Lukonde and Ors v Zambia Railways Ltd (Appeal 156 of 2004) [2005] ZMSC 18 (29 November 2005)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO.156/2004 HOLDEN AT KABWE/LUSAKA (Civil Jurisdiction) BETWEEN: EMMANUEL KAFULA LUKONDE AND 71 OTHERS Appellants AND ZAMBIA RAILWAYS LIMITED Respondent CORAM: Chirwa, Chitengi and Silomba, JJS. On 2nd November, 2004 and 29th November, 2005 For the Appellants: Mr. L. Zulu of Messrs Central Chambers For the Respondent: Mr. M. Nsefu - Legal Counsel JUDGMENT Chitengi, JS, delivered the judgment of the Court. Case referred to: - 1. Zambia Railways Limited V Likando and Others Appeal No. 168 of 2000 (Unreported) In this judgment we shall refer to the Appellants as the Complainants and the Respondent still as the Respondent, which is what they were in the court below. J2 The facts of this case are that the complainants who were retrenched former employees of the Respondent brought this action claiming to be paid repatriation allowances in accordance with ZIMCO conditions of service under which they served. In determining how much is due to them the complainants asked the court below to interpret Clause 11.1 of the ZIMCO Conditions of Service. Clause 11.1 reads ; 11.1 All BETWEEN place of recruitment and place of work paid for by the Company for the employee and his dependants at the beginning and end of employment. FURTHER in case of ZAMBIANS the company shall bear the cost of repatriation at the prevailing ZAMBIA Railways/ United Bus Company fares but not on separation on disciplinary grounds. Transport relating to personal effects will be restricted to 100% of employee's annual salary." The court below interpreted this Clause as to apply only to employees who have been retired and not retrenched. In the event, the court below held that the complainants having been retrenched were not entitled to repatriation advance under Clause 11.1. Instead, the court below held that the complainants were entitled to payment under the Revised COMPENSATION PACKAGE FOR SURPLUS LABOUR J3 CIRCULAR NO. HRA/07/101 for employees serving on ZIMCO CONDITIONS OF SERVICE dated 26* July, 1993 which provides in Clause (ii) as follows:- “Affected employees to be paid in lieu of repatriation inclusive of passage:- (a) Married employees K200,000.00 per employee (b) Single employees KI 50,000.00 per employee? The circular further states that where a company’s separation package is superior to the newly revised formular, the former W will apply. In this case, the court found that the Respondents’ formular for repatriation allowance is K120,000.00 and therefore inferior to the 1993 conditions of service. The court below then i ordered the Respondent to pay the complainants the difference between the amount payable under the 1993 Conditions of Service and the amount already paid. The court below also ordered interest on the balance at the Bank of Zambia lending £ rate from the date the first payments were made till when the payment will be effected. The complainants now appeal to this court against the judgment of the court below. J4 The Complainants filed one ground of appeal which is that the court below erred in law and fact in holding that the Appellants were not entitled to payment of repatriation allowance in accordance with the provisions of Clause 11.1 of ZIMCO Conditions of Service of 1995 because they were retrenched and not retired. Both Counsel filed written heads of argument, which they augmented with oral submissions. In his written heads of argument Mr. Zulu, learned Counsel for the Complainants submitted that the court below misconstrued the extent of Clause of 11.1 of the ZIMCO Conditions of Service 1995. It was Mr. Zulu’s submission that in Zambia Railways Limited Vs Likando And Others}^, this court held that Clause 11.1 does not preclude the repatriation of employees terminated by the employer other than on grounds of retirement. He said that in Likando case!11, the court held that although the Respondents were deemed to have been declared redundant, they were entitled to repatriation allowances set out in Clause 11.1. It was Mr. Zulu’s submission that the proper interpretation of Clause 11.1 is that all employees to whom the ZIMCO conditions of Service applied and whose services were not .terminated on disciplinary grounds were entitled , to J5 repatriation allowances. Mr. Zulu argued that the complainants were ZIMCO employees and were entitled to be paid repatriation allowances under the ZIMCO Conditions of Service. Mr. Zulu’s oral submissions are a repeat of his written heads of argument and it is not, therefore, necessary to reproduce them. The sum and substance of Mr. Nsefu’s written heads of argument and oral submissions is that the Conditions of Service relating to repatriation were for physical transport to be provided. He said payment of K120,000.00 was meant for those not to be physically transported. It was Mr. Nsefu’s submission that the 1995 ZIMCO Conditions of Service were for surplus labour. He pointed out that the court below relied upon the 1995 ZIMCO Conditions of Service. According to Mr. Nsefu, it is irregular to compare physical provision of transport and the Zambia Railways Conditions of Service with the money offered under the ZIMCO Conditions of Service, if the purpose is to determine that one is superior to the other. It was Mr. Nsefu’s submission that the two'are not the same and that physical provision of transport ensured that the employee reached his destination. For this reason, Mr. Nsefu argued that it is erroneous to say that physical transport was inferior to cash payment. J6 On the Likando case, Mr. Nsefu submitted that that case arose in 1992 when ZIMCO had no surplus labour. He pointed out that this case having arisen in 1995 the provisions applicable are the 1993 provisions on page 15 of record of appeal. He said that these are the conditions of service the court below relied upon. Mr. Nsefu ended by saying that the 1993 Conditions can only be relied upon if the Respondent's conditions were inferior. £ In reply Mr. Zulu submitted that the appeal arises out of the finding by the court below that the complainants were retrenched and not retired. It was Mr. Zulu’s submission tfyat t what rules apply was not the issue in the court below. I I We can dispose of Mr. Zulu’s submission in reply before we proceed. We find this submission startling. As we understand the complainants’ case, and even Mr. Zulu’s main submissions, the crux of the matter is that the complainants should have been paid under Clause 11.1 of the 1992 edition of the ZIMCO Conditions of Service and not under Clause (ii) of the 1993 ZIMCO circular on surplus labour. Mr. Zulu’s submissions in reply are, therefore, self defeating. J7 We now deal with the issue whether the complainants should have been paid under 1992 Conditions or under the 1993 Circular, We have considered the facts of this case, the submissions of Counsel and the judgment of the court below. We have no hesitation to accept Mr. Nsefu’s submission that the 1992 conditions do not apply to the complainants. It is clear to us that the 1992 conditions dealt with a normal situation. In that regard, and as Mr. Nsefu rightly submitted, the case of Likando does not apply to this case. It is clear to us on the evidence that in 1993 ZIMCO was in surplus labour crisis and a circular of that year was issued instructing how workers to be shedded off would be repatriated. The complainants were retrenched in 1995. There is therefore, no basis upon which the 1993 Circular can be over-looked in order to have the complainants paid repatriation allowances under the 1992 conditions. In the event, we do not accept Mr. Zulu’s submissions that the complainants should have been paid under Clause 11.1 of the 1992 edition of the ZIMCO Conditions of Service. Mr. Nsefu has argued that the complainants cannot claim repatriation advances under the ZIMCO Conditions of Service because, according to him, the physical provision of transport 7. J8 which enables an employee to reach his destination cannot be said to be inferior to cash payment. We are bound to say that these submissions by Mr. Nsefu are in a vacuum and we reject them. There is no evidence that each complainant was provided with transport to his destination and that he refused to take up the offer. What we have instead is uncontroverted evidence that the complainants were paid K120,000.00 each in repatriation allowance. The Respondent’s repatriation package can, therefore, be properly characterized as inferior to the ZIMCO package. T The court below was, therefore, on firm ground when it ordered the Defendant to pay the complainants the difference between the Respondents repatriation package and the ZIMCO repatriation package. This appeal has, therefore, no merit and we dismiss it. But having regard to the circumstances of this case, we make no order as to costs. Before we leave the matter we wish to comment on the order by the court below awarding interest to the complainants. The court below awarded interest at Bank of Zambia lending rate from the date the first payments were made till when the payment will be effected. The order is erroneous and we quash it. We substitute it with one of interest at average fixed deposit rate from the date of the first payment to the date of J9 judgment and thereafter at the Bank lending rate as determined by the Bank of Zambia until final payment. D. K. CHIRWA SUPREME COURT JUDGE SUPREME COURT JUDGE S. S. SILOMBA SUPREME COURT JUDGE 9