Benjamin Tembo and Ors v Sanlam Life General Insurance [2021] ZMCA 207 (23 February 2021)

;. IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO. 193/2019 _"c OF . ;:i."'OF-A J ' ·, ··; LT . J - - ,..,..~ l ..,J r 1:..,1 -- - .. R£.:.01CTRf HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN: BENJAMIN TEMBO DONIANA ZIMBA EDITH MAKAYI KAYINDANA MUZEYA RACHEL MUTALE MUYUNDA HELEN PHIRI AND 1 ST APPELLANT 2ND APPELLANT 3RD APPELLANT 4TH APPELLANT 5TH APPELLANT 6TH APPELLANT SANLAM LIFE GENERAL INSURANCE COMPANY ZAMBIA LIMITED RESPONDENT CORAM: CHASHI, LENGALENGA AND NGULUBE, JJA. On 18th February, 2021 and 25th February, 2021. For the Appellants: Mr. 0 . Sitimela, of Messrs Oga Sitimela & Partners . For the Respondent: Mr. J. Ngisi, of Messrs Chibesakunda and Company. JUDGMENT NGULUBE, JA delivered the judgment of the Court. Cases referred to: 1. 2. 3. United Bank of Africa vs Maxwell Sichilongo, SCZ Appeal No. 56 of 2015. Raphael Mwale and Another vs BP Zambia Plc, SCZ Appeal No. 109A of 2002. Nkhata and Four others vs The Attorney-General of Zambia (1966) Z. R. 124. .. • -J2- 4. Madison Investment Property and Advisory Company Limited vs Peter Kanyinji, SCZJudgment No. 48 of 2018. 5. Richard H. Chama & 213 Others vs National Pension Scheme Authority, Staff 6. 7. 8. Pension Scheme & 7 others, SCZAppeal No. 001 of 2018. Standard Chartered Bank (Z) Plc vs Willard Solomon Nthanga and 402 others (2008) 1 Z. R. 129. Wilson Masauso Zulu vs Avondale Hous ing Project Ltd (1982) Z. R. 172. Engen Petroleum Zambia Limited vs Willis Muhanga and J eromy Lumba, SCZ Appeal No. 11 7 of 2016. 9. Zambia Telecommunications Company Limited vs Mirriam Shabwanga & 5 others, Appeal No. 78 of 2016 & Appeal 81 of 2016. Legis lation re fe rred to: 1. The Minimum Wages and Conditions of Employment Act, Chapter 276 of the Laws of Zambia. 2. The Minimum Wages and Conditions of Employment (General) Order, 2011, Statutory Instrument No. 2 of 2011. The Court of Appeal Rules, Statutory Instrument Number 65 of 2016. The Industrial and Labour Relations Rules, Chapter 269 of the Laws of Zambia. 3. 4. Ot her works re ferred to: 1. The Rules of the Supreme Court, 1965 (White Book) RSC, Volume 1, 1999 Edition. INTRODUCTION 1. Th is is an a ppeal against parts of a Judgment of the Industrial Relations Division (IRD) of the High Court delivered on 27th March, 2019, by Honourable Mr. Justice E. L. Musona. The appeal is challenging the decision of the court below to dismiss the appellants' claim for three months' pay as compensation for -J3- the period when the respondent had no pens10n scheme. The respondent has also cross-appealed against the decision of the court below to award the appellants' claim for one month's pay for each year served which was withheld from their terminal benefits. BACKGROUND 2. The brief background to this case is that the appellants were employees of the respondent who served in different positions until their contracts of employment were terminated by the respondent by way of redundancy on 9 th November, 2015. The appellants challenged the termination of their employment and lodged a complaint in the court below. They raised a number of issues in their complaint most of which are not relevant to this appeal because they have not been raised by the parties. 3 . The appellants complained that there were various aspects of their employment which had not been resolved at the time their employment was terminated. One of the issues raised was pension benefits the appellants were promised to be paid for the period they had served from the time of their respective engagements until 2013 when the respondent introduced a new pension scheme. The appellants wanted to be paid three months' • -J4- salary as compensation for the period when there was no pension scheme. 4 . They also took issue with the terminal benefits package they had received, which they said was not in keeping with the respondent's practice of paying three months' pay for each year served, as they had only been paid two months' pay for each year served. According to them, they were similarly circumstanced with an earlier group of employees whose employment was terminated and were paid a three months' pay for each year served. The appellants wanted to be paid one month's pay for each year served, which was allegedly withheld from their benefits. 5. They sought various claims, which included among other reliefs: (a) one month's pay for each year served that was withheld from the appellants' terminal benefits as per company practice followed in previous retrenchments where employees were paid three months' salary for each year served; (b) three months' pay being compensation for the period when there was no pension scheme, as conceded and promised by the respondent; interest on the claims; and costs (c) (d) 6 . The respondent denied having withheld any of the appellants' terminal benefits or there being a company practice of paying employees whose employment is terminated three m onths ' salary -JS- for each year served. It was the respondent's position that none of the appellants was a protected employee under the Minimum Wages and Conditions of Employment Act1 , therefore the respondent merely acted in good faith when it paid the appellants a redundancy package of two months' salary for each year served. 7. The respondent further contested the claim for the appellant's compensation for the period when it had no pension scheme, contending that at the time the pension sch eme was introduced, its employees were advised that the terminal benefits for their past service would be reconciled and paid into the fund at the time the benefits would become due, which was at retirement. DECISION OF THE HIGH COURT 8. After hearing the parties, the court below found that the appellants were similarly circumstanced with an earlier group of former employees whose employment was terminated by the respondent by way of redundancy and were paid a redundancy package of three months' salary for each year served. The former employees whom the court said were similarly circumstanced with the appellants wer e Felix Phiri, Opha Mulila, Tapson Kahenya and Irene Mubita. -J6- 9. The court set out the circumstances which were similar between the said employees and those of the appellants. The first similarity was that in both cases the respondent had cited Clause B6. 4 of the 2010 Terms and Conditions for African Life Assurance Company in terminating the contracts of employment. The second was that in both cases there was no agreed terminal benefits package as the respondent had unilaterally determined the package. The third was that in both cases, none of the employees were protected employees. The court below cited the case of United Bank of Africa vs Maxwell Sichilongo1, and held that similarly circumstanced employees must be treated in the like manner. 10. The court below dismissed the respondent's contention that the former employees who were paid a three months' pay for each year served were employees of Sancare Medical Insurance Limited (Sancare), which is a subsidiary of the respondent. The court below specifically considered the respondent's notice of termination for Felix Phiri, whom the court said was a former employee of the respondent but was paid three months' pay for each year served. -J7- 11. Considering that the appellants were paid a two months' salary for each year served, the court ordered the respondent to pay the appellants the balance of a month's salary for each year served, being the terminal benefits that were withheld from them. 12. The court below held that the appellants were not entitled to the claim for three months' pay as compensation for the period when there was no pension scheme. According to the court below, the appellants' claim was that after the pension scheme was introduced in 2013, the respondent promised to reconcile their previous years of service and further stated that their money would be paid in the pension fund. 13. The court below found from the documentary evidence, that the appellants, upon joining Saturnia Regna Pension Fund were informed that their previous years of service would be paid to the Fund. The court below further found that the respondent admitted in its evidence, that at the time of establishing the pension scheme, its employees were advised that their past benefits would be reconciled and paid into the fund at the time the benefits would become due, which was at retirement. 14. The court below referred to a letter which was entitled: "Past Liability Transfer Qualification". The letter showed that the -JS- eligible staff were to join the pension scheme from 1st May, 2015 and all eligible employees that joined the scheme and would have served the respondent for ten years at the point of separation, would qualify to have their past service liability transferred to the scheme, calculated from their date of engagement to 31 st April, 2013 prorated, plus interest applicable to the funds in the pension scheme. 15. The court below also referred to the respondent's letter to one Venus Daka dated 21 st May, 2014, in which the respondent stated that past benefits would only be considered upon an employee reaching fifty-five years and after having worked for ten years. 16. From the said letter, the court was satisfied that for past benefits to be reconciled and paid into the pension scheme, an employee ought to have reached fifty-five years and must have worked for the respondent for a continuous period of ten years. The court reasoned that the appellants not having fulfilled these conditions could not be entitled to the claim for three months' pay as compensation for the period when there was no pension scheme. -J9- THE APPEAL AND CROSS-APPEAL TO THIS COURT 17. Dissatisfied with the decision of the court below, the appellants appealed to this Court and the respondent cross-appealed. The grounds of appeal advanced by the appellants are that- 1. The Court below erred in both law and fact by failing to recognize that the dispute between the appellants and the respondent was not whether or not the former were entitled to have the past benefits reconciled and paid into the scheme but rather at what point were the past benefits to be reconciled and paid into the scheme; 2. The erudite Judge in the court below erred in both law and fact by failing to appreciate that the appellants were entitled to have the past benefits reconciled and paid into the scheme at date of introduction of the scheme or at point of separation as was promised and pledged by the respondent, in writing; 3. The learned Judge in the court below erred in both law and fact when he held that the appellants were not entitled to the past benefits on the basis that they ought to have reached fifty-five years and worked for a continuous period of ten years for the respondent; and 4. Alternatively, having found that for the past benefits to be reconciled and paid to the scheme an employee ought to have reached 55 years and worked for a continuous period of 10 years for the respondent, the court ought to have found further that the appellants were entitled to access the past benefits once they reached 55 years seeing that they had already served for a continuous period of 10 years with the -JlO- respondent, failing to so find was an error in both law and fact. 18. On behalf of the appellants, Mr. Sitimela filed heads of argument in support of this appeal on 9 th October, 2019. 19 . The respondent's counsel filed heads of argument on 29 th November, 2019 , which opposed the appeal. They also contained a sole ground which is purportedly a cross-appeal with supporting arguments. The ground of appeal is that: (1) The learned trial Judge erred in law and fact when he held that the Respondent was liable to pay a balance of one (1) month's pay for each year served to the Appellants on the sole basis that the Respondent had authored the letter of termination to employees of Sancare Medical Insurance Limited, a company in which it wielded Control. 20. When this appeal came up for hearing on 18th February, 2021, counsel for the parties relied on their respective heads of argument which they augmented with oral submissions. 21. In his oral submissions, the respondent's counsel submitted that the court below should not have ordered costs against the respondent because this matter emanated from the IRD. To support this argument, Mr. Ngisi referred us to Rule 44 (1) of the Industrial and Labour Relations Rules3. -J11- THE APPELLANTS' CONTENTIONS 22. Counsel for the appellants argued the first, second and third grounds of appeal together, under which it submitted that the court below relied on the respondent's letter to a Mr. Venus Daka, to come to the conclusion that an employee ought to have reached fifty-five years and worked for the respondent for a minimum period of te-.1 years, to qualify for past benefits. He argued that it was erroneous for the court to have attached significant weight on t hat letter because it was not signed and lacked authenticity. Counsel further submitted that Mr. Venus Daka was a lso not called as a witness and the letter was not produced in evidence before court. Therefore, this must be sanctioned to the detriment of the respondent. 23. It was cou nsel conte~tion that the cou rt below should have addressed its mind to, among others, a letter entitled: "Past Liability Transfer Qualification", which he said is of grave I importance. Mr. Sitimela went on to submit that the respondent had promised the appellants that " ... management will reconcile your previous years of service with Satumia Regna Pension Fund. Your previous years of service would be paid to the fund". -Jl2- 24. Counsel therefore submitted that the only criteria for an employee to qualify to have past service benefits transferred to the scheme, was if and when an eligible employee had served for ten years at the point of separation. He contended that it was never a question of whether or not the appellants were entitled to past service benefits, it was instead at what point the appellants could access past service benefits from the respondent. 25. Mr. Sitimela submitted that the respondent promised that past service benefits would be reconciled and paid to the fund at inception of the pension scheme and the appellants would be entitled to draw and access past benefits from the respondent at separation. 26. Counsel emphatically submitted that the appellants were not claiming for their retirement benefits, but their past service benefits which had accrued and were due at the point of separation. For this contention, counsel cited the case of Raphael Mwale and Another vs BP Zambia Plc2 . 27. Mr. Sitimela submitted that it is trite that an appellate court will rarely overturn findings of fact by a trial court unless, as held in case of Nkhata and Fou r others vs The Attorney-General of Zambia3 , any of the following can be established, that is to say if- -J13- "(1} the Judge erred in accepting evidence, or (2) the Judge erred in assessing and evaluating the evidence by taking into account some matter which he should have ignored or failing to take into account something which he should have considered, or (3) the Judge did not take proper advantage of having seen and heard the witnesses, (4) external evidence demonstrates that the judge erred in assessing the manner and demeanour of witnesses." 28. Counsel urged this court to interfere with the findings of the court below, based on his submission regarding the respondent's letter to Mr. Venus Daka. He accordingly urged us to sustain the first, second and third grounds of appeal. 29. On the fourth ground of appeal, Mr. Sitimela submitted that this ground is in the alternative and should this court uphold the finding of the court below. He argued that as the appellants had reached ten years of service at the time of separation from the respondent, the only condition that remained to be satisfied was the attainment of the age of fifty-five years and that upon any of the appellants reaching that age, they shall individually be entitled to draw and access their respective past service benefits. He submitted that this is an accrued benefit which, at the right time when the appellants individually attain the age of fifty-five -Jl4- years, must come to fruition. It was his submission that this appeal should be upheld with costs. THE RESPONDENT'S CONTENTIONS 30. Counsel for the respondent opposed the first, second and third grounds of appeal. According to Mr. Ngisi, the appellants were never entitled to retirement or pension benefits either at commencement of the respondent's pension scheme or at the point they were d eclared redundant. 31. Counsel submitted that one of the two ways in which the appellants would have been entitled to retirement or pension benefits was if they had been protected employees under Rule 8 of the Minimum Wages and Conditions of Employment (General) Order, 2011 2 , which was the applicable law at the time. He contended that the a ppellants' contracts of employment showed that they were not protected employees and were therefore , not entitled to pension benefits provided by the law. 32. Mr. Ngisi a rgued that the other way the appellants would have been entitled to retirement or pension benefits was if their contracts of employment made provision for such benefits. He submitted that the appellants' contracts of employment showed that there was no such agreement between the parties. Further -JlS- that, the respondent's "Terms and Conditions of Service 201 O'' which were applicable to the appellants, did not also provide for retirement or pension benefits. 33. The pith and core of counsel's argument was that the appellants were not entitled to retirement or pension benefits at law or by way of contract. It was his further argument that at the time the appellants were declared redundant in 2015 , they did not meet the conditions given by the respondent, for receiving retirement or pension benefits. He argued that none of the appellants reached the retirement age of 55 years on which the retirement benefits were based. 34. Counsel for the respondent went on to oppose the fourth ground of appeal and essentially reiterated his earlier submissions by reason of which we see no relevance in repeating them. 35. Coming to the sole ground of the cross-appeal, the respondent's counsel argued that the court below awarded the appellants a balance of a one month's salary for each year served, on the sole basis that the respondent authored the letters of termination to employees of Sancare Medical Insurance Limited (Sancare), a company in which the respondent wielded control. -J16- 36. Mr. Ngisi argued that the court below solely relied on the fact that the respondent authored the letters and concluded that they were all employees of the respondent. Arising from that finding, the court concluded that the respondent had a practice of awarding redundancy benefits of three months' pay for each year served, as that is what was given to Sancare employees in those letters. That therefore, it followed that the appellants being employees of the respondent were also entitled to a similar redundancy package. 37. He cited the case of Madison Investment Property and Advisory Company Limited vs Peter Kanyinji4 , where the Supreme Court held as follows: "The law takes the position that companies in a group are separate entities and are not agents of each other. At a general level, therefore, the effect of the rule in Salomon v Salomon & Co. as it relates to individual subsidiaries within a conglomerate or group of companies is that they will be treated as separate entities and the parent company cannot be made liable for their legal obligations." 38. It was counsel's contention that the court below ignored the principle of separate corporate existence of the respondent and that of Sancare. According to him, a parent company can author • -J17- letters on behalf of its subsidiary company without losing its separate corporate personality. 39. It was his further argument that the appellant failed to prove that the respondent had employees who had been paid a redundancy package of three months' pay for each year s erved. He also submitted that the appellant failed to produce sufficient evidence, that could have shown that the addressees 1n the letters relied on by the court below were employees of the respondent. 40. We were urged to dismiss the appeal with costs and allow the cross-appeal. CONSIDERATION OF THE MATTER BY THIS COURT AND VERDICT 41. We have considered the evidence on record, the heads of argument filed by Counsel for the parties, their oral submissions and the authorities to which we were referred. It is common cause that the respondent had no pension scheme for its employees until 1st May, 2013 , when the Saturnia Regna Pension Scheme was introduced. On 16th April, 2014, the r espondent wrote to the appellants advising that following the appellant's option to become members of the pension scheme, the -J18- respondent would reconcile their previous years of service and pay them into the pension fund. 42. This appeal emanates from the decision of the court below throwing out the appellants' claim relating to their past benefits from the period when the respondent had no pension scheme. The common question that runs through the first, second and third grounds of appeal, which grounds we shall determine together, is whether the past benefits were supposed to be reconciled and paid into the pension fund when they attain their respective retirement age of fifty-five years or at the point when they separated from the respondent. 43. The respondent's argument in the court below was that its employees were advised at the time the pension scheme was introduced, that their past benefits would be reconciled and paid into the pension fund at the time the benefits would become due, which was at retirement. The court, after analyzing the evidence, opined that for past benefits to be reconciled and paid into the pension scheme, an employee ought to have reached fifty-five years and must have worked for the respondent for a continuous period of ten years. It held that the appellants did not fulfil this condition and were not entitled to the claim. • -J19- 44. In our view, the court below fell into grave error because the requirement that the appellants ought to have reached fifty-five years in order for their past benefits to be reconciled and paid into the pension fund, amounted to a deferral of the appellants' past benefits which is illegal. Deferral of benefits was long abolished by the law and it should not have been upheld by the court below. In the case of Richard H. Chama & 213 others vs National Pension Scheme Authority, Staff Pension Scheme & 7 others5, the Supreme Court held that: "It is clear from a reading of section 18(1)(/) that an employee who leaves his employer or changes jobs and stops paying into the pension does not have to leave it where it is. He or she is enabled access to his or her full benefits. He or she is entitled, in terms of the provisions of section 18(1)(/), to full portability of his or her accrued benefits at the time he leaves. In other words, the pension does not have to be preserved or deferred till the employee reaches the prescribed retirement age." 45. We are also fortified by the case of Standard Chartered Bank (Z) Plc vs Willard Solomon Nthanga and 402 others6 , where the Court stated the following: "The defendant bank was compelled by laws to give full statements to the plaintiffs of their accrued benefits and pay out on separation. Deferred pension was .. -J20- abolished by law. The question of the plaintiffs voluntarily opting to accept the lower amounts is also unattainable at law." 46. In our con sidered view, the court should have m a de its decision based on th e letter d ated 7 th Au gus t, 201 3, wh ich gives a picture of how the pension s ch em e was intended to b e implem en ted. The r elevant p a rt of the letter read a s follows : "Our understanding of your preferred option is as follows: 1. All eligible staff are to join the new pension scheme from 1s t of May 2013 2. No members' past liability will be transferred to pension scheme at commencement. 3. All eligible employees that Loin the scheme and would have served the company for 10 years at the point of separation will qualify to have their past seroice liability transferred to the scheme and calculated from the day they were engaged to 31st April 2013 prorated plus interest applicable to the funds in the pension scheme 4. All members leaving employment (company) under any mode of exit such as resignation, dismissal having served the company for less than 10 years shall forfeit the accrued benefits under the past seroice but will be entitled only to their contributions into the pension scheme plus interest rate 5. Employees exiting the company under ill health shall have access to their accrued benefits from past seroice liability computed as in (3) above plus their contribution plus interest under the company pension scheme. • -J21- We agree with African Life Assurance Company that this is a feasible and perfectly acceptable way of incepting the proposed pension scheme for the affected staff. We undertake to fully support the process as you roll out the scheme." 47. From the foregoing letter, it is clear that the appellants who had served the respondent for ten years qualified at the point of separation, to have their past service liability transferred to the scheme. These were supposed to be calculated from the day they wer e engaged to 31st April 20 13 prorated, plus interest applicable to the funds in the pension scheme. The above letter is supported by the respondent's letters to the appellants dated 16th April, 20 14. For the foregoing reasons, we allow the first, second and third grounds of appeal. 48 . The first three grounds of appeal having succeeded, the fourth ground of appeal automatically becomes otiose as it was advanced in the alternative. 49. Coming to the cross-appeal, we are of the considered op1n10n t h at it was n ot competently brought before this court because there was no n otice of cross-appeal filed into court in accordance with the court rule s . The respondent's cou nsel casually filed .. -J22- heads of argument containing a sole ground which is purportedly dubbed as a cross-appeal with supporting arguments. 50. The law provides that a respondent who, having been served with a notice of appeal, desires to contend by way of cross-appeal that the decision of the court below was wrong in whole or in part must give notice to that effect, specifying the grounds of his contention. In a case where the respondent desires that the decision of the court below should be varied, or affirmed on grounds other than those relied upon by that court, the notice must specify the precise form of the order which the respondent proposes to ask the court to make. 51. Secondly, when we critically look at the nature of the so called cross-appeal, it is clear to us that the respondent ought to have filed a notice to vary the judgment of the court below and not a cross-appeal. The three circumstances in which a cross-appeal may be filed are: where there are separate and distinct causes of action; where there are several parties, and a respondent seeks to vary the order of the court on a point in which the appellant has no interest but other parties are interested; or where the respondent intends to contest the jurisdiction of the court below. • -J23- 52. This is explained in Order 59/6/1 of the Rules of the Supreme Courtf1J, which provides as follows: "59/6/1 Respondent's notice - There are three kinds of notice that may be given by a respondent: (1} a ' respor,dent's notice by way of cross-appeal funder r.6(1J(cJJ; (2) a respondent's notice to vary, (r.6(1)(a)); or (3) a respondent's notice to affirm, i.e. a notice asking that the order of the court below be affirmed on the grounds other than those relied upon by that court fr. 6(1)(b)). A respondf!!nt's notice by way of cross-appeal shpuld be given onlY, where: (iJ there are separate and distinct causes of action (whether both by the same party, or one by cl~im and another by counterclaim} and the appellant has appealed the decision upon one cause of action and the respondent seeks to appeal upon anot~er cause of action ... ; (ii} where there are several parties, and a respondent seeks to vary the order of the court on a point in which the appellant has no interest but other parties are interested ... ; (iii} where the respondent intends to contest the furisdiction of the court below ... In all other cases the notice to be given is either a respondent's notice to affirm or a respondent's notice to vary, and it must be given whether the appellant has appealed from the whole of the judgment or only part ... In each case the grounds relied upon, and the precise form of order asked for, must be specified. " 53. The respondent's purported cross-appeal does not emanate from any of the circumstances set out in the above provision. We .. -J24- deprecate the casual manner in which the purported cross appeal was brought before this court. The respondent should have ensured that the cross-appeal complied with the provisions of Order 10 Rule 11 of the Court of Appeal Rules2 , as read together with Order 59 Rule 6 of the Rules of the Supreme Court1 . We cannot emphasize enough that the purported cross-appeal was incompetently brought before us and cannot be sustained. 54. We are of the further opinion that even on the merits, the cross appeal was doomed to fail. The respondent contends that the court below solely relied on the fact that the respondent authored the letters of termination for employees of Sancare, to conclude that the respondent had a practice of awarding a three months' salary for each year served. We have examined the said letters which were written to Felix Phiri, Opha Mulila, Tapson Kahenya and Irene Mubita. 55. It is abundantly clear to us that there is no evidence from the record to support the respondent's contention that the four individuals were employees of Sancare. The court below specifically dismissed the respondent's argument that those who were paid a three months' salary were employees of Sancare. The court found that it was evident from the termination letter of Felix Phiri, that he was an employee of the respondent, yet he was paid a three ., -J25- months' salary for each year served. In the case of Wilson Masauso Zulu vs Avondale Housing Project Ltd" , the Supreme Court held that: "Before this court can reverse findings of fact made by a trial judge, we would have to be satisfied that the findings in question were either perverse or made in the absence of any relevant evidence or upon a misapprehension of the facts or that they were findings which, on a proper view of the evidence, no trial court acting correctly could reasonably make." The finding of the court below is supported by the evidence on record and we find no basis on which it can be overturned by this court. The long and short of what we have stated is that the respondent's purported cross-appeal was not only incompetently brought before us, it also lacks merit. We accordingly dismiss it. 56. We now turn to the argument advanced by the respondent's counsel that the court below should not have ordered costs against the respondent because this matter emanated from the IRD . This issue was not raised in the cross-appeal or the heads arguments filed by the parties, but we have taken the liberty to address it because we feel it is important for us to set the record straight. Mr. Ngisi referred to Rule 44 (1) of the Industrial and Labour Relations Rules3, which provides that: -J26- "Where it appears to the Court that any person has been guilty of unreasonable delay, or of taking improper, vexations or unnecessary steps in any proceedings, or of other unreasonable conduct, the Court may make an order for costs or expenses against him." 57. We have no trepidation in agreeing with counsel for the respondent, that the effect of Rule 44 (1) is that the IRD can only make an order for costs against a litigant if he has been guilty of unreasonable delay, or taking improper, vexatious or unnecessary steps in the proceedings, or of other unreasonable conduct. This principle was espoused in a plethora of authorities such as Engen Petroleum Zambia Limited vs Willis Muhanga and Jeromy Lumba8 . 58. The Supreme Court in Zambia Telecommunications Company Limited vs Mirriam Shabwanga & 5 others9 , explained the rationale behind Rule 44(1) of the Industrial and Labour Relations Rules and why the Rule restricts the discretion of the IRD in the award of costs to instances specified in the provision. The court held that the IRD was established as an employment tribunal, and the rules were intended to guard against the abuse of the court process through unreasonable delays, unnecessary or vexatious applications while ensuring that genuine litigants are not discouraged from asserting -J27- their rights on account of cumbersome rules of evidence and litigation costs to which they could be condemned. 59 . There is no evidence in this case that the respondent was guilty of unreasonable delay; or taking improper, vexatious or unnecessary steps in the proceedings; or indeed of other unreasonable conduct as stipulated in Rule 44(1) of the Industrial and Labour Relations Rules. It was therefore a total misdirection on the part of the Court below to have awarded costs against the respondent. We set aside its award of costs to the appellants. 60. The corollary of the foregoing is that this appeal has merit and we and it is accordingly dismissed J HASHI COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE P. C. M . NGULUBE COURT OF APPEAL JUDGE