Masinga v Lever Brothers (Malawi) Limited & Another (Civil Cause 544 of 1985) [1987] MWHC 11 (14 September 1987)

SS. IN THE HIGH COURT OF MALAWI, BLANTYRE g PRINCIPAL REGISTRY a CIVIL CAUSE NO.544 OF 1985 BETWEEN : E. L. MASINGA .....ccccccceecceosceceoe PLAINTIFF AND DEVER BROTHERS (MALAWI) LIMITED ..,... ISE DBPENDAaHT AND P. F. A. ST. C. WILSON ........ceee+e+++ 2ND DEFENDANT Coram: MTEGHA, J. ‘Nakanga, Counsel for the Plaintiff Makhalira, Counsel for the lst Defendant Mkumbira, Official Interpreter Manda, Court Reporter JUDGMENT The plaintiff in this case E. L. Masinga is claiming. from the lst defendants, Lever Brothers (Malawi) Limited the sum of K3,668.35 liquidated damages resulting from unlawful dismissal from his employment by the defendants. For all practical purposes this judgment is concerned with the first defendant only, and reference to the "defendants" refers only to the lst defendants. The plaintiff's pleadings, in so far as they are relevant to this claim, disclose that the plaintiff was employed by the defendants as a fitter on lst October, 1964 at a salary of K80.00 per month which was subsequently revised to K457.00 per month. They also disclose that the terms of employment, inter alia, include terms to the effect that the plaintiff would be given one month notice terminating his employment; he would be entitled to 25 working days leave for each completed year of service, and that he would be entitled to K120.00 bonus each year. Further, the pleadings disclose that the plaintiff would join the Pension Scheme which the defendants ran, and that if the plaintiff was out of Malawi he would be entitled to K120.00 per day. In breach of this agreement, the defendants terminated the plaintiff's employment on 27th August 1985. As a result the plaintiff has been deprived of his pension scheme, salary, leave pay, allowance and K760.00 which he paid on behalf of the defendants to PVHO employees. On the other hand, the defendants deny that they wrongfully dismissed the plaintiff, but were entitled to do so because the plaintiff misconducted himself by disobeying reasonable orders; he was dishonest and negligent of duty. They further contend that he wilfully and negligently lost the defendants property placed in his care. The particulars of misconduct have been itemised, and I think it is prudent if I set them down because the defence felies entixely on them. These are as follows: (a) Falsifying expenses the plaintiff incurred on duty in the Northern Region of Malawi and Tanzania between 28th March 1985 and 29th June 1985. (b) Failure to account for the encashment of £350.00 in travellers cheques and 10 US Dollars given by the defendants to the plaintiff for his use whilst in Tanzania. (c) The plaintiff's admission that the exchanged 10 US Dollars for approximately 400 Tanzanian Shillings with a friend in Tanzania which is in contravention of Exchange Control Regulations. (d) The plaintiff's admission that the expenses Claim for towing charges in the sum of K500 was fabricated by himself. Te) Pailure to follow laid down procedure of defendants and (£) The plaintiff's admission that there were irregularities in his claiming expenses for use of fuel and groceries, and as a result, he was not entitled to any allowance. Finally, the defendants are denying that the plaintiff is entitled to any bonus because he was dismissed for misconduct. These, in brief, are the parties pleadings, and I will now examine the evidence. It was the plaintiff's evidence that he was employed by Lever Brothers in 1964 as a fitter. Exhibit Pl is a letter of appointment. The material part of this letter states: "1. Leave: You will be entitled to 25 working days leave per annum with effect from 1/10/64. Of these days, you must take at least 20 working days each year, but you may accumulate the remaining 5 working days up to a maximum of 45 working days. Your accumulated leave may be taken at any time provided it is in conjunction with annual leave. Leave to you can only be taken on completion of one year's service. 2. Pension fund: It is a condition of your appointment that you join the Company's Contributary Pension fund, details of which will be notified to you later. 3. Termination of Service: As you are paid monthly it will, of course, be necessary for you or the Company to give 30 days notice in the event of termination of your services. Except as otherwise provided by law, should the Company decide to terminate the period of service upon lesser notice you will be paid one month's salary or the proportionate amount thereof in lieu of the said thirty days notice. Should you wish to terminate your services in less than thirty days notice, then you will forfeit or refund to the company an amount equal to one month's salary or the proportion thereof." It was the plaintiff's evidence that he left the employment on 19th August 1985 as a result of Exhibit P2; Exhibit P2 dated 27th August 1985 states; "I refer to the discussion you had with our Commercial management regarding your allowance claims and write to inform you that I have been directed to advise you that the Company has decided to terminate your services as from 19th August 1985 for falsifying expenses claims during your stay up north and Tanzania as admitted by you. As a result of this decision the Company has arranged to give you one month's notice pay in lieu of notice. Arrangements have also been made to refund you your pension contributions as soon as our pension administrators advise us as to how much you should be paid ..." The Plaintiff went on to say that he did not get his one month's salary, and when he left he was entitled to 11 days annual leave for which he was not paid - about K251.35 and he was not paid K80.00 as part of the K120.00 annual bonus. He went on to say that he worked for 21 years and at the time he was leaving, he was aged 48 years, and according to Rule 7 of the Pension Scheme Rules, he qualified for reduced retirement pension. Rule 7 stipulates: "3. Leaving Service Before Normal Retirement Age day On ceasing service before normal retirement age: (i) After completion of 10 years' Pensionable Service, unless by dismissal for fraud or dishonesty or (ii) After completion of less than 10 years' Pensionable Service and with the agreement of the Company, or (iii) Within 10 years of Normal Retirement Age, or (iv) Because of permanent ill-health or permanent incapacity or (v) Because of the winding up of the Member's Employer, A member shall be entitled to a deferred retirement pension from Normal Retirement Age equal to the Retirement Pension calculated as in Rule 5 but based on Pensionable Service up until the date of ceasing Service and Pinal Pensienablea pay as at the date of weacing ge1ivice. (b) At the request of the Member the Board may substitute a reduced retirement pension payable from such earlier date as the Member shall request, being not earlier than 10 years before Normal Retirement Age unless retirement on account of permanent ill-health or permanent incapacity. The amount of the reduced retirement pension shall be determined by the Actuary." It was his evidence that he is entitled to have his pension in accordance with Rule 7(a) and (b). It was the plaintiff's evidence that he was sent to Tanzania by the defendant and his allowance was K120.00 per day. He was there for 55 days as can be seen on Exhibit P5, his diary. He went on to say that he was out of the country for 55 days, and he was paid K4,380.00 instead of K6,600.00, and he is claiming the difference. To support that he was entitled to this amount he produced a copy of a statement which Mr. J. A. Allgrove, the defendant's Chief Accountant, gave to the Police. At page 2 Mr. Allgiove states: "The Company applies to the Reserve Bank of Malawi for exchange control authority for the business allowance per day (normally K120.00)." It was again the evidence of the plaintiff that he paid K760 to PVHO staff which was not refunded to him. In cross~examination he stated that the allegation in Exhibit P2 that he falsified claims when he was in Tanzania is false, because he made a breakdown which he thought was correct. He further stated that he did not tell the Accountant that he changed US.$10 with friends, but at Customs. He also said that he was told he would get K120.00 per day while outside. The first defence witness was Mr. Samuel Mpasu, Legal Administrator for the defendants. He told the court that when the plaintiff went to Tanzania he organised transport for him and a driver; while in Tanzania the vehicle was involved in a road accident. As a result he sent spare parts after getting a telephone call from the plaintiff. He also organised truck tyres to be sent after being told that the garage where the vehicle was taken demanded truck tyres in payment of repairs and not money. It was his evidence that no one gets K120.00 per day, but that at his grade, and according to Exhibit D3, he was entitled to K5.00 breakfast, K7.00 lunch, K12.00 dinner and K7.00 incidentals ~ total K29.00 per day, and that all the rest had to be accounted for by the receipts. It was his evidence that the plaintiff was entitled to K10.00 per month as bonus at the end of December each year, i.e. after completing the whole year, he would get K120.00. He further told the court that since his departure from the Company was not clean, he was only entitled to his own personal pension contribution under Rule 9 of Exhibit P4, and as Secretary to the Board of Directors of the Pension Scheme, his claim under Rule 7(a) or (b) was rejected because of fraud. DW.2, Mr. Tambula, was the Personnel Manager. He told the court that the plaintiff's services were terminated because the Company lost confidence in hin, when it was discovered that he was falsifying claims for his Tanzania trip, and, on the instructions of the Company, he wrote Exhibit P2. The third witness for the defence was Mr. Edward Edson Gwazantini, employed by National Bank as Financial Services Manager, and in this respect he used to deal with Lever Brothers on their pension scheme. He was one of the Board Members. It was his evidence that the Board prepared Mr. Masinga's pension under Rule 7(c). Rule 7(c) stipulates: "A member who is entitled to benefits under (a) of this Rule may request the Board at any time prior to the first payment of the pension to substitute a refund of contributions in accordance with Rule 9 provided that the refund is made before payment of pension has commenced." It was Mr. Gwazantini's evidence that the Board considered the plaintiff's case under Rule 7(c) and a cheque was prepared and sent to the defendants with a view to passing it over to the plaintiff. Subsequently the Board received a letter from the plaintiff's solicitors requesting the Board to consider the plaintiff's case under Rule 7(a) and 7(b), but the Board did not sit since the Board considered they had already considered the plaintiff's case. It was his view that the plaintiff was entitled to benefits under Rule 7(a) and 7(b). The fourth witness for the defence was Mr. Amos Alfred Likungwe. He told the court that he was Purchase and Salaries Accountant, employed by the defendants. He had something to do with this case in that he asked the plaintiff to produce receipts and documents to show how he spent the money which the Company gave him on the plaintiff's trip to Tanzania. It was the witness's evidence that the plaintiff was given £1,540.00 and £770.00, making a total of £2,310.00. It was this witness's evidence that when he checked the receipts, etc. he found that the plaintiff changed less money than he was given, and he should have brought back the money which he did not change i.e. £350.00 and 10 US Dollars. After being questioned, he stated that he changed the money with friends. Apart from these, there were other discrepancies, so the witness said. In cross-examination the witness conceded that the plaintiff did in fact change the money at the banks, for in Tanzania he changed £780.00, while in Karonga he changed £1,530.00 total £2,310.00, the exact amount he was given apart from the 10 US Dollars. It was the witness's evidence in cross~examination that a draft breakdown of expenditure was K6,110.00 including the irregularities, e.g. drinks worth K18.00 on Ist April, K11.30 on 3rd May, K18.70 on 20th February, K17.80 pork chop, K16.50 on 20th February, scrambled egg on 20th February for K6.50, telephone calls K156.50 (2) which had no documents, yet under cross- examination he admitted that although he did not speak to him, he might have spoken to someone else. It was his evidence that he should have identified the items he bought - not just say, “groceries". The fifth and last witness for the defence was MacPherson James Nkusa, Chief Accountant of the defendant. He told the court that when he took over Mr. Allgrove's duties he found Exhibit D6 which he tendered - it is a statement which his predecessor had made. I will refer to this document at a later stage. What appears to me to be clear is that the defendants terminated the plaintiff's services because the defendants had lost confidence in the plaintiff. It also appears to me that the loss of confidence was due to what had transpired after the plaintiff had returned from Tanzania in relation to the accountability of the money which was given to him. A careful scrutiny of the evidence reveals that this appears to be the procedure adopted by the defendants when employees account for the money given to them. This procedure comes out clearly from Exhibit P6 and Exhibit D6, which were Mr. Allgrove's Statement to Police. When an employee is leaving the country for abroad or on duty, the Company applies for foreign exchange approval for business allowance - at that time K120.00 per day. It was a standing instruction that when abroad, all the travellers cheques given to an emptoyes must be changed at a recognised institution such as a bank or hotel whare documents must be received to cuppart that transaction. It was also in the defendants evidence that upon return, and after accounting for the money, the employee has to pay back if he failed to account for all the monies, and that if his accounts revealed a surplus after taking into account all the receipts and incidentals, the employee would be refunded by the company. Now the particulars of misconduct have been set out. I will have to relate these to the evidence, and see if the justification pleaded by the defendant can stand. In the first place, it is alleged that the plaintiff falsified the expenses which he incurred whilst in Tanzania. The defendants have to prove this on a balance of probabilities. It appears the evidence to support this comes from Exhibit D6. In that document, the Statement tendered to Police by Mr. Allgrove states: "There were other irregularities in the expense claims by Mr. Masinga. (1) Two receipts were included for K3.00 and K4.40 which were clearly dated 29/8/84. I asked Mr. Masinga why he had included receipts from 1984. He said he had not, but that these were for batteries and a film he had bought in Lilongwe at Kandodo. He said the dates on the receipts must be wrong. (2) Mr. Masinga kept a diary of the events during his trips in which expenditure is recorded; some items have clearly been charged after the event. For instance on 18/4/85 an amount paid for towing of K120.00 has been charged to K70.00 and then deleted but when the expense form which Mr. Chinkwezule submitted is examined the amount is K195.00. Similar discrepancies on 17/4/84. I asked Mr. Masinga how the discrepancies arose. He said that the original entry was thought to be correct at the time he made it, but after arguing with transporters he did not have to pay. Eventually after repeated questioning he admitted that the form which Mr. Masinga gave to Mr. Chinkwezule so Mr. Chinkwezule should claim monies from the company was a fabrication." This, of course, the plaintiff denies. Having looked at the evidence, I hold that indeed the plaintiff tried to fabricate the claims. The second misconduct levelled against the plaintiff is that he failed to account for the encashment of £350.00 in travellers cheques and 10 US Dollars given by the defendants to the plaintiff for his use whilst in Tanzania. I do not think the defendant has proved that this is so. Clearly, the evidence in cross-examination of DW4, Likungwe, the Purchase and Salaries Accountant, reveals that he did enchash the whole amount given through banks in Tanzania and Karonga. Supporting documents are there. As to 10 US Dollars the plaintiff explained he changed at Customs in Tanzania. In my considered opinion he did account for the same. The third misconduct alleged is that the plaintiff admitted to have changed 10 US Dollars with a friend for 400 Tanzanian Shillings in contravention of Exchange Control Regulations. With respect, it is not clear whether he contravened Malawi Exchange Control Regulations or Tanzanian Exchange Control Regulations. These have never been proved before this court. In any case, I do not see how this misconduct can affect the defendants. This particular misconduct has not, in my view, been proved. The next misconduct particularised is that the plaintiff admitted he fabricated towing charges in the sum of K550.00. The evidence reveals that the amount involved was less - about K70.00. Nevertheless, this was a fabrication. This has been proved. I will skip the fifth misconduct and go on to the sixth one which alleges that the plaintiff admitted that there were irregularities in his claiming expenses for fuel and groceries. On the evidence I do not see how this came about, because, in cross-examination, DW4 clearly stated that the plaintiff was entitled to buy groceries, and indeed, there were receipts to this effect. Furthermore, I have seen no evidence about the purchase of fuel. This cannot be said, in my view, to be a misconduct which has been proved. Finally it is alleged, in the sixth allegation of misconduct, that he failed to follow laid down procedures of the defendant. The procedure was that the plaintiff had to account for all the expenses he incurred on his trip. The evidence shows that he did tender his expenditure. It was up to the defendants to accept it or not, but before they had done so he was discharged from his duties. He did tender his expenditure, and if the defendants were minded, they should have calculated the final figures and if the plaintiff owed them money, he should have been told to refund or vice versa. In my view, the defendants have proved only two of the allegations of misconduct, which the defendant relied on for the summary dismissal. What then is the position in the present case? Did these two misconducts entitle the defendants to dismiss the plaintiff? In Clauston and rry (1906) A. C. 122 at 129 games, L. J. had this to say, "Now the sufficiency of this justification depended upon the extent of misconduct. There is no fixed rule of law defining the degree of misconduct which will justify dismissal. Of course there may be misconduct in a servant which will not justify the determination of the contract of service by one of the two parties to it against the will of the other. On the other hand, misconduct inconsistent with the fulfilment of the express or implied conditions of service will justify dismissai". One should also not forget the words of Sachs, L. J. in Sinclair v. Neighbour (1967) 2 0. B. 279 at 289 when he said that, "it is well established law that a servant can be instantly dismissed when his conduct is such that it not only amounts to a wrongful act inconsistent with his duty towards his master, but is also inconsistent with the continuance of confidence between them." The evidence before me indicates that the defendant lost confidence in the plaintiff because he falsified some expenses he incurred in Tanzania and Karonga and that he fabricated towing charges. The defendant was therefore entitled to dismiss the plaintiff. However, this is not the only point ~ but did the defendants in fact dismiss the plaintiff? To answer this question one has to look at the contract of employment and the letter terminating the plaintiff's employment. The contract, as set out above in Exhibit Pl, states that either party can give 30 days notice in the event of terminating the service. Also it is stipulated that should the defendant decide to terminate the service upon lesser notice, the plaintiff will be given one month's salary in lieu of appropriate notice of 30 days, and should the plaintiff decide to terminate the service on shorter notice, - 10 - he will forfeit or refund to the defendants an amount equal to one month's salary or the proportion thereof. In Exhibit P2, the letter from the defendants to the plaintiff terminating the plaintiff's employment, the defendants clearly stipulated that the plaintiff will be paid one month's salary in lieu of notice and that his pension contribution will be paid. It would appear that the plaintiff is under the impression that he was dismissed. This is not correct. The defendants terminated his employment in accordance with the terms of the contract and in my judgment the defendants were entitled to do so. I would dismiss the claim for wrongful dismissal with costs. However, this is not the end of the matter. The plaintiff says he is entitled to certain monies. Firstly, he says he is entitled to K457.00 as one month's notice pay in lieu of notice. This is not disputed by the defendants, and clearly he is entitled to this. If it has not been paid to him, he should be paid. Secondly, he says he is entitled to proportionate bonus up to August 1985 of K80.00. This claim cannot succeed; the evidence reveals that the bonus is discretionary and in any case it is paid at the end of December. Being a discretionary payment the defendants were entitled to refuse the payment. I dismiss this claim. In the third place, the plaintiff is claiming K251.35 as leave pay. In my considered opinion, the plaintiff was entitled to this amount, as he had already earned it. I see no justification for its retention. I allow this claim. Fourthly, the plaintiff is claiming K2,220.00 as unpaid allowance. It was the evidence of the plaintiff that when he went to Tanzania, he was entitled to K120.00 per day allowance and he was there for 63 days and the defendants gave him only a sum of £1,540.00, £770.00 and 10 US Dollars. He says according to the period he stayed in Tanzania he was entitled to have K2,220 more. It is not disputed that the plaintiff went to Tanzania, but the defendants say he was not entitled to this amount, because the K120.00 per day is the amount which the defendants applied to the Reserve Bank as business allowance and that the plaintiff is supposed to account for every expenditure he incurred; and if he incurred more than the allowance which was given, he would be refunded the difference; and if he failed to account for some expense, he would refund to the defendants. In my view this is correct as can be seen in the statement of Mr. Allgrove. The dilemma I have is that the defendants and the plaintiff have not come up with the exact expenditure. It is therefore impossible for me to arrive at the figure. In the circumstances it would only be fair if I order that the expense account should be completed, and whoever would be found to owe some money to the other, he should refund. ~ 11 « Fifthly, the plaintiff is claiming K760.00 as money which he paid on behalf of the defendants to P. V. H. O. employees. I am afraid there is no evidence to support this. No witness was called by the plaintiff to support this claim; indeed there was no documentary evidence to support it. I dismiss this claim. Pinally, the plaintiff is claiming for Pension in terms of Rule 7(a) and 7(b) of the Scheme. The defendants offered to pay him only his personal contribution. I do not see why. The defendants lawfully terminated the plaintiff's employment. The rights and privileges of both parties, accrued to them as on the date of termination of employment, must be given to them. Now the guestion which I should determine is whether the plaintiff was entitled to claim under 7(a) or 7(b). It is clear from the evidence that the plaintiff qualified under Rule 7(a) and 7(b). I see no reason why his request was not granted since the termination of employment was lawful. Indeed, Mr. Gwazantini, DW.3, from National Bank, stated that the plaintiff could have been considered under Rule 7(a) and 7(b) if the plaintiff or the defendants requested the Board to do so. I will allow this claim and order that the plaintiff be paid his pension in accordance with Rule 7(a) and 7(b). All in all, the plaintiff succeeds as to (a) One month's salary of K457.00; (b) 11 days leave pay of K251.35 and (c) Pension under Rule 7(a) and 7(b) with costs. PRONOUNCED in open Court this 14th day of September, 1987 at Blantyre. tl bes gha JUDGE