Frank Chinambu and Anor v Zambia Airports Corporation Limited (2020/HP/0482) [2024] ZMHC 270 (3 December 2024)

IN THE HIGH COURT FOR ZAMBIA AT THE PRINCIPAL REGI HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: FRANK CHINAMBU TAPIWA CHIKUMBU AND ZAMBIA AIRPORTS CORPORATION LIMITED • 2020/HP/0482 1 ST PLAINTIFF 2ND PLAINTIFF DEFENDANT BEFORE THE HONOURABLE MRS. JUSTICE M. C. KOMBE For the Plaintiffs: Mr. S. Mulengeshi - Messrs. Mulengeshi & Company For the Defendant: Mrs. C. Phiri Jere - Messrs. Kaumbu Mwondela Legal Practitioners. JUDGMENT Cases referred to: 1. Colgate Palmolive (Z) Inc v. Abel Shemu Chika and 110 others (SCZ Appeal no. 181 of 2005). 2. Katusha Bwalya v. Chadore-Properties and another SCZ no. 20 of 2015). 3. Phinate Chona v. ZESCO Limited (CAZ Appeal no. 66 of 2019). 4. Investors Compensation Scheme Limited v. West Bromwich Building Society [1998] 1 WLR 896. 5. Holmes Limited v. Buildwell Construction Company Limited (1973) ZR 97. 6. Bank of Zambia v. Kasonde (SCZ Judgment no. 14 of 1997). 7. Credit Suisse Asset Management Ltd. v. Armstrong and others [1996] ICR 882; [1996] I RLR 450. • 8. Zambia Oxygen Limited and another v. Chisakula and others (SCZ Judgment no. 4 of 2000). 9. National Milling Company Limited v. Simataa and others, (SCZ Judgment no. 21 of 2000). 10. Gildah Ngoma and others v. World Vision Zambia (Appeal 159 of2019). 11. Cehave NV v. Bremer Handelsgesellschaft mbH (1976] QB 44. 12. Powell v. Braun (1954] 1 WLR 401 CA. 13. Wilson Masautso Zulu v. Avondale Housing Project (SCZ Judgment No. 10 of 2013). 14. Indo Zambia Bank Limited v. Mushauka Muhanga (2009) Z. R 266. 15. Robson Sikombe v. Access Bank (Zambia) Limited (SCZ/8/309/2013). 16. Tula Nayanda and four others v. Plessey Zambia Limited (Comp No. 152/2016). 17. Hastings Obrian Gondwe v. BP (Zambia) Limited (1995-97) Z. R. 178. 18. Jack S. Ward and N. B. Allen v. Leonard Kasula (SCZ Judgment No. 52/2000). Legislation and other works referred to: 1. The Employment Code Act No. 3 of 2019. 2. The High Court Rules, Chapter 27 of the Laws of Zambia. 3. The Rules of the Supreme Court, 1999 Edition. 4. Garner B. A, Black's Law Dictionary, 8 th Edition (Thomson West 2004). 5. Halsbury's Laws of England, Vol. 16, 4 th Edition, Re-Issue (Butterworths 1976). 6. Mwenda and Chungu: A Comprehensive Guide to Employment Law in Zambia, University of Zambia Press, Lusaka, 2021. J2 • 1. INTRODUCTION 1.1 In a writ of summons taken out on 13th May, 2020, the Plaintiff claims against the Defendant inter alia the following reliefs: (i) Damages for the breach of contract which was entered into between the Plaintiffs and the Defendant. (ii) Payment of repatriation allowance in favour of the 1st Plaintiff following the expiration of the contract between him and the Defendant. (iii) Payment of the outstanding end of year bonuses for 2019 in respect of both Plaintiffs. (iv) An Order compelling the Defendant to follow the provisions of the contract of employment and Director's Car Policy when calculating the selling price of the personal to holder motor vehicle namely Nissan Navara Registration Number BAL 1011 in the sale of the said vehicle to the 1st Plaintiff (v) Interest on the amounts found to be due. (vi) Any other relief that the court may deem.fit. (vii) Costs. 2. PLEADINGS 2 .1 The salient facts revealed by the pleadings are that the Plaintiffs ' were engaged by the Defendant company under fixed-term J3 • • contracts, holding positions as Director of Air Navigation Services and Director of Finance respectively. Although their contracts were set to expire on December 31, 2019, the Defendant terminated their employment on June 30, 2019, deeming their contracts to have run until the stipulated end date in December. The Plaintiffs' contractual period from June to December was monetized based on the Defendant's calculations. 2.2 It was stipulated in the contracts that the Plaintiffs would have the option to purchase their personal-to-holder vehicles at prices determined in accordance with the provisions of the Director's Car Policy. Upon the termination of their contracts, the Defendant extended offers to sell the personal-to-holder vehicles to the Plaintiffs. However, in the case of the 1st Plaintiff, the Defendant incorrectly calculated the price for the vehicle, thus breaching the terms outlined in the Director's Car Policy, which formed an integral part of the Plaintiffs' contracts. In contrast, the 2 n d Plaintiff was offered the opportunity to purchase his/her personal-to-holder vehicle at the correct price, and subsequently acquired it. J4 • 2.3 The Plaintiffs further averred that they were entitled to a repatriation allowance, which was only disbursed to the 2 nd Plaintiff and not to the 1st Plaintiff. Further that, both Plaintiffs were not remunerated their end-of-year bonuses as stipulated in their contracts. Consequently, the Plaintiffs had incurred losses and damages due to those breaches of contract. 2.4 In its defence, the Defendant disputed breaching any contractual provisions related to the employment contracts with the Plaintiffs. Regarding the Plaintiffs' contractual terms, the Defendant averred that only the 1st Plaintiffs contract expired on December 31, 2019, while the 2 nd Plaintiffs contract was deemed to have run until January 31, 2020, when it expired. 2.5 The Defendant claimed that the Plaintiffs' dues were calculated based on recognized and applicable guidelines. Regarding the purchase of personal-to-holder motor vehicles. The Defendant clarified that the employment contracts did not specifically cover this matter. Instead, other documents such as the Staff Handbooks were considered alongside the employment contracts. The Defendant disagreed with the assertion that the purchase price for the 1st Plaintiffs personal-to-holder vehicle JS • was not calculated according to the Plaintiffs contracted conditions. They affirmed that the calculation indeed adhered to the Plaintiffs contracted conditions of service. Furthermore, the Defendant indicated that their Board of Directors held the authority to determine the value of the Defendant's motor vehicles. 2.6 The Defendant also contested the assertion that the Plaintiffs were not paid their repatriation allowances, affirming that both Plaintiffs received repatriation allowances along with all other benefits. Concerning the claim for bonuses, the Defendant clarified that the Plaintiffs did not fulfill the specified conditions necessary to qualify for end-of-year bonuses. 2 . 7 In conclusion, the Defendant maintained that both Plaintiffs were indeed paid their repatriation allowances. They reiterated that eligibility for the end-of-year bonus was contingent upon meeting contractual requirements, which the Plaintiffs did not satisfy. Additionally, the calculation of the purchase price for the 1st Plaintiffs personal-to-holder vehicle was conducted in accordance with the terms specified in the 1st Plaintiff's contract of service. J6 • 3. PLAINTIFF'S EVIDENCE 3 .1 When the matter came up for hearing on 22nd July 2021, the 2 nd Plaintiff had filed a Notice of Discontinuance on June 7, 2021, on the grounds that all his claims had been settled by the Defendant. Therefore, the trial proceedings and the Court's decision are in respect of the 1s t Plain tiff who will hereinafter be referred to as the Plaintiff. 3.2 The Plaintiff testified on his own behalf and did not present any other witnesses. He stated that he was initially a pensionable employee from 1989 to 2010, and from 2010 to 2019, he worked under a three-year contract. He informed the Court that he no longer sought repatriation, as that matter had been resolved. 3.3 According to his testimony, in June 2019, six months before his contract was due to end, he was summoned to the office of the Chief Executive Officer (CEO). Also present was the acting Human Resources Director, who informed .him of the intention to terminate his contract. During the meeting, they mutually agreed that he would not face any disadvantages and would receive his full benefits. J7 • 3.4 He testified that in February 2020, he was offered his Personal to-Holder vehicle. Referring to the offer letter, found on page 14 of the Plaintiffs Bundle of Documents, he stated that the offer price contradicted the provision of the Director's Car Policy. When directed to page 82 of the Defendant's Bundle of Documents, which included the Handbook of General Terms and Conditions, he acknowledged that the Director's Car Policy was indeed part of it, though it was not explicitly included because it pertained to a selected few employees and the Handbook was already extensive. 3.5 Page 9 of the Plaintiffs Bundle of Documents was referenced, which contained the Director's Car Policy. The Plaintiff testified that since his personal-to-holder vehicle was less than a year old, it fell under Clause 10.2(ii) of the Policy, which stipulated a 20% depreciation before the vehicle could be offered to the eligible officer. He further stated that on page 14 of his Bundle of Documents, there was a letter from the Defendant Company offering the vehicle at a price of Kwacha Five Hundred Ninety Three Thousand, Eight Hundred and Forty-Two Thirty-Eight Ngwee (K593,840.38). The Plaintiff asserted that the issue arose J8 because he was offered to purchase the vehicle at a price reflecting only the 20% depreciation. 3.6 According to the Plaintiffs testimony, there was a discrepancy between the purchase price offered and the residual value as outlined in Clause 10.2(i) of the Director's Car Policy. This clause stated that an eligible employee was entitled to purchase the vehicle at 25% of its residual value. The Plaintiff claimed that this clause was not applied in his case and that only the depreciation was calculated in determining the purchase price offered to him. 3 .7 As an example of how the purchase price should be determined, the Plaintiff directed the Court's attention to page 16 of his Bundle of Documents. There, an email displayed vehicle computations for a vehicle he previously owned and another vehicle intended for a different employee. The Plaintiff emphasized that the Defendant should adhere to the proper computation methods to establish the purchase . price accurately. J9 3.8 Regarding his claim for a bonus, he asserted that he was entitled to receive it based on assurances that he would enjoy all benefits without exception for the remainder of his contract. 3 .9 He also testified that he sought damages for breach of contract, arguing that the Defendant did not adhere to the contractual terms in computing the purchase price of the vehicle. Additionally, he claimed that the vehicle was taken away, which incurred costs for him as he had to rent vehicles for transportation to and from his farm. 3 . 10 On the day the vehicle was demanded, he was 50 kilometers away at his farm and had to abandon his farming activities to return the vehicle. This led to further losses as he missed a crucial stage of applying fertilizer, resulting in the loss of his en tire crop. 3.11 During cross-examination, the Plaintiff confirmed that he had received repatriation. He acknowledged that he was not an employee of the Defendant at the time the vehicle was being repossessed but asserted that he still had a legal right to it. J10 .. 3.12 When directed to page l0(b) of the Plaintiff's Bundle of Documents, which contained the Director's Car Policy, the Plaintiff disagreed with its characterization as optional, asserting instead that the provisions were mandatory. 3.13 Regarding the computation policies found on page 16 of the Plaintiff's Bundle of Documents and page 6 of the Defendant's Bundle of Documents, the Plaintiff clarified that the policy on page 16 dated 2018 superseded the policy on page 6 dated 2012. 3.14 The Plaintiff stated that his personal-to-holder vehicle, which was the subject of the suit, was less than a year old. He refuted the claim that the options listed at 10.2(i), 10.2(ii), and 10.2(iii) of the Director's Car Policy were mutually exclusive, asserting instead that they were mutually inclusive. Additionally, he contended that the Board had no role in determining the vehicle's value and purchase price. 3.15 In relation to the claim for bonus payment, the Plaintiff stated that there was no written agreement to that effect as payment was discretionary. Jll 3.16 In re-examination, the Plaintiff clarified that the Board did not work out the value of the vehicle on offer. It was management that did that. As regards 10. 2, he clarified that it provided for eligibility whereas subparagraphs (i), (ii) and (iii) were what determined the purchase price. 4. DEFENDANT'S EVIDENCE 4.1 The Defendant called one witness, PATRICK TEMBO, the Manager Human Resource in the Defendant company. 4.2 He testified that the Plaintiff started work in the Defendant company in 1989 and served in different portfolios until October 2010 when he was appointed Director Air Navigation. His appointment as Director entitled him to a personal-to-holder vehicle as part of his conditions of service. The conditions of service also entitled him to purchase the personal-to-holder vehicle after four years. He narrated that since the contract was a three- year contract, it meant that for the vehicle to be offered, it would overlap into the next contract if it was renewed. Where the contract was not renewed, the eligible officer would still be given the first right of refusal to purchase the motor vehicle. J12 4.3 DWl narrated to the Court that there was a Director's Car Policy which guided the process of sale of motor vehicles. He explained that the Director's Car Policy found at page 101 of the Defendant's Bundle of Documents, in Clause 10, provided for the disposal of personal-to-holder vehicles. When the offer was made under Clause 10.2, it required approval of the Board whether the asset could be disposed of. 4 .4 Further that, according to the Handbook of General Terms and Conditions of Service and Employment found at page 82 of the Defendant's Bundle of Documents, the Board's approval was required to procure some assets above a certai.n limit. And in determining the offer price, options (i), (ii) and (iii) were used. 4.5 It was DWl 's testimony that the Plaintiff had previously bought his personal-to-holder motor vehicle. Since the vehicle had reached replacement point, 20% depreciation was applied and then offered at 25% of the residual value or book value. He explained that title in the vehicle passed when the purchasing process was completed. J13 • 4.6 Regarding the Plaintiffs claim for a bonus, DWl stated that a bonus was discretionary and only payable based on the financial performance of the corporation. The Plaintiff was not entitled as he had not been at work for six months and individual performance evaluation could not be done. 4 .7 In cross-examination, DWl stated that the Plaintiff qualified to be paid bonus on a pro-rata basis in accordance with the provisions under Clause k(iv) and (v) of the Hand book of General Terms and Conditions of Service and Employment. That these conditions provided for payment on a pro-rata basis for employees who had worked for at least six months but less than 12 months in a financial year. Since the Plaintiff was deemed to have worked up to 31 s t December 2019, he qualified for bonus on a pro-rata basis. 4.8 In relation to the sale of the personal-to-holder vehicle, DWl stated that the Plaintiff was an eligible officer and that he fell under options (ii) and (iii) of Clause 10 .2 of the Director's Car Policy. He agreed that the purchase price for the sale of the personal-to-holder vehicle was calculated by first applying 20% depreciation and then 25% of the residual value. He agreed that J14 • in respect of the Plaintiff, the amount of K593,840 .38 was the residual value and that 25% was not factored in. 4.9 He however, denied the proposition that the calculation for the Plaintiff's vehicle was not done in accordance with the Director's Car Policy, stating that the computation complied with option (ii) of Clause 10.2. 4.10 Regarding the approval of the Board before selling of vehicles, DWI maintained that the Board had to approve before the sale of a personal-to-holder vehicle but that it was management that recommended to the Board. When referred to Clause 13(a) of the Handbook of General Terms and Conditions of Service and Employment at page 82 of the Defendant's Bundle of Documents, DWl stated that the guidelines contained thereon were for the use of management. That the Director's Car Policy found at page 101 did not give authority to the Board to d etermine the price. Further that, other than what was contained at Clause 10.2, there was nothing else which guided on the disposal of vehicles. J15 • 4.11 In re-examination, he clarified that depending on the age of the vehicle, the residual value was arrived at either by option (ii) or (iii) of Clause 10.2 and after applying depreciation, adding that options (i) and (ii) were considered separately. 4 . 12 Further that, the Director's Car Policy was for the use of the Board and it was the Board that determined selling price. That in accordance with the Director's Car Policy, the price should have been 25% of the residual value. He clarified that the purchase price was arrived at by first exercising either option (ii) or (iii) and then applying option (i) but that in the case of the Plaintiff, the Board restricted it to option (i) only. 4.13 On the bonus, he explained tha~ the Plaintiff's performance appraisal had not been done for him to have been considered for bonus. 5. SUBMISSIONS 5.1 The parties complied with the orders for directions regarding the filing of submissions. 5.2 On behalf of the Plaintiff, learned counsel for the Plaintiff Mr. Mulengeshi submitted first on a party's freedom to contract. It J16 • was submitted that the parties freely and voluntarily entered into the contract and were therefore, bound by the contract and that the contract should be given legal effect. In support of this submission, the case of Colgate Palmolive (Z) Inc. v. Abel Shemu Chika and 110 Others (l), was cited. 5.3 On authority of the case of Katusha Bwalya v. Chadore Properties and Another l2l , where the Supreme Court stated that the Court will only refuse to enforce the contract where there is fraud and misrepresentation, it was submitted that the Defendant in the instant case had not pleaded fraud or misrepresentation. It was argued that it was a term of the contract of employment that the Plaintiff was entitled to purchase the personal-to-holder vehicle but that, the Defendant wrongly calculated the purchase price contrary to the Director's Car Policy. 5.4 Submitting on the interpretation of the terms of a contract, the Court of Appeal of Zambia case of Phinate Chona v. ZESCO Limited (3 ), was cited. In that case, the Court of Appeal referred to the English Court case of Investors Compensation Scheme Limited v. West Bromwich Building Societyl4 ) wherein it was J17 stated that interpretation of a contract entailed ascertaining the meaning to be ascribed to the document by a reasonable person having all the background knowledge available to the parties to the contract at the time of agreement. 5.5 It was further submitted that where the contractual terms were clear and unambiguous, they should not be modified and no extrinsic evidence should be allowed. In support of this submission, reference was made to the case of Holmes Limited v. Buildwell Construction Company Limited (5 ). 5.6 On the basis of the above, counsel submitted that the starting point was Clause 5.2 (b) of the Employment Contract dated 25th November, 2016. It was submitted that in accordance with Section 127 of the Employment Code Act No. 3 of 2019, this Court should apply a more favourable condition to Clause 10 of the Director's Car Policy to which the Plaintiff was amenable. Section 127 of Act No. 3 of 2019 provides as follows: "127. Where a contract of employment, collective agreement or other written law provides conditions more favourable to the employee, the contract, agreement or other written law shall prevail to the extent of the favourable conditions." J18 5. 7 It was further submitted that Clause 10.2(i) of the Director's Car Policy provided that an employee shall be offered a motor vehicle at 25% of its residual. 5.8 According to Black's Law Dictionary, 4 th Edition at 1473, residual means, the part remaining. That from Clause 10.2(i), depreciation should be charged to the motor vehicle first before it was offered to the employee at 25% of the residual value. 5.9 Furthermore, that the Defendant erroneously ascribed the powers to determine the value of the motor vehicle to the Board and therefore, the Defendant's reliance on Clause 13 of the Handbook of General Terms and Conditions of Employment and Service was misplaced and misguided. That in any case, Clause 13 did not refer to the Board determining the disposal price of personal-to-holder vehicles but rather referred to the Board determining the capacity and value of the personal-to-holder vehicles at the time of purchasing the vehicles. That Clause 13 itself referred to the detailed guidelines in the Directors' Car Policy. J19 • 5.10 It was submitted that a perusal of Clause 5.2(b) of the Plaintiff's employment contract revealed that the Director's Car Policy was part of the contract. Further that, it could be seen that the contract was signed on 25th November, 2016 while the General Terms and Conditions of Employment and Service Handbook were only approved on 28th September, 2018. Therefore, the Handbook was not referenced in the Plaintiff's employment contract, neither was the Plaintiff made aware of any amendments to the Director's Car Policy. 5.11 That notwithstanding, the Handbook still referred to the Director's Car Policy for detailed guidelines regarding personal to-holder vehicles and their considerations. 5 .12 In reference to page 16 of the Plaintiff's Bundle of Documents, it was submitted that the Defendant had applied the correct calculation for the Plaintiff's first personal-to-holder vehicle. That to now treat the Plaintiff differently and in a manner that was unfair, was against public policy which required that public institutions to be fair and consistent in their dealings with their employees. In support of this submission, the case of Bank of Zambia v. Kasonde (6l was referred to. In that case, the J20 • Supreme Court upheld the decision of the High Court in that the allegations against the Respondent had not been substantiated. That the Appellate Bank, being a public institution, and those running it must at all times adhere to the principles of fair play. 5.13 On the basis of the decision in the above case, it was submitted that the Defendant, being a public institution, should adhere to rules of fair play and not use a different calculation in respect of the Plaintiffs personal-to-holder vehicle as doing so would be discriminatory. In concluding on this aspect, it was submitted that the Plaintiff should be allowed to purchase his personal-to holder vehicle in accordance with Clauses 10.2(i) and 10.2(iii) . 5.14 I was invited to take judicial notice of the fact that at the time of commencement of this matter, the age of the vehicle was under one year but as at April 2022, the vehicle was over three years. Therefore, the calculation of the purchase price should be in accordance with Clause 10.2(i) and 10.2(iii) of the Director's Car Policy. J21 • 5.15 As regards the bonus, it was submitted that in the meeting of June 2019, it was agreed that the Plaintiff would stop work on condition that the Defendant would honour its contractual obligations to the Plaintiff for the remainder of the duration of the contract which was to expire in December 2019. That it was laid in evidence that the Defendant continued paying the Plaintiff money for newspapers , fuel money as well as sending T-shirts but decided not to pay him the Christmas bonus which all other employees were paid. The Bank of Zambia v. Kasonde decision was reiterated for emphasis. Therefore, the Plaintiff should be paid his 2019 Christmas bonus. 5.16 The Plaintiff concluded by submitting that he be granted the reliefs sought. 5.17 The Defendant filed its final submissions in which it asserted that there was no breach of contract as alleged by the Plaintiff. That Clause 10 of the Director's Car Policy relied on by the Plaintiff was not a basic condition of service but merely a guideline in Clause 3. To emphasize the argument that basic conditions of service had a contractual effect 1n contradistinction to guidelines, the following cases were cited: J22 • Credit Suisse Asset Management Ltd. v . Armstrong and others (71; Zambia Oxygen Limited and Another v . Chisakula and Others l8l; and National Milling Company Limit ed v. Simataa and Others 191, in which the superior courts found conditions of service to have a contractual effect. 5.18 According to the Defendant, the Supreme Court, 1n the National Milling case, held that basic conditions were fundamental and essential and affected the essential character of the bargain and breach thereof, would justify the innocent party to repudiate or rescind the contract. 5 .19 On the other hand, in Gildah Ngoma and Others v. World Vision Zambia (lO) , th e Court of Appeal held that a manual did not form part of conditions of service and was just a guidance to management. To augment this argument, the English case of Cehave NV v . Bremer Handelsgesellschaft mBH 11 11 was referred to in which Roskel LJ stressed the importance of the court to distinguish between breach of a condition which gave rise to a right to reject and that breach which was founded in damages. J23 • 5.20 On the basis of the case law cited, the Defendant submitted that the question that this Court should address was whether the Director's Car Policy amounted to basic conditions of service. 5.21 It was submitted that there was no dispute that the Plaintiff was entitled to a personal-to-holder vehicle but that the entitlement was only for the duration of the contract. The contract having ended, a new relationship was created between the Plaintiff and the Defendant. The Defendant could not therefore, be said to have breached the contract when it was the Plaintiff who did not accept the Defendant's offer to purchase the vehicle at the price of K593,842 .38. 5 .22 The Defendant properly computec;l the purchase price of the vehicle. The Plaintiff's reliance on the computation done in relation to vehicles which were four years old was distinguishable as the vehicle now under consideration was brand new and had not yet clocked a year. 5.23 On the Plaintiff's claim for a bonus, the Defendant referenced Black's Law Dictionary, at page 194 where bonus is said to be: J24 • "A premium paid in addition to what is due or expected ... in the employment context, workers bonuses are not a gift or gratuity, they are paid for services or on consideration in addition to or in excess of the compensation that would ordinarily be given." 5.24 The Halsbury's Laws of England, Vol. 9 at paragraph 512 was also referred to where the authors stated as follows: "A condition may be subject to an event which is dependent upon the will of one or both of the parties to the contract or of a third person. Where services are performed under an agreement that remuneration shall be in the discretion of the employer, the question whether the employer has the right to determine whether any remuneration shall be paid, so that his decision is a condition precedent to any claim, or merely has the right to itx the amount of the remuneration is a question of construction and intention in each particular case. If the amount only is left to the decision of the employer, the employee is entitled to be paid a reaso.nable sum." 5.25 The Defendant distinguished the definitions reproduced above which placed a bonus as discretionary with the holding in the case of Powell v. Braun l12J where the Court found that the parties did not intend for the bonus to be purely discretionary. J25 • Applying the authorities referred to above, to the current case, the Defendant submitted that Clause 8.11 of the Conditions of Service for Non-Unionized and Contract Staff provided for a bonus to be paid at the discretion of management and subject to the performance of the corporation. Further that, a bonus was upon performance review. The Plaintiff, not having completed the contract, was not subjected to the annual performance management review and therefore, not entitled to a bonus. 5.26 The Defendant concluded by submitting that the matter lacked merit and should be dismissed with costs to the Defendant. 6 . DECISION OF THE COURT 6 . 1 I have considered the parties' pleadings, oral testimonies as well as their competing final submissions. 6.2 From the outset I wish to state that the burden of proof lies on the Plaintiff to prove his case on a balance of probabilities. In the case of Wilson Masautso Zulu v. Avondale Housing Project (l 3 ) the Supreme Court stated that: J26 .. "Where a plaintiff alleges that he has been unfairly dismissed, as indeed in any other case where he makes an allegation, it is for him to prove those allegations. A plaintiff who has failed to prove his case cannot be entitled to a judgment whatever maybe said of the opponent's case." 6.3 Having considered the pleadings and evidence adduced by the parties, the following facts are not in dispute: (i) The Plaintiff and the Defendant were . Ill an employee/ employer relationship. (ii) The parties mutually agreed to sever the employment relationship before the end of the term of the contract on condition that the Plaintiff would be deemed to have completed the contracted term and on assurance that he would be given all that was due to him for the remainder of the contracted term. (iii) The Plaintiff was entitled to be offered to purchase his personal-to-holder vehicle either at the end of four years when the vehicle became due for disposal, or, at the point J27 • of severance of the employment relationship, where the contract is not renewed. (iv) In pursuance to the agreement, the Plaintiff continued receiving all benefits due to him for the remainder of the contract term, including newspapers. 6 .4 The misunderstanding which culminated into this suit arose when according to the Plaintiff, the Defendant did not follow terms of the Director's Car Policy in computing the purchase price for the personal-to-holder vehicle and also not paying the Plaintiff his bonus for the year ending December, 2019. 6.5 In response to this assertion, the Defendant contends that it was the Board that determines the purchase price as opposed to management, adding that management only recommends to the Board. 6.6 Further, whereas the Plaintiff contends that the computation should have been in accordance with the Director's Car Policy, the Defendant on the other hand argues that the Director's Car Policy is an ancillary document which is subject to the J28 • Handbook of General Terms and Conditions of Employment and Service and only caters for a select few individuals. 6 .7 To this, the Plaintiff asserts that the same Handbook actually refers to the Director's Car Policy when it comes to computation of purchase price for personal-to-holder vehicles. 6.8 Arising from the above, the issues for determination by this Court are threefold. (i) Who determines the purchase/ sale price of personal to-holder vehicles? (ii) Was the purchase/ sale price for the Plaintiffs personal-to-holder vehicle arrived at within the provisions of the contract of employment? (iii) If the answer to (ii) above is in the negative, was there a breach of contract? (iv) Was the Plaintiff entitled to bonus pay? 6.9 Who determines and the purchase/sale price of personal-to holder vehicles? J29 • 6.10 With regards the first issue, a perusal of the Handbook of General Terms and Conditions of Employment and Service, found at page 82 of the Defendant's bundle of documents, in Clause 13(a) entitled 'personal to holder vehicles', reads as follows: "The Chief Executive and Directors shall be entitled to company vehicles on a personal-to-holder basis. The capacity and value of the motor vehicles shall be determined and approved by the board from time to time. Detailed guidelines are contained in the Director's Car Policy document." 6.11 Clause 13(a) reproduced above begins by giving provision for the Chief Executive and Directors to have personal-to-holder vehicles. This is followed by the requirement of the Board's approval in determining the capacity and value of the vehicle. At this point, it is envisaged that the Board has to approve at procurement stage the capacity and value of the vehicle that the institution has to procure for the Chief Executive and Director. 6.12 The Clause goes further to refer the reader to the Director's Car Policy. Clause 3 of the policy gives the Objective of the Car Policy. It reads as follows: J30 • "This policy is intended to provide guideline in respect of the allocation, utilization and disposal of personal to holder- vehicles allocated to the Chief Executive Officer and the Directors." 6 . 13 What the foregoing entail is that once the Board has determined what vehicles to procure for the Chief Executive and Directors, the policy offers guidelines in terms of vehicle allocation, utilization which includes control, fuel allocation, refueling and repairing. It also addresses the issue of disposal of vehicles. 6.14 In terms of disposal, guidelines are provided under Clause 10. Details of this clause will be discussed when considering the second question suffice it to mention that the employee, that is the Chief Executive Officer and the Director are given the right of first refusal to purchase their own personal-to holder-vehicle. 6.15 Clause 10.2 guides on how the purchase price is to be determined before it is offered for sale to the employee. According to the evidence of DWl, the Defendant's own witness, the guidelines are used by management which makes recommendations to the Board for approval. That there is J31 nothing in the guidelines which gives the Board authority to determine the price at disposal stage. 6.16 Given the foregoing, it is abundantly clear and I find that the Board determines and approves the capacity and value of motor vehicles at procurement stage while management determines the price of the vehicle based on the guidelines in the Directors Car Policy at disposal stage and recommends to the Board for approval. 6.17 Was the purchase/sale price for the Plaintiff's personal-to holder vehicle arrived at within the provisions of the Director's Car Policy? 6.18 Coming to the second issue of computation of the purchase price for the Plaintiffs personal-to-holder vehicle, I have already stated that the Director's Car Policy exhibited at page 1 O(b) of the Plaintiff's bundle of documents gives guidance on disposal of director's personal-to-holder vehicles. For ease of reference, Clause 10, entitled 'disposal of personal-to-holder vehicles for directors' is reproduced below. "10. On replacement of personal-to-holder motor vehicles, the old vehicle shall be offered for purchase to J32 the user Director under the following circumstances and terms: - 10.1 The employee will be given the first right of refusal to purchase own personal-to-holder vehicle when leaving employment at any time of the contract 10.2 The employee will be offered to buy the vehicle on expiry of the three- year contract, if one's contract has not been renewed or upon attaining four years, if the employee's contract has been renewed, at which time the vehicle is due for replacement. The following options shall be available to eligible officers on the purchase of the motor vehicle: - (i) eligible officers shall be offered to purchase vehicles at Twenty-five (25) percent of the residual value; (ii) For vehicles that are below One (1) year Twenty (20) percent depreciation shall be charged before the vehicle is offered to the eligible officer (iii) For vehicles that are between Two (2) and Four (4) years, twenty (20) percent depreciation shall be charged annually before the vehicle is offered to the eligible officer." J33 6.19 Clause 10.1 is clear and unambiguous in its terms. It is trite that when interpreting the contract of employment, if the provisions are expressed in plain language and there is nothing to warrant the court to put on them a construction different from what the words import, the actual words used must prevail. 6.20 In this regard, Clause 10.1 should be given a literal interpretation. It gives the employee having a personal-to-holder vehicle the first choice to either purchase the vehicle or not. However, there is a difference in interpreting what is termed as the options under 10.2. According to Clause 10.2, where the employee chooses to purchase the vehicle, the options at (i), (ii) and (iii) are used to determine the amount of depreciation to be applied and ultimately the purchase price. 6.21 In my understanding of the entire Clause, what is termed as option (i) is not supposed to be an option but a general provision giving the value at which vehicles will be offered to eligible officers. This value is pegged at twenty-five percent of the residual value. J34 6.22 How is the residual value arrived at? This is arrived at by either applying option (ii) which is the amount of depreciation to be applied to vehicles less than one- year old or by applying option (iii), which is the amount of depreciation applied to vehicles that are between two and four years old. 6.23 After the residual value has been determined after applying either option (i) or (ii) depending on the age of the vehicle, then the general provision is applied to determine the purchase price. The purchase price will therefore be at twenty- five percent (25°/o) of the residual value. 6 .24 It is not in dispute that the Plaintiff was a Director in the Defendant company. He therefore, falls in the ambit of the Director's Car Policy. There is testimony from both parties that the Plaintiff's vehicle, subject of this litigation, was slightly below a year at the time that the Plaintiff entered into an agreement with the Defendant to give up his position and stop work. The vehicle therefore, falls under option (ii) of Clause 10.2. BS 6.25 Option (ii) provides for twenty percent (20%) depreciation to be charged to vehicles that are below one year. After charging twenty percent depreciation for vehicles below one year, the Defendant was supposed to apply the general provision by charging twenty-five (25%) on the amount found in option (ii) in order to arrive at the purchase price. 6.26 It is clear from the evidence on record that the Defendant did not factor in the twenty-five percent (25%) as it considered it as an option. Based on the wording used, what is provided for as option (i) cannot be an option as it is a provision which applies to all eligible officers. In my view therefore, the contra proferentum role would apply which is that where there is a doubt or ambiguity about the meaning of a contract, the words will be construed against the person who put them forward in a particular contract. 6.27 I am fortified by what was stated by the Supreme Court in the case of Indo Zambia Bank Limited v. Mushauka Muhanga (l l when it held inter alia that: "If the insertion of the words "permanent and pensionable" was a result of careless drafting, then J36 • .. under the doctrine of contra proferentum the document has to be construed against them and in favour of the respondent." 6.28 Guided by the above authority and given what I have stated that clause 10.2 (i) is of general provision and the ambiguity arose because of the use of the word option to Clause 10.2 (i), I find that the use of the word option was as a result of careless drafting and therefore under the doctrine of contra proferentum the clause has to be construed against the Defendant and in favour of the Plain tiff. 6. 29 In view of the foregoing, I find that: (i) The Plaintiff's personal-to-holder vehicle having been less than one- year old, twenty percent (20%) depreciation should have been applied then followed by twenty-five percent (25%) of the residual value to arrive at the purchase price. (ii) The Defendant only applied twenty p ercent (20%) depreciation which was a wrong computation. 6.30 If the answer to (ii) above is in the negative, was there a breach of contract? J37 • ... 6 .31 The Plaintiff contends that even though it was a term of his contract of employment that he was entitled to purchase a personal-to-holder vehicle, the Defendant offered it to him to purchase as a wrongly calculated price which was not in accordance with the Director's Car Policy which was part of his contract of employment. 6.32 The Defendant on the other hand has argued that there was no breach of the Plaintiff's contract of employment as the Director's Car Policy was not a basic condition of service but merely a guideline as stated in clause 3 line 1 on page 8 of the Defendant's bundle of documents on how the Defendant's motor vehicles were to be disposed of. 6.33 In employment law, terms and conditions of employment are what regulate the employment relationship between parties. According to the learned authors Winnie Sithole Mwenda and Chanda Chungu in the book entitled: A Comprehensive Guide to Employment Law in Zambia, they stated that: "In Zambia the terms and conditions are also referred to as conditions of service ... Express terms refer to those terms which are negotiated, agreed to and explicitly J38 • .. outlined in a contract of employment... Incorporated terms are terms that are not specifically agreed to by the employer and employee individually but are explicitly incorporated into individual contracts of employment." 6.34 In relation to incorporated terms, the same authors state that these terms may be set out in documents such as workplace rules, company handbooks, disciplinary codes and collective agreements. Therefore, when an employee signs a contract of employment, the employer's code of conduct or handbook also binds the employee if the contract makes reference to that handbook. 6.35 Thus, the Supreme Court in the case of Robson Sikombe v. Access Bank (Zambia) Limited (lSJ rejected an argument by the employee that he was only bound to the contract of employment and not other documents affecting the employment relationship. The employee attempted to argue that he was only bound to the letter of offer of employment and his contract and not the staff handbook which laid out disciplinary measures. In its judgment, the Supreme Court held inter alia that: " .. . Clearly the provisions of the staff handbook were incorporated into the appellant's employment contract J39 and applied with full force and effect as if the appellant had signed them specifically." 6.36 The significance of this case is that it highlights the principle that for a code of conduct or company policy or handbook to form part of the employment contract, the contract must make mention of the documents or they must be attached to the contract. 6.37 This principle was applied by Musaluke J. (as he then was) in the case of Tula Nayanda and four others v. Plessey Zambia Limited 116 ). In that case, the company had an Incentive Policy and Procedures document that provided for bonuses and other incentives. This policy was an addendum to their fixed term of contracts. However, when the employees' fixed term contracts came to an end on 30th September, 2014, they entered into new fixed term contracts but these renewed contracts did not have the incentive policy attached. In delivering judgment, the Judge stated that: "I have perused the Incentive Policy and Procedures document at "JHK. IA". It is clear this Policy on incentives was executed as an addendum to the expired contracts. The contracts under which the complainants J40 • were operating prior to being declared redundant were those executed in 1 October 2014 ... There is no mention of an Incentive Policy in the contracts of 1 October 2014. It follows therefore that the Incentive Policy was not a condition of service." 6.38 Based on the foregoing, the Court held that because there was no mention of the Incentive Policy in the renewed contracts of employment, the employees could not claim the bonus in that document as it was not part of their new contract of employment. 6.39 In the present case, it is not in dispute that the Plaintiff and the Defendant were in an employee/employer relationship. The Plaintiff's employment contract is at page 2-8 of the Plaintiff's bundle of documents. According to Clause 5.2 (b) on Transport, it reads as follows: "The Employee will be availed a personal to holder motor vehicle which is as stipulated in the Director's Car Policy document for official and personal use with an allocation of 350 liters of fuel per month." 6.40 5.2 (k) reads as follows: J41 ., "Other conditions of service applicable to this Contract of Employment shall be in accordance with the following documents: - -Handbook of General Terms and Conditions of Employment and Service. - Handbook of Conditions of Service for Contract and Non-Unionized Employees. -Director's Car Policy." 6.41 What is clear from the above provision is that the Handbook of General Terms and Conditions of Employment and Service, Handbook of Conditions of Service for Contract and Non Unionized Employees, Director's Car Policy were incorporated in the Plaintiffs contract of employment as his conditions of service applicable to the Plaintiffs contract of employment and so I find. 6.42 In view of the above finding, I do not accept the Defendant's contention that the Director's Car Policy was not a condition of service. In point of fact, the case of Gilda Ngoma & Others v. World Visions which the Defendant has relied on held that the manual served as a guidance to management on how to run the organization and its employees and did not form part of the conditions of service for its employees because the manual was J42 ♦ • not expressly incorporated in the appellant's conditions of service. This case therefore does not assist the Defendant. 6.43 The question now that begs an answer is whether the Defendant breached the Plaintiffs contract of employment. It is important to state from the outset that the condition of service that the Plaintiff was entitled to a personal to holder vehicle is what in employment law is termed fringe benefits. 6.44 Mwenda and Chungu define fringe benefits as: "Those benefits that supplement the employee's wage or salary such as the use of a company car or company house or the payment of an employee's children's school fees." 6.45 In the case of Hastings Obrian Gondwe v. BP (Zambia) Limited 117) the Supreme Court stated that there are two types of fringe benefits. The first type refers to those that are enjoyed as an incident of employment which terminate with the termination of employment. The second type are those which are enjoyed after a certain period while in employment or at the end of employment which can be enjoyed after termination of employment. J43 • 6.46 The same authors state that once the fringe benefits terminate with employment contract, an employee has no legal right to enjoy or use the fringe benefit. This was stated by the Supreme Court in the case of Jack S. Ward and N. B. Allen v. Leonard Kasula (isi that: ''Where an employee is no longer an employee of the employer corporation, the employer has no legal obligation to provide him with accommodation." 6 .47 In relation to those benefits that do not terminate when the employment relationship ends, the Supreme Court in the Hastings Obrian Gondwe case stated that: "Personal to holder motor vehicle is not an incidence of employment but a benefit which the employee is to continue enjoying after he leaves the employer's employment." 6.48 However, the employee is only entitled to keep or enjoy the fringe benefit if that is the term of the contract of service and where there is a firm off er to purchase from the employer and an acceptance of the off er. 6.49 In the present case, the Defendant however contends that while the Plaintiff was entitled to a personal to holder vehicle as J44 provided for in clause 5.2 (b) of his employment contract, this entitlement was only for the duration of the contract. That once the contract came to an end, the disposal procedure created a new relationship between the parties based on offer, acceptance and consideration. 6.50 Therefore, it is contended that it cannot be a breach of contract when the Plaintiff did not accept the Defendant's offer to purchase the vehicle at the price of ZMW 593,842.38 and there was no consideration to complete the formation of the contract. 6.51 The Defendant in my view has taken this position because its starting premise is that the Director's Car Policy was not incorporated in the Plaintiff's employment contract. However, I have made a finding that the Plaintiff was entitled to a personal to holder vehicle and by virtue of the policy which was incorporated into the contract, he was entitled to purchase the vehicle upon the expiration of the three-year contract. 6.52 In short, what the foregoing means is that the entitlement to a personal to holder vehicle was not an incidence of employment which terminated when the contract of employment expired but J45 • one which the Plaintiff continued to enjoy after he left the Defendant's employment. This is because it was provided for in the contract that he would be entitled to purchase the same when the contract expired. 6.53 It is not in dispute that the Plaintiff was offered to purchase the subject motor vehicle at the price of ZMW 593,842.38. The letter of offer at page 14 of the Plaintiffs bundle of document's shows that the amount was arrived at by reducing the purchase price of ZMW 742,302.93 by 20% depreciation for 2019, the year in which it was procured. That the same was in line with clause 10.2 (ii). 6.54 While the Plaintiff accepted the offer to purchase the vehicle, he did not accept to purchase it at the amount of ZMW 593,842.38 as shown by his letter at page 1 7 of the Plaintiffs bundle of documents. The fact that he did not accept that amount in my view does not mean that there was no binding contract which the Defendant breached. 6.55 I have made a finding that the Director's Car Policy which contained the formula to be applied at disposal stage was J46 ' 6.58 The Defendant on the other hand contends that Clause 8.11 of the Conditions of Service for Non-Unionized and Contract Staff provides for a bonus to be paid at the discretion of management and subject to the performance of the corporation. Further that, a bonus is paid upon performance review. The Plaintiff, not having completed the contract, was not subjected to the annual performance management review and therefore, not entitled to a bonus. 6.59 I have perused the Handbook of General Terms and Conditions of Employment and Service. At page 81 of the Defendant's Bundle of Documents is Clause k entitled 'Bonus rules and Guidelines'. 6.60 For the sake of clarity, the Clause provides that: "Bonus payment is determined by management and paid subject to performance of the Corporation and Board approval. Following the implementation of the Performance Management System (PMS) in 2012, payment of bonuses if applicable shall be on the basis of individual performance. Below are the detailed Rules and Guidelines for payment of bonus: J48 ' (i) Payment of annual bonus shall be determined at the sole discretion of management and the Board of Directors depending on the company's financial performance. (ii) The annual bonus shall be paid to employees on the basis of individual performance. The annual performance rating for the year will be used to allocate the bonus for employees on PMS system. (iii) Employees who fail to submit their annual performance appraisal forms to Human Resources Department by cut-off date shall not be eligible for payment of bonus. (iv) Payment of bonus will be restricted to employees who have worked a minimum of six months in the financial year under consideration. (v) Employees who have worked for more than six months but less than 12 months in the financial year will be paid bonus on pro rata basis. (vi) Employees issued with a final written warning will not be eligible for payment of bonus during the financial year in which the letter was issued." 6 .6 1 Wh at I have discerned from the above clause is th at b onus is determin ed at t h e discretion of m anagem ent and th e Board J49 depending on the financial performance. Employees are paid based on their individual performance for the year. This is the foundation parameter for eligibility. On the tenure of service in the particular performance year, the minimum allowable is six (6) months and any period above six (6) months but below one (1) year bonus shall be paid on a pro rata basis. 6. 62 In relation to the Plaintiff, the basis for determination of eligibility would be on the performance rating for the period worked. However, the evidence is that the Plaintiff was not appraised for the financial year that the bonus was supposed to be paid but he had worked for six months which is the minimum allowable for bonus payment. 6 .63 The view that I hold is that the Plaintiff was supposed to be appraised at the time of separation especially that there is indisputable evidence that he was assured that he would not be disadvantaged by the termination but that he would continue to receive what he was entitled to. 6.64 I am fortified in holding this view based on the letter at page 12 of the Plaintiff's bundle of documents which shows that the JSO Plaintiff's contract of employment ceased as at 30th June, 2019 but the remainder of the contract was encashed up to 31 st December, 2019 so that he did not lose his entitlements like basic salary, housing allowance, utility allowance, fuel and social tour among other entitlement. 6 .65 The Defendant's witness in cross examination also admitted that it was agreed that the Plaintiff would continue receiving the above benefits up to December 2019 and that the Plaintiff used to receive these benefits like the other Directors in the Defendant company who were still in employment. Thus there was no difference. 6.66 The Defendant's witness also admitted that the Plaintiff was entitled to a bonus according to clause (iv) because he had worked for six (6) months. 6.67 In view of the foregoing and given the fact that the appraisal was not done through no fault of the Plaintiff, I find that the Plaintiff cannot be disadvantaged because it was the Defendant's obligation to ensure that the appraisal process was closed before he separated so that he could also benefit from the bonus JSl ► 1v. The amounts in (ii) and (iii) a bove shall attract inter est at short term deposit rate from date of writ to date of judgment and thereafter at Bank of Zambia Comm ercial lending rate fr om date of judgment to final payment. v. Costs of this suit are awarded to the Plaintiff to be taxed in default of agreement. 6.70 Leave to appeal is granted . DELIVERED AT LUSAKA THIS 3RD DAY OF DECEMBER, 2024 ')-t • ••• ••• • •••••••••••••• •• ••••••••••• M. C. KOMBE JUDGE J53