Anthony Khetani Phiri v Workers Compensation Control Board (APPEAL NO. 53 of 2003; SCZ NO. 2 OF 2003) [2003] ZMSC 185 (4 March 2003)

16 I THE SUPREME COURT FOR ZAMBIA , - APPEAL NO. 53 of 2003 scz NO. 2 OF 2003 ' [OLDEN AT NDOLA (¢1VIL JURISDICTION] BETWE~N: ANTHONY ~<HET ANI PHIRI APPELLANT AND WORKERS COMPENSATION CONTROL BOARD - RESPONDENT Coram: Lewanika DCJ, Chibesakunda and Mambilima JJS at Ndola 1 on 4 th June, 2002 and 4 111 March, 2003. For the Appellant: i Mr. Z. M. Muya of Muya, Musaluke and Co. For the Respondent: Mrs. J_ Kabuka of J. Kabuka and Co. JUDGMENT M MBILIMA JS, delivered the Judgment of the Court. 17 Athorities referred to: (1) ·Kay vs Godwin (1830) 6 Bing 576 at 582 cited in Orders Construction of Deeds and Statutes, 5 th Edition page 357. (2) Altocorse Ltd vs Orrell (1968) 2 QB 98 and 101. I (3) ~loyd vs Brassey (1968) 2 QB 98. ( 4) Marriot vs Oxford and District Co-operative Society (no.2) (1970) 1 QBD 186 at page 191 . I I (5) Secretary of State tor Employment vs Globe Elastic Thread Co. L!td (1979 2 All ER 1077. ,..._,. ~ '--- This is an appeal against the Judgment of the Court below dismissing the Appellant's counter-claim in the sum of K108,979,380.00 against the Respondent in an action in which the Respondent had, through a Writ of Su mans claimed for the sum of K34,876, 531.67 in respect of nces on loans which the Appellant obtained from the Respondent on var'ous dates between 301 " April, 1995 and 15th February, 2001. The tria Judge found that the Respondent's claim had been proved since the Ap el/ant had admitted obtaining the said loans. What was in issue was ) the net amount owing in that the Appellant had contended that deductions for the said loans for the month of February, 2001 had ~een effected .and were not off-set from the total amount claimed. The learned trial Judge referred the matter to the Deputy Registrar for assessment of the correct amount owing to the Respondent. I I In his counter-claim, the Appellant claimed for a separation package in form of redundancy as provided by Clause 7.5 of his I conditions· of service, together with interests and costs. In rejecting this claim, thei learned trial Judge looked at various definitions of the word "redundan:cy,. He was of the view that although the Employment Act included iri its definition of redundancy , a situation where the employer cased to exist or carry on business by virtue of which the employee was I en · aged, the Appellant in this case was not declared redundant and that I th I extinction of his former employer was a technical one. According to the evidence which was before the lower Court, the Ap el/ant was employed by the Workers Compensation Fund Control Bo rd which was established under the Workers Compensation Act, ChJ ter 271 of the Laws of Zambia. This Act was repealed by Section 19 153 of the Workers Compensation Act (Act No. 10 of 1999) passed on 4 1 h Octoper, 1999. It came into force on 1 s1 December, 2000. Act Number 10 of 1999 also repealed the Pneumoconiosis Act, Chapter 217 of the Laws of Zambia. It merged the functions of the Workers Compensation Board and the Pneumoconiosis Compensation Board. I I I The employees of the former Boards were transferred to the new I Workers 1Compensation Fund Control Board under section 149 of the new Act. 1 According to tt1is section, such employees upon transfer were to "be engaged on such conditions as the Workers Compensation Board shall determine". I The Appellant testified in the Court below that he was a Board retary of the new Board. Top Management of the Board met shortly I aft ) r the coming in to force of Act Number 1 0 of 1999 and resolved that a cir [ ular letter be written to all employees, informing them of their transfer to I e new Board. On the advice ol the Appellant, the said circular letter ha j a provision for the employees to show whether they consented to trat sfer to the new Board. The Appellant, upon receipt of his circular letter on 121 I h December, 2002 did not sign that he was willing to transfer. 20 He went to see the Commissioner and informed him of the same. ' Efforts by the Commissioner to persuade the Appellant to stay proved futile. On 3 rd January, 2001 the Appellant asked the Board to pay him hjs sepa~ation and redundancy package, but the Board declined to do I so. The; Appellant's contention is that the repealing of the previous I W rkers Compensation Act, Cap 271 of the Laws of Zambia, a new ej ployer was created and since he did not wish to transl er to the new I erriployer, he was entitled to a redundancy package under Section 26B f I (3) of the Employment Act Chapter 268 of the Laws of Zambia as , {1 ) I I -· a ended by Act Number 15 of 1997. He also argued that the new Bo rd was obfiged to pay him his package under Section 147(1) of the W ( kers Compensation Act Number 10, of 1999. This is the provision which vests the assets and liabilities of the dissolved Boards into the ne Board. After evaluating the evidence and the applicable law, the learned trial Judge found that since the Appellant was in the employment of the Workers Compensation Fund Control Board and not in the I ' I I 21 Pneumoconiosis Compensation Board, he was not called upon to work under totally different conditions of service. He maintained the same job and :the same conditions of service under the new Board and I therefore : had not lost his job. According to the learned trial Judge, the I \::':: pr~vision~ which the Appellant relied on to support his contention that hit termi~alion was under redundancy were inapplicable and irrele;ant . H found ,that the Appellant had resigned and was therefore only entitled to a package of an employee who had resigned. He consequently di missed the counter-claim. The Appellant has appealed to this Court against this finding by th Court below advancing four grounds of appeal namely: that the learned trial Judge misdirected himself in law and in fact when he held that the extinction of the Defendant's employer was a technical one; that the learned trial Judge erred in law in failing to hold that the contract of employment of the Defendant terminated on repeal of the Workers Compensation Act, Cap 271 and that '('. ... .. . ... 22 therefore the Defendant was entitled to a separation , redundancy package; - I I I I l ' I I that the learned trial Judge erred in law in failing to hold that the Defendant, not having consented to be transferred to the Plaintiff's employment, he was entitled to the payment of 1 separation redundancy package; and that the learned trial Judge misdirected himself in law and fact when he held that the Defendant had resigned from the Plaintiff's employment. Submitting in support of the first ground of appeal, Counsel for the el/ant in his written heads of argument stated that the Court below ha . recognized that the Appellant had a former employer who had ce sed to exist. This was the Workers Compensation Fund Control Bo, rd which had employed the Appellant on 1st October, 1995. The Act which established the Board was repealed by Act Number 1 O of 1999 and therefore, the said Board was extinct. He referred us to the case of J in which it was stated that "the effect of repealing a Kay vs Goc{win < I statute is to obliterate it completely from the records of Parliament as if it· ,·. '\lo ..... - 23 I I ' hj d nev~r been passed; and it must be considered as a law that never e1isted except for the purpose of those actions which were commenced, prosecutad and concluded whilst it was an existing law". Counsel · argued that the intention of the Legislature in repealing the Workers C mpensation Act, Cap 271 of the Laws of Zambia, was not to bring a out a superficial change but a radical one to the administration of the la v relating to compensation for industrial diseases and accidents. To thi effect, all institutions created by the former Act were abolished and th re is no provision in the Savings Section of Act Number i O of 1999 for continuity by another institution. Counsel argued that although the na e of the employer was carried over, it is in law a completely different entity from the previous employer. In the light of these changes, Mr. Muya argued that it was a misdirection for the trial Judge to hold that the extinction bf the Appellant's employer was merely a technical or superficial one . In support of the second ground of appeal, Mr. Muya stated in his Heads of Argument that upon dissolution of the AppeHant's employer on repeal of the Workers Compensation Act Cap 271, the Appellant had I I I I I I 24 accrued ,rights arising under his employment , and Act Number 1 O of 1999 was not entitled to take away these rights, and in this respect, the I trial Judge ought to have strictly interpreted the Act so as not to take , I a ay or encroach on the subsisting rights of former employees of the 'tt d ssolved Board. He referred us to Section 14(3) (c) of the Interpretation Provisions Act, Cap 2 of the Laws of Zambia, which repeal of a law does not affect any right, privilege, o ligations or liability accrued, acquired, or incurred under any law so re ealed. : According to Mr. Muya, the learned trial Judge merely gl ssed over the accrued rights of the Appellant thereby falling into error by not protecting the said rights. In reply to Mr. Muya's submissions on the first and second grounds of appeal, Mrs. Kabuka for the Respondent argued both unds together. Sile stated in her oral submissions and written heads of rgumer'.it that the Appellant proceeded on a wrong premise, by tak ng a lil'era/ interpretation of the words "ceasing" or "intending to ce3ise". Shf3 submitted that under Section 268 (1 )(a) of the Employment ) I (Amendment Act No. 15 of 1997) these words are used in relation to I I I I ' · 25 "carrying;. on the business by virtue of which the employee was engaged". On the meaning of "employer ceasing to carry on business", rs. Kabuka referred us to the case of Altcorse Ltd vs Orrell (2) in which the Court, ·considering similar provisions to our Section 268(1) (a) said: "The provision under the Act is first to ascertain under S.1 (1) that the claimant was employed by an employer and then under Section 1 (2) to see whether the employer has ceased to carry on business in which the claimant was employed. The "business" is made up of "assets" and "activities" carried on with those assets. Neither can, by itself, be the business." Mrs. Kabuka submitted on the authority of this case that notwithstanding the repeal of the Workers Compensation Act, Cap 271 of the Laws of Za bia, the operations or business activities of the Respondent orgf nizatioh continued without any interruption. The Respondent did not !declare :the Appellant redundant because it still needed his services. MrJ. Kabu)a also referred us to the case of Lloyd vs Brassey ' in wh J h Lord Denning observed that "If the new owner takes the business as a going concern so that the business remains the same business but I I I in differen.t hands and the employee keeps the same job with the new o ner,. then he is not entitled to redundancy payment". Mrs. Kabuka further that the evidence on record had clearly established (a) the Respondent did not cease to carry on the business by virtue of' which the Appellant was engaged. She argued that consequently, the Appellant's contract of service was not terminated in the manner envisaged by Section 26b(1 )(a) of the Employment Act and he is therefore not entitled to any payment for redundancy. (b) for an employee to successfully claim termination of his contract by reason of redundancy under Section 26B(1) (a} his case must not fall within the Sections enumerated under . Section 268(4) (a) to (e) . (c) where an employee had been offered alternative employment as envisaged by Section 268(4) (e)" and has I ynreasonably refused the said offer, he shall not be deemed l .• • . ' ~ 1- . ' I r ' I I I I I I I 1 1 I 27 (d) to have· been terminated by reason of redundancy under Section 26891 )(a). (e) Mrs. Kabuka accordingly argued that the Appellant, having been offered continued employment which he refused, the Respondent cannot be held liable to pay him the redundancy separation package. The Appellant argued grounds 3 and 4 together. According to Mr. Muya, the trial Judge misdirected himself by implying consent from the I . A ppellant's conduct. According to Mr. Muya, the fact that the Appellant continued working and receiving salary after 1 si December, 2000 cannot be construed as consent to work for the Respondent. For this submission, he referred us to the Judgment of Lord Denning in the case of Marriot: vs Oxford and District Co-operative Society (no.2)<4 > in which he asked: "Does Mr. Marriot lose his redundancy payment simply I because he stayed on for three or four weeks whilst he got another job? I I think not. ~ He never agreed to the dictated terms". According to Mr. Muya, the :Appellant never agreed to work for the Respondent. He I invited us td take Judicial notice of the fact that a smooth handover of IJ t jb office was necessary and hence the necessity for the Appellant to e sure that that was done. He submitted further that it was a isdirection on the part of the trial Judge to hold that the Appellant r signed from the Respondent's employment and that the transfer of the A pellant to the new Workers Compensation Fund Control Board was n t an offer of alternative employment. In reply to the last grounds of appeal, Mrs. Kabuka argued that the facts in the case of Marriot on which the Appellant seeks to rely are disnguishable in that. in that case, the status and wages of Mr. Marriot were reduced. This adversely altered his basic conditions of service and Mr. Marriot tried to obtain work elsewhere which he secured after two to three weeks. The Court found on this evidence that Mr. Marriot had not accepted the terms despite his continuing to work for the Respondent for I I three to four weeks. ln the Appellant's case, he was the legal advisor of the former Board during the process of transferring the employees to the new Board. ' Mrs. Kabuka submitted, that the essence of Section 149 (1) of Act Numl;)er 1 O of 1999 was to ensure the continued employment of certain employees so that there was no break in the continuity of the I i 29 pfoyees' employment. She argued that on this premise, the finding the learned trial Judge which presumed the employment to have en continuous cannot therefore be faulted. She referred us to the c se of Secretary of State for Employment vs Globe Elastic Thread r-=~~~ ' C . Limited(5 ) in which it was held that a person's employment during any period should be presumed to have been continuous unless the contrary was proved. ' ' I Mrs.; Kabuka further submitted that in the circumstances of this case, the Respondent's action was on the basis of advice given by the Appellant. 1 The Appellant should therefore be estopped from attacking the same. She pointed out that the Appellant initiated the termination of his contract of service on his own accord by way of resignation when he communicated his intention to cease to be in employment on ·151 " February, 4001. According to Mrs. Kabuka, the learned trial Judge therefore properly found that the only accrued rights due to the Appellant I I I were thosJ payable on termination of employment by way of resignation. i In the circumstances, she urged this Court to up-hold the I ' ' I I 30 decision of the Court below by dismissing the appeal for lack of merit ith costs. We have considered the evidence on record, the Judgment of the C urt below and the submissions by Counsel. It is common cause that the Appellant was employed by the defunct Workers Compensation I Fund Control Board created under the Workers Compensation Act, Cap 271 of the Laws of Zambia. It is also common cause that when Cap 271 I was repealed by Act. No. 10 of 1999, it was inter alia to merge the functions of the Workers Compensation Fund Control Board and the Pneumoconiosis Compensation Board which was created under the red ealed Pneumoconiosis Act, Cap 217 of the Laws of Zambia. Under Section 149 (1) of Act No. 10 of 1999, employees could be tra I sf erred from the dissolved Boards to the new Workers Cot pensat!on Board. It is on record that the Appellant advised his Board on ~he mechanism of such transfers. Upon his advice, the tra lsferred !employees had to sign signifying consent to the transfer. · I The Appelfaht, by a letter dated 301 h November, 2000 appearing on page 114 of the record of appeal, was transferred "laterally" to the new 31 orkers Compensation Fund Control Board in the same capacity as he as in the dissolved Board. In his reply to the transfer dated 4 th nuary, 2000, the Appellant wrote, inter alia: " ••••• I DO NOT consent to the transfer to the Workers ' Compensation Fund Control Board created by Act No. 1 o of 1999. To this end therefore, I advise that upon completion of my i , , outstanding work, but at any event not later than February 15 2001, r will cease to be in employment". The Appellant ended his letter by requesting the Board to work out and I pa} his s~paration package constituted in his accrued rights under cla1se 7.5 ?f the conditions of service by the dissolved Board. The said c /af.se 7.5 iw hic h appears on page 69 of the Record of appeal is on R e , u nd a ncy a nd Retrenchment payments. I The ~espondent in its reply to the Appellant's letter on 8 111 January,, . I 1 stated ltha t: 2 00 17 "The transfer of all members of staff to the new institution was effected last year on 1 s 1 December, 2000 pursuant to a Board resolution on 30th November, 2000. Since then all staff including yourself have been receiving emoluments under the new Workers Compensation Fund Control Board following an appropriate notification." By another letter on 241 h January, 2001, the Respondent treated thi Appellant's leller of 411 ' January, 2001 as a resignation whicil had been accepted. The sequence of these events show that the Respondent did not declare the Appellant to be redundant or retrenched. The evidence on record suggests that the services of the Appellant as legal Office'.r were still needed. I I I I The fppel/anl has forcefully argued before us that his services should be deemed to have been terminated by redundancy because his I former employer ceased to exist. He attacks the finding of the learned trial Judge U1at the extinction of his former employer was technical. ,. 33 uch as we would agree that the repeal of Cap 271 by Act No. 1 O of 1999 brought in a new entity under the same one, it is clear to us that thr new Board did not cease to carry on the business in which the A J pellant was employed. What was added to the new Board were the adtivities of lhe Pneumoconiosis Compensation Board. The new Board in as far as the former Workers Compensation Fund Control Board was cor cerned, was in the same business and the Appellant kept the same jol since ~e was lo be transferred laleralfy. We cannot therefore faull the Judge when he found that the extinction of the old Board was technical. The rest of the grounds of appeal cannot also stand because, as I I Mrs. Kabuka pointed out, the Appellant needed to prove that in terms of I I Section 268 (1) (a), his employer ceased to carry on the business by virtue of which he was employed and that his case did not fall within the I exceptions in Section 26B (4) (a) to (e). Section 26 8(4) (e) provides ; I that Section 26 B will not apply if the employee was offered alternative emproyment and has unreasonably refused the offer. The Appellant 'Was transferred to the new Board but he refused to accept the transfer. 34 e transfer was in the same capacity and to carry out the same job that he had with the old Board. Clearly, he was offered employment and he turned it down. Sect!on 149(1) of Act No. 10 of 1999 provides for the transfer of employees from the old Board to the new Boards. A "transfer'' does not connote a· break in employment. It is on record that it is the Appellant who advised the Respondent on adding a provision of consent to the transfer. fhis is not provided for in the law. The use of the word. 11transfer" 'persuades us to agree that employment in this case was continuous. As was held in the case of Secretary of State for I Employm~nt vs Globe Elastic Thread Co. Ltd<5> to which we were I. referred by Mrs. Kabuka, "a person's employment during any period I I ,. should be ~resumed to have been continuous unless the contrary was sproved." fraving indicated that he would cease to be in employment on ! 15th February, 2001, we cannot fault the trial Judge for having found thati I the Appellant terminated his employment by resignation and he was I entit ed to benefits on resignation up to the time that he stopped work. 35 We find no merit in the whole appeal and it is dismissed with costs to the Respondent to be taxed in default of agreement. ' D. M. LEWANIKA L. P. CHIBESAKUNDA DEPUTY CHfEF JUSTICE JUDGE SUPREME COURT -----------~-: _________________ _ I ' Cc I. M. C. MAMBILIMA JUDGE SUPREME COURT