Darius Chpasha and Ors v Swarp Spinning Mills PLC (Appeal 129 of 2006) [2007] ZMSC 141 (5 September 2007)

IN THE SUPREME COURT OF ZAMBIA Appeal No, 129/2006 HOLDEN AT LUSAKA/NDOLA (Civil Jurisdiction) BETWEEN: DARIUS CHIPASHA & 999 OTHERS Appellant AND SWARP SPINNING MILLS PLC Respondent Coram: Sakala, CJ, Mumba and Chitengi, JSS on 6th March, 2007 and 5th September, 2007. For the Appellants : Mr. Q. K. Mumba of Messrs Quintino M. Kalonde & Company For the Respondent: Mr. K. H. Makala of Messrs Makala & Company JUDGMENT Chitengi, JS, delivered the judgment of the Court. Cases referred to: - 1. Georgina Mutate (T/a S. M. Manufacturers Limited V Zambia National Building Society (2002) ZR 19. 2. Collect V Van Zyl Brothers Limited (1966) ZR 65 This is an appeal and cross appeal against the judgment of the High Court in a case of unlawful dismissal. The appeal is against the dismissal of the Appellants’ claim seeking nullification of their dismissal and damages for wrongful dismissal and inconvenience and terminal benefits for the period the Appellants worked when the Respondent was a Private Limited Company e.t.c. The cross appeal is against the dismissal of the Respondent’s counter claim for loss of business and refusal to award costs by the High Court after it had found that the Appellants went on an illegal strike and cessation of work. The facts of this case, according to the Appellants are that the Appellants were employees of the Respondent. During their employment, their conditions of sendee remained unchanged. Representations to the management on the subject did not yield anything. Since management could not listen to, and, address their requests, the Appellants stopped work in order to force management to address their grievances. However, on 5th July the Respondent dismissed all the Appellants for having gone on an illegal strike. On the counter claim, the Appellants say that they do not owe dhe Respondent any property. Whatever property the appellants were given was recovered from their salaries. In any case, the Respondent was to blame for the loss of business sought in the counter claim. According to the evidence of Mr. Ronal Chanje(DWl), Mr. Christopher Mtonga (DW2 and Mr. John Bwalya (DW3), in the morning of 26th June, 2003 the reporting and knocking off workers joined together at the gate and resolved to stop work. A quick meeting between the management and the Union branch officials resolved that workers resume work. The Union officials spoke to the workers but workers did not resume work. An appeal by the management did not yield any result. The management then informed the Union mother body and the Labour officer. During the afternoon at 15:00 hours, representatives of the Union came and had a meeting with the management and it was resolved that the union appeals to its members to resume work. This was done but the workers did not resume work and even threatened the Union representatives. The stalemate continued the following day despite intervention by representatives from the Labour officer and Office of the Permanent Secretary. The workers were demanding the removal of Mr. Christopher Mtonga, (DW2), the Director of Administration. Seeing that the workers were not prepared to work, the Respondent charged the workers for inciting and taking part in an illegal strike and the charge letters were given to the workers at the gate. These charge letters were also published in the Times of Zambia of 1st and 2nd July, 2003 and on Radio Phoenix, Apart from stating the charges against each worker, the charge letters also called for exculpation. The majority of the workers did not Respondent. - J4- Consequently, on 5th July, 2003 those who did not respond were dismissed in accordance with Clause 13.14 of the Disciplinary Code. However, even those who were dismissed were asked to reapply for their job. According to Mr. John Bwalya, (DW3), the Secretary-General of the Appellants Trade Union, the strike in which the Appellants were involved was illegal. The Respondent’s staff complement was 1231 workers. 879 went on strike leading to the closure of the Respondent’s plant for 14 days. The key staff could not be easily replaced. It would require training. The shut down resulted into huge losses to the Respondent. The Respondent does not owe wages of 5 days. In fact, it is the Appellants who owe the Respond a refund of salaries for 5 days from 25th June, 2003, which they did not work for. The status of the Respondent has never changed. Previously, the Respondent was a Private Company but in 1997 the Respondent became a Public Liability Company in order to increase the shareholders and be able to source funds from European financiers. Employees who had served 10 years and above continued to receive their awards. No new contracts of service wure issued to the employees as the legal status of the Respondent had not changed. - J5 - The learned trial Judge dismissed both the Appellants’ claim and the Respondent’s counter claim in their entirety. On the Appellant’s claim for a declaration to nullify the Appellant’s dismissal, the learned trial Judge found that this relief was not available to the Appellants because they were involved in an illegal strike and their dismissal, therefore, proper. For the same reason, the learned trial Judge dismissed the Appellants’ claim for damages for wrongful dismissal. On the claim for terminal benefits the learned trial Judge held that the status of the Respondent did not change to entitle the Appellants to terminal benefits. The learned trial Judge also dismissed the claim for a declaration that the Appellants be paid leave days and salaries for the period they worked before dismissal saying the evidence showed that the Appellants were paid all their dues. As regards the claim for damages for inconvenience, the learned trial Judge held that the Appellants having been lawfully dismissed, the question of damages for inconvenience did not arise and he dismissed the claim. The learned trial Judge dismissed the counter claim for lack of evidence. Further, the learned trial Judge said that even if the - J6- Respondent had proved his claim for loss of business of USD 985,600, the court would be reluctant to award the claim because it would be difficult, if not impossible, to enforce as the Appellants cannot be expected to pay such an amount. The award would be an academic exercise. The Appellants now appeal to this court against the judgment of the court below dismissing their claim. The Respondent on the other hand has cross-appealed against the dismissal of its counter claim by the court below. When we heard the appeal counsel for the Appellants appeared but counsel for the Respondent did not appear. However, after an explanation from counsel for the Appellant we decided to proceed with the hearing of the appeal, but we let it open for Mr. Makala, learned counsel for the Respondent to file heads of argument if he so wished and these were filed on 9th March, 2007. Learned counsel for the Appellants filed heads of argument on which he wholly relied and made no oral submissions. The Appellants advanced four grounds of appeal. The first ground of appeal is that His Lord ship erred on both points of law and fact when he found that the Appellants were properly dismissed in accordance with the Collective - J7- Agreement and Disciplinary Code of Conduct when in fact the same expired on 30th June, 2003 prior to the Appellants dismissal on 5th July, 2003. The second ground of appeal state that His Lordship erred on both points of law and facts when he found that there was a cessation or withdrawal of labour by the Appellants contrary to the Conditions of service when the same were non existent after expiring on 30th June, 2003. The third ground of appeal is that his Lord ship erred on both points of law and fact when he disregarded the Appellants’ submissions that they were entitled to leave days. In fact, the Respondent admitted this fact in their Defence. The fourth ground of appeal is that His Lord ship further erred on points of law and fact when he found that the Appellants were not entitled to payments for the period they worked for the Respondent when it was a private company despite the overwhelming evidence adduced by the Appellants. In the cross appeal, the Respondent advanced two grounds of appeal. The first ground of the cross-appeal is that having found as a fact that the Appellants herein went on an illegal strike and or cessation of work, the Honourable trial Judge in the court below erred in law when he rejected the - J8- Respondent’s counter claim for damages for loss of business arising out of the work stoppage. The second ground of the cross-appeal is that the Honourable Trial Judge in the court erred in law when he declined to grant the Respondent the costs for the proceedings. In the main appeal, grounds one and two can conveniently be dealt with together. And in the view we take of these grounds of appeal we do find it necessary to restate the submissions of counsel on these grounds. Suffice it to say that we have carefully considered these submissions. The core of these submissions is that the Appellants were charged and dismissed on non-existent Disciplinary Code because the Collective Agreement between the Appellants’ Union and the Respondent had expired on 30th June, 2003 long before the Appellants’ dismissal on 5th July, 2003. These submissions are not only unsupported by evidence but they also disregard the evidence on record. The undisputed evidence before the learned trial Judge was that the trouble started on 26th June, 2003. On 27th June 2003, the Appellants were charged with the dismissible offence contrary to Clause 13(4), The charge letters referred to the events of 26th June, 2003 when the Appellants went on an illegal strike. The Appellants were asked to exculpate - J9- themselves by 4th July, 2003. Therefore, to argue and submit that the Appellants were dismissed on a non-existent Disciplinary Code is totally untenable. The fact that the punishment was handed down on 5th July, 2003 does not alter the fact that the Appellants breached the Disciplinary' and were charged in June, 2003 during the subsistence of the Collective Agreement. To accept the argument by Mr. Mumba would lead to absurdity. It would mean that on 1st July, 2003 the Respondent should have unconditionally dropped the charges against the Appellants simply because the Collective agreement had come to an end. Mr. Mumba argued that in fact there was no illegal strike because there was no riot and no property was damaged. This submission does not reflect a correct statement of law on illegal strikes. In his judgment, the learned trial Judge reproduced the definition of a strike. For the purpose of determination of this appeal, it is unnecessary for us to restate the definition of strike. It is only sufficient for us to say that an illegal strike is one which is outside the law and that an illegal strike is not coterminous with violence. Indeed, even the Secretary General of the Appellants’ Union told the court below that the Appellants went on an illegal strike. In the event, we affirm the learned trial Judge’s finding that the Appellants were involved in an illegal strike and were - .110 - lawfully dismissed. These two grounds of appeal, therefore, fail. The third ground of appeal relates to payment of leave days. Mr. Mumba submitted that this part of the claim is admitted in paragraph 10 of the Defence and the learned trial Judge should not have disallowed it. The counter argument by Mr. Makala on this claim is that the learned trial Judge was persuaded by the evidence that the Appellants were paid all that was due to them, including payment in lieu of leave days for the days they worked for in the month they were dismissed. On the evidence it is clear to us that the leave days the learned trial Judge referred to are in fact the days included in the Counter Claim. But the claim for leave days is for more than these five days. Paragraphs 14 and 19(d) of the Statement of Claim seek a declaration that the Respondent pays the Appellants leave days etc for the period worked before their dismissal. The Respondent replied to this claim in paragraph 10 of the Defence saying that the Respondent had not withheld payment for leave days but that it required sufficient time to process the payment. Further, the Respondent said that this claim was premature as it pre-empted the processing of the payments. - JI I - From what the Respondent said in Paragraph 10 of the Defence, it is clear, as Mr. Mumba submitted, that the Respondent admitted this claim. The learned trial Judge should, therefore, have given the Appellants judgment on this claim with the amount due to be assessed. Accordingly, we uphold the appeal on this claim. The Deputy Registrar will assess the amount due. The fourth ground of appeal related to terminal benefits, which allegedly arose from the changed status of the Respondent from a Private Company to Public Liability Company. Both counsel submitted on this claim but on account of the view we take of this claim we find it unnecessary" to recite the submissions. Suffice it to say that we have given our careful consideration to these submissions. We are bound to say that we are startled by this ground of appeal and Mr. Mumba’s submissions on this ground. There was no change of employer in this case. What happened in this case, for the reasons stated, was change of the Respondent from a Private Company with limited shareholding to a Public Liability Company with enlarged shareholding. Bringing more shareholders in a company does not change the status of the company in its relationship with its employees. Just as change of the ownership of the shareholding does not bring into being a new company. Mr. Mumba, in his submissions, referred us to the document at page 24 of the Appellants’ supplementary7 record of appeal as evidence of payment of terminal benefits because of the Respondent changed from a Private Company to a Public Liability Company. We have carefully read the document. We are satisfied, as Mr. Makala rightly pointed out, that the payment on page 24 of the Appellants’ supplementary record of appeal has nothing whatsoever to do with the Respondent’s change from a Private Company to a Public Liability Company. The payment on page 24 of the Appellants’ supplementary record of appeal is clearly indicated as payment for end of contract. We regret, but we must say it. What Mr. Mumba’s submissions on this ground amount to is an invitation to us to write a new chapter in Company Law. We decline the invitation. This ground, therefore, fails. To the extent we have found that the Appellants are entitled to leave days to be assessed, the appeal partially succeeds. We now deal with the cross appeal. In respect of ground one in the cross appeal, Mr. Makala submitted that the evidence is that the Respondent suffered damage as a result of the Appellants’ illegal strike. He pointed out that the factory remained shut for 14 days. It was Mr. Makala’s submission that the learned trial Judge having found -J] 3 - that the Appellants withheld their labour illegally, the learned trial Judge should have awarded the Respondent damages for loss of business. Mr. Makala emphasized that the loss of production was a direct consequence of the Appellants’ illegal cessation of work. On the quantum of the damages, Mr. Makala submitted that in the absence of specific evidence of the value of the loss the trial court should refer the matter to the Deputy Registrar for assessment. As authority for this statement Mr. Makala referred us to the case of Georgina Mutate (T/a G. M. Manufacturers Limited) V Zambia National Building Society(l). Ground two in the cross appeal deals with costs. The argument is that although the Respondent lost on the counter claim, the learned trial Judge should have properly exercised his discretion to award the Respondent costs as it had successfully defended the Appellants’ claims. It was Mr. Makala’s submission that the learned trial Judge should not have taken a simplistic view that since the Respondent had lost on its Counter Claim it was not entitled to costs. Mr. Makala submitted that the learned trial Judge should have considered the substantial result as was stated in Collect V Van Zyl Brothers Limited^. He said that having - J]4 - successfully defended the Appellants' claims, the Respondent ought to have been awarded costs. Mr. Mumba advanced no submissions on the cross appeal. We have considered the submissions on ground one in the cross appeal. We agree with Mr. Makala that having found that the Appellant went on an illegal strike and withheld their labour unlawful leading to the shut down of the Respondent’s plant, the learned trial Judge should have found for the Respondent on the Countei" Claim for loss of business and awarded the Respondent damages for loss of business to be assessed. The opinion expressed by the learned trial Judge that even if the Respondent was awarded damages for loss of business, the Appellants will not be able to pay is totally misplaced. The ability of the Defendant to pay is not the concern of the court. The concern of the court is the liability of the party for his actions. This ground of appeal is, therefore, successful. The Respondents are awarded damages for loss of business to be assessed by the Deputy Registrar. Finally, we deal with ground two in the cross appeal. We have considered Mr. Makala’s submissions on this ground and the case of Colette^ as cited to us. Considering the conclusion the learned trial Judge came to after the trial, we can not fault - J15- him in the exercise of his discretion to order each party to bear his own costs. This ground of appeal therefore fails. The result of our judgment is that both the appeal and cross appeal are partially successful. Each party will bear his costs both in this court and in the court below. E. L. SAKALA CHIEF JUSTICE F. N. M. MUMBA SUPREME COURT JUDGE PteTERXHIT^NGF supreme Court judge