Zambia Telecommunications Company Limited v Mweetwa & Others (Appeal 195 of 2010) [2014] ZMSC 10 (10 February 2014)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO. 195/2010 HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN: ZAMBIA TELECOMMUNICATIONS COMPANY APPELLANT LIMITED AND NEWTON MWEETWA AND 93 OTHERS RESPONDENTS Coram: Chirwa, A/DCJ, Phiri and Muyovwe, JJS On 20th March, 2012 and 11th February, 2014 For the Appellant: Mr. Mbindo, Messrs Jacques & Partners For the Respondent: Mr. D. Mulenga, Messrs Derrick Mulenga & Company J U D G M E N T MUYOVWE, JS, delivered the Judgment of the Court Cases referred to: 1. Pamodzi Hotel vs. Godwin Mbewe (1987) ZR 56 2. Peter Ng’andwe and Others vs. ZAMOX Limited and Zambia Privatisation Agency (1999) ZR 90 3. P. C. Cheelo and Others vs. Zambia Consolidated Copper Mines Limited (1999) ZR 162 4. National Milling Company Limited vs. Grace Simataa and Others (2000) ZR 91 J1 When we heard this appeal Judge Chirwa sat with us. He has since retired and, therefore, this is a majority judgment. This is an appeal against the Judgment of the Ndola High Court which ordered that the respondents be paid car allowance from the date the allowance was unilaterally withdrawn to the date of the new Collective Agreement. The learned Judge ordered costs against the appellant. The brief facts which were accepted by the Court below are that the respondents were employed by the appellant on unionized conditions. That the appellant and the respondents entered into a Collective Agreement which was duly registered by the Ministry of Labour. That the said Collective Agreement governed the conditions of service of unionized employees (respondents). That among other conditions, the said Collective Agreement provided for the payment of car allowance under Clause 32 (f) to the employees in the grades specified. That the appellant through its Director Human Resource issued Circular number 2 of 2004 which stated as follows: J2 “It has come to the attention of management that some employees in receipt of car allowance have not been using their vehicles on official duties within 25 kilometres radius as required. Management has taken the decision to monitor the use of this allowance in order to ensure that the company’s limited resources are put to good use. Line Directors will determine which employees should use their vehicles on official company business.” This was followed by Circular number 4 of 2004 which stated thus: “It has become necessary to clarify contents of Director Human Resources circular No. 2 of 2004 on car allowance. Please note that management has not withdrawn the car allowance. Staff who are entitled to car allowance should claim according to existing procedure.” The learned Judge found that the said Circulars were not intended to stop the payment of the car allowance but that in effect the appellant unilaterally stopped payment of the same in May 2004. The learned trial Judge, after analyzing the evidence found that the respondents had proved their case on a balance of J3 probability and ordered that the appellant pays car allowance to the respondents in arrears with interest. Dissatisfied with the Judgment of the Court below, the appellant appealed to this Court advancing four grounds of appeal namely: 1. The Court below fell in error when it held that payment of the car allowance was stopped when in fact that was not so but that the appellant issued a circular whose effect was to bring in a proper administrative system for payment of the car allowance to eligible employees; and/or 2. The Court was in error when it held that the provisions of Clause 24 of the Collective Agreement as it relates to employees in the specified grades who are in possession of a motor vehicle is mandatory when in fact certain procedural steps had to be taken by an employee before the allowance became payable; and/or 3. The Court fell in error in failing to correctly interpret Clause 32 (f) of the Collective Agreement; and/or 4. The High Court lacked jurisdiction to try the action. On behalf of the appellant, Counsel filed Heads of Argument. In support of ground one, it was submitted that there was a Collective Agreement entered into between the appellant and the J4 respondents which provided for car allowance under Clause 32 (f). That in terms of this Clause, the respondents were eligible employees. That Clause 32 (f) provides that: “The company shall pay car allowance to employees who are in grades UTS/UGS 5 and above who are in possession of motor vehicle at the rates given in the Appendix. The employees shall be expected to use his/her vehicle within a radius of 25 kilometres on official duties.” Counsel submitted that in 2004, the appellant issued two Circulars No. 2 and No. 4 referred to above. Counsel submitted that the two circulars were necessary because there was need to clarify the words “on official duties” appearing in clause 32(f). It was pointed out that the respondents understood the words “official duties” to include the use of the vehicle to and from work. That, however, the appellant’s position was that the words “on official duties” did not include or envisage the use of a vehicle to and from work. Counsel contended that the two Circulars were not meant to withdraw or stop the payment of the car allowance. That the two Circulars were issued to reinforce the controls and it was this control that appeared to the general membership that the effect was withdrawal of the allowance. That to the contrary, J5 the allowance was still in effect and that the appellant continued to pay car allowance to those eligible employees who had vehicles and used them on official duties. It was submitted that the Court below, therefore, erred when it held that payment of car allowance was stopped. Counsel argued ground two and three together and clarified that reference to Clause 24 in ground two referred to Clause 32 (f) of the Collective Agreement. It was submitted that the Court below in its Judgment at Page 21 of the Record of appeal said: “As would be noted from the foregoing the requirement to pay employees in the specified grades who are in possession of motor vehicles is mandatory.” Counsel contended that the effect of this finding was that the Court interpreted Clause 32 (f) strictly and that the appellant was exposed to “strict liability” in respect of payment of car allowance. Counsel argued that the court below fell into error as the liability to pay car allowance was dependent on: being in grades UTS/UGS5 and above; being in possession of a motor vehicle and using the motor vehicle within a radius of 25 J6 kilometres “on official duties.” According to Counsel, it would be absurd for the appellant to pay car allowance to an employee who drove his/her vehicle to and from work but park the vehicle at the office the whole day for the whole month. It was submitted that the Court below failed to interpret Clause 32 (f) and that had the Court done so, it would have held that the respondents were entitled to car allowance only when it was shown that they had used the vehicle or vehicles “on official duties.” In support of ground four, Counsel submitted that the Court below had no jurisdiction to hear this case as it was a case relating to interpretation of Clause 32 (f) of the Collective Agreement. Counsel submitted that Section 85 (1) of the Industrial and Labour Regulations Act provides that: “The Court shall have original and exclusive jurisdiction to hear and determine any Industrial relations matters…” Further, Counsel referred us to Section 85 (9) which provides that: “For the purpose of this Section “Industrial relations matters” shall be issues relating to: (b) interpretation of the terms of…collective agreements…” J7 It was submitted that this case centred on the interpretation of the words “on official duties” in Clause 32 (f) and that the court below failed to interpret the meaning of the said words. Counsel urged us to allow the appeal. Counsel for the respondents also filed Heads of Argument. In response to ground one, Counsel argued that the trial Judge was on firm ground when he held that the appellant stopped the payment of car allowance. It was pointed out that Circular No. 2 in the last paragraph stated that: “Line Directors will determine which employees should use their vehicles on official company business.” Counsel contended that the above condition was unilaterally added to Clause 32 (f) of the Collective Agreement which affected certain employees’ eligibility as regards the receipt of car allowance. Counsel contended that the collective agreement was approved by the Ministry of Labour and hence the car allowance was a condition of service. Counsel relied, inter alia, on the case of Pamodzi Hotel vs. Godwin Mbewe1 and Peter Ng’andwe and Others vs. ZAMOX Limited and Zambia Privatisation J8 Agency.2 He argued that the above cases gave guidance that the appellant was bound to follow the procedure laid down in the Collective Agreement. That in fact, upon issuance of Circular No. 2 none of the respondents received car allowance. He submitted that Circular No. 4 which is a clarification of Circular No. 2 in the last paragraph reads: “Staff who are entitled to car allowance should claim according to existing procedure” It was submitted that Circular No. 2 showed that there was an existing procedure as far as claims for car allowance were concerned. That, however, despite the issuance of Circular No. 4 the appellant did not pay car allowance to the respondents and this prompted the Union to engage the appellant’s management on the issue. In response to ground two, Counsel submitted that the lower Court was on firm ground when it arrived at the finding that payment of car allowance was mandatory. That the appellant’s action of unilaterally varying payment of car allowance to the J9 respondent was a violation of the Collective Agreement. It was argued that Clause 32 (f) of the Collective Agreement did not include the requirement by the line directors to have the discretion to determine which employee should use their vehicles on official company duty. That the said clause merely provided that employees in Grade UTS/UGSS5 and above in possession of motor vehicles qualified. Counsel relied on the case of Peter Ng’andwe and Others vs. ZAMOX Limited and Zambia Privatisation Agency2 where we held that if an employer should vary the basic conditions of employment without the consent of the employee, then the contract of employment terminates.2 Counsel prayed that this ground should fail. In arguing ground three, Counsel submitted that in accordance with the Court’s findings, the respondents qualified to the entitlement of car allowance which they received from 1992 to April 2004 as part of their conditions of service. He argued that as the lower Court correctly found that as the payment of car allowance to the respondents was a condition after negotiations with the Union, its withdrawal required discussion with the Union. It was his submission that the trial Court properly interpreted J10 Clause 32 (f) of the Collective Agreement and that this ground must accordingly fail. In response to ground four, it was submitted that the respondents commenced proceedings on the 3rd February, 2005 and did not raise the issue of jurisdiction of the lower Court and instead proceeded to file an appearance and defence on the 11 th February, 2005. That the appellant cannot be heard at this stage of the proceedings to argue that the Court below had no jurisdiction to hear the matter. Counsel submitted that Order 2 Rule 2 of the Supreme Court Rules is instructive on this point. Counsel also relied on the case of P. C. Cheelo and Others vs. Zambia Consolidated Copper Mines Limited3 in which this Court held, inter alia, that: “Notwithstanding, the removal of the High Court from the Employment Act and on proper interpretation of Section 85 of the Industrial and Labour Relations Act, Chapter 269 of the laws of Zambia, the High Court has jurisdiction to try cases arising out of pure “Master and Servant relationship.” It was submitted that at the time of commencement of this action, it was not a collective dispute but an action involving J11 individual rights, and as such, the Court below had jurisdiction. It was Counsel’s argument that there is no reason whatsoever for this Court to depart from its earlier decision. He prayed that this ground should fail. We have considered the evidence in the court below, the Judgment appealed against and the submissions by learned Counsel for the parties. In addressing ground one, we note that the learned trial Judge found that the appellant stopped giving car allowance to the respondents. The appellant argued that the trial Judge erred when he arrived at this finding because when the Company issued Circular No. 2 and 4 of 2004, payment of car allowance was not stopped. Further, the appellant’s argument was that the Circulars were meant to bring in a proper administrative system for payment of the car allowance to eligible employees, and that the two Circulars were necessary to clarify the words “on official duties” appearing in clause 32 (f). On the other hand, the respondents’ argument was that from May, 2004 when the two circulars were issued, none of them J12 received car allowance, and yet in Clause 32 (f), the words “on official duties” did envisage the use of the motor vehicle to and from work. We have perused the record and we agree with the finding of the trial Judge that from the time the two Circulars were issued, the respondents stopped receiving car allowance. Otherwise, this matter would not have found itself in court. According to Counsel for the appellant, it was admitted that the respondents were eligible to receive car allowance as per Clause 32 (f) of the Collective Agreement. We have failed to see the logic in the argument by the appellant that the construction of the words “on official duties” does not envisage using the vehicle to and from work. In our view, the appellant should have come up with practical administrative measures to ensure that only eligible employees received the car allowance for official duties which was the intended purpose. As regards the issue of employees driving their motor vehicles registered for receipt of car allowance to and from work – we find the appellant’s objection to this rather absurd, for the simple reason that it would be unreasonable to expect an employee to use public transport to and from work and J13 only drive the vehicle while at work. In our view, this would not be practical as this would entail that the eligible employees park their motor vehicles at the appellant’s premises. We take the view that what was important was that the appellant satisfied itself that the vehicle was used for official duties. The question of whether the employee drove the vehicle to and from work was neither here nor there. Further, we find that the two Circulars had the effect of altering clause 32 (f) of the Collective Agreement. For instance, circular No. 2 introduced a new issue to the effect that Line Directors would determine which employees should use their vehicles on official company business. We take the view that for the administrative controls to be effective, and understood by the employees, there should have been dialogue between management and the Union as they would have explained the same to their members who included the respondents. Therefore, we agree with Counsel for the respondents that the appellant unilaterally altered Clause 32 (f) of the Collective Agreement and stopped paying car allowance. According to the case of National Milling Company Limited vs. Grace J14 Simataa and Others,4 considering that the allowance had become part of the conditions of service, the action to unilaterally withdrawal it was unlawful. Ground one, therefore, fails. We now propose to tackle ground two and three together as they are inter-related. Briefly, these grounds relate to the interpretation of Clause 32 (f) of the Collective Agreement, as the Judge found that its application was mandatory to employees who owned a motor vehicle. The appellant argued that this clause was not mandatory but depended on employees taking certain steps in order to receive the allowance. It was argued that the interpretation given to Clause 32 (f) of the Collective Agreement by the Court below was that of strict application and that the appellant was exposed to “strict liability” to pay the car allowance. On behalf of the respondents, it was argued that car allowance had been paid to the respondents on the basis of the said conditions from 1992 to April 2004. We have perused the record and it is common cause that prior to the issuance of the two Circulars, the respondents were receiving the allowance. We have not seen any evidence to show J15 that the respondents, failed to meet the conditions required to receive the said allowance. While we agree that there were procedural steps to be taken by eligible employees before payment of the allowance was effected, this did not entitle the appellant to stop payment of the said allowance to the respondents. We believe each respondent’s individual situation should have been examined, such as those respondents whose vehicles had broken down, instead of effecting a blanket withdrawal of the allowance. All issues considered, we find that we cannot fault the learned Judge when he arrived at his finding in grounds two and three. Grounds two and three also fail. Turning to ground four, the appellant argued that the trial Court had no jurisdiction to hear the matter. Section 85 of the Industrial and Labour Relations Act was relied on. The respondents argued that the trial Judge had jurisdiction to hear the matter and added that the appellant did not raise this issue in the Court below, and therefore, they cannot begin to raise it in this Court. The respondents referred us to the case of P. C. Cheelo and Others vs. Zambia Consolidated Copper Mines Limited.3 We have perused the record and we agree with learned J16 Counsel for the respondent that the issue of jurisdiction was not raised in the Court below. In the case of P. C. Cheelo and Others3 this Court addressed the issue of jurisdiction of the High Court in matters of this nature. In that case, the appellants were members of the Mine Workers Union of Zambia and the Union and the Association of Copper Mining Employers signed a redundancy agreement on 26th August 1992. The appellants were declared redundant but they never received their redundancy packages. They commenced an action in the Kitwe High Court for the recovery of their benefits. The respondent objected on ground that the High Court had no jurisdiction to hear the case. The matter eventually reached this Court and it was held that the High Court had jurisdiction to try cases arising out of pure master and servant relationship. We are of the view that the Cheelo case2 is applicable to this case and we hold that the trial Court had jurisdiction to hear this matter. Further, this is a ground, the appellant should have raised ab initio instead of waiting to introduce it as a ground in the appellate court. Ground four also fails. J17 In sum, we find that the learned trial Judge was on firm ground when he found in favour of the respondents who were certainly entitled to the car allowance and which allowance the appellant had no right to withdraw. In our view, as an employer the appellant should have ensured that it sealed the perceived loopholes so that each respondent continued to receive the allowance. And in our view, it would have been prudent for the appellant to engage the Union in this process and would have avoided unnecessary and prolonged litigation. We find no merit in this appeal. We dismiss it with costs to the respondents, to be taxed in default of agreement. RETIRED ……………….……….……………….…….. D. K. CHIRWA ACTING DEPUTY CHIEF JUSTICE J18 …………………………….……….. G. S. PHIRI SUPREME COURT JUDGE …………….…………….……………. E. N. C. MUYOVWE SUPREME COURT JUDGE J19