Lubanda & Others v Mwale (Roan United Football Club) & Another (Appeal 84 of 2011) [2014] ZMSC 14 (29 January 2014)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO. 84 OF 2011 HOLDEN AT LUSAKA (Civil Jurisdiction) B E T W E E N: MELISE LUBANDA AND 72 OTHERS APPELLANT AND PIERSON MWALE (Sued in his capacity as Secretary-Roan United Football Club) 1 st RESPONDENT LAMECK CHITI (Sued in his capacity as Secretary-Roan United Football Club) 2 nd RESPONDENT ZAMBIA CONSOLIDATED COPPER MINES LIMITED 3 rd RESPONDENT CORAM: MUMBA, AG. DCJ, CHIBOMBA AND WANKI, JJS On 5th June, 2012 and 30th January, 2014 For the Appellants: Mr. G. Ngowani (39th Appellant) For the 1st and 2nd Respondents: N/A For the 3rd Respondents: Miss. Namwinga - In House Counsel J U D G M E N T WANKI, JS, delivered the Judgment of the Court. CASES REFERRED TO: 1. Beatrice Muimui -Vs- Sylvia Chanda SCZ No. 50 of 2000. J2 2. Rosemary Phiri Madaza -Vs- Awadh Karen Coleen SCZ No. 2 of 2008. This is an appeal against a High Court judgment in which the trial Judge held that the appellants’ claim for the purchase of the houses they occupy failed and that Roan United Football Club was liable to pay the appellants’ retrenchment package and not the 3 rd Respondent. The brief background of this case is that Roan United Football Club (RUFC) which employed the appellants was being supported financially through grants by ZCCM, Luanshya Division, until 1997. In October, 1997 ZCCM, Luanshya Division, was sold to Roan Antelope Mining Corporation of Zambia (RAMCOZ) which assumed responsibility to support RUFC financially. In December, 1997 an Internal Audit of RUFC was conducted and the Audit Report recommended among other things, reduction of the workforce at RUFC as a measure of redressing the financial constraints faced by RUFC. As a result of the said recommendation, the appellants were retrenched. The appellants were not paid their benefits upon their retrenchment and in April, 1998 the appellants commenced legal proceedings against the J3 respondents claiming for a declaration that they were serving under the 3rd respondent’s Conditions of Service by virtue of serving under Roan United Football Club (RUFC); an order for the appellants as sitting tenants to purchase the 3rd respondent’s houses; an order that the respondents render an account of terminal benefits due to the appellants under the 3rd respondent’s Conditions of Service and an order for payment of their benefits found to be due. After protracted proceedings the trial Court rendered its judgment on 25th February, 2011. It is this judgment which has formed the basis of this appeal. The appellants in their Memorandum of Appeal set out ten grounds of appeal. The grounds of appeal as set out by the appellants are that:- 1. 2. 3. The Judge erred and misdirected himself when he mentioned in his judgment that “As regards the 1st plaintiff, Melise Lubanda and Noah Pelete, the witnesses said that the two had since withdrawn from the proceedings because they were paid the retrenchment packages in accordance with the earlier stated formula and sold the houses they were occupying.” The judgment of the trial Court was injudicious, erroneous and in bad faith because it was based on disputed fraudulently altered documents. That the trial Judge erred and misdirected himself when he based his judgment on the fraudulently altered documents. J4 4. 5. 6. 7. 8. 9. That the trial Court erred and misdirected itself when it found that Roan Antelope Mining Corporation of Zambia Internal Audit Report led to the redundancy of Roan United Football Club excess labour force. That the trial Court erred and misdirected itself when it held that Zambia Consolidated Copper Mines Limited (ZCCM) was not responsible for paying the appellants. That the trial Court erred to have based its judgment on oral evidence from two witnesses on their allegations that Melise Lubanda and Noah Pelete’s salaries were paid by ZCCM. That the trial Court erred and misdirected itself when it held that from 1997 the 3rd defendant ceased giving grants to the club. That the trial Court erred and misdirected itself when it held that the club is liable and not Zambia Consolidated Copper Mines Limited (ZCCM) for the payment of retrenchment benefits to the appellants in accordance with the Section 26B Employment Act. That the trial Court erred and misdirected itself when it held that the appellants are not entitled to purchase the Zambia Consolidated Copper Mines Limited (ZCCM) houses. 10. That the appellants are entitled to be paid retrenchment benefits by Zambia Consolidated Copper Mines Limited (ZCCM) and to purchase the houses they are occupying. The appellants in this matter were unrepresented but they made submissions in support of nine grounds of appeal herein. The appellants remained mute about ground ten and in this light, it can only be inferred that they opted to abandon ground ten. Counsel for the 3rd Respondent responded in writing and we are J5 indebted to both the appellants and the Counsel for the 3 rd respondent for their submissions. The arguments as advanced by the parties herein are summarized below. The appellants in ground one contended that Melisa Lubanda and Noah Pelete were part of the appellants and the 3 rd respondent’s treatment of the duo should be extended to the rest of the appellants. The response on behalf of the 3 rd respondent is that the trial Court merely referred to the evidence of PW1 in respect of Melise Lubanda and Noah Pelete. In ground two, the appellants argued that the trial Judge based his judgment on disputed fraudulently altered documents. In response Counsel argued that the judgment does not show that the trial Court based its judgment on those documents. In ground three, the appellants submitted inter alia, that the trial Court based its judgment on matters which were not pleaded and cited ROSEMARY PHIRI MADAZA -VS- AWADH KAREN COLEEN. (2) The response to this ground was that there was evidence before the trial Court to the effect that some RAMCOZ employees prepared the Audit Report following the sale of J6 Luanshya Division of ZCCM and the ZCCM used to fund the club until it was sold in October, 1997. In ground four, the appellants argued that the trial Court erred and misdirected itself when it found that RAMCOZ Internal Audit Report commissioned the retrenchment of RUFC excess labour force. In respect of this ground the response was that this was a finding of fact supported by evidence and cannot be faulted. It was the appellants’ argument in ground five that the trial Court misdirected itself when it held that ZCCM was not responsible for paying the appellants but RAMCOZ. The response was that the trial Court did not find RAMCOZ liable to pay the appellants but found the club liable. In ground six, the appellants submitted that the trial Court erred when it based its judgment on the oral evidence from two ZCCM witnesses which had no documentary proof. In response to ground six, it was submitted that there is no rule which prevents the Court from basing its decision on oral evidence. The contention in respect of ground seven was that the trial Court erred in law and fact when it found that ZCCM ceased J7 giving grants to the club from 1997 as it was no longer under the jurisdiction of ZCCM. The response to this ground was that this was a finding of fact supported by evidence which cannot be faulted. In ground eight, the appellants argued that the trial Court erred and misdirected itself when it found the club liable and not ZCCM Limited for the payment of retrenchment benefits to the appellants computed in accordance with Section 26B (3)(a) of the Employment Act. The third respondent’s response was that the trial Court was on firm ground by deciding that the club was liable and that the formula to be used is that provided by law. The submission advanced by the appellants in ground nine is that the appellants as employees of the club were wholly owned by ZCCM under Human Resource Department and were entitled to occupy the ZCCM houses and had rights to purchase the ZCCM houses. The response as advanced by the 3rd respondent is that the trial Court made a finding of fact stating that the appellants were not employees of the 3rd respondent. We have examined the grounds advanced by the appellants and we have also considered the arguments presented for and J8 against the grounds of appeal. It is our view that this appeal has called upon us to determine three questions namely: who was the appellants’ employer; who is liable to pay the appellants’ retrenchment benefits; and whether the appellants are entitled to purchase ZCCM houses which they occupy. An employer is a person or organization (corporate or incorporate) that pays salaries or wages to workers in return for their services rendered. A relationship of employment must have been created formally or informally which obliges the employer to pay wages and meet all other conditions attendant to that relationship. It is clear from the facts of this case that the appellants herein were directly employed by Roan United Football Club (RUFC). At the time of their employment, Roan United Football Club (RUFC) was part of ZCCM as one of its business ventures. In 1997, ZCCM’s Luanshya Division with all its assets which included Roan United Football Club (RUFC) was sold to RAMCOZ which took over the Luanshya Division in October of that year. Prior to the sale of ZCCM’s Luanshya Division, Roan United Football Club (RUFC) was the direct employer of the appellants which fell under ZCCM. After the sale and subsequent takeover of J9 Luanshya Division and its assets Roan United Football Club (RUFC) included Roan United Football Club, (RUFC) remained the direct employer of the appellants. When the retrenchment process began and the appellants were subsequently retrenched in 1998, Roan United Football Club (RUFC) had become a business venture of RAMCOZ and ZCCM no longer had any connection with it. The evidence presented before the trial Court established that the retrenchment process was instituted by RAMCOZ and not ZCCM as was alleged by the appellants. Retrenchment as we understand it in employment circles is the process of cutting down or reducing the labour force on account of the organization’s financial constraints in the bid to maintain the organization as a going concern. It is a process whereby the employer terminates the employment of its unnecessary employees. Any employer that retrenches its employees is obliged to pay the attendant benefits in accordance with the method stipulated in the contract of employment. In a case where the employment contract is silent on the method of payment, retrenchment benefits will be paid in accordance with J10 the provisions of Regulation 11 of Minimum Wages and Conditions of Employment Regulations of 1997. In the instant case the appellants were retrenched by Roan United Football Club (RUFC). It is clear from the facts in this case that it was not ZCCM which retrenched the appellants. We have stated herein that it is the duty of an employer that retrenches its employees to pay the retrenchment benefits. Therefore, in this case, it is Roan United Football Club (RUFC) which has a duty to pay retrenchment benefits to the appellants. It is our view that the trial Court rightly found Roan United Football Club (RUFC) liable to pay the appellants’ benefits. In 1996, the Government of the Republic of Zambia in the spirit of empowering Zambians to acquire their own houses, decided to sell some of its pool houses to sitting tenants who were civil servants. To this effect Cabinet Office circulated Circular Number 12 of 1996 which provided guidelines for the sale of Government Pool Houses. In the same spirit parastatal companies and other institutions which were wholly or partly owned by Government emulated the Government and decided to J11 sell their houses to their respective employees who met the criteria they determined. The appellants herein occupied and still occupy ZCCM houses. The appellants did not demonstrate before the trial Court as sitting tenants among other criteria, that ZCCM had offered or given them the opportunity to purchase the houses they occupy, neither did they establish the guidelines ZCCM put in place regarding the sale of its houses which could have given rise to the appellants’ expectation to be offered and to purchase the houses they occupy. Further, the appellants, as can be seen from the evidence which was before the trial Court, were not employees of ZCCM at the time of their retrenchment but employees of the Roan United Football Club. We wish to restate here what we said in BEATRICE MUIMUI -VS- SYLVIA CHANDA (1) that being sitting tenants is not the sole criteria for the sale of Government Pool Houses and or houses of Government Institutions and its Parastatal Organizations. For the reasons we have given, we find no basis for faulting the Lower Court’s judgment. In sum this appeal fails and we J12 dismiss it accordingly. In the circumstances, each party will bear their own costs. …………………………… F. N. M. Mumba, ACTING DEPUTY CHIEF JUSTICE ………………………………… H. Chibomba, SUPREME COURT JUDGE JUDGE ……..………………………… M. E. Wanki, SUPREME COURT