Chilanga Cement PLC v Lushinga (Appeal 93 of 2002) [2003] ZMSC 14 (15 November 2003)

IN THE SUPREME COURT FOR ZAMBIA (cid:9) APPEAL NO. 93/2002 HOLDEN AT LUSAKA [CIVIL JURISDICTION] BETWEEN: CHILANGA CEMENT PLC APPELLANT AND BALDWIN LUSHINGA RESPONDENT Coram: (cid:9) Sakala 0, Mambilima and Silomba JJS on le October 2002 and 15th November, 2003. For the Appellant - (cid:9) Mr. N. Nchito of MNB For the Respondent - (cid:9) Mr. E. C. Lungu of Andreya Masiye and Company JUDGMENT Mambilima 35, delivered the Judgment of the Court. Authorities referred to: (1) (cid:9) Bank of Zambia vs Kasonde (1995-97) ZLR 238 This is an appeal against the decision of the High Court, sitting at Lusaka, which found that the dismissal of the Respondent by the Appellant was wrongful. The Respondent had taken out a Writ of Summons in the Court below, seeking (cid:9) (cid:9) damages for wrongful termination of employment in form of long service benefits and pension. The Respondent's case was that up to the time of his dismissal, he had worked for the Appellant Company for 21 years. On 23rd June, 1999, he was charged with gross negligence of duty. It was alleged that on this day, the Respondent had passed on two cheques for the purchase of cement by a customer, to the cashier without endorsing at the back. He was alleged to have delivered the said cement to the customer before the two cheques were honoured by the Bank. The cheques in question were brought by the wife of a regular customer, by the name of Crydon Sichali, for the purchase of 150 tons of block mate cement. They were blank and Mrs. Sichali filled them in after ascertaining the cost of the cement. The procedure obtaining at the Appellant's factory was that for cheque transactions, all cheques had first to be endorsed at the back by the Chief Marketing Manager, or the Marketing Manager, or the Sales Manager or the Credit Controller or the Chief Accountant. In their absence, the Respondent had authority to endorse the cheques. On the date in question, the Respondent sent Mrs. Sitali to have the cheques filled in by the Controller, a Mr. Kasote. Mrs. Sitali did not return to the Respondent. The Respondent only saw the receipts the following day and he handed them over to the Sales Clerk to raise Control Sheets. The customer later took delivery of the cement on the instructions of the Sales Manager, a Mr. Mwape. The cheques were later dishonoured. This led to the suspension of the Respondent together with the cashier and two Sales Clerks. He was charged with gross negligence, which he denied. The payment was made good later but the Respondent was, however, dismissed. The Cashier and the two Clerks were cleared and later reinstated. The Appellant, in its defence, called evidence to show that the Respondent took the cheques in question to Regina Mulindeti, (DW1) an Accounts Clerk, contrary to the normal procedure. (cid:9) The cheques were accompanied by a payment authority slip. The payment slip was an authority for DW1 to receipt the cheques. The Appellant contended that the Respondent should not have taken the cheques to DW1. DW1, however, accepted the cheques and issued receipts. DW1 told the Court below that she thought the Respondent had endorsed the cheques since there was no one else to endorse them apart from the Respondent. For her part, DW1 was charged with negligence and demoted. When the two cheques were dishonoured, investigations were launched and these revealed that the Respondent was negligent. He was charged with gross negligence for having passed on the two cheques without endorsing them at the back and for having delivered the cement to the customer before the cheques were honoured. After evaluating the evidence on record, the learned trial Judge found that the Appellant and the Respondent, gave a different version of the events of 29th April 1999. He found as a fact that the Respondent saw the cheques in question and that he ought to have endorsed them at the back, which he did not do. The trial Judge did not believe the testimony of the Respondent, that the only part he played in the transaction, was to tell Mrs. Sichali the cost of the cement. He found a "ring of truth" in the evidence of DW1 because it was supported by the contents of the documents in the agreed bundle. The learned trial Judge found, on a balance of probability, that both the Respondent and DW1 were negligent in that they did not bother to check whether the cheques were endorsed. He found that after instructing one of the officers to raise payment slips, the Respondent then passed on the documents, as well as the unendorsed cheques to DW1 to receipt them. The trial Judge, however, found that it was the Sales Manager and not the Respondent who gave instructions to deliver the cement. As to whether the Respondent was guilty of gross negligence arising from his actions in this case, the learned trial Judge considered the wording of Clause 2.5 in the Appellant's Disciplinary Code and Grievance Procedure. It reads: "2.5 Gross negligence where an employee fails to carry a normal part of his job which leads to loss of revenue, production sales or any other loss of efficiency or profitability of the company." The learned trial Judge found that on this definition, to amount to gross negligence, there must be loss to the Defendant. He concluded that since the bounced cheques were made good, there was no loss to the Appellant and as such, the Respondent was not guilty of gross negligence. He went on to state that like Regina Mulindeti, the Respondent was only guilty of negligence as defined in clause 2.2 which states: "2.2 Negligence. Any employee who fails to carry out normal part of his job regardless of the consequences shall be deemed to be negligent." The punishment for a first offender is a written or verbal warning and not dismissal, as was meted out on the Respondent. On this premise, the learned trial Judge found that the Respondent's dismissal was wrongful and ordered that he be paid damages in form of long service benefits and pension, to be assessed by the Deputy Registrar, and once assessed, the damages are to be paid with interest at the rate of 25% per annum from the date of the Writ up to the date of Judgment and thereafter, at the current Bank of Zambia lending rate. In his Memorandum of appeal, the Appellant advanced four grounds of appeal but at the hearing, only three grounds were argued, namely: 1. That the Honourable Judge erred both in law and fact when he held that the Respondent was not guilty of gross negligence after he had already ruled that on the balance of probabilities the Appellant had established that the Respondent had passed on an unendorsed cheques to the cashier which cheques later bounced. 2. That the Honourable Judge in the Court below erred both in law and fact when he held that the Definition of gross negligence in the Appellants Disciplinary Code and Grievance Procedure required that loss to the company be established and that as the amount on the bounced cheque was later recovered the loss by the company was not established. 4. That the Honourable Judge erred in law when he granted the Respondent long term service benefits and pension as damages. In his written heads of argument which were augmented with oral submissions, Mr. Nchito submitted, in support of the first ground of appeal, that the conclusion by the trial Judge in the Court below was unjustified because both the evidence and the facts showed that the Respondent was grossly negligent. He argued, while referring us to portions of the Judgment on page 10, that the Judge found, on a balance of probability that the Respondent passed on un endorsed cheques to Regina Mulindeti. According to Mr. Nchito, this was a cash sale which ended up as a credit sale and the company lost the use of the money when the cheques bounced. He submitted further, on the authority of our decision in the case of Bank of Zambia vs Kasonde (1) that the Appellant discharged its burden and proved that the Respondent was negligent. The only reasonable conclusion that the Court could have drawn was that the Respondent was grossly negligent. On the second ground of appeal, Mr. Nchito referred us to clause 2.5 of the Disciplinary Code which defines negligence. He submitted that from the definition outlined in this clause, it was clear that the question of the loss haying been remedied later does not absolve the erring employee from being negligent. He stated further, that by stating that the Respondent should have been asked to follow up the matter of payment and should only have been charged with gross negligence if the customer had disappeared with the money, the learned trial Judge created an onerous duty on the Appellant which was not supported by evidence. He went on to state that, having omitted to perform a normal part of employment, the Respondent was grossly negligent, leading the Appellant to incur a loss which was later remedied. On the last ground of appeal, Mr. Nchito argued that granting the Respondent his long service and pension was tantamount to re-instatement. He submitted, relying on the case of Bank of Zambia vs Kasonde (1), that reinstatement should only be ordered where there are special circumstances. The normal damages for dismissal are the period of the notice which the Respondent would have been entitled to. Mr. Lungu, in his reply argued grounds one and two together. He submitted that the learned trial Judge was on firm ground to hold, as he did, that the Respondent was not guilty of gross negligence. He submitted further that The (cid:9) re was no evidence of loss adduced in the Court below and it is not known for how long the cheque was bounced before it was made good. On the argument that this was meant to be a cash transaction, Mr. Lungu replied that this was a cheque transaction. He argued that even if the cheque had been endorsed, it would not have changed anything. The cheque would have bounced. He went on to state that the request by the Company for cheques to be endorsed was not meant to ensure that the customer has money. On the last ground of appeal, Mr. Lungu referred us to the Respondent's statement of claim filed in the Court below. He submitted that the Respondent specifically pleaded for the damages which he was awarded. According to Mr. Lungu, the Court was on firm ground to have awarded the Respondent the claimed damages. He argued further, that it was wrong to bring in the case of Bank of Zambia vs Kasonde(1). He urged us to dismiss the whole appeal with costs. We have considered, the submissions by Counsel, the Judgment of the lower Court and the issues raised. In our view, the first and second grounds of appeal call for the interpretation of the relevant clauses in the Appellant's Disciplinary Code and Grievance Procedure. It is common cause that the Respondent was charged with gross negligence, and that the prescribed penalty for an employee found guilty of this offence is dismissal. According to clause 2.5, an employee is guilty of gross negligence if the employee fails to carry out a normal part of his job and this failure leads to "loss of revenue, production sales or any other loss..." If an employee fails to carry out his normal duty, he is, regardless of the consequences, "deemed to be negligent". The learned trial Judge made a finding that the Respondent failed to carry out a normal part of his job by passing on unendorsed cheques. It is on record that the cheques in question, were made good after they had bounced. The question of loss to the company did not, therefore, arise. Although Mr. Nchito has put up a spirited argument that the Appellant was prevented from using this money since this was meant to be a cash transaction, we agree with Mr. Lungu that it was a cheque transaction and the Appellant was to get its money after the cheque was cleared. Indeed, there is no evidence as to how long after the cheque was dishonoured was it made good. In our view, it was up to the Appellant to show what loss it suffered, if any. (cid:9) We cannot fault the learned trial Judge, therefore, for having found that the Appellant suffered no loss and consequently, wrongly charged the Respondent with gross negligence. On the facts which were before the lower Court, the Respondent was only guilty of negligence. It is common cause that the penalty for negligence on a first offender is verbal or written warning and not summary dismissal. In this case, the Respondent was dismissed when he ought to have been given a warning. The learned trial Judge was on firm ground, to have found that he Respondent was . wrongfully dismissed. The first and second grounds of appeal are therefore dismissed. Coming to the third ground of appeal, we have perused through the Writ of Summons, and the Statement of Claim filed in the Court below. The Respondent claimed damages for wrongful termination of employment in form of long service benefits and pension. It goes without saying that had he not been wrongfully dismissed, the Respondent would have been entitled to long service benefits and pension according to his conditions of service. The Appellant's wrongful termination of his employment cannot prejudice the Respondent's entitlement to rights which had accrued to him by virtue of his 21 years service with the Appellant Company. We agree with the learned trial Judge that the Appellant acted in a high handed manner. We also find no merit in the third ground of appeal. From the foregoing, the whole appeal stands dismissed. The Respondent shall have his costs in this Court and in the Court below, to be taxed in default of agreement. E. L. Sakala CHIEF JUSTICE I. C. Mambilima (cid:9) JUDGE SUPREME COURT (cid:9) S. S. Silomba JUDGE SUPREME COURT 10