Tasomo v The Credit Organisation Of Zambia (1971/HP/200,201,202,207) [1973] ZMHC 347 (16 November 1973)

TASOMO v THE CREDIT ORGANISATION OF ZAMBIA (1973) ZR 347 (HC) HIGH COURT DOYLE CJ 16th NOVEMBER 1973 I (Cause No. 1971/HP/200, 201, 202, 207) 30 Flynote Master and servant - Suspension of servant - Whether master liable to pay salary during period of suspension. Headnote The plaintiff was employed by the defendant under a three - years' contract which provided for salary, leave, gratuity and housing. During the course of the contract the plaintiff was suspended for fourteen months 35 and then re-instated. When the contract expired the plaintiff continued working and received a circular setting out his conditions of service in which no provision was made for payment of gratuity but there was provision for leave and housing allowance. ■ 1973 ZR p348 DOYLE CJ Held: (i) During his period of suspension the plaintiff was not entitled to receive any payment from the defendant. I (ii) The period of suspension did not lengthen the period of the contract. 5 Cases cited: ■ (1) Hanley v Pease and Partners Ltd (1915) 1 KB 698; (2) Wallwork v Fielding (1922) All ER 298. I Legislation referred to: 10 Land Bank Ordinance ex Cap. 249, S. 17 (1); Credit Organisation of Zambia Act, Cap. 353, s. 11 (1). M Folotiya, Folotiya and Co., for the plaintiff. R G Care, Martin and Co., for the respondent. Judgment Doyle CJ: This is a claim by the plaintiff for a sum alleged to be 15 due for leave pay for arrears of salary, gratuity and housing allowance to the plaintiff by the defendant, in respect of plaintiff's employment by the defendant. A defence has been filed which denies that any sums are due, alleges that subsidised housing was provided by the defendant, that certain sums 20 were paid in respect of leave pay, that no amount of arrears were due and that no gratuity was payable by reason of alleged inefficiency. The defence also contained certain irrelevant matters which have been promptly resiled from by Mr Care who I hasten to add did not draft the defence. I mention this to draw attention to the fact that more care should be 25 taken with pleadings and the time of the court should not be occupied with putting them to rights. In the event no attempt was made to prove the positive matters raised in the defence and the trial merely took the form of the plaintiff attempting from his papers and recollection to I prove his case. 30 The evidence shows a somewhat haphazard method of employment. The plaintiff was first employed on a temporary basis for three months from the 19th August, 1965, at a salary of £1,300 per annum. I would interpolate here that the parties have treated this as K2, 600 per annum and I propose where the sums are stated in sterling to deal with them on this 35 basis of conversion. The employer in this instance was the Government of Zambia though the heading on the contract was the Credit Organisation of Zambia. Paragraph 5 of the contract provided that the Government might later offer a two - three year contract. I There was no provision for leave, housing or gratuity. 40 ■ ■ ■ At the expiry of the three month period nothing was done, but the plaintiff continued to work, as he said, for the Credit Organisation of Zambia. His pay was increased with effect from 1st March, 1966, to K2,800 per annum. 1973 ZR p349 DOYLE CJ On the 30th May, 1967, i.e. some eighteen months after the expiry of the original contract, the plaintiff and the defendant entered into a three year contract which was back - dated to the 1st September, 1965. This contract again provided for a salary of £1,300 (K2,600), clause 7 provided for 42 accumulative days leave per year subject to a maximum 5 accumulation of 126 days. Clause 9 reads as follows - I "9. The employee shall be entitled to a gratuity of 5 per cent for the first, second, and third year each of the total salary drawn during his/her employment under the contract except if he resigns from employment of his own accord during the first year of 10 the contract he may forfeit such gratuity to the Bank at the discretion of the Bank." Clause 12 reads as follows - ■ ■ ■ "12. The employee shall be entitled to a subsidised housing where such houses are owned or taken on lease by the Bank and 15 the employee shall be charged at 121/2 per cent of his salary towards rent. However, if the employee has made his own arrangements for such housing accommodation the Bank shall pay to the employee a housing allowance at 10 per cent of pay subject to the maximum of £30 per month." 20 ■ The employer in this contract was the Land and Agricultural Bank of Zambia. It is common cause however that this employer can be treated as the Credit Organisation of Zambia. During the course of this contract the plaintiff was suspended on the 25th of January, 1967, and was reinstated in March, 1968. The plaintiff 25 could not remember the exact date of re- instatement and the defendants typically, did not know it. I find it to be on or about the 25th March, 1968. When that contract expired, again nothing was done about a new contract. The plaintiff, however, states that early in 1967 a confidential circular was issued by the General Manager of C. O. Z. setting out conditions 30 of service for employees of C. O. Z. He relies on that circular as constituting his conditions of service after his contract expired. Under that contract a grade 4 employee, i.e. an employee in the scale K2,000 x 150 - K2,600 x 200 - K3,000 received 31/2 days leave a month which could be accumulated to 180 days. Where housing was not provided 35 an allowance was to be given in the following ■ scale. I quote only the relevant portion - £1,000 - £1,499 - K50 per month; £1,500 - £1,999 - K60 per month. It will be noted that in the usual confused fashion which seems to have 40 prevailed in the defendant's dealings the salary originally expressed in kwacha is here expressed in pounds, but I again treat the sterling figures as being equivalent to double the amount in kwacha. ■ ■ 1973 ZR p350 DOYLE CJ No provision is made for gratuity, but there is a requirement to join the Z. N. P. F. and provision for a pension fund. The plaintiff's salary was increased from K2,800 per annum to K3,000 with effect from the 1st March, 1969, and he continued to serve on that 5 rate until his service terminated on the 1st December, 1970. The plaintiff agrees that he took two months' leave in September and October, 1969. He also agrees that he was paid gratuity up to the end of 1967. He contends, however, that he is due leave pay for leave not taken; that he is due gratuity for the years 1968, 1969 and 1970, and that he is 10 entitled to be paid arrears of salary unpaid during his fourteen months' suspension. He also contends that as he provided his own housing he is entitled to be paid housing allowance. Nothing arises from the original temporary contract which merely provided for a salary of K2,600 without fringe benefits. Whatever salary 15 was due under this was paid. ■ I ■ The plaintiffs position was regularised by the back - dating of the contract, Exhibit 2, which was expressed to run for three years from September, 1965, and under which he was to I receive salary, housing allowance, leave and gratuity. 20 The plaintiff was suspended from the 25th January, 1967, to the 25th March, 1968. A question of law arises as to what effect this has on the contract. At common law the employer has no power to suspend a servant without payment during the time he chooses to prevent that servant from working - see Hanley v Pease and Partners Ltd [1]. However section 11(1) of the Land Bank Ordinance gives power to the bank to suspend 25 and discharge its servants and section 17 (1) of the Credit Organisation of Zambia Act, 1967, which came into force on the 11th August, 1967, gave power to the C. O. Z. to suspend or discharge its servants. The Land Bank and C. O. Z. have been treated as one for the purpose of this employment, 30 and I am satisfied that the suspension which began within the era of the Land and Agricultural Bank and continued into the era of C. O. Z. was a suspension imposed and adopted by the employer. The effect of suspension has been considered in Wallwork v Fielding [2]. In that case the Watch Committee had suspended a police constable 35 and stopped his pay. It was argued that the power of suspension did not import a power to withhold pay during suspension. Lord Sterndale, M. R , referred to Henley v Pease and Partners and then went on to say: "Those learned judges, as it seems to me, treat it as indisputable that if there is a power of suspension, the whole contract is suspended; the obligations on both sides are 40 suspended. It seems to me that that is the inevitable meaning of suspension, and there was here express statutory power to suspend the man from duty; that, in my opinion, means to suspend him from duty, and from payment for his duty. It suspends the contract with regard to the performance of it by both sides, and not by one only. I think, therefore, that that 45 point also fails, and that the appeal should be dismissed with costs." ■ ■ ■ ■ ■ DOYLE CJ Warrington, L. J, gave judgment to the same effect - he said: 1973 ZR p351 I ■ ■ "It is said that the power to suspend does not involve the power to abstain from paying. That argument is, in my opinion, unfounded, and for this reason. The relations are those of employer and employed. If the employed is suspended from his functions as 5 an employed person, it seems to me that the effect is to suspend the relation of employer and employed for the time being, to excuse the employed person from performing his part of the contract, and at the same time to relieve the employer from performing his part of the contract. It would be a most extraordinary thing if suspension 10 (assuming that there is power to effect suspension) were to be so one - sided that the servant was to be excused from performing his part of the contract while the employer remained liable to perform his part. It seems to me that suspension suspends for the time being the contractual relation between the two parties on both sides. Therefore, 15 suspension by the Watch Committee does involve suspension of payment by them, as well as suspension of the performance of the duty by the police constable. I think that the appeal must fail." Scrutton, L. J, a very eminent judge, agreed with both judges. I would adopt the reasoning in this case and hold to the same effect. 20 The fact that the employer here did continue to pay the plaintiff at half rate did not alter the legal position. The employer may have been following the Government practice in accordance with regulations binding the Government, but these regulations were not part of the conditions of service of the plaintiff. In law the payment was not due and was merely ex gratia. This 25 ex ■ gratia payment of half pay could not impose an obligation upon the employer to pay the full salary. I hold, therefore, that no sum was due to the plaintiff in respect of arrears for this period of suspension. I do not, however, consider that the period of suspension lengthened the period of the contract and I find that it expired on the due expiry date, 30 namely the 1st September, 1968. The plaintiff served twenty - two complete months of that contract. He was entitled therefore to seventy - seven days' leave. Whether or not he asked for his leave he was not in fact given it. It may be that his employers considered that in effect he had been idling for some fourteen months. 35 However, they are not entitled to offset their generosity by refusing to pay what is legally due. He was legally due his leave unless it was barred by the passage of time, which has not been pleaded. I consider that he was entitled to seventy - ■ ■ ■ seven days' pay at the rate prevailing at the date of termination of that contract, namely K2,800 per annum. That 40 amounts to K590. I would like to interpolate here that there is provision in the contract for commutation at a reduced proportion. This, however, is not a case of commutation. As the plaintiff provided his own housing, he was also entitled to housing allowance at the 10 per cent rate provided by clause 12. That 45 amounts to K513. ■ ■ 1973 ZR p352 I DOYLE CJ He was also entitled to gratuity at 5 per cent in accordance with clause 9 of the total pay. Clause 9 of the contract does not state that he has to serve the whole of any particular year to be entitled to gratuity. He in fact served the whole of the first year, twenty - five days of the second 5 year and some nine months of the third year. The plaintiff agrees he was paid up to the end of 1967 and his contract expired on the 1st of September, 1968. He had been suspended for almost three months and was therefore entitled to gratuity for just over five I months. I calculate the amount to be due at K130. 10 Under this contract I find, therefore, the plaintiff is entitled to recover a total of K1,233. The plaintiff claims that he was later covered by conditions of service given to him, as he says, early in 1967. I doubt if in fact he was ever given these as a personal indication of his terms of service, but clearly they were 15 a general expression by C. O. Z. of the terms of ■ service of their employees. These were general conditions and they could not affect the plaintiff's contract in being. I am satisfied that when his contract expired on the 1st September, 1968, he in fact, though perhaps not entirely consciously, accepted the new conditions. C. O. Z. in so far as they can be said to have done anything, acquiesed in 20 keeping him on as an employee. In fact his salary was increased in accordance with the scale set out in the conditions of service which is an indication of C. O. Z.'s intention. The plaintiff served from 1st September, 1968, to 1st March, 1969, at K2,800 per annum and thereafter at K3,000 per annum, until termination. These conditions of 25 service made no provision for gratuity, so that plaintiff is not contractually entitled to gratuity under them. He was, however, in addition to his pay entitled to leave al the rate of 31/2 days per month for 27 months, i.e. 941/2 days. He admits to having taken 61 days leave, which left him with 331/2 days leave due at his final rate of pay of K3,000 per annum. He should 30 have ■ been given this leave on final termination, but was not. I calculate he was due K275. While he was serving at the rate of K2,800 he was entitled to K60 per month housing allowance and when his rate went up to K3,000 he was entitled to K70 per month. I calculate this as 6 months at K60 and 21 35 months at K70 which amounts to K1,830. The ■ total sum therefore due for his service under these conditions was K2,105. The total damages due therefore amounts to K3,338 and I give judgment for the plaintiff in this sum with costs. Judgment for the plaintiff 40 ■ ■ ■ 1973 ZR p357