Barclays Bank (Z) PLC v Stanley Kaseko (Appeal 130 of 2007) [2009] ZMSC 149 (30 December 2009)

JI IN THE SUPREME COURT OF ZAMBIA Appeal No. 130/2007 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN BARCLAYS BANK (Z) PLC APPELLANT AND STANLEY KASEKO RESPONDENT Coram: Chirwa, Acting DCJ, Chibesakunda, & Silomba JJS 4th March, 2008 and 30th December, 2009 For the Appellant: Mr R Mwanza of Messrs R Mwanza and Partners, For the Respondent: N/A Chibesakunda, JS delivered the Judgment of Court. JUDGMENT Cases referred to: 1. Kabwe and BP Zambia Limited, 1995/97 ZR. This is an appeal against a High Court Judgment in-which the w High Court held’inWour of the Respondent (who was the Plaintiff before the High Court) in a claim for: - (i) The sum of KI 18,791,666.67 being the net underpayment due to the Respondent from the Appellant as Customer Team Leader under the Voluntary Early Separation dated 6th May 2005. (ii) An order that the Respondent is entitled to have his separation package calculated at the same salary rate J2 as all Customer Team Leaders at the time of separation. (iii) (iv) Interest on awards above. Further and other relief. The brief facts before the High Court, on which there was common ground, were that, the Respondent was employed as a Bank Cashier on the 2nd May, 1991 by the Appellant Bank. He served in different positions within the Appellant Bank. He became a member of ZUFIAW in April, 2001. On April, 6th 2004 he was appointed on promotion to be Retail Manager with a Management salary of Grade B4. He was then transferred to Lusaka with immediate effect. He was put on probation for a period of six months. The Appellant Bank cut shot the probation period from six months to three months. As an employee in Grade B4 he ceased to be a member of the union (see page 28 of the record). By letter —dated august 13th, 2004, the Appellant Bank advised the Respondent that following an assessment of his performance in the shortened probationary period, they found that he was not suitable to be promoted to be Retail Manager (See page 40 on the record of Appeal). So he was informed that' he was not going to be confirmed in that position of Retail Manager with a management salary Grade B4. In the same letter dated 13th August 2004, the Appellant Bank informed him that he was going to be appointed as Customer Team Leader in Management salary Grade B3. However, he was informed that he was going to keep his salary of Grade B4 as J3 Customer Team Leader in Management on a personal to holder basis. So now that he got demoted to be in Grade B3 he went back to union position (See page 90 on the record). This meant that he and the Appellant Bank had to pay his annual subscription to the Union. But even in that capacity as Customer Team Leader, he continued to receive the gross salary of K42,250,000.00 and he continued to enjoy the other conditions of service which he enjoyed as Retail Manager up to his early retirement date. The Appellant Bank also informed the Respondent that in that capacity as Customer Team Leader, he was to be transferred to North-End Branch, Lusaka with effect from 1st August, 2004. It was also common ground that early December 2003, the Appellant Bank restructured its Corporate Division. Later in December, 2003, the Appellant Bank undertook a restructuring exercise affecting its Retail and service Divisions across the nation. This exercise required the Appellant Bank to make changes to its organisational structure and the way business was being conducted, by way of retrenchment and placement of staff into the new structure to be in line with the customer numbers and business volume etc. All the members of staff were communicated to in writing indicating whether each of these members of staff were placed in the new structure with their job titles indicated or whether they were retrenched (See the letters at pages 71- 72 on the records of appeal). According to this new structure, the J4 Retail Division of the Appellant Bank was to continue to be handled at branch level by a Retail Manager with Management salary Grade of B4. These Retail Managers were to supervise the Customer Team Leaders in Grade B3. In January, 2005, the Appellant Bank initiated another restructuring scheme. In this new scheme, the Appellant bank's employees were invited to apply for early retirement. This same scheme was to last up to 30th March, 2005. On 28th February, 2005 the Respondent applied for this early separation package. The Appellant Bank accepted the Respondent’s request for early retirement on 15th April, 2009 with the following conditions that: - (i) That the contract of employment will stand terminated by early separation with effect from 24h May 2005 (ii) That Payment of repatriation allowance of KI,400,000.00 without an option of physical transport. (iii) That Continued membership of the ZAMED Scheme for three months effective from the date of separation. (iv) That A bonus to be paid in February or March 2006 for the four months period worked in 2005. (v) That to receive an encashment of thirty-two (32) leave ’ days which would have accrued as atWXAay/2005. On 23rd April, 2005, as can be seen at page 53 of the record of Appeal, the Appellant Bank sought to amend these conditions cited supra. Now in letter dated 23rd May, 2005, this time the conditions were:- 1. Your contract of employment will stand terminated by early separation with effect from 24th May, 2005. J5 2. A bonus will be paid to you in February or March 2006 for the five months period worked in 2005. Such bonus will be based on a review of your performance for the months worked in 2005 and annual recommendation by group for Zambia. 3. You will receive an encashment of thirty four point five (34.5) leave days which you would have accrued as at 24th May 2005. The Respondent's case before the High Court was that as per this letter of 15th April 2005 from the Appellant Bank at page 50 of the record, the Appellant Bank had to calculate his terminal benefits using the last drawn salary as a basis of calculating the Respondent’s terminal benefits. According to him, salaries of a Customer Team Leader were placed at Management scale and were doubled with effect from 3rd April, 2005 a date when he was still an employee of the Appellant Bank since his employment was only terminated on the 26th May, 2005. It is also his case that after being demoted to Grade B3 a unionised position, the General Secretary of ZUFIAW wrote to the Appellant Bank explaining to them that there was no provision in the Memorandum of . . • • - ' .• - r.-x Recognition Agreement under Clause 6A which specifically referred to Grades B3 and B4 being in management positions. The Appellant Bank’s case before the High Court is that as the Respondent was a Customer Team leader, the salary of a Customer Team Leader ranged from K42,250,000.00, J6 <50,000,000.00, K64,000,000.00, <70,000,000.00, <84,000,000.00 and <85,000,000.00 per annum was the last notch. According to the only witness called by the Appellant Bank, Retail Managers were getting <42,250,000.00, although the Respondent was only getting <42,000,000.00. This was the same amount he was getting even at the time he acted as Retail Manager. So, even after he was demoted, that salary remained personal to holder. He explained that Management, in deciding whether to place an employee in these Grades took into account a number of factors such as the market force vulnerability, the rate of performance of an individual etc. The Respondent was rated as a moderate performer; he was not rated as a higher achiever. So he was given a salary according to that category of moderate performer. This witness testified that for good performers the rate of increment was 5%. For excellent performers the rate was 10%. According to this witness, from 1st April, 2005, the Respondent was entitled to 3% increment taking into account his rate of performance. This witness also testified that poor performers were not entitled to be given any increment in 2004. The Appellant Bank in the year 2004 gave all moderate performers 5% increment. The excellent performers got between 5% - 10% increment. In the year 2005, those workers rated as moderate performers got 3% increment from 3rd April, 2005. So the Respondent in 2005 got only 3% of that increment on his annual salary of <42,000,000.00. His last day of service was 24th May 2005. J7 The witness also testified that in April, 2005 union members were given increment of 18% across the board. This resulted in the disparity amongst the Team Leaders’ of the Appellant Bank because some Team Managers in Ndola got even K85.000,000.00 per annum. The High Court having listened to the evidence and submissions held that:- (a) The Appellant Bank should re-calculate the Respondent's package basing it on his salary of K84,500,000.00 per annum. (b) The Appellant Bank should pay interest on the amount which will be arrived at (a) above the rate of 18% per annum from the date of the Writ to the date of Judgment and thereafter at the rate of 8% per centum to the date of full settlement. (c) The Appellant bank should pay costs of and incidental to this action. The Appellant being dissatisfied with this Judgment hence came to this Court. On appeal, they have raised three grounds of Appeal. These were'amended to read as follows:- 1. The Learned trial Judge erred in law in having misapprehended the facts and having arrived at the findings, which on a proper view of the evidence, no trial court acting correctly could reasonably make. J8 2. the Learned trial Judge erred in law and fact in not having taken proper advantage of having seen and heard the witnesses in arriving at the decision and the reasons for it. 3. The authority relied upon by the Learned trial Judge in arriving at its decision (viz, the case of Kabwe and BP Zambia Limited[1), is not on all fours with the matter in issue and as such does not provide the relevant judicial precedent to support the court’s decision. Before this Court, Mr Katongo Counsel for the Respondent, put in a notice of non appearance but had filed heads of argument. He therefore did not appear before this Court and relied on the filed heads of argument. Mr Mwanza Counsel for the Respondent relied on his written heads of argument. In his written heads of argument, Mr Mwanza argued that the lower Court erred in law and in fact in not having taken proper advantage of having seen and heard the witnesses in arriving at the decision which the Learned trial Judge arrived at. Counsel argued that the Learned trial Judge erred in law and in fact in having misapprehended _ the facts and having arrived at the findings, which on a proper view of the evidence, no trial court acting correctly could reasonably have made. He argued also that the Learned trial Judge misdirected himself in relying on the case of Kabwe and BP Zambia Limited, 1995/97 ZR( 1), a case which was not at all fours with the case before us. J9 Counsel referred to the restructuring programme which was undertaken by the Appellant Bank. He argued that the first restructuring programme was undertaken as early as December, 2003 and this was for Corporate Division of the Appellant Bank. The one that was undertaken late December, 2003 was for all Retail and Services Division. He went on to argue that the Respondent was given a probation period of six months which was later changed to three months. He was assessed in the three months as Retail Manager COMESA branch. According to the Appellant Bank, he failed to reach the Grade. He was therefore demoted. Counsel argued that although the Respondent kept the salary of Grade B4 on a personal to holder basis, his Grade nevertheless in actual fact was B3. Counsel further argued that according to the new structure, different Grades had different role profiles. He pointed out that although there was little difference to the structure of Relail Manager, nevertheless, the Retail Managers remained in B4. They supervised Customer Team Leaders in Grade B3. He pointed out that some Customer Team Leaders managed certain branches. He further stated that the Respondent was demoted to B3 even though he kept the salary of B4 on personal to holder basis up to the time of his early retirement. So he argued that whatever increment which were for B4, those did not affect the salary of the Respondent. He pointed out that the Respondent was not a high performer. J10 His increment was tied to those that ranked as moderate performers. In the year 2004, he was told that he earned no increment as he had not performed well. So he was not entitled to any increment. He pointed out to the Court that according to the practice of the Appellant Bank, the good performers' rates was 5%, for excellent performers, the rate was between 5% - 10%. According to Counsel, echoing the witness for the Appellant Bank, the Respondent was only entitled to 3% increment from 31st April, 2005. He also explained that according to the correspondences produced before the Court, there was distinction between Customer Team Leaders in terms of their salaries. He submitted that union members in B3 had salaries ranging from <42,500,000.00 to <80,000,000.00 per year gross salary and that these distinctions were communicated to the employees of the Appellant Bank before the exercise for the option of accepting to stay in their jobs after this restructuring exercise was carried out. He gave a particular example of different salary and treatment which was accorded to different members of staff such as Mr Steve Tembo. He -therefore asked the Court to uphold the appeal. Counsel for the Respondent supported the lower Court's decision. He argued that some of the details given by Counsel for the Appellant bank were not correct. Counsel for the Respondent explained that the Respondent applied for early separation on 28th February, 2005 when he was still JI 1 enjoying the salary of <42, 250,000.00 per annum. At that time, he enjoyed all other conditions of service attached to Managerial position. (See page 84 of the record). The Appellant Bank accepted the Respondent's application for early separation in April 2005 in a letter dated 15th April, 2005. The said letter stipulated as follows:- "Separation benefits payable which comprises two elements will be based on the following: (i) 2.5 months salary per each completed year of service and that the monthly salary that will be used is the last drawn salary at the time of separation. (ii) Three months salary in lieu of notice." The Respondent's argument was that the calculation by the Appellant Bank of his terminal package was wrong as it was pegged only to his gross salary per year of <42,250,000.00. His contention was that the last salary drown by the Respondent ought to have been <84,500,000.00 and not <42,250,000.00 because according to him the salaries of “Customer Team Leader in Management salary scale were doubled with effect from 1st April, 2005 on- a date when the Respondent was still on employee of the Appellant Bank as Customer Team Leader Manager. The Respondent therefore argued that the Court was correct in holding as it did. We have looked at the Judgment and the record before us. There are a number of facts on which there is common ground. These are that the Respondent was employed as a Cashier in the Appellant Bank. He moved up in the ladder of the Appellant Bank up to the position of Retail Manager. He J12 was appointed as Retail Manager on probation for six months. The Appellant Bank without any explanation shortened the period to three months. He was assessed in his performance, he failed to make his Grade. He was liien demoted to B3. It is also common ground that B3 is a unionised position. It is not disputed by the Appellant Bank that the Respondent stopped to be a member of the union when he was promoted to the position of Retail Manager. But this was temporary position because after being demoted, after assessment by the Appellant Bank in the shortened probation period, he joined the union as Grade B3 (See page 90 of the record of appeal). We are therefore satisfied that at the time of his early retirement he was unionised staff member of the Appellant Bank. So at the time of his early retirement, he was both unionised staff as well as Grade B3, although he enjoyed Grade B4 conditions of service which he kept at the time of his demotion. Coming to the other issues, we realise that the core argument of the Respondent is premised on the interpretation of the letter of 13M April, 2004 which letter talked about his demotion to Grade B3 but keeping Grade B4 salary on personal to holder basis plus continuing to enjoy all other conditions of service which he enjoyed before his demotion up to the time of his early retirement. The question, was as we see it, is whether the Respondent was entitled to whatever increments which Grade B4 employees got up to J13 the time of his retirement. The answer in our view is in the negative because although he retained his Grade B4 salary, this was on a personal to holder basis. He was in actual fact in Grade B3, as a Customer Team Leader. The next question is whether he was entitled to increments effected to Customer Team Leaders and unionised staff up to the time he went on retirement. The Appellant Bank have argued that the Respondent was only entitled to any increments which affected Grade B3 members of staff. They have also stated that Customer Team Leaders had different entitlements and that their increments were dependant on the rate of performance. Their evidence was that in the year 2004, the Respondent was rated as a moderate performer and that he received no increments. The Appellant stated that in the year 2005, the Respondent was entitled to an increment of 3%. The difficult we see in this particular case is that, other than the increments, the evidence of the Respondent fell short of what conditions he enjoyed up to the time of his retirement. Also the correspondence produced before the Court between the Appellant Bank and its employees is very confusing as it does not bring out the rationale why the Appellant Bank gave different treatment to different employees in the same grade. It would have been easier to explain the Appellant's rationale if the Appellant Bank had stuck to the criteria of performance in down grading or upgrading portfolio of its employees. What adds more to this confusion is that the J14 Appellant Bank accepted in their evidence that at the end of the day, Customer Team Leaders ended up with different salaries. Some even got K84, 500.000.00 while others got K42, 250,000.00 with no solid explanation as to how these distinctions came about. But what comes out is that the Appellant Bank did an assessment of the employees. The Respondent as a result of this assessment was demoted to B3 while retaining his salary of B4 plus his conditions. Also what was equally established and which the Appellant accepted is that, the Respondent had an increment of at least 3% in the year 2005. In the years 2004, he did not merit an increment. In sum total therefore in calculating his retirement package, this 3% increment ought to have been taken into account. ■ However as we are of the view that this Court may not be in a position to respond as to what was the actual salary of the Respondent at the time of his early retirement, taking into account his 3% increment in 2005 as unionized officer. Because of the foresaid, we find merit in the appeal in the sense that we accept that he was not on the <84,500,000.00 salary scale and that his retirement package ought not to have been even calculated on that salary scale, we nonetheless are satisfied that the Respondent is entitled to a recalculated retirement package by the Deputy Registrar taking into account of his 2005 increment of 3%. We therefore direct that the matter goes before the Deputy Registrar to calculate his retirement package taking into account the 3% increment we have J15 indicated in our Judgment. In sum total we uphold the appeal. But in view of our earlier remarks, we direct that if at the end of the assessment by the Deputy Registrar of his retirement package based on his K42,250,000.00 salary plus 3% increment there will be any outstanding amount due to the Respondent, that amount should carry interest at the current Bank of Zambia deposit rate from the date of writ to the date of the High Court Judgment and thereafter at Bank of Zambia lending rate until payment. We make no order on costs. D. K. Chirwa SUPREME COURT JUDGE L. P. Chibesakunda SUPREME COURT JUDGE S. S. Silomba SUPREME COURT JUDGE