Defendant's reliance on the Employment Code Act No. 3 of 2019 was misapprehended as it was enacted after the Plaintiffs retirement in 201 7 and could not apply retrospectively. Reliance was placed on, inera alia, the cases of Moobola_y Muweza (1990 - 1992) Z. R. 3gc4 > and Stanbic Bank Zambia Limited v Savenda Management Services Limited CAZ/08/040/2016(5>, to support this position. 4.4 It was therefore submitted that the Plaintiffs benefits ought to have been calculated using full monthly pay inclusive of allowances. J171 P agc 4.5 Secondly, on the balance owed to the Plaintiff, it was submitted that the outstanding amount stood at ZMW 1,490,094.25. It was prayed that interest on ZMW 1,461,624.50 be awarded at the short term deposit rate from the date of writ to 23rd December 2021 (the date of payment into court), and on the balance of ZMW 28,469.75 from 23rd December 2021 to the date of judgment, with post judgment interest to accrue at the commercial lending rate. 4.6 Concerning the third issue, it was submitted that Clause 27.l(b) required an employee to give three months' notice of retirement, or to pay the Defendant three months' salary in lieu thereof. It was argued that while the clause expressly imposed an obligation on the employee, it was silent on the employer's corresponding obligation. Citing Liverpool City Council v hwin [1977] AC 239<6>, Counsel submitted that the law allowed the Court to imply terms into contracts to reflect fairness and reasonableness. It was argued that the Defendant should have been similarly bound by the notice period and should compensate the Plaintiff for the two months' notice that was unilaterally cut short. 4. 7 Turning to the fourth issue, it was submitted that the Plaintiff was entitled to ZMW 87,892.00, being two months' salary calculated from a monthly figure of ZMW 43,946.00, if the third issue were found in the affirmative. 4.8 On the fifth issue, referene was made to Article 189(2) of the Constitution of Zambia (Amendment) Act No. 2 of 2016, which JI8 I Pa g c mandates that an employee who is not paid pension benefits on their last working day must be retained on the payroll until payment is made. The case of Levy Mwale v Zambia National Broadcasting Corporation 2020/CCZ/00J2C7> was cited in support. It was submitted that the Plaintiff was not paid in full and should therefore be deemed to have remained on the payroll from November 2017 to date. Alternatively, if the Court found that full payment was effected on 23rd December 2021, then the Plaintiff should be deemed to have been on the payroll up to that date. 4. 9 Regarding the sixth issue, it was stated that the computed amount owed in salaries was ZMW 2,724,652.00 (i.e., ZMW 43,946.00 x 62 months from November 2017 to February 2023), or ZMW 2,153,354.00 for 49 months ending December 2021. 4.10 Lastly, it was submitted that the Defendant had wrongfully deducted an amount in respect of mortgage protection from the Plaintitrs benefits. It was argued that the contract did not contain any provision regarding mortgage protection, and that the policy was introduced after the Plaintiff had already given notice of retirement. Relying on Chitty on Contracts<1 > at page 10, it was argued that the Defendant had no legal basis to deduct sums in relation to the mortgage protection, and should only have deducted the actual loan balance. 4.11 In conclusion, it was prayed that the Court grant all reliefs sought, arguing that the Plaintiff had demonstrated entitlement to the Jl9 j pa g C recalculated retirement benefits, salary for the shortened notice period, outstanding salary due to non-removal from payroll, and a refund of the wrongly deducted mortgage protection sum. 4.12 The gist of the Defendant's submissions was that the issues for determination were: (t.) whether the Terms and Conditions of employment provided that the Plaintiff's retirement benefits should include allowances; (t.'t) whether the Plaintiff should have been maintained on the payroll; and (iit) Whether the deduction of the mortgage protection amount was lawfal, in light of the Plaintiff's claim that it did not apply to him. 4.13 On the first issue, it was submitted that by a letter dated 8th November 2017, the Defendant had communicated to the Plaintiff the computation of his retirement benefits in accordance with the applicable terms and conditions of service. The Plaintiff had responded, requesting a recalculation of the benefits in accordance with the law. The Defendant had then clarified that Clause 27 of the conditions of service governed the Plaintiff's circumstances. It was further submitted that the Defendant complied with the terms and conditions of employment, and that the Plaintiff's benefits had been calculated and paid as per those terms. J20 I P a g l' 4.14 To support this position, reliance was placed on the case of Rosemary Ngorima v Zambia Consolidated Copper Mines, SCZ Appeal No. 149 of 2011<8>, where it was held that parties to an employment contract are bound by the terms they agreed upon. It was submitted that in the case of Maamba Collieries Limited v Douglas Siakalonga and Others (Appeal No. 51 of 2004)<9 > it was held that unless the conditions of service explicitly provide for what is due to an employee, no other terms will be implied. Further reliance was placed on the case of Development Bank of Zambia v Dominic Mambo (1995) ZMSC 13<10>, which affirmed that a party cannot seek to benefit from conditions of service that were neither known to nor applicable to him. 4.15 It was argued that there was no prov1s10n m the Plaintiffs conditions of service stipulating that retirement benefits were to be computed using allowances. The Defendant submitted that both parties were bound by the initial agreement and that the Plaintiff had been paid all sums due at retirement. 4.16 Regarding the second issue as to whether the Plaintiff ought to have been retained on the payroll, it was submitted that the Plaintiff had tendered three months' notice of retirement on 30th September 2017. The Defendant had accepted the notice on 25th October 2017 and subsequently computed and paid the Plaintiffs retirement benefits in full. J21 I P a g c 4.17 It was submitted that these provisions of Article 189(1) and (2) of the Constitution of Zambia (Amendment) Act No. 2 of 2016 did not apply to the present case, as the Plaintiff was duly paid in a lump sum. To buttress this argument, the case of McQueen Zenzo Zaza v ZESCO Limited, CCZ 006/2018(1 1 > was cited. 4.18 Further reliance was placed on the case of Levy Mwale v Zambia National Broadcasting Corporation, 2020/CCZ/0012(7), where the Court clarified that retention on payroll only applies where pension benefits are to be paid by instalments and not otherwise. Counsel therefore submitted that since the Plaintiff was paid his benefits in full and promptly, he had no legal basis to claim that he should have remained on the payroll. 4.19 Turning to the third issue, being the mortgage protection deduction, it was submitted that the deduction of ZMW 4,157. 78 for mortgage protection was properly effected, as the scheme applied to the Plaintiff at the time of retirement. It was argued that the Plaintiff remained in active employment when the mortgage protection scheme applied, and that the applicable conditions of service at the time of separation governed the computation of benefits. Reliance was placed on the case of Dickson Zulu and Others v Zambia State Insurance Corporation Limited, Appeal No. 203 of 2008( 12>, where the Court reaffirmed that the conditions of service in force at the time of separation must govern terminal benefit calculations. J22 I Pa g c 4.20 Further reference was made to Phipson on Evidence(2), paragraph 6-06 at page 151, to state that the burden of proof in civil cases lies on the party asserting the affirmative. It was submitted that the Plaintiff had failed to discharge this burden. 4.21 Additionally, the Constitutional Court's decision m Anderson Mwale, Buchisa Mwalongo, Kola Odubote v Zambian Open University 2021/CC/001<13> was cited. In that case, the Court held that the Petitioners had failed to prove that the gratuity due to them was a pension benefit protected by the Constitution and therefore declined to declare their removal from payroll unconstitutional. 4.22 Lastly, reliance was placed on the decision in Galaunia Farms Limited v National Milling Company Limited and Another (2004) Z. R. 1<14>, were it was held that a Plaintiff must prove their case on a balance of probabilities, even if the defence fails. 4.23 In reply, it was argued that the term "3 months' pay", as used in the Defendant Bank's Terms and Conditions of Service, was ambiguous because it did not specify whether it referred to basic pay or full pay. It was pointed out that the Defendant, being the drafter of the contract, had a duty to be clear. 4.24 It was submitted that the Employment Code Act No. 3 of 2019 defined both "basic pay" and "full pay", the latter encompassing allowances and cash equivalents of allowances. It was contended that the clause in question should be interpreted in favour of the J23 I pa g C Plaintiff under the contra proferentem rule, and that the Court should construe "3 months' pay" to mean.full pay, not basic pay. 4.25 Furthermore, it was contended that the Defendant's reliance on the case in McQueen Zaza <11> was misplaced. It was stated that the facts in that case could be distinguished from the case in casu as unlike m McQueen Zaza< 11>, who only discovered the underpayment of his . redundancy package after obtaining judgment, the Plaintiff in this case raised objections to the calculation of his benefits within six days of receiving payment. It was argued that this was not a case of after the fact discovery or re computation; rather, the Plaintiffs claim was consistent and immediate. They concluded that the McQueen Zaza<11 > decision should not apply because the factual basis and procedural posture of that case differed materially. 4.26 On the issue of whether the benefits in dispute qualified as pension benefits, it was submitted that Clause 27.1 of the Terms and Conditions clearly set out the circumstances under which normal retirement could occur - either by age (55 or 60 years) or after 20 years of continuous service. It was argued that this made the benefits due under that clause compensatory in nature, and therefore aligned with the constitutional definition of pension benefit under Article 266 of the Constitution of Zambia. Furthermore, the Plaintiffs benefits, just like in the McQueen Zaza ~ case, were "compensation or similar allowance in respect of a person's service" and thus qualified as pension benefits under J24 I P age Article 189 of the Constitution of Zambia. The Plaintiffs Counsel invoked the principles of contract law, in Holmes Ltd v Buildwell Construction Company Limited (1973) Z. R 97<15>, to argue that the Court should enforce the written contract on its face without entertaining extrinsic justifications from the Defendant. 4.27 Lastly, it was submitted that the mortgage protection policy ought never to have been applied to the Plaintiff. It was argued that by the time the policy was introduced, both parties were aware that the Plaintiff was due to leave employment by 31st December 2017. Moreover, the Plaintiff's notice period was cut short by the Defendant, further demonstrating that the mortgage protection policy had no application. It was contended that the terms and conditions applicable to the Plaintiff did not mention mortgage protection or any deductions thereunder, and therefore the deduction was unlawful. 5 LAW 5 .1 The learned au tho rs of Phipson on Evidence < 2>, at paragraphs 6-06 on page 15 state that: "So far as that persuasive burden is concerned, the burden of proof lies upon the party who substantially asserts the affirmative of the issues. If, when all the evidence is adduced by all parties, the party who has this burden has not discharged it, the decision must be J25 I P age against him. It is an ancient rule founded on considerations of good sense and should not be departed from without strong reasons. " 5.2 The above principle has also been well articulated in a plethora of authorities, including the case of Khalid Mohamed v Attorney General 1982 Z. R 66 < 16>. 5.3 In relation to what should constitute a separation package it was held in the case of Care International Zambia v Misheck Tembo Selected Judgement No. 56 of 2018 Appeal No. 57 /2016 < 11>, that: "the mode of an employee's exit from employment determines the relief he will be entitled to and the nature of his benefits. Therefore, the nature and manner in which the employee leaves employment will determine the termination benefits that he will be entitled to at the end of the employment relationship." 5 .4 In Maamba Collieries Limited v Douglas Siakalonga and others <2>, it was held that: - "unless the conditions of service provide for what is due to the employee, no other terms and conditions will be inferred when it comes to determining what is due to the employee" 5.5 In the case of Hastings O'Brian Gondwe v BP (Zambia) Limited (S. C. Z. Judgment 1 of 1997) (ls>, the Supreme Court stated in essence that perks enjoyed as an incidence of one's employment terminates with the termination of employment. J26 I p 3 g C • 5.5 It is also worth recalling that where ambiguity anses m the interpretation of a contract, the language employed will be construed against the party who drafted or proposed it. This is commonly known as the contra proferentem rule. In Association of British Travel Agents Ltd v British Airways Plc [2002] 2 All E. R. 204 < 19>, Sedley L. J. described the principle as "a principle not only of law, but of justice." 5 .6 This principle has found application in our jurisdiction, wherein the Supreme Court invoked the contra proferentem rule in Indo Zambia Bank Limited v Muhanga (2009) Z. R. 266°>. 5. 7 In the case of Holmes Limited v Buildwell Construction Company Limited (1973) Z. R. 97 < 20>, it was stated that: " Where the parties have embodied the terms of their contract in a written document, extrinsic evidence is not generally admissible to add to, vary, subtract from or contradict the terms of the written contract. " 5.8 It's apt to note that in the case of Zambia National Commercial Bank v Evans Hampopwe SCZ Appeal No. 188/ 2008 < 21>, the Court underscored a fundamental principle of law when it held: "Where an employee alleges underpayment of salary, wages or allowances before the Court, the employee has to plead the issue explicitly and lead evidence to prove the allegation. " 121 I P a g c 5. 9 In the case of Lucas Hamaatowe and Others v Zambia Postal Services Corporation 2022/CCZ/0015<22>, whose facts are similar to the ones in the present case, to the extent that the petitioners therein were retrenched before the 2016 constitutional amendment but sought to rely on Article 189 (2) of the Constitution, it was stated that: "It is trite that the law does not operate retrospectively unless there is a specific provision providing for the retrospective effect of the law, and there is abundant case law on this principle in this jurisdiction. In the case of Ben ·amin Mwelwa v The Attorne General 2020/CCZ/007. we reiterated that for the statutory or constitutional provisions to have retrospective effect, the wording of the retrospective effect must be clear. A perusal of the Constitution and indeed a plain reading of the said Article 189 (2) reveals that the clause does not provide for retrospective application. The petitioners cannot, therefore, seek to enforce their rights under Article 189 (2) of the Constitution, which was not in existence at the time of their retrenchment. This provision in the Constitution cannot apply to the petitioners' situation as doing so would amount to applying the law retrospectively when it is not provided for such application. 11 6 ANALYSIS 6.1 The following facts are not in dispute in this matter: J28 I pa g C • • a. The Plaintiff served the Defendant for approximately twenty-five (25) years. b. The Plaintiff tendered a notice of retirement of three (3) months, indicating that his last working date would be 31st December 2017. c. The Defendant accepted the notice but directed the Plaintiff to stop working earlier than 31st December 2017 (by about one and a half months), removed him from payroll, and paid him a separation/terminal package computed on basic pay. d. A mortgage protection fee was deducted from the terminal benefits. e. The Plaintiff received the payment, stopped working, but later asserted he had been underpaid and that the deduction for mortgage protection was unlawful. 6.2 The foregoing facts not being in dispute in this matter are found as facts in this case. 6.3 Issues for Determination 6.4 The Court is invited to determine the following issues: 1. Whether the separation/ terminal benefits were to be computed on basic pay or on gross pay (basic pay plus allowances/ regular benefits), given that the terms "pay" and "salary" are not defined in the applicable conditions of service. 11. Whether the Plaintiff is entitled to salary for the unexpired portion of the three-month notice period (approximately two months), having been directed by the Defendant to stop working earlier than the intended retirement date and removed from payroll. J29 j pa g C • • iii. Whether the deduction of a mortgage protection fee from the terminal benefits was contractually permissible. 6.5 Contractual interpretation 6.6 An employment contract, and any incorporated conditions of service, are construed according to ordinary principles of contractual interpretation: the Court seeks the objective intention of the parties from the words used, read in context and as a whole. Where the language is clear, the Court does not re-write the bargain merely because one party later considers the outcome harsh or inconvenient. This is as was held in the Maamba Collieries Limited v Siakalonga case. However, where wording is ambiguous, context and commercial sense may properly assist, but they cannot be used to contradict the text. 6. 7 Further, where a standard-form employment instrument is drafted by the employer, in this case the terms and conditions of service, and ambiguity remains unresolved, the contra proferentem approach may apply, construing ambiguity against the drafter- particularly where the disputed clause affects an employee's pecuniary entitlements. See the case of Association of British Travel Agents Ltd v British Airways Pk [2002] 2 AUER 204. 6.8 The Plaintiff bears the burden to prove underpayment and unlawful deductions on a balance of probabilities. The Defendant, however, bears an evidential burden to produce the contractual instrument(s) and policy basis relied upon to justify the computation method and the J30 I P a g c • • deduction, smce those matters lie especially within its custody and control. Reference is made to the case of Zambia National Commercial Bank v Evans Hampopwe. 6.9 The Plaintiffs case is that he reasonably expected terminal benefits to be computed on his overall remuneration package, inclusive of allowances and attached benefits, because those allowances were part of what he regularly earned. The Defendant's case is that terminal benefits were correctly computed on basic pay. 6.10 The difficulty is that the terms "pay" and "salary" are not defined in the conditions of service placed before the Court (as relayed), and neither party demonstrated a definition clause that decisively resolves the dispute. In employment practice, "basic salary /pay" ordinarily denotes the fixed core remuneration exclusive of allowances, while "gross pay" often refers to total cash earnings before deductions, inclusive of regular allowances. However, the legal question is not what terms can mean in abstract, but what the parties' contract, properly construed, did mean in relation to terminal benefit computation. 6 .11 The most reliable indicators of contractual meaning in this context are: 1. any express formula m the conditions of service govemmg terminal benefits; 2. the payslip structure (what is treated as basic, what is variable); 3. the consistency of past practice in the organisation for similarly situated retirees; and J31 1Pagc • • 4. whether particular allowances are fixed, universally payable, and integral to remuneration as opposed to discretionary or reimbursive. 6.12 In Chrispin Lienda v Zambia National Building Society (Court of Appeal), the Court addressed a dispute where an employee asserted that a redundancy package ought to have been calculated on gross pay and linked his claim to correspondence about his last drawn salary and the notice period, illustrating that "gross monthly income" versus "basic salary" distinctions may be outcome-determinative depending on the governing instrument and the facts. 6.13 Applying the foregoing principles, and for an appeal-proof resolution, I make the following findings: (a) Where the conditions of service expressly tie terminal benefits to "basic salary /basic pay," the Court must give effect to that bargain even if allowances formed part of the employee's monthly take-home, unless the clause is illegal or contrary to a mandatory statutory minimum applicable at the material time. The Court's duty is interpretation, not re-allocation of risk after the fact. (b) Where the conditions of service do not expressly specify "basic" and instead use "salary" or "pay" without definition, the Court must decide- on evidence-whether the parties meant basic salary only or total remuneration. In such a scenario, fixed and consistently paid allowances that are not J32 I p a g C • reimbursive in nature may, depending on the evidence, be treated as part of "salary" in substance. 6.14 On the record as summarised to the Court, the Defendant computed the benefits on basic pay and treated allowances as excluded. The Plaintiff's expectation alone cannot displace the contractual meaning; however, the Defendant must justify exclusion by pointing to (i) an express formula; or (ii) a demonstrated uniform policy / practice incorporated into the employment relationship. 6.15 In the absence of a clear definitional clause, and given that the employer drafted the conditions of service, any genuine ambiguity concerning the meaning of "salary/ pay" in a terminal benefits formula ought not to operate to the employee's detriment without clear words. This is particularly so where the disputed allowances are shown to be fixed, not discretionary, and integral to monthly remuneration. As the conditions simply refer to "salary / pay" without definition, then on the balance of probabilities the Court prefers an interpretation that includes fixed contractual allowances forming part of regular monthly remuneration, while excluding discretionary benefits and pure reimbursements, because that best reflects what a reasonable person in the parties' position would understand "salary" to capture in an employment compensation context. 6.16 Given the pleaded controversy, and to finally determine the dispute rather than issue an abstract pronouncement, I proceed on the footing that the governing instrument is silent/ambiguous and no express "basic salary only" formula was proved with clarity. In that event, I J33 I pa g C • hold that the separation package should have been calculated on the Plaintiffs gross monthly contractual remuneration, limited to basic salary plus fixed and consistently payable allowances that were part of his contractual pay package. 6.17 Entitlement to pay for the balance of the notice period 1. The Plaintiff gave three (3) months' notice of retirement. The Defendant accepted the notice but directed the Plaintiff to stop working earlier, removed him from payroll, and did not pay him for the remainder of the notice period (about two months). In law and fairness, an employee who validly gives notice to terminate by retirement ordinarily remains in service until expiry of notice, with reciprocal obligations continuing, unless the parties agree otherwise. 2. Where an employer elects not to reqmre the employee's attendance during the notice period, it may place the employee on paid leave or pay in lieu of notice, but it cannot both (i) accelerate separation unilaterally and (ii) withhold the wages that would have accrued during the unexpired notice period, absent contractual authority. 3. The reasoning is that payment in lieu of notice is treated as pay for the notice period and may carry the implication that employment is treated as subsisting for that period for purposes of related computations, depending on the contract and the facts . 4. The Defendant, having accepted a three-month notice but directed earlier cessation without paying the balance, is liable to pay the Plaintiff the remuneration he would have earned for the unexpired J34 I P age • portion of the notice period, assessed on the same remuneration basis applicable to his monthly pay during service (i.e., basic plus fixed contractual allowances, excluding reimbursements), unless the Defendant proves that such sum was already included within the paid terminal package as an identifiable component of pay in lieu of notice. 7 CONCLUSION 7.1 On the facts presented, the terminal package was described as a separation package calculated on basic pay and did not include salaries for the remaining two months. I therefore award the Plaintiff two (2) months' remuneration in lieu of the unserved portion of the notice period, computed on the Plaintiff's monthly contractual remuneration (basic plus fixed contractual allowances). 7.2 The Plaintiff disputes the deduction of a mortgage protection fee from terminal benefits . He asserts this condition was introduced after he tendered his notice of retirement. The Defendant asserts the mortgage protection fee was always a term in the Plaintiff's conditions of service. 7.3 Deductions from an employee's pay/ terminal benefits must have a lawful basis: contractual authorisation, statutory authorisation, or the employee's informed consent. If mortgage protection was part of the terms governing a staff mortgage product accepted by the Plaintiff (including deductions upon exit), and those terms were incorporated into the employment relationship or the loan agreement, the deduction may be permissible. If the term was introduced later without the Plaintiffs assent and sought to be applied retrospectively to accrued entitlements, it would be unenforceable against him. J35 I P age • 7.4 The Defendant bears the evidential burden to produce the applicable policy/ contractual term authorising the deduction as at the material time. No evidence has been adduced by the Defendant to this effect therefore to do so was unlawful and the amount deducted must be refunded. No clear documentary term was placed in evidence by the Defendant to back its assertion. In the absence of strict proof of contractual authority, I resolve the issue in the Plaintiffs favour and order the Defendant to refund the mortgage protection deduction. 7.5 For the reasons set out above, judgment is entered for the Plaintiff as follows : a) Underpayment of separation/terminal benefits: The Defendant shall recomputed the Plaintiffs terminal benefits on the basis of the Plaintiffs gross monthly contractual remuneration, meaning basic salary plus fixed and consistently payable contractual allowances, excluding discretionary benefits and reimbursements, and shall pay any shortfall within thirty (30) days of this judgment. b) Pay for balance of notice period: The Defendant shall pay the Plaintiff two (2) months' remuneration in lieu of the unserved portion of the notice p_eriod, computed on the Plaintiffs monthly contractual remuneration (basic plus fixed contractual allowances), within thirty (30) days. c) Mortgage protection deduction: The Defendant shall refund to the Plaintiff the mortgage insurance fee deducted from his terminal benefits, within thirty (30) days. d) Interest: Sums found due under (a)- (c) shall attract interest at the short term bank lending rate from the date of accrual to date of full payment. J36 I P a g i.: • e) Costs: Costs follow the event and are awarded to the Plaintiff, to be taxed in default of agreement. 7.6 Leave to appeal is granted. Dated at Lusaka this 3. \. of December, 2025. ~,} C. M. LOMBE JUDGE J37 i I' a g l'