Phiri v MASM Medi Clinics Limited (MATTER NUMBER IRC 91 of 2013) [2020] MWIRC 6 (31 July 2020)

DOAAGAT ~The Ragistrar aciuseet tag hee! a a id Agog vi | on IN THE INDUSTRIAL RELATIONS COURT OF MALAWI ea THE MALAWI JUDICIARY MZUZU REGISTRY MATTER NUMBER I. R. C. 91 OF 2013 BETWEEN NDIYUD) PHIRI ssscrscspscies ci scnnnnearcnsennnvesnannenannemaunaseunenwens APPLICANT MASM MEDI CLINICS LID ssiccassscseavsccscsestsnsereeessecnsnensenes RESPONDENT CORAM: HIS HON. KINGSLEY D. MLUNGU, DEPUTY CHAIRPERSON MR LEONARD MBULO, COUNSEL FOR THE APPLICANT MR CHIBWE& MR LUPANDE, RESPONDENT’S COUNSEL MR HEZRONE MHONE, COURT CLERK Ruling on a Motion for Review of the Assessment Order by the Assistant Registrar of the Court. Under R. 5 A (2) of the IRC (Procedure) Rules, 1999 Mlungu, K. D INTRODUCTION Before me are review proceedings in respect of an order of assessment made by His Honour Mtchera, the Assistant Registrar of this Court on 11' day of February, 2020, of reee Sout | The background of the matter is that the applicant filed a claim for damages for unfair dismissal and unlawful termination of contract; Pay in lieu of notice, severance allowance and gratuity against the Respondent. 1. FACTS Facts of the matter which were not generally in dispute were that in the year 2009, the parties herein entered into an employment contract for a period of 36 months. In 2012, when the contract came to an end, the applicant continued to work for the Respondent. However some time in 2013, the applicant received a letter from the Respondent informing him that his services were no longer required without giving him reasons for the said termination and also a right to be heard. Due to these above alluded to facts it’s when the applicant commenced the action herein claiming the aforesaid reliefs. The parties herein entered a Consent Order or liability and claims which should be awarded to the applicant. The matter came for assessment of Compensation pursuant to the said Consent Order and the areas of focus per the said order were Notice pay, gratuity and damages for unfair dismissal. The Court awarded the applicant the sum of K2,275,150.00 as damages for unfair dismissal which represented wages for five months. He was further awarded MK1, 601,694.00 as Notice pay. No order as to gratuity was made as the Court found that the applicant was already paid the same. Being dissatisfied with this order on Assessment by the Assistant Registrar, the applicant herein brought an application under Rule 5 (A)2) of the Industrial Relations Court (Procedure} Rules before this Court for review. 2. ARGUENDOS The main arguments advanced by the applicant were that as per the Respondent's Terms and Conditions of Service, namely, paragraph 12 of the Contract of Employment , 2009 and under section 63 (5) of the Employment Act the applicant should have been awarded damages for unfair dismissal which were an equivalent of his salary and benefits for 24 months. To that end the applicant prays that this Court do award the applicant a sum of MK29,502,577.20 as damages for unfair dismissal as the same reflects his salary, various allowances and fuel entitlements (Remuneration) They make this prayer whilst contending that the award which the Registrar of this Court made to the applicant were on the lower side in light of what the applicant submitted before him as well as having regard to the comparative assessment orders. Secondly he contends that the Assistant Registrar wrongly applied the principle of ‘Employment is not for life.” The Respondent submits that there is no legal basis for the present application as the Assistant Registrar was not wrong to award the applicant herein wages for 5 months between February, 2013 to July, 2013 as that was the period in which one would have said to have indeed suffered loss more or so considering the provisions of section 63 (4) of the Employment Act. 3. LEGAL ISSUE ($) TO BE DETERMINED Whether the award of MK2,275,150.00 as damages for unfair dismissal was wrongfully made or on the lower side 4. THE APPLICABLE LAW Rule 5 (A) of the Industrial Relations Court (Procedure) Rules, 1999 provides as follows: (2) Any decision of the Registrar or a Deputy Registrar may be reviewed by the Chairperson or Deputy Chairperson on an application by a party to the matter or proceeding; and upon such a review, the Chairperson or Deputy Chairperson may — (a) Dismiss the application or confirm, set aside, vary or amend the decision of the Registrar or Deputy Registrar: (b) Determine the matter as it was coming before him or her in the first instance and give such decision as the case may require; or (c) Refer the matter back to the Registrar, or Deputy Registrar with directions for further consideration. Section 63 of the Employment Act provides for remedies for unfair dismissal which are reinstatement; reengagement and Compensation. Subsection 63 (4) is couched as follows; “An award of compensation shall be such an amount as the Court considers just and equitable in the circumstances having regard to the loss sustained by the employee in consequence of the dismissal in so far as the loss is a attributable to action taken by the employer and the extent, if any to which the employee caused or contributed to the dismissal” subsection (5) provides for the minimum awards which the Court can make (see generally Chakhaza V. Portland Cement (2008) MLLR 118 5.1 CASE LAW In Kambuwa V. Malawi Institute of Management (2000 — 2001) MLR 90, the High Court made the following pronouncements; per Ndovi, J. Parties to a contract take on rights and obligations as defined in the Contract itself to the extent necessarily intended by them; anything outside the contract would not, and cannot, constitute any rights and obligations there under. See also Council of UNIMA V. Urban Mkandawire MSCA, Civil Appeal No. 38 of 2003. Permanent employment is not employment for life and may be terminated under proper circumstances if there is breach of honesty, or there is misconduct, negligence and inefficiency. Sections 41 and 46 of the Constitution of the Republic of Malawi empowers the Courts to give adequate and effective remedies to the employee where he is dismissed in wanton violation of his fundamental rights under the Constitution which includes damages beyond notice Pay and Pension. Words/phrases of “Permanent and pensionable employment” do not mean employment for life but rather general employment as opposed to temporary employment. It is always liable to be determined by reasonable notice. see also: Kachinjika V. Portland CEMENT Co. Lid (2008) MLLR 161; Chiume V. SS Rent Acar IRC Matter No. 149 of 2000 In Munthali V. Malawi ODA Ciant (2000 —- 2001) MLR 347 (HC) at 350, Justice Nyirenda (as he was then) made the following comments: “The defendant’s action was a clear violation of the employment contract between the defendant and the plaintiff. As | have said earlier the defendant made a thoughtless and impetous decision in terminating the contract. The decision was not preceded by any warnings either on the ground of misconduct or inefficiency on part of the plaintiff. It is for these reasons that the plaintiff seeks to be paid her full salary for the remaining part of her contract period. The plaintiff's contract with the defendant was for a fixed period. The measures of damages for wrongful dismissal in such a case is Prima facie the amount that the plaintiff would have earned had the employment continued according to the contract.” In Cotrim V. Dos Santos 7 MLR at 115, Skinner C. J quoted Mayne & Mc Gregor on Damages, 12' ed; paragraph 608 at 552 (1961) as follows: “The measure of damages for wrongful dismissal is Prima facie the amount that the plaintiff would have earned had the employment continued according to contract subject to a deductions in respect of any amount accruing from any other employment which the plaintiff, in minimizing damages, either had obtained or should reasonably have obtained” The Judge therein went on to opine as follows: “Where the defendant has a right to terminate the contract before the end of the term on notice then the length of such notice may be relevant, but that is not the position in the present case.” In Mwatulirwa V. Manica (mw) Lid, Matter No. IRC 34o0f 2004, the Court stated as follows: “The Court may also consider future loss of benefits. This period covers loss of benefits from date of Judgment to date of retirement or to date when the applicant would secure alternative employment. The applicant recovers nothing where he secures better or comparable alternative employment before assessment. 5. APPLICATION OF THE LAW TO THE FACTS Having analysed the evidence and the applicable law this Court proceeds as follows: What is coming out clear is that Dr Ndiyudi Phiri was employed on a fixed term of 3 years contract from 9th February, 2009 to February 2012. The applicant's contract was then tacitly renewed for another three years and the applicant only worked for 12 months and had 24 months remaining from his contract. The contract of employment provided that either party may terminate the contract on giving three months’ notice in writing or in lieu of notice, paying equal amount of 3 months’ salary and benefits accrued within the particular time. Dr Ndiyudi found a comparable job within five months after termination of the contract by the Respondent clearly showing that Dr Ndiyudi Phiri mitigated his loss. The applicant neither challenged this fact in any way nor did he bring contrary evidence to show that the said job was not comparable to the one before. Accordingly, the applicant mitigated his loss. It is trite law that it is not the Court's duty to re-write contractual terms freely and voluntarily agreed upon by the parties — See Chiume, Kambuwa and Urban Mkandawire cases, supra. The argument that the proper award for damages for unfair dismissal could have been the salary and benefits for the 24 months remaining to the applicant's 5 contract cannot stand the test of the case law expounded above as the same has only been said to be Primafacie. See Munthali V. ODA Ciant, Cotrim V. Dos Santos cases, supra. Both in Cotrim case and the Munthali case, the learned judges quoted Mayne &Mcgregor on Damages which stated that the position of the law on damages such as being sought in the instant case is prima facie the amount that the plaintiff could have earned had the employment contract continued subject to the employment which he may have secured or may have reasonably secured, i.e. mitigating the loss. Commenting on this position of the law, Mwangulu, J. as he then was observed as follows in the case of Kalinda V. Limbe Leaf Tobacco Lid, Civil Cause No. 542 of 1995: “Compensating for financial loss is a complete exercise. It involves a speculation about the employee's job prospects and all relevant circumstances that make the award equitable. In relation to future job prospects, few problems arise where the employer finds another job. In the instant case the award includes the losses, based on the employee's current earnings up to the commencement of the new job. Consequently, the employee would recover nothing if he immediately finds a job.” Thus, it is our considered opinion that the Registrar of this Court made no error in law in not awarding the applicant compensation for the entire two years remaining in his contract. On page 6 of the Order on Assessment, the learned Registrar opined as follows: “Be that as it may, we are of the view that compensating the applicant up to the time the contract would have expired runs counter to the principle that | employment is not for life. As correctly observed in the Kachinjika case above, and as provided in the contract of employment, it could come to an end due to various reasons. In addition it is evidence that the applicant secured another job almost five months after the termination of his contract of employment, thereby mitigating his loss. This however, does not exonerate the Respondent from the Unprofessional manner in which it handled the applicant's case. In view of this and regard being had to the provisions of sections 63(4) of the Employment Act, the applicant is awarded the sum of K2,275,150.00 ( two Million two hundred and seventy five thousand one hundred and fifty kwacha) as damages for unfair dismissal.” The Assistant Registrar then proceeded to deal with the claim of Notice Pay and gratuity. From the expose of the law above, we are satisfied that the Registrar ably dealt with the issue of Compensation in as far as the applicable law is concerned. Be that as it may, we feel persuaded with the applicant’s submission on the inclusion of allowances in determination of the compensation herein. On fringe benefits, it is said that (... the Court may award fringe benefits if the employee can show that they formed part and parcel of his/ her contract of employment. These may include benefits in kind or in cash. see R. S Sikwese, Labour Law in Malawi, 2010, 0.121. The learned author proceeded to opine as follows: “Calculation of Compensation In computing compensation, the Court shall take into consideration the remuneration that the employee was receiving at the time of termination of employment. In Stanbic Bank Ltd V. Mfukula (200) MLLR 54 the SCA held that ‘wage; ‘pay’ and ‘remuneration’ are used interchangeably and include allowances, benefits and basic salary.” Thus, we proceed to make the following further awards which were allowances payable to the applicant under the contract of his employment. e Transport allowance for five months at MK176,000.00 per month translating to K880,000.00 e Five Hundred litres of fuel at the current market price, to wit, MK690.50 translating to MK345,250.00 ¢ Five months Housing allowance at MK160,169.40 per month translating to MK800,847 .00 * Five months Phone allowance at MIK14,800 per month translating to MK 74,000.00 This said sums to be paid within 7 days from the date of this order. This far is how this Court has exercised its powers of review of this matter as per Rule 5 (A) (2) of the Industrial Relations Court {procedure} Rules, 1999. MADE This 315! Day of July, 2020 at Mzuzu. K. D - UNGU DEPUTY CHAIRPERSON 7