Pensulo v Varun Beverages (Zambia) Ltd (Appeal No. 161/2021) [2023] ZMCA 234 (31 August 2023)

IN THE COURT OF APPEAL OF ZAMBIA Appeal No. 161/2021 HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN: AGATHA PENSULO APPELLANT .· AND VARUN BEVERAGES (ZAMBIA) LIMITED RESPONDENT CORAM: KONDOLO SC, NGULUBE AND SHARPE-PHIRI, On 24th August, 2023 and 31st August, 2023. JJA. For the Appellant: Mrs. IM. Kunda SC-Messrs. George Kunda & Co. on behalf of Messrs. Mweemba & Company For the Respondent: Mr. B. Mulunda -Messrs. Apton & Partners JUDGMENT NGULUBE, JA delivered the Judgment of the Court. to: Cases referred 1. University of Zambia vs University of Zambia and Allied Workers Unions (through the General Secretary Michael Kaluba) (2003) ZR24 2. Colgate Palmolive (Z) Inc vs Shemu and others SCZ Appeal Number 11 of2005 Legislation to: referred 1. The Industrial and Labour Relations Act Chapter 269 of the Laws of Zambia 1.0 INTRODUCTION 1.1 The appellant appeals against the decision of Mwansa, J, of the Industrial Relations Division of the High Court (IRD) at Lusaka, delivered on 23rd June, 2021. Judge Mwansa held that at the time when the appellant was notified of the non-renewal of her contract, the Collective Agreement was already in effect. 1.2 The Court further found that the appellant was not on permanent and pensionable employment and that her contract of employment lapsed by effluxion of time. 2.0 BACKGROUND AND CLAIM 2.1 In the introductory part of this judgment, we shall refer to the parties by their designations in the lower Court. The appellant is Agatha Pensulo and she was the complainant in the Court below. The respondent, is Varun Beverages and Zambia Limited was the respondent in the lower Court. 2.2 The complainant, Agatha Pensulo was employed by the respondent on 30th August, 2016 as a Senior Light Inspector on a two years renewable contract. Subsequently, the respondent and the Union signed a Collective Agreement to the effect that all the respondent's employees would be placed on permanent and pensionable employment. 2.3 The complainant averred that to her surprise, on 14th August, 2018, the respondent terminated her contract of employment J2 unlawfully and unfairly without adhering to clause 17.0 of the collective agreement that- which provides "All employees are now on permanent and pensionable basis." 2.4 The respondent filed an Answer to the complaint and averred that the complainant's contract of employment lapsed and was not renewed by the respondent. It was also averred that the non­ renewal of the complainant's contract of employment was valid. It was further contended that the complainant was not entitled to damages for wrongful termination of employment. 2.5 The respondent denied owing the complainant any terminal benefits contending that all the money that was due to her under the contract of employment was duly paid to her. In the affidavit in support of the Answer, Mr. Langson Kamanga, the Industrial and Labour Relations Coordinator, in the respondent Company deposed that the complainant was employed by the respondent on a two year contract which commenced on 30th August, 2016 and expired on 29th August, 2018. It was deposed that the complainant's contract of employment lapsed and was not terminated. 2.6 It was further deposed that the respondent and the National Union of Commercial and Industrial Workers signed a Collective J3 Agreement on 6th March, 2018. Clause 17.0 of the Collective Agreement provided that- "Employees shall be on permanent and pensionable conditions of service. The contract of employment shall remain in force unless otherwise stated for a permanent and pensionable period." 3.0 HEARING IN THE COURT BELOW 3.1 At the hearing of the matter in the lower Court, the complainant emphasized that the Collective with Agreement was registered the Ministry of Labour on 1st January, 2018 and during which time, her contract of employment was subsisting. She further maintained that the respondent's letter of termination of employment did not give any reasons for terminating her employment. 3.2 The respondent did not call any witnesses but filed written submissions. These were to the effect that the contract of employment between the complainant and was the respondent the paramount document that governed the relationships between the parties. 3.3 It was submitted that the contract lapsed on 29th August, 2018 and the respondent exercised the agreed and available option of not renewing the complainant's contract of employment. She was duly informed of the said nonrenewal of the fixed term contract of employment. J4 3.4 The respondent submitted that the complainant was not employed on permanent and pensionable terms and that the decision not to renew her contract was not lawful and valid. 4.0 DECISION OF THE LOWER COURT 4.1 After considering the evidence on record, the arguments and the submissions of the parties, the lower Court came to the conclusion that the Collective Agreement in issue came into effect on 30th July, 2018, when the Ministry of Labour informed the respondent that the Collective Agreement had been approved. 4.2 The lower Court further concluded that the complainant's contract of employment came to an end by effluxion of time because clause 17 .0 of the Collective Agreement was not yet in effect. The learned trial judge accordingly dismissed the complainant's claims for lack of merit. 5.0 THE APPEAL 5.1 The appellant was dissatisfied with the decision of the lower court and appealed to this court, advancing four grounds of appeal couched as follows- 1. The Learned Judge in the court below erred in law and fact when he held that clause 17.0 of the Collective Agreement was not in effect on 14th August, JS 2018, when the appellant's contract of employment was allegedly not renewed. 2. The Learned Judge in the court below erred in law and fact when he held that the appellant was not on permanent and pensionable conditions of employment and that the contract lapsed by effluxion of time. 3. The Learned Judge in the court below erred in law and fact when he dismissed the appellant's complaint. 4. Further and other grounds of either law or fact at the hearing of this appeal shall be deemed fit to advance. 6.0 APPELLANT'S CONTENTIONS 6.1 The appellant relied on her heads of argument filed on 23rd July, 2021. In arguing ground one, the court's attention was drawn to Clause 17.0 of the Collective Agreement which that­ provides "Employees shall be on permanent and pensionable conditions of service. The contract of employment shall remain in force unless otherwise stated, for a permanent and pensionable period AGREED BUT MANAGEMENT WILL DETERMINE COMMENCEMENT DATE AFTER LOOKING AT OTHER MODALITIES AND CONSULTATIONS." 6.2 Reference was further 31st May, made to a Memorandum dated 2018, exhibited on page 66 of the Record of Appeal. The said Memorandum was co-authored by the respondent's Director of Human Resources and the Union Branch Chairman, addressed to all members of staff and couched as follows- JG "RE: COLLECTIVE AGREEMENT IMPLEMENTATION Reference is made to the above subject matter. Take note that the collective agreement has been signed by management and the Union and therefore the contents put into effect. For any clarification you may contact the acting branch chairman." 6.3 Our attention was also drawn to a letter written by the Labour Commissioner and addressed to the respondent's Manager of Human Resources, to the effect that- "RE: APPROVAL OF COLLECTIVE AGREEMENT Reference is made to the subject matter above. The Minister is pleased to inform you that the collective agreement you submitted has been approved and registered. Enclosed herewith are copies of the said documents for your record and necessary action." 6.4 It was contended that the lower court erred in law and fact when it held that the Collective Agreement did not have a commencement date. According to the learned trial Judge, clause 17.0 had a proviso which deferred the time of implementation to a further decision of management. We were urged to reverse the lower court's erroneous finding that clause 17.0 was not operative on the 14th August, 2018, when the appellant's employment contract was not renewed. 6.5 Ground two attacks the lower court's holding that the appellant was not on permanent and pensionable conditions of J7 employment and that her contract of employment lapsed by effluxion of time. 6.6 It was submitted by the appellant's counsel that the collective agreement came into effect by the memorandum dated 31st May, 2018 which was approved and confirmed by the Labour Commissioner in a letter dated 30th July, 2018. 6. 7 According to Counsel, the appellant's employment was governed by the Collective Agreement and therefore could not have ended by effluxion of time. We were urged to allow ground two for the aforestated reasons. 6.8 The third ground of appeal attacks the lower Court for dismissing the appellant's complaint. In arguing ground three, it was submitted that since the Collective Agreement was in effect, the appellant's employment could not have been terminated by effluxion of time. It was contended that the appellant's employment in the respondent company had become permanent and pensionable and that no valid reason was given to the appellant for the termination of her employment as provided for under Clause 29 of the Collective Agreement. 6.9 It was submitted that the Court ought to have awarded the appellant the following reliefs- "2. Reinstatement. 3. Damages for termination of employment. JS 4. Alternatively, terminal benefits as a pensionable employee." 6.10 We were urged to allow the appeal, with costs to the appellant, in this court and in the lower court, to be truced in default of agreement. 7.0 RESPONDENT'S CONTENTIONS 7.1 The respondent filed its heads of argument on 27th August, 2021. Counsel for the responden t, relied on the filed submissions. In response that to ground one, it was submitted the learned trial Judge in the Court below was on firm ground in holding that Clause 17.0 of the Collective Agreement was not in effect on 24th August, 2018. 7.2 The court's attention was drawn to section 68 of the Industrial and Labour Relations Act Chapter 269 of the Laws of that- Zambia which provides "Every Collective Agreement shall contain clauses in this part referred to as statutory clauses stipulating (a) The date on which the agreement is to come into effect and the period for which it is to remain in force." 7.3 Reference was further made to section 71(3) of the Industrial and Labour Relations that- Act which provides "Every Collective Agreement which has been approved by the Minister shall (a) Come into force on the date on which it is approved or on a date later specified in the Collective Agreement." 7.4 The case of The Council of the University of Zambia vs University of Zambia and Allied Workers Unions (through its General Secretary Michael Kaluba)l was referred to, where the Supreme Court held inter alia that- "A Collective Agreement, although satisfies section 68 of the Industrial and Labour Relations Act, it is of no effect if it has not been approved by the Minister of Labour." 7.5 It was contended that a Collective Agreement has to be approved by the Minister of Labour for it to have legal effect. It was argued that the collective agreement in issue only came into effect when it was approved by the Minister of Labour on 30th July, 2018. 7 .6 According to Counsel, the memorandum that was issued by the respondent's management on the Collective Agreement was prematurely issued as at 31st May, 2018, as the Minister of Labour had not approved the Collective Agreement and it had no legal effect. 7.7 The respondent's Counsel further contended that the appellant's contract of employment remained the same and was not affected J10 by the Collective Agreement. It was argued that the terms and conditions of the appellant's contract of employment remained the same. Counsel contended that the appellant's contract of employment was terminated by effluxion of time. We were urged to dismiss ground one of the appeal for lack of merit. 7.8 In response to ground two, it was submitted that this Court should find in favour of the respondent and dismiss the appellant's second ground of appeal. It was argued that the respondent's relationship with the appellant was governed by the employment contract which commenced on 1st August, 2016 and came to an end on 29th August, 2018. 7.9 According to Counsel, the appellant was notified by the respondent in a letter dated 27th July, 2018 that her employment contract even would not be renewed and that the appellant re�eived her terminal benefits. It was submitted that the lower court was therefore on firm ground when it found that the appellant was not on permanent and pensionable conditions of employment and that her employment contract was terminated by effluxion of time. We were urged to dismiss the second ground of appeal for lack of merit. 7 .10 Responding to ground three, it was submitted that the appellant was not employed under the permanent and pensionable conditions of employment and was employed on a fixed term Jll contract which the respondent decided not to renew. According to Counsel, contracts of employment that existed prior to the coming into effect of the Collective Agreement remained in force and were not affected by the said Collective Agreement. 7.11 It was argued that the appellant freely and voluntarily entered into the contract of employment which came to an end on 29th August, 2018. It was submitted that the lower court was on firm ground when it dismissed the appellant's complaint in its entirety the for lack of merit. This court was urged to dismiss three grounds of appeal for lack of merit. 8.0 THE COURT'S CONSIDERATION AND DECISION 8.1 We have carefully considered the record of appeal and the submissions by Counsel for both parties. 8.2 The challenge to the decision of Judge Mwansa alleges that he erred in law and fact when he held that the appellant was not on permanent and pensionable conditions of employment and her contract of employment lapsed by effluxion of time. The lower court was also challenged for finding that the collective agreement was not in effect on 14th August, 2018 when the of employment Appellant's contract was not renewed. 8.3 We note that the grounds of appeal are so intertwined that the parties have repeated themselves in their submissions. Nevertheless, the issues as we see them relate to the following- J12 1. Whether the collective agreement was in effect on 14th August, 2018 when the appellant's contract of employment was not renewed. 2. Whether the appellant was on permanent and pensionable conditions of employment at the time the respondent informed of her her of the non-renewal contract of employment. 3. Whether the collective agreement affected the appellant's contract of employment. 8.4 We will begin by considering the submissions of the parties in ground two, which is that the learned Judge in the court below erred in law and fact when he held that the appellant was not on permanent and pensionable conditions of employment and that her contract lapsed by effluxion of time. 8.5 The gist of the appellant's argument is that the collective agreement was put into effect by the memorandum of 31st May, 2018. The appellant's contention was that by virtue of the Collective Agreement her employment was no longer governed by the fixed term contract but was governed by the collective agreement, which made her employment and permanent pensionable. On the other hand, the respondent's rebuttal is that the court was on firm ground by finding that the appellant's contract of employment governed her terms of employment. 8.6 The learned Judge considered the kernel of the matter by examining the contract of employment. The effective date, as per J13 the said contract was 30th day of August, 2016 for a period of two years. The contract accordingly expired on 29th August, 2018. 8.7 Further, it is worth noting that on 27th July, 2018, the respondent's Director of Human Resources, Mr Richard Kajokoto informed the appellant that her contract of employment that was The due to expire on 30th August, 2018 would not be renewed. appellant was accordingly paid her salary, accepted leave days and gratuity. As was held by the Supreme Court in the case of Colgate Palmolive (Z) Inc vs Shemu and others2, public policy requires that men of full age and competent understanding shall have utmost liberty in contracting and when the said contracts are entered freely and voluntarily, they shall be enforced by courts of justice. 8.8 We are therefore of the view that the lower court was on firm ground when it held that the appellant was not employed on permanent and pensionable terms as her contract of employment clearly stipulated that she would be employed on a two year fixed term contract. Consequently, we do not find merit in the second ground of appeal and it fails. 8.9 We will now consider ground one which attacks the lower Court for holding that clause 17.0 of the Collective Agreement was not J14 in effect on 14th August, of 2018, when the appellant's contract employment was not renewed. 8.10 The point raised in ground one is whether the Collective Agreement was applicable to the appellant as at 14th August 2018. Section 71(3) of the Industrial and Labour Relations Act provides that a Collective Agreement approved by the Minister or on a shall come into force on the date it is approved date later specified in the Collective Agreement. We note that the date on which the Collective Agreement came into effect was not specified nor was it endorsed on the Collective Agreement. However, to the the letter from the Labour Commissioner respondent's that- Manager Human Resources stated "RE: APPROVAL OF COLLECTIVE AGREEMENT Reference is made to the subject matter above. The Ministry is pleased to inform you that the collective agreement you submitted has been approved and registered. Endorsed herewith are copies of the said document for your record and necessary action." We are of the view that the letter from the labour Commission which informed the respondent that the collective agreement was approved was dated 30th July, 2018. 8.11 We are of the view that the letter from the Labour Commissioner which informed the respondent that the Collective Agreement was approved was dated 30th July, 2018. However, the JlS respondent informed the appellant that her contract would not be renewed on 27th July, 2018. For the foregoing reasons, we are of the view that the clause 17.0 of the Collective Agreement did not apply to the appellant was already aware of the non­ renewal of her contract and could not rely on the collective agreement and claim that she was now deemed to be on permanent and pensionable terms of employment. 8.12 The appellant having been informed of her contract's non­ renewal on 27th July, 2018, she could not rely on the Collective Agreement to convert her employment from a fixed term contract to that of permanent and pensionable. Although the lower court misdirected itself in finding that the collective agreement was not in effect on 14th August, 2018, this finding is of no benefit to the appellant who was already aware that her contract of employment would not 2018. be renewed as at 27th July, 8.13 Further, a perusal of Clause 17.0 of the Collective Agreement shows that the "contract of employment would remain in force unless otherwise stated, for a permanent and pensionable period." This entails that the respondent had a discretion to determine the contracts of employment of its employees on a case by case basis. In the case of the appellant, it was stated that the contract which was due to expire on 29th August, 2018, would not be renewed and thus would not remain J16 in force for a permanent and pensionable period. Her belief that that it would remain in force was flawed. We accordingly find no merit in ground one of the appeal and it fails. 8.14 Having found that the appellant's complaint lacked merit, we find ground three of the appeal has been rendered otiose and we accordingly it. dismiss 9.0 CONCLUSION 9.1 We do not find merit in this appeal for the aforestated reasons. The appeal is accordingly dismissed and each party will bear its own costs of the appeal. --=== M. M. KONDOLO, SC COURT OF APPEAL JUDGE P. C. M. NGULUBE COURT OF APPEAL JUDGE . A. SHARPE-PH COURT OF APPEAL JUDGE RI J17