Engen Marketing Limited and Anor v Mubita Akapelwa (APPEAL NO. 70/2022) [2024] ZMCA 124 (25 January 2024)

• IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO. 70/2022 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: ENGEN MARKETING LIMITED ? :, ,, ENGEN PETROLEUM ZAMBIA LIMITED 1ST APPELLANT 2ND APPELLANT , ... •-""' AND MUBITA AKAPELWA RESPONDENT CORAM: MAJULA, NGULUBE AND BANDA-BOBO, JJA. On 18th January and 26th January, 2024. For the Appellants: VMs. M. Nachinga - Messrs Corpus Legal Practitioners For the Respondent: Mr M. D. Lisimba - Mambwe, Siwila and Lisimba Advocates JUDGMENT NGULUBE JA, delivered the Judgment of the Court. Cases referred to: 1. Mcqueen Zenzo Zaza vs ZESCO Limited, 2018/ CCZ/ 006 2. 3. Vacher vs London Society of Compositors, (1913) AC 107 Kaumba Lemba and Godfrey Songe Ndungu vs Senior Chief Ishindi and the Attorney General, Appeal Number 169/2010 4. Marcus Kapumba Achiume vs Attorney-General, SCZ Judgment Number 2 of 1993 • 1.0 INTRODUCTION 1. 1 In a Judgment delivered on 24 July, 2020, by Honourable Mr. Justice E. Mwansa of the Industrial Relations Division of the High Court, the Court ordered that the respondent be paid salaries from August, 2015 to the time his full redundancy payment would be made. The appellants appealed against the lower court's order on one ground, that it is contrary to the provisions of the law on redundancy. 2.0 BACKGROUND 2.1 The respondent was employed by Caltex Oil Zambia Limited in 1988, (which was later changed to Chevron (Zambia) Limited) and rose through the ranks to the position of Retail District Sales Manager - Developing Countries. He deposed that during his employment, his conditions of service were governed by the conditions of service for non-unionized staff of Caltex Oil Zambia Limited. In 2010, Chevron (Zambia) Limited was acquired by the appellants as a going concern and the conditions of the acquisition included that the employees of Chevron (Zambia) Limited would continue to be employed by the first appellant on the terms and -J2- .. conditions of service that they worked under prior to the acquisition. 2.2 After the acquisition of Chevron (Zambia) Limited, the first appellant was restructured and the respondent was offered the position of Regional Project Manager - Southern Africa, as the position that he held prior to the acquisition was not available anymore. The respondent was of the view that this was a demotion as the scope of responsibility for the new position was smaller than the one that the respondent held previously. The respondent declined to accept the position he was offered and proposed that the first appellant declares him redundant, based on the conditions of service that governed his employment. However, this was not considered. 2.3 In 2011, the respondent was assigned to work as Managing Director in Tanzania but this was a temporary assignment and his contract remained with Engen Marketing Limited in Zambia under the Caltex Conditions of Service. 2.4 The respondent's contract was scheduled to end in July, 2015 but in May, 2015, a Project Manager was sent to Tanzania from South Africa, whose assignment was to oversee the hand over to the Acting Managing Director of Engen Tanzania Limited. The respondent -J3- alleged that the Project Manager tried to harass and bully the respondent out of the company. He stated that he had an acrimonious relationship with the Project Manager and on 10 July, 2015, the respondent was informed that there was no position for him in Zambia. He was given a notice of termination of employment which was effective on 31 July, 2015. The respondent was informed that he would be paid retrenchment benefits amounting to ZMW2,683,795.5 which was calculated at the rate of2 months' pay for every year served. 2.5 The respondent deposed that this was contrary to the provisions of the Caltex conditions of service which provided for 5 months' pay for every year served as redundancy pay amounting to ZMW7 ,082,071.88. 2.6 The respondent informed the appellant of the underpayment of his benefits and demanded that he be paid in accordance with his conditions of service. The appellants responded on 31 July, 2015, informing the respondent that he was paid the severance package in accordance with the law. He was encouraged to make a claim out of the company's pension scheme but the respondent was of the view that this was irrelevant for the payment of redundancy benefits. -J4- 2.7 The respondent stated that he was paid ZMW2,683,795.50 as his severance pay and from the time he left employment in July, 2015, he had not been paid his full wages up to payment of his terminal benefits as is provided for in his conditions of service. The respondent contended that ZMW4,398,276.38 of his redundancy benefits remained outstanding. 2.8 The respondent sought an order that his redundancy benefits be calculated and paid at the rate of 5 months' pay for each year worked with the respondent's conditions of employment. 2.9 The respondent further sought an order that he be paid ZMW4,398,276.38 as the outstanding balance from his redundancy package amounting to ZMW7,082,071.88 calculated at 5 months' pay for each year served. He also sought an order that he be paid his full wages from the date of termination of employment to the date his redundancy benefits would be settled in full. 2.10 The respondent also sought damages for breach of contract for the respondent's failure to adhere to the grievance code, with interest on the amounts found due, and costs. -JS- 3.0 APPELLANTS' ANSWER AND COUNTERCLAIM IN THE LOWER COURT 3.1 The first appellant filed an Answer and deposed that it acquired Chevron (Zambia) Limited, that the respondent was engaged as Marketing Retail District Sales Manager - Developing Countries and that there was no change in the position that he previously held nor in the conditions of service that he was employed under previously. 3.2 It was further deposed that after the acquisition of Chevron by the first appellant, there was a restructuring exercise in the first appellant company which led to the termination of the respondent's employment by way of redundancy. Prior to being declared redundant, the respondent was offered two alternative positions, of HESQ Manager and Commercial Manager with the same duties and benefits as that of Marketing Retail District Sales Manager which offer the respondent rejected. 3.3 The first appellant deposed that there was a transfer of employees from the first appellant to the second appellant and a revision of the employees' conditions of service was effected after consultation with the affected employees, including the respondent. -J6- 3.4 The employees then joined the appellants' Saturnia Regna Pension Fund administered by Africa Life Financial Services Limited and reduced the redundancy benefits payable from 5 months' pay per year of service. According to the first respondent, the balance of 3 months' pay under the Chevron conditions of service would be accommodated as a lump sum payment into the newly formed pension fund. 3.5 The first appellant maintained that the respondent's contract of employment was terminated in accordance with the law and the revised conditions of service. According to the first appellant, the respondent's contract of employment was terminated by way of redundancy and not as a result of the alleged misconduct. 3.6 The first appellant deposed that the respondent agreed to have part of his redundancy package paid under the Pension Scheme as there were no accrued benefits under Chevron to be transferred to the first appellant's pension scheme. 3.7 It was deposed that when the respondent consented to transfer to the Pension Fund, he accepted to have his conditions of service varied and consolidated into the second appellant. The first appellant denied owing the respondent any of the reliefs sought and averred that the claims against it lacked merit. -J7- 3.8 The first appellant filed a counterclaim, seeking the recovery of the sum of ZMW2,501,998.48 being three months payment for each year served for the period 1988 to 31 July, 2015 through a private pensions scheme managed by African Life on behalf of the appellants. 3.9 It was deposed that the monies were advanced to the respondent in error as they were not part of his redundancy package. The appellants deposed that the respondent only joined the Pension Fund on 31 March, 2012 and could only claim monies outstanding on the contributions the respondent made to the fund between 31 March, 2012 and 31 July, 2015. 3.10 The appellants counterclaimed for the repayment of a total sum of ZMW2,501,998.48 which was allegedly paid in error to the respondent by the appellants. They also sought interest and costs. 4.0 CONSIDERATION OF THE MATTER BY THE LOWER COURT 4.1 The lower court heard the respondent and two witnesses who testified on behalf of the appellant. The court came to the conclusion that the respondent's employment was terminated as his position of Retail District Sale Manager - Developing Countries was no longer available under the Engen Structure. The Court -J8- further found that the respondent's conditions of service did not change and that he was still working under the conditions of service of Chevron Company Limited. 4.2 The Court referred to Clause 21 of the Chevron Conditions of employment which provided that an employee whose contract of service had been terminated by reason of redundancy would be entitled to a redundancy package not less than five months per year of service as required by law. 4.3 The clause further provided that in the event that the company is unable to pay the redundancy benefits on the last day of duty of the employee, the company would continue to pay the employee full wages until the redundancy benefits would be paid as required by law. 4.4 The Court found that the respondent should have been paid his redundancy package at the rate of 5 months for each year served. The Court ordered that the respondent be paid the balance of the redundancy package at 5 months for each year served. 4.5 The court found that the respondent failed to state the injury that he suffered to prove that there was breach of contract and went on to state that the respondent being bullied and harassed did not constitute breach of contract. -J9- 4.6 Regarding the appellants' counterclaim, the court found that all Chevron employees joined the pension fund with a positive balance. The court referred to Clause 19 .2 of the Chevron conditions of service which provided that the pension fund would pay out in cases of death, resignation or retirement. The court stated that the respondent should not have been paid the lump sum from the pension fund since he did not meet the requirements for such a payment as provided for in Clause 19.2 of the Chevron conditions of service. 4.7 The court ordered that the money that was paid to the respondent by the appellants from the pension fund be recovered from him. The court ordered that the counterclaim should be found in favour of the appellants and that after assessment by the registrar, the balance would be paid to whoever would be found to be deserving. The matter was accordingly referred to the registrar for assessment. 5.0 THE APPEAL 5.1 Dissatisfied with the lower court's decision, the appellants appealed to this court, advancing one ground of appeal couched as fallows: 1. That the learned Judge in the court below erred both in law and fact when he ordered at page JB that owing to the error in computing the complainants redundancy -JlO- payment, the complainant be paid salaries from August 2015 to the time full redundancy payment will be made contrary to the provisions of the law on redundancy. 5.2 In arguing the sole ground of appeal, it was submitted that a trial court must make findings of fact after analyzing the evidence and the law and that where this is not done, the appellate court will reverse the said findings of fact. It was argued that the lower court has a duty to make findings of fact that are supported by the evidence on record. 5.3 It was argued that the lower court gravely misconstrued the meaning of clause 21.3 of the conditions of service as the correct rule of interpretation was not applied regarding when a complainant is entitled to continue receiving wages after they have been declared redundant. It was argued that the lower court ignored the fact that the appellants paid the respondent a lump sum package on his last day of employment, which was based on two months' pay. 5.4 It was argued that the lower court should have considered clause 21.3 in light of the literal rule of interpretation and this court1s attention was drawn to the case of Mcqueen Zenzo Zaza vs ZESCO Limited1 . -J11- 5.5 It was submitted that the primary rule of interpretation is that words should be given their ordinary grammatical and natural meaning and that only when there is ambiguity can recourse be had to other principles of interpretation. The case of Vacher vs London Society of Compositors2 was referred to where Lord Macnaghtan stated that- "Now it is "the universal rule" as Lord Wensleydale observed in Grey vs Pearson (3) that in construing statutes, as in construing all other written instruments, the grammatical and ordinary sense of the words is to be adhered to unless that would lead to some absurdity or some repugnance or inconsistency with the rest of the instrument in which case the grammatical and ordinary sense of the words may be modified so as to avoid that absurdity or inconsistency, but no further. 5.6 It was argued that the respondent would only have been entitled to be kept on the payroll if his redundancy package had not been paid to him at all and not when there was only a dispute regarding the calculation of the payment of the said redundancy package. 5.7 The case of Mcqueen Zenzo Zaza vs ZESCO Limited (supra) was referred to where the Constitutional Court held that- "Further, we do not agree with the interpretation of Article 189(2) advanced by the petition that, when -J12- • ~ terminal benefits are found to have been underpaid after a court action, the concerned employee should be paid salary for the period of the litigation up to the settlement of the Judgment sum found to have been underpaid. We cannot discern this proportion from the Article in issue." 5.8 It was submitted that the lower court fell in grave error when it found that the respondent was entitled to continue receiving full wages and salary due to a miscalculation of the redundancy package. It was argued that there was a change in the terms of the contract of service and that the appellants paid the respondent the redundancy package on the last day of employment. 5.9 It was contended that the lower court's findings of fact were contrary to the evidence on record and were a misapprehension of the law of redundancy. The case of Kaumba Lemba and Godfrey Bonge Ndungu vs Senior Chief Ishindi and the Attorney General3 was referred to where the Supreme Court stated that- "On many occasions we have pronounced that the appellate court will only reverse findings of fact made by a trial court if it is satisfied that the findings in question were either perverse or made in the absence of any relevant evidence or upon a misapprehension of the facts or that they were findings which on a proper view of the -J13- .. • evidence, no trial court acting correctly could reasonably make. 5.10 The case of Marcus Kapumba Achiume vs Attomey-General4 , was also referred to in this regard. We were urged to reverse the lower court's order and further order that the respondent reimburses the payments that he received as salaries from August, 2015 to date. 5.11 It was submitted that the lower court failed to give weight to pertinent evidence and law before it, which resulted in unfair dispensation of justice. We were urged to allow the appeal with costs to the appellants. 6.0 THE HEARING 6.1 At the hearing of the appeal, the learned Counsel for the appellant Ms Nachinga submitted that the appellants' would rely on the ground of appeal and heads of argument filed. 6.2 The learned Counsel for the respondent, Mr Lisimba submitted that the respondent had filed a cross-appeal in September, 2023, but had not filed the heads of argument. He sought leave to file the said heads of argument in court. Ms. N achinga, on behalf of the appellants opposed the application, stating that there was -J14- • 'l.' • inordinate delay on the part of the respondent to file heads of argument in respect of the cross-appeal when the said cross-appeal was filed in September, 2023. 6. 3 This Court considered the respondent's Counsel's application and declined to grant the respondent leave to file the heads of argument in support of the cross-appeal as there was inordinate delay on the part of the respondent. The application was accordingly dismissed. 7.0 CONSIDERATION OF THE MATTER BY THIS COURT 7.1 We have anxiously considered the record of appeal and the arguments filed by the appellant. The issue we are being called upon to determine is whether the respondent is entitled to be paid salaries from August 2015 to the time his full redundancy package will be paid. 7 .2 The issue whether the respondent should have been retained on the payroll is dependent on whether the appellant should have been paid his redundancy package at the rate of five months' pay for each year served as provided for under the conditions with Chevron or two months' pay as provided for under the conditions of service he had with the 1st appellant. -J15- • • 7.3 It is clear from the letter dated 1st December, 2010 at page 54 of the record of appeal that the appellants were to maintain the respondent's conditions of service previously had with Chevron. In the letter dated 1st February, 2011, where the respondent was appointed as Project Manager-South Africa, it was clearly stated that this particular contract would not replace the existing contract he had with the 1st appellant and would be based at the office in Zambia. It is also clear from the record that the position the respondent held with Chevron no longer existed under the 1st appellant and he declined the position he was offered. The respondent was declared redundant after his return from his assignment in Tanzania. The assignment letter on page 73 of the record of appeal, clearly provided that the terms and conditions therein would cease at the conclusion of assignment. The term and conditions enjoyed by the respondent during the assignment in Tanzania are therefore not applicable in determining what redundancy package would be applicable to the respondent. 7.4 It was argued that the conditions of service the respondent enjoyed with Chevron were amended to change the redundancy package from 5 months pay for each year served to 2 months pay for each completed year of service. There was no evidence presented before -J16- .. .... • the Court below to support the 1st appellant's assertion. The learned trial Judge was therefore on firm ground, when he found that the respondent was entitled to five months' pay for each completed year of service. 7.5 The question that remains is whether the respondent should have been retained on the payroll. There was a dispute between the parties as to whether the respondent should be paid his redundancy package under his previous conditions with Chevron or whether he should be paid under the new conditions. However, the 1st appellant paid the respondent his package as provided for under his previous conditions, presumably what the 1st appellant believed the respondent was entitled to at the time. The finding of the lower Court was essentially that the respondent was under paid his redundancy benefits. It would be absurd to order an employer to pay an employee's salary for the period simply because he is found to have been under paid. We are fortified by the case of Mcqueen Zenzo Zaza vs ZECSO Limited {supra} where the Constitutional Court of Zambia disagreed with the proposition that where terminal benefits are found to have been underpaid after a Court action, the concerned employee should be paid salaries for the period of the litigation. Therefore, the lower Court's award was -J17- • - .. - erroneous because it included salaries for the period that this matter was being litigated. 8.0 CONCLUSION 8.1 The appellants' appeal succeeds. The net effect is that the Judgment of the lower Court in relation to payment of the respondent's salary from August 2015 to the date of full payment of the redundancy package is hereby set aside. 8.2 This matter having emanated from the Industrial Relations Court Division of the High Court, we order that each party shall bear their own costs. . ~ COURT OF APPEAL JUDGE ({[Lb_ P. C. M. NGULUBE COURT OF APPEAL JUDGE ~ A. M. BANDA - BOBO COURT OF APPEAL JUDGE -J18-