Zambia Telecommunications Company Ltd v Chisakuta (Appeal 110 of 2000) [2003] ZMSC 126 (2 September 2003)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO. 1 1 0/2000 HOLDEN AT NDOLA (CIVIL JURISDICTION) BETWEEN: ZAMBIA TELECOMMUNICATIONS COMPANY LIMITED APPELLANT AND BONIFACE KANYANTA CHISAKUTA RESPONDENT CORAM: LEWANIKA DCJ, CHIBESAKUNDA, SILOMBA JJS On 3rd September, 2002 and 2nd September, 2003. For the Appellant: T. T. SHAMAKAMBA, Legal Counsel For the Respondent: W. MWALE of Mwale, Musonda & Co. JUDGMENT LEWANIKA, DCJ. Delivered the judgment of the court. This is an appeal against the assessment of damages by the Deputy Registrar and there is also a cross appeal by the Respondent. The evidence on record is that the Respondent was employed by the Appellant as Manager, Revenue and had his employment terminated as a result of a robbery that occurred at Meridian Bank when the Appellant's money which was due to be banked was stolen. The Respondent instituted proceedings in the High Court and the learned trial Judge found that the Respondent was wrongfully discharged and declared the said discharge a nullity. He however, declined to order reinstatement of the Respondent but awarded the Respondent 12 months salary and whatever allowances were due to him. Subsequent to the main judgment, the parties could not agree on what was due to the Respondent and made application to the learned trial Judge who ruled that the Respondent was entitled to 12 months salary, pension and gratuity, if any, and all other benefits due to him at the time of his dismissal. The matter then proceeded to assessment and it is against the assessment that there is an appeal and a cross-appeal. Counsel for the Appellant has filed two grounds of appeal, namely:- 1. 2. that the court below erred in law and fact when it decided that the Respondent was entitled to the £100,000.00 retained by the Appellant as this claim was not in the writ of summons; that the court below erred in law when it decided that the Appellant was supposed to merge the salary and allowances when computing the Respondent's terminal benefits. In arguing the first ground of appeal Counsel for the Appellant said that the sum of KI00,000.00 should not have been awarded to the Respondent, as the same had not been pleaded. In arguing the second ground of appeal Counsel said that the Deputy Registrar misdirected himself in law and fact when he ordered that the Respondent was entitled to be paid a merger of the salary and allowances when computing his terminal benefits or long service gratuity. He said that this was done on the basis of a letter dated 25th March, 1995 which appears on page 42 of the record. He said that the Respondent was dismissed on 30th December, 1994, some three months before the letter was issued. He asked the question whether an employee who leaves employment is entitled to claim a benefit which came after he had left employment. He said that the law on this matter is that an employee who is not in employment on the date a condition of service is implemented is not entitled to the same. He referred us to the cases of ZAMBIAN BREWERIES PLC VS FATIMA MWALE, SCZ. NO. 104 of 2000 and ZAMBIA TELECOMMUNICATIONS COMPANY LTD VS DAMIAN KUMASA AND OTHERS, SCZ No. 25 of 2001 on the point. He also submitted that the memorandum dated 26lf' July, 1993 does not affect the Respondent as he was not surplus labour. In reply counsel for the Respondent said that there was no error on the part of the Deputy Registrar when he found that the Respondent was entitled to a refund of the KI00,000.00 which the Appellant held as security for water bills. He said that this claim was not contested by the Appellant and that it would be inequitable not to allow the refund of the money to the Respondent which belonged to him. As to the second ground, Counsel said that in the main judgment in the court below the learned trial Judge declared the Respondent's discharge from employment a nullity. He contended that if the Respondent's discharge was declared a nullity, there is no way an argument can be advanced that at the time when the letter which permitted the merging of salary and allowances, the Respondent ought to be treated as not having been in employment. He said that the Deputy Registrar was justified in finding that the Respondent's benefits be computed by merging his basic salary and allowances in line with the case of JOHN PAUL MWILA KASENGELE AND OTHERS VS ZAMBIA NATIONAL COMMERCIAL BANK case. He said that the cases referred to by Counsel for the Appellant have no relevance to this case, because in those cases the conditions of service did not permit the employees to be considered as employees at the time the changed conditions of service which would have conferred a benefit on them occurred. On the cross appeal Counsel for the Respondent submitted that the Deputy Registrar fell into serious error when he found that the Respondent was not entitled to be paid benefits for surplus labour. He said that in the main judgment the court below nullified the Respondent’s discharge from employment but could not order reinstatement because at that time the job had gone through being taken up by somebody else. He said that his understanding of this reasoning is that the court meant that the Respondent's labour was superfluous to the Appellant's staff requirements. That the meaning of this is that through the Appellant's own conduct of filling up the Respondent's position, the Respondent was brought within the purview of the circular dated 26th July, 1993 appearing on page 43 of the record. He contended that the package for surplus labour formed part of the benefits to which the Respondent was entitled and that it was a misdirection on the part of the Deputy Registrar to hold that the Respondent was not entitled to the package for surplus labour because he had been compensated through the award of 12 months salary. On the second ground of the cross-appeal, counsel submitted that the Deputy Registrar erred when he found that the monies due to the Respondent be taxed. He said that it was not in dispute that the Respondent was employed under the ZIMCO conditions of service and that Clause 30.6 of the said conditions of service provides that the long service gratuity shall be tax free, tax if any payable, shall be borne by the employer. He submitted that there was an error on the part of the Deputy Registrar when he ordered that the Respondent should be taxed on his terminal benefits. He urged us to allow the cross appeal. In response, Counsel for the Appellant said that the Respondent was not entitled to the merged salaries and allowances as the circular relied on came into effect after he had been dismissed. As to the cross appeal he said that the Respondent is not entitled to be considered as having been declared redundant or surplus labour. He however conceded that the money paid to the Respondent as gratuity should be tax free in accordance with the conditions of service. We have considered the arguments advanced by Counsel for the Appellant and for the Respondent as well as the evidence on record. On the first ground of appeal advanced by Counsel for the Appellant, it is correct that the sum of K100,000.00 retained by the Appellant from the Respondent was not pleaded. But there is no dispute that the money belonged to the Respondent and it would be inequitable not to allow it to be refunded to the Respondent. This ground of appeal fails. As to the second ground of appeal the learned trial Judge in the main judgment found as follows:- "I find that the Defendant wrongfully discharged the Plaintiff and I declare the discharge a nullity. I have no doubt that by now the Plaintiffs job is gone. An order of reinstatement will not be appropriate in the circumstances of this case.... I award the Plaintiff 12 months salary and whatever allowances goes with it........" In his reserved Ruling delivered on 25th November, 1999 the learned trial Judge stated as follows:- "Again for the avoidance of doubt I order that the Plaintiff be paid the damages I ordered and all other benefits due to him at the time of his dismissal. " It is quite clear to us that the 12 months salary, allowances etc. that were to be paid to the Respondent as compensation or damages were the salary or allowances that the Respondent was in receipt of at the time of his dismissal, namely 30th December, 1994. The Respondent is not entitled to benefit from the circular issued on 25tfl March, 1995 as the same came into effect after the Respondent had left employment. This ground of appeal has succeeded. Coming to the cross-appeal, the learned trial Judge made a finding that the Respondent was wrongfully discharged from employment and declared the discharge a nullity. He declined to order reinstatement and instead ordered compensation of 12 months salary etc. The circular appearing on page 43 of the record deals with surplus labour or employees who have been declared redundant. This was not the case with the Respondent who was initially dismissed and then discharged. The circular has no application to the Respondent and this ground of the cross appeal cannot succeed. As to the second ground of the cross appeal, Counsel for the Appellant has conceded that Clause 30.6 of the ZIMCO conditions of service provides that Jong service gratuity shall be tax free and this ground of appeal succeeds to that extent. As both the appeal and cross-appeal have succeeded in part, there will be no order as to costs. D. M. Lewanika DEPUTY CHIEF JUSTICE L. P. Chibesakunda SUPREME COURT JUDGE S. S. Silomba SUPREME COURT JUDGE 6