Brighton Mwaipopo v Zesco Limited (2022 /HPIR/ 667) [2023] ZMHC 83 (26 October 2023)

.. ... IN THE HIGH COURT FOR ZAMBIA 2022 /HPIR/ 667 INDUSTRIAL RELATIONS DIVISION HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN: BRIGHTON MWAIPOPO ,,,-, / I SKA COMPLAINANT AND ZESCO LIMITED Z 6 OCT 2023 SEAL RESPONDENT CORAM: HON. E. MWANSA Esq JUDGE APPEARANCES: For the Complainant : Mr. C. Chungu - Messrs Nsapato and Company For the Respondent : Mr. K. Mweemba and Ms. B. Mapani - In-House Counsel JUDGMENT Legislation referred to: 1. Industrial and Labour Relations Act Chapter 269 of the Laws of Zambia. 2 . Employment Code Act No. 3 of 2019. ... Cases referred to: 1. Konkola Copper Mines Plc -V-Aaron Chimfwembe and Kingstone Simbayi SCZ/8/278/2013 2. 3. 4. Swarp Spining Mills Plc -V- Chileshe & Others (2002) Z. R 23 Chilanga Cement PLC -V- Kasote Singogo No. 13 of 2009 Joseph Daniel Chimtofwa-V- Ndola Lime SCZ No. 28 of 1990 Authoritative Texts 1. Michael Jefferson, Principles of Employment Law, (2000) 4th Edition, Cavendish Publishing Limited, Sydney, Australia. 1. INTRODUCTION 1.1 This action was commenced by Brighton Mwaipopo, the Complainant. It was commenced by way of a Notice of Complaint accompanied by an Affidavit pursuant to section 85(4) rule 9 of the Industrial and Labour Relations Act Chapter 269 of the Laws of Zambia. 1.2 The Complainant filed his Notice of Complaint and accompanying Affidavit on 30th August 2022 which was later superceded by an Amended Affidavit verifying Notice of Complaint dated 28th November, 2023. The Respondents on the other hand filed their Answer and Affidavit on 20th October 2022. The Complainant's Reply to Answer and Affidavit was filed on 28th November 2022. 1.3 By way of a Consent Judgment, the parties resolved the following: Jl .. 1.3.1 Firstly, that the Respondent pays the Complainant the difference in pay on his total redundancy package. Secondly, that the Complainant be compensated his underpaid salaries and that he be paid in lieu of notice. Thirdly, that h e was to be paid full outstanding salaries up until the redundancy package is paid. 1.3.2 Furthermore, that this court would only adjudicate th e issue of ::, ··· whether the termination of the Complainant's employment by redundancy was wrongful, unfair and unlawful. Additionally, the parties agreed that this court should determine the issue of whether the award of 42 months' salary as damages for wrongful, unfair and unlawful termination of employment contract by redundancy should be given. 1.4 The grounds set out in the Notice of Complaint were: 1.4.1 The Complainant was employed as Graduate Engineer - Southern division from 7 th October, 2005. 1.4.2 On 19th November 20 14, the Complainant was confirmed as Chief Engineer Construction south from 8 th October, 2014. 1.4.3 The Complainant on 9 th January, 20 17 was transferred from the Northern division to Lusaka division in the same capacity as Chief Engineer. J2 ',- 1.4.4 On 7 th January, 2022, the Complainant was promoted to the position of Senior Manager - Construction south subject to 3 months' probation. 1.4.5 The Complainant was confirmed in the new position because the Respondent did not issue any notice to the contrary. 1.4.6 The Respondent did not pay the Complainant his full salary from April 2022. 1.4.7 On 15th June 2022, the Respondent terminated the Complainant's employment on grounds of redundancy per clause 5 .25.10 of their conditions without consulting him or following the redundancy procedure. 1.4.8 The Respondent appointed Mr. Edward Mutumba to the position of Senior Manager - Construction south. 1.4. 9 The Respondent's conduct was wrongful, unfair and unlawful and needs to be atoned for in damages. 1.5 The Complainant seeks the following reliefs: 1.5.1 A declaration that the Complainant was confirmed as Senior Manager-Construction sou th. J3 1.5.2 A declaration that the termination by redundancy was wrongful, unfair and unlawful. 1.5.3 Payment of Complainant's salaries from April to June 2022. 1.5.4 42 months' salary as damages for wrongful, unfair and unlawful termination. 1.5.5 Accrued leave days. 1.5.6 Leave days. 2 .0 2.1 :, COMPLAINANT'S EVIDENCE In his affidavit, the Complainant averred that he joined the Respondent Company in 2005 and was promoted several times up until he ascended to the position of Chief Engineer - Construction South on 7 th April, 2014. Later, on 7 t h January 2022 he was further promoted to the position of Senior Manager - Construction South and his gross salary increased to level ML3 as a result. 2.2 The Complainant further gave evidence that despite not receiving a formal confirmation letter, he had a successful performance appraisal. He added that the Respondent's conditions of service for non-represented staff ("conditions of service") which are exhibited and marked "BM 27" in the Complainant's Amended J4 that he has been unable to find employment and has suffered lack of income. Trial Hearing 2 .6 During trial, the Complainant referred to hereinafter as CWl augmented his affidavit evidence by adding that with regard to his termination, his line director Mr. Habeene, who had appraised him, was equally surprised at the Respondent Company's decision to terminate him. 2 .7 In cross-examination, CW 1 admitted to having no documentary evidence showing that he had hypertension or that he had suffered from a mental or psychological condition. He also acknowledged the redundancy conditions set out in clause 5.25.10 of the Respondent Company's conditions of service for non-represented employees. The Complainant stated however that the above conditions of service do not supercede the law. 2.8 Furthermore, he indicated that he could not produce evidence of the appraisal process he underwent even though he insisted it was done by his line director Mr. Habeene. J6 3.0 RESPONDENT'S EVIDENCE 3.1 In the Answer, the Respondent denied the fact that CWl was confirmed to the position of Senior Manager - Construction South as he did not transition to that position. They added that CWl was properly declared redundant in accordance with the law by way of payment in lieu of notice. 3.2 l In the Affidavit in Support of Answer, deposed to by a Mr. Derrick Ngubai whose designation was Principal Human Capital officer for the Respondent Company. The deponent confirmed the position that CWl was on 7 th January 2022 promoted to the position of Senior Manager - Construction South subject to a three month probation period. The deponent also stated that CW 1 's probation was unsuccessful as such his acting allowance fell off and that is why his salary reverted to that of Chief Engineer - Construction South. 3.2 Furthermore, the deponent confirmed that on 15th June 2022 CWl was declared redundant as a result of re-organisation. The deponent also told this court that Mr. Edward Mutumba was not appointed to CWl 's role because CWl was never confirmed as Senior Manager - Construction South. 3.3 i Additionally, it was the deponent's evidence that CWl was paid 3 months' salary in lieu of notice at termination. He added that the redundancy payment was based on CWl's salary as Chief J7 Engineer -Construction South a position he held at separation. This salary was indicated on CWl 's last payslip exhibited and marked "DN 2" in the Respondent's Affidavit in Support of Answer. Trial Hearing 3.4 At the trial hearing, the Respondent called two witnesses namely; Derrick Ngubai their Principal Human Capital officer and Musiyani Silwelwa their Senior Manager employee relations hereinafter referred to as RW 1 and RW2 respectively. 3 .5 RWl 's testimony, in addition to his affidavit evidence, was that redundancy for non-represented members of staff was governed by clause 5.25. 10 of the conditions of service. He averred that the Respondent Company sensitises all employees they intend to subject to the redundancy process. , .6 In the case of CWl, it was RWl's evidence that the Respondent Company terminated CWl with immediate effect and paid him three months' salary in lieu of notice. He also told this court that CW 1 was also given redundancy pay at the rate prescribed in the conditions of service. 3. 7 Furthermore, RWl gave evidence that after being declared redundant, CWl wrote back to the Respondent expressing his views regarding underpayments and his bank loan. RWl testified J8 that the Respondent Company resolved the underpayment issues and in terms of the bank loan, they were only involved to the extent that they facilitated the process of CWl obtaining it. 3. 8 RWl also testified that the reason the Respondent declared CWl redundant was because they embarked on a labour optimisation process in order to be efficient. This process according to him required the reduction of labour in some areas. RWl insisted that CWl was not replaced by Mr. Edward Mutumba as Senior Manager - Construction South but what happened was a realignment of human resources to ensure continuity of operations. 3.9 During cross-examination, RWl testified and admitted that CWl was not given an opportunity to be heard during the redundancy process. He also admitted that there was no evidence that CWl could not contribute to the quality of service of the Respondent. RWl further confirmed that CWl 's last position was Senior Manager - Construction South. 3.10 It was RWl 's further testimony that CWl was replaced in the position of Senior Manager - Construction South by Mr. Edward Mutumba although the former was acting in that position. Despite acknowledging that clause 5.14 of the Respondent's conditions provides that employees shall be deemed confirmed after probationary period expires, if the Respondent Company J9 does not communicate, RWl maintained that CWl was still Chief Engineer - Construction South at separation. 3.11 RW 1 added that CW 1 could be replaced if there was a change of mind on the part of the Respondent Company however he stated that his position had become void as a result of the redundancy. RW 1 also told this court that decisions pertaining to reorganisation are made by senior management and the board of directors. He admitted that he did not know the selection criteria that led to CWl being selected for redundancy. 3.12 RW2 Musyani Siwelwa testified that in December 2021 the Respondent received a report from an organisation called EMRC which did a cost of service study in relation to similar organisations. According to him, it was found that the cost of running the Respondent Company was significantly higher because of administrative costs as a result of overstaffing. 3.13 In his further testimony, RW2 stated as a result of the cost of service, the Respondent Company started restructuring from around November 2021. He told the court that under the construction department CWl was one of those identified at senior management level for retrenchment and was replaced by Mr. Edward Mutumba. JlO 3.14 The decision to replace CWl with Mr. Edward Mutumba was, according to RW2, based mainly on who served the Respondent Company longer and that Mr. Mutumba had an M. Sc. in engineering when CW 1 had an MBA. He added that Mr. Mutumba was appointed mentor and trainer and also held the position of chief engineer before CW 1. 3. is Furthermore, RW2 testified that the Respondent Company did not need to consult CWl because what they carried out was a retrenchment exercise and not redundancy. He stated that they also did not have anywhere else to place CWl. It was also RW2's evidence that two months after separating from the Respondent Company, CWl was employed by an engineering consultancy firm called Better Consulting Engineers. This information was t obtained from CWl 's Linkedln profile. 3.16 During cross-examination, RW2 confirmed that the Respondent's Answer in paragraph four states that CW 1 was declared redundant. He also stated that the 2019 Employment Code did not provide for retrenchment. 3.17 RW2 went on to confirm that the Respondent Company appointed Mr. Edward Mutumba as Senior Manager - Construction South effective 6 th April 2022 and he was confirmed on the 18th of August 2022 per page 27 of the Respondent's Notice to Produce. He also told this court that he had no evidence J 11 to show that Mr. Mutumba was construction senior manager for both north and south. 3.18 Additionally, RW2 testified that there was no evidence before court to show that the Respondent Company had a human resource optimisation program. He also h ad no documentary evidence to show that CWl was an inefficient employee. RW2 further admitted that the EMRC prepared their report for ERB and not the Respondent Company. 3 . 19 RW2 testified that they decided which positions were not productive even though there was no evidence of a developed selection criteria. He insisted that h uman resource costs had a bearing on adjustment of tariffs. 3 .20 In re-examination, RW2 clarified that the reason Mr. Mutumba was appointed in the southern region was because it was commercially bigger than the north as it requires more connections. He also explained that they only wanted to remain with one senior manager in the construction department. With regard to the ERB report, RW2 testified that the Respondent Company was told by ERB to accelerate the process of streamlining costs. J12 4 .0 4 .1 DECISION OF THE COURT Findings of Fact Having reviewed the all the evidence submitted by both parties as well as the entire record, I now make the following findings of fact: 4.1.1 First, CW1 was an employee of the Respondent Company and was appointed Senior Manager - Construction South on 7 th January 2022 albeit in an acting capacity but he did not receive a formal confirmation letter from the Respondent Company. 4.1.2 Second, by way of a notice of termination from the Managing Director dated 15th June 2022, CW1 was terminated with immediate effect under clause 5.25.10 of the Respondent Company's conditions of service for non-represented staff. 4 . 1.2 Third, Mr. Edward Mutumba was appointed to the position of Senior Manager - Construction South effective 6 th April 2022 and was confirmed on 18th August 2022 . 4 .2 Issues for Determination I have considered the evidence and the submissions filed by both parties' counsel. I shall not deal with the issues that have already been canvassed and addressed in the Consent Order but shall restrict myself to those that the parties themselves have agreed should be adjudicated upon. In light of this, the issues for determination are as follows: J13 •• • would not have been any written report regarding their poor performance. However, the employee due for confirmation shall be communicated in writing within 45 calendar days after the end of the probationary period. (Emphasis mine). 4.3.2 The import of clause 5.14 above in the circumstances of the present case is therefore that CWl having completed the 3 months' probation period in the new position should have been subjected to a probationary performance assessment. The resulting probationary report ou gh t to have been prepared by his supervisor and confirmed by management. There is no evidence however to suggest that any of this was done by the Respondent Company. What is clear however is that after 3 months of probation there was silence on the part of the employer thus CWl was not overtly confirmed. In the absence of a written adverse performance report, the n ecessary implication is that he was deemed to have been confirmed per the clause cited above. And I so declare . 4 .3 .3 On the issue of whether the termination of CW 1 was a redundancy or retrenchment. From the evidence, the contention that CW 1 was retrenched and not declared redundant em erged during the testimony of RW2. This came as a surprise because Jl5 l . . from the outset the Respondent in paragraph 4 of their Answer stated that they properly declared CWl redundant by payment in lieu of notice. 4.3.4 This position was re-echoed in RWl 's evidence. He earlier acknowledged that the redundancy was as a result of reorganisation necessitated by the labour optimisation programme. Furthermore, the Respondent Company terminated CWl using clause 5.25.10 with the subheading redundancy and sub clauses dealing with compensation and notice of redundancy. It is my view therefore that based on the evidence on record augmented by the Respondent Company's witnesses' own acknowledgement, the mode of terminating CWl was through redundancy. 4.3.5 At this juncture, the decisive question for consideration is whether terminating CW 1 by way of redundancy was wrongful, unfair and unlawful. The decision to declare CWl redundant according RW2 stemmed from a report done by the Energy Market and Regulatory Consultants Limited ("EMRC") for the Energy Regulation Board ("ERB") dated 10th December 2021 exhibited on page 31 of the Respondent's Notice to Produce. 4.3.6 According to RW2's testimony, the Respondent Company had neither a document to show that they embarked upon a labour optimisation process nor a board resolution revealing that this J16 L • ' position was taken by the company. The record also does not show any evidence that the Respondent Company had developed a selection criteria to demonstrate how they ultimately came to the decision that CWl ought to have been declared redundant. 4.3.7 Furthermore, CWl was terminated with immediate effect and he was not consulted or given an opportunity to be heard by the Respondent Company on the redundancy process. I refer to section 55 (2) (a) and (b) of the Employment Code Act which provides as follows: "Where an employer intends to terminate a contract of employment by reason of redundancy, the employer shall - (a) give notice of not less than thirty days to the employee or a representative of the employee of the impending redundancy and inform the representative on the number of employees, if more than one to be affected and the period within which the termination is intended to be carried out; (b) afford the employee or representative of the employees an opportunity to consult on the measures Jl7 . • to be taken to minimise the termination and the adverse effects on the employee." 4 .3 .8 The upshot of this prov1s10n 1s that an employee selected for termination of employment by reason of redundancy is supposed to be given not less than 30 days' notice of this intended termination. The employee also needs to be consulted on measures to be taken to minimise the adverse effects of the termination on the employee. In casu, the Respondent Company in direct contravention of the law terminated CWl with immediate effect. 4.3.9 Additionally, CWl 's position of Senior Manager - Construction South was not abolished or voided because it was later filled by Mr. Edward Mutumba. The Complainant's counsel referred this court to section 57 of the Employment Code which provides that: "Where, within nine months from the date when the notice of termination of employment under section 55 takes effect, the circumstances leading to the redundancy of an employee have changed and an employer w ishes to fill a vacancy occasioned by that redundancy, the employer shall offer a contract of J18 employment, in respect of the vacancy, to the employee previously dee la red redundant, before considering any other applicant. 4.3.10 CWl was not afforded this right of first refusal as envisaged by section 57 above. The job that he previou sly held was instead offered to Mr. Edward Mutumba who was appointed effective 6 th April 2022 and confirmed on the 18th of August 2022. The effective date being April was actually before the termination of CW 1. This fact highlights the premeditated manner in wh ich CW l's termination was done and that the process lacked any sincerity. i..3.11 On the strength of the above, I therefore find that the provisions of section 55(2) (a) and (b) as well as section 57 of the Employment Code were not complied with by the Respondent Company in terminating the CW l 's employment. The failure to comply with the law made the termination unlawful and unfair. i..3 . 12 In addition, the Respondent Company failed to avail any evidence to support the assertion that currently they only have one senior manager in the construction department or that Mr. Mutumba is heading both the south and north division because his appointment letter indicates "Construction South". The failure to prove that there is only one senior manager position remaining means that CW 1 was merely replaced. Jl9 i..3.13 Furthermore, in addition to the absence of a board resolution supporting the managing director's claims of a re-organisation per the letter of termination, the purported redundancy was unlawful owing to the fact that that there is no evidence that there was a selection criteria for who would be declared redundant. Also, there is no evidence that the Respondent Company was actually downscaling because CW 1 was replaced. Further, CW 1 has adduced evidence that he was an excellent employee without performance or efficiency issues which the Respondent Company has failed to rebut. i..3 . 14 In the circumstances, it is my firm view that under the guise of redundancy but in total disregard of the law, the Respondent Company terminated the Complainant. The termination was thus mala fide and the true intention was to get rid of CWl the Complainant . . 15 With respect to the contention that CWl was wrongfully terminated, 'wrongful' refers to a termination that breaches a term embodied in a contract of employment. According to Michael Jefferson, author of Principles of Employment Law, (2000) 4th Edit ion, 'wrongful' dismissal looks to the form of the dismissal. It refers to a situation where an employer dismisses an employee without notice or with insufficient notice. J20 , I . . i..3.16 Against this backdrop, the Respondent Company complied with clause 5.25.10 (b) which provides for a 3 months' notice of redundancy or payment of 3 mon ths' basic pay in lieu of notice. This clause providing for payment in lieu of notice in cases of redundancy abrogates section 55(2) of the Employment Code which prescribes what an employer must do if they intend to terminate an employee by reason of redundancy. On account of this, I find that the wrongful termination claim lacks merit because there was no breach of con tractual terms or conditions of employment. What the Respondent Company breached, however, was the Employment Code Act. i..3 . 17 Having found that CWl was unlawfully and unfairly terminated, I now deal with the quantum of damages to be awarded to him. The claim is for 42 months as damages for unlawful and unfair termination of employment contract by redundancy. The Supreme Court guided in Swarp Spinning Mills -V- Chileshe & Others that: "( 1) The normal measure of damages usually relates to the applicable contractual length of notice or the reasonable notice where the contract is silent. (2) The normal measure is departed from where the termination may have been inflicted i n a traumatic fashion which J21 • .. -- • • "' ~ causes undue distress or mental suffering normally, in unlawful termination, the measure of damages is the notice period unless there are grounds or circumstances warranting damages beyond the normal measu re of damages". J,':l , 18 There are a plethora of authorities speaking to the general rule regarding damages for wrongful and unlawful termination being equivalent to the notice period. In the case of Konkola Copper Mines PLC-V- Aaron Chimfwembe and Kingstone Simbayiit was held that only in deserving cases where it is proved that there are exceptional circumstances that the court will depart from the ordinary measure of damages, such as where aggravating circumstances are proved as was found in Chi langa Cement PLC - V- Kasote Singogo where the employee's ill treatment was considered. J.3 . 19 I must mention that the record shows that the Complainant was paid 3 months' salary in lieu of notice, full redundancy package and full outstanding salaries. I further do not find any evidence of mental trauma, stress or hypertension, as claimed, that the Complainant may have suffered as a result of the termination by redundancy. No evidence of this was advanced to warrant a steep gradient of departure from the normal measure of damages that is beyond the notice period. J22 i..3.20 However, an award of enhanced damages in casu shall be granted. The justification is that such an award is meant to ameliorate the inconvenience and distress very likely occasioned to and suffered by the employee as a result of the abrupt loss of employment as well as the blatant disregard of the law by the employer. Additionally, I have considered the Complainant's age, skills and the job market in the current state of the economy where . J opportunities are far and few for a person in his position. Despite the Complainant being a consultant, he applied for employment and was not successful. A case in point is Chimtofwa -V- Ndola Lime referred to us by the Complainant's counsel where the Supreme Court was alive to the state of opportunities in the job 5.0 5.1 market. CONCLUSION In conclusion, the Complainant has proved his claims for unlawful and unfair termination on a balance of probabilities. I thus find and hold that the Complainant's employment was unlawfully and unfairly terminated under the guise of redundancy . I accordingly award the Complainant (06) six months' salary, at the rate applicable to him as Senior Manager - Construction South, as compensation for unlawful and unfair termination by way of redundancy. J 2 3 ,. 5.2 The awards to be subjected to the Bank of Zambia Short Term Deposit Rate, from date of Notice of Complaint to Judgment and thereafter at 6% to date of complete settlement. 5.3 I make no order for costs. 5.4 Parties are informed of their right of appeal. Leave to Appeal is granted as of right. Delivered this ......... day of ............................... ,2023 .................................•........ E. MWANSA HIGH COURT JUDG J24