Ndau, Mafeni & Partridge v Press Corporation PLC (MATTER NUMBER IRC 417 of 2022) [2024] MWHC 54 (22 October 2024)

THE MALAWI JUDICIARY IN THE INDUSTRIAL RELATIONS COURT PRINCIPAL REGISTRY MATTER NO. IRC 417 OF 2022 In the dispute between: BENARD NDAU...………………..………………….….……………1ST APPLICANT ELIZABETH MAFENI...………………….….……………………..2ND APPLICANT DR. GEORGE PARTRIDGE………………………………………..3RD APPLICANT -AND- PRESS CORPORATION PLC…………………….……………….. RESPONDENT CORAM: TAMANDA C. NYIMBA J. Suzi Banda P. Mpaka R. Msimuko (Mrs) : Deputy Chairperson : Counsel for the Applicant : Counsel for the Respondent : Court Clerk JUDGMENT PRELIMINARIES 1.1 Press Corporation PLC, the respondent herein, is a public company incorporated under the Companies Act 1984 and is listed on the Malawi Stock Exchange. It is the country’s largest business corporation with its tentacles spread across different sectors of the Malawi economy. As the nation’s leading and highly diversified holding company, the respondent has stakes in several companies comprising of subsidiaries, joint ventures and an associate. 1.2 Up until 31st January 2022, the 1st, 2nd and 3rd applicants herein occupied the most senior executive positions in the respondent company namely, Group Administrative Executive & General Counsel, Group Financial Controller and Group Chief Executive respectively. Operationally, the trio were the beating heart, so to speak, of the respondent conglomerate. The 1st applicant had been the respondent’s employee for a period of nine (9) years. The 2nd applicant had worked for the respondent for twenty-six (26) years. The 3rd applicant’s stewardship of the respondent as its Group Chief Executive lasted five (5) years. 1.3 In the period between August and October 2021, a functional review exercise was undertaken by an independent Consultant at the respondent’s Corporate Office culminating in the adoption of a new corporate and remuneration structure. On 10th December 2021, the applicants were individually orally informed by respondent’s Board of Directors (hereinafter referred to as ‘the Board’) that a decision had been made to terminate their employment contracts on account of the outcome of the functional review which established that the applicants’ salaries were too high; their positions did not fit into the respondent’s new structure and that the respondent needed to have a lean structure. The applicants were retrenched, as it were, based on the operational requirements of the respondent. Retrenchment of several other employees followed in March 2022. 1.4 Aggrieved by the circumstances of termination of their services, the applicants brought the suit herein seeking various reliefs. All the applicants are claiming compensation for unfair and/or unlawful dismissal, damages for unfair labour practices, payment of properly calculated terminal benefits relating to car allowance, exemplary damages and indemnity for legal fees. There are further individualistic claims to be mentioned in this judgment when a summary of the applicants’ evidence is being presented. 1.5 I should, however, point out at this early stage that it appears the applicants abandoned their curiously pleaded claims for exemplary damages and indemnity for legal fees. I say this because the applicants did not bother to properly address the said claims beyond merely indifferently stating them in their pleadings and cavalierly averring them in their witness statements. Also, these do not appear anywhere in their final written submissions. Therefore, bereft of any merit, I shall not attend to the said discarded aspects of the applicants’ claims any further in this judgment. 1.6 In similar fashion, I further observe that much as the applicants dealt with an issue of discrimination in their evidence and submissions, ultimately it was not clearly canvassed – by way of pleadings – as a standalone claim whereon the applicants sought compensation or damages. My understanding is that the aspect of discrimination comes in to complement or shore up the applicants’ claims for unfair and/or unlawful dismissal and damages for unfair labour practices. Unhappily, the way the discrimination issue has been presented is evidentially problematic. Hence, that issue will also not preoccupy me in this judgment. GENERAL REMARKS ON THE TRIAL AND SUBMISSIONS 2.1 Further before all else, I must point out that trial in this matter was conducted over three full days on 1st, 2nd and 3rd July 2024. The Court received a humongous volume of evidential material running into hundreds of pages. The amalgamated trial bundle alone totalled in excess of 500 pages. The final written submissions of both Counsel for the applicants and respondent reached a further 500 plus pages. 2.2 With the foregoing in mind, the evidential matrix to be set out in this judgment is deliberately – and to a great extent tediously – exhaustive. Mindful that an excessively long judgment is susceptible to being deemed inaccessible thereby threatening the rule of law on account of its length, I made every effort not to make the judgment too long so as to aid its readability and comprehension. Clearly, my mission in that regard has spectacularly flopped because, in the end, this judgment contains a ginormous 104 pages. But that was my best shot and could not be helped given the massive evidence and submissions I had to work with. 2.3 Nevertheless, recognizing that reading an inordinately long judgment is typically heavy-going for the uncommitted reader, I invite such a reader to skip straight to the section headed “Issues-for-Determination” (p.59) in this judgment for I guarantee that the decision will still make sense even if one starts reading from that part. Of course, a complete appreciation of the reasons for the decisions can only be had on a complete engagement with the evidence adduced by the witnesses. 2.4 I must also express my sincere and profound gratitude to both parties for their extremely focused and comprehensive submissions, skillfully presented by learned Counsel Suzi-Banda for the applicants and learned Counsel Mpaka for the respondent, rendering the Court’s task at hand fairly effortless than would have been the case in their absence. I should equally say that in arriving at my decision I have, where relevant, taken into account all of those submissions, even if I do not make express reference to each one in this judgment. THE 1ST APPLICANT’S EVIDENCE EVIDENCE-IN-CHIEF 3.1 The 1st applicant, Mr. Benard Ndau, testified that he joined the respondent on 3rd December 2012 as Company Secretary/Compliance Officer. By virtue of his position, he was a member of Executive Management. His contract of employment was for an unspecified period1. Subsequently, he was elevated to the post of Group Administrative Executive and General Counsel. 3.2 He stated that during a Board meeting in November 2020, there was an inquiry by one of the Board members regarding whether 2nd applicant, Mrs Elizabeth Mafeni, and himself were on fixed term contract or contract for unspecified period. On the Board hearing that they were both on contracts for unspecified period, the Board resolved that all members of senior management should be on contract effective 1st January 20212. In that regard, a discussion was to be had with the 1st and 2nd applicants for them to consider changing their employment status to contract terms. 3.3 He went on to state that following the said Board resolution, the 2nd applicant and himself agreed in principle to the change in their employment status. As a result, draft contracts were negotiated and agreed to except for the remuneration part3. The draft contracts were then considered by the Board’s Appointments and Remuneration Committee (henceforward interchangeably referred to as “the Committee” and “the Board’s Committee”) at its meeting held in March 2021 whereat comments pertaining to the same were solicited and provided45. The draft contracts included a term of 36 months as agreed by the 1st and 2nd applicants on the one hand and the Board on the other6. 1 Exhibit BN 1 (Copy of appointment letter). 2 Exhibit BN 2 (Minutes of the Board meeting of 27th November 2020). 3 Exhibit BN 5 (Draft contract of employment). 4 Exhibit BN 3 (Minutes of the meeting of the Board’s Committee of 8th March 2021). 5 Exhibit BN 4 (Minutes of the meeting of the Board of 26th March 2021. 6 Exhibit BN 6 (A cover note written by the 3rd applicant addressed to the Board’s Committee for consideration and approval of the draft contract). 3.4 Before the contracts could be adopted, the Board decided to obtain independent legal opinion on the employment switch seeing that the 1st and 2nd applicants were interested parties and the Board felt the need to seek neutral advice. The same was procured from Messrs GK & Associates, a private practice law firm which, to all intents and purposes, reached the conclusion that the Board could convert the status of the two applicants’ employment. However, that the Board needed to terminate their services first and pay out their dues7. 3.5 While waiting for the Board to adopt the contracts, he and the 2nd applicant were taken aback to note that at its meeting held in May 2021, the Board unilaterally and without justifiable cause, abandoned the said process and resolved that it would carry out a functional review exercise. They were not accorded any reason on the change in the Board’s decision8. That all along he had a reasonable expectation that the respondent, through its Board, would honour its promise and commitment to grant him and the 2nd applicant the 36 months’ contract. 3.6 Then in or between September and November 2021, the respondent carried out a functional review exercise using the services of a consultant called Management Consulting Solutions (hereinafter interchangeably referred to as “MCS” and the “Consultant(s)” as the context dictates). MCS were solely hired by the Board and before so hiring them, the Board asked him to engage them to agree on terms of their engagement. He participated in the negotiations with MCS including the review and agreement of their Terms of Reference (TORs). 3.7 The negotiations resulted in the execution of a Consultancy Services Engagement Agreement9. To his knowledge, MCS conducted their task from their offices in Lilongwe and at no point in time did they ever visit the respondent’s offices at PCL House in Blantyre. They also did not consult him or the 2nd and 3rd applicants in their capacity as members of Executive Management, either before, during or after their engagement or report. He 7 Exhibit BN 7 (Legal opinion from Messrs. GK & Associates). 8 Exhibit BN 8 (Minutes of the meeting of the Board’s Committee of 24th May 2021). 9 Exhibit BN 11 (Final draft of the Agreement signed by MCS and the respondent). recollected MCS asking for some documents which he sent them10. During this period, the Board itself never at all consulted him or, to his knowledge, the rest of the applicants, whilst the functional review was underway. He stated that at various meetings of the Board, the issue or any updates on the exercise were being discussed in camera and at no point was any update of progress or any matter at all reported to him or any of his colleagues. 3.8 He was, therefore, surprised when on 10th December 2021, the Chairman of the Board, Mr. R. Mwadiwa, and the Chairman of the Board’s Committee, Mr. S. Malata, called him to the Boardroom where a special meeting in camera was being held. The Chairman then informed him that (i) the Board had received a report from MCS and that (ii) the Board had decided to terminate his services based on what it was stated were the outcome of the functional review exercise. In particular, the Chairman of the Board told him by word of mouth that based on the recommendations of MCS, his position and that of the 2nd and 3rd applicants had been earmarked for retrenchment because (1) their salaries were too high; (2) the company would no longer have positions exercising group responsibilities; and (3) the company needed to have a lean structure. 3.9 On 7th January 2022, he received a retrenchment notice from the respondent, backdated to 20th December 2021, informing him about the termination of his employment and stating that the retrenchment would be effective 31st January 2022 but that the notice period was effective 1st January 202211. He said at no point did the Board, prior to its decision, consult him on any of the reasons that were cited or even on the recommendations of the consultant. The report of MCS was never shared with him prior to the Board’s decision or even afterwards. He said MCS never consulted him on their exercise at all. 3.10 Regarding the validity of the reason for his dismissal, he believed the reasons were invalid and a smokescreen to offer the Board a way out of the commitment it had made to give him a three-year contract. Thus, he considers the retrenchment was in fact a dismissal citing the following reasons for his belief: 10 Exhibit BN 12 (Copy of a letter from MCS to the 3rd applicant requesting some information). 11 Exhibit BN 13 (Letter of retrenchment notice). (a) his salary was periodically being approved by the Board and at no point prior to the retrenchment was he ever engaged to have his salary revised; (b) his salary was raised by the Board six months prior to the so called retrenchment based on his performance;12 (c) in the previous year, the Board had approved a MK701,746,050.00 bonus to all employees;13 (d) prior to the functional review exercise in 2021, the respondent unilaterally removed some of his benefits such as bonus14 and foreign medical benefit on the basis that he was already well paid off meaning the respondent had already reflected on the remuneration of the applicants and removed those parts it deemed superfluous; (e) he was not told of the new or proposed structure nor were any options discussed with him. 3.11 He, therefore, believed that his contract of employment was terminated unfairly and unlawfully, and in the least transparent and most secretive manner, as he was not consulted nor given an opportunity of being heard. 3.12 Further, he believed the decision of the respondent to terminate his services was made in violation of his right to legitimate expectations that he would be consulted during the retrenchment exercise and prior to any decisions being reached in relation thereto because: (a) prior to the decision to carry out a retrenchment exercise, the respondent consulted him and the 2nd applicant when it wanted to change the status of their employment from contracts for unspecified period to fixed term contracts; (b) in 2017, the respondent carried out a similar exercise during which all employees were consulted prior to the implementation of the decision to terminate their services; (c) the TORs and the agreed Scope of Work for the Consultant hired to carry out the functional review exercise specifically provided that Management would be consulted and this was not done. 12 Exhibit BN 14 (annual increment letter from the respondent to the applicant). 13 Exhibit BN 15 (minutes of the meeting of the Board held on 14th April, 2020 determining bonus). 14 Exhibit BN 16 (Letter from Deloitte discontinuing phantom share scheme for senior members of staff). (d) prior to the adoption of the Consultant’s TORs, the respondent requested the 1st applicant and his colleagues to review and agree the said TORs with the Consultant but beyond this, the applicants were never consulted by neither the Board nor the Consultant. 3.13 He also said the respondent discriminated against him and his fellow applicants in the manner that it carried out the functional review exercise because: (a) long after the Board had terminated their employment, the respondent carried out individual consultations with all employees at the respondent company as part of the functional review exercise and prior to terminating their services and he saw no reason why they did not offer this opportunity to the applicants; (b) in a similar exercise in 2017, the respondent consulted all employees and yet did not do so with the applicants during this exercise for no justifiable reason; (c) he was reliably informed by his former workmates at the respondent company that the respondent held consultations with those employees it retrenched after the applicants left. 3.14 He said the retrenchment was implemented unlawfully and secretly as the Ministry of Labour was not notified of the process as required by Government policy and by legal precedent. 3.15 On the claim for wrongful calculation of car allowance, Mr. Ndau said he would adopt the evidence of the 3rd applicant, Dr George Partridge. 3.16 In concluding his evidence, he said he and the rest of the applicants tried to engage the respondent regarding the unfairness of its actions to no avail15. That it was his belief that he was treated most unfairly, in breach of well-established principles of conducting a retrenchment exercise, in violation of fair labour practices and his legitimate expectations and, therefore, claimed all the reliefs common to the three applicants as enumerated hereinbefore as well as damages for rescission of promise to offer contract or, in the alternative, 15 Exhibits BN 17, BN 18, BN 19 and BN 20 (copies of the correspondence between the applicants and the respondent following termination of their services). damages for breach of legitimate expectations created by the respondent’s offer to change his employment status to fixed term contract. CROSS-EXAMINATION 3.17 During cross-examination, the 1st applicant adduced the following evidence. 3.18 He confirmed that he is a lawyer by profession. He agreed the respondent is a body corporate and that its Memorandum and Articles of Association form the constitutive documents of the respondent. He also confirmed the provisions of the respondent’s Memorandum and Articles of Association16 particularly clause 52 on the appointment of the Board by Press Trust and Old Mutual which are the major individual shareholders. He equally confirmed that the duty of managing a company lies with the Board and that Management only carries out functions delegated to it by the Board. 3.19 He agreed that a company like the respondent is regulated by the Companies Act but disagreed that it is also regulated by the Malawi Code17. Rather, that Malawi Code offers some guidance as a company can have due regard to it with respect to corporate governance issues. When referred to Clauses 13.2 and 13.3 of the Malawi Code, he agreed that they provide that the Company Secretary is responsible for advising the Chairman and the Board on the implementation of the Code and that all members of the Board should have access to the advice and services of the Company Secretary. 3.20 He went on to confirm that his employment contract was subject to the respondent company’s Conditions of Service (“CoS”) and further agreed that the CoS provide a guidance on annual cost of living salary adjustments18 but caveated the response with a statement that the respondent abandoned the cost of living adjustment (COLA) and opted for performance-based salary adjustments which took into account the individual’s key performance indicators (KPIs) using the balanced scorecard system. He agreed that the CoS provided for the termination of service by the respondent and that, thereunder, 16 Exhibit PCL 1. 17 Exhibit PCL 2. 18 Exhibit PCL 4D. the respondent has the right to terminate employment contracts for operational requirements. 3.21 When shown his job description19 as Group Administration Executive and Company Secretary, he admitted that his job included, inter alia, reviewing documents, representing the company in legal proceedings and advising it on legal matters. He said though he might have treated the respondent as a client depending on the functions he was performing, the respondent was in essence his employer and not his client. 3.22 He confirmed that he reviewed the Agreement between MCS and the respondent as well as the TORs for the functional review exercise. That said, he did not extend advice to the Board regarding the Agreement. He participated in the negotiations with MCS regarding the terms of the Consultancy Agreement and the TORs but was not involved in the negotiations regarding the engagement of MCS as this done by the Board per the information conveyed to Executive Management. That aside from the review of the Agreement and the TORs, Management was only tasked with the role of facilitating the exercise and nothing beyond that. That the Board took up the role of managing the exercise. That if he proffered any advice, he extended the same to his immediate supervisor, the 3rd applicant and it was upon his advice to the 3rd applicant that the document was executed by the respondent. 3.23 He further confirmed that the Agreement and the TORs provided that the Consultant shall consult members of staff of the respondent especially key management. He, however, stated that he was not involved in the consultation process and maintained that he was never at all consulted by the Consultant. He admitted to have sent an email20 on 12th August 2021 to all members of staff urging them to cooperate with the Consultant and the team gathering information. He was also shown an email21 which he admitted he sent to all members of staff to which he attached a questionnaire sent to him by the Consultant which members of staff had to complete and send back directly to 19 Exhibit PCL 4C(iii). 20 Exhibit PCL 11. 21 Exhibit PCL 13. the Consultant by 2 o’clock in the afternoon of the following day, to wit, 15th September, 2021. He also acknowledged having sent another email22 wherein he circulated to all senior managers a questionnaire to be specifically completed by them. 3.24 He further acknowledged that he was aware of an email23 that was sent out to the Consultant by the Chairman of the Board’s Committee emphasizing his hope that the consultations with Management and the Board would be thorough. He also confirmed that the 3rd applicant wrote a memorandum to all members of staff explaining to them the process which the Consultant was going to follow during the exercise including, among other things, limited face-to-face consultations because of the Covid-19 pandemic which was prevalent at the time. 3.25 He said the TORs had four aspects to the exercise namely, (a) consultations; (b) data collection/review of documentation; (c) preparation of recommendations and; (d) providing the final report. He said the applicants had no issues with the data collection aspect which was done by the Consultant but the consultations bit which was skipped by the Consultant. He said data collection should be viewed as part of review of documentation. 3.26 Upon his attention being drawn to the TORs24 and particularly Clause 4 thereof which was about the review of key documentation under the heading “Scope of Works”, he said even though data collection was not expressly listed, it remained part of review of documentation as the list contained mere examples and that some of those examples (such as job description) encompass data collection. 3.27 He accepted that exhibits PCL 14, PCL 15B, PCL 15C, PCL 15D and PCL 16 were forms or questionnaires that were sent out to be completed by the addressees and sent back to the Consultant. He said he believed that the questionnaires were a mere data collection exercise and he assumed 22 Exhibit PCL 14. 23 Exhibit PCL 10. 24 Exhibit BN 9. consultations would be done subsequently. He stated that to him filling out questionnaires was not tantamount to consultation. 3.28 Upon being shown exhibit PCL 9 being minutes of the meeting of the Board’s Committee of 24th May, 2021, he confirmed that Executive Management was advised in that meeting that the Board at its 165th meeting had resolved that the respondent shall carry out a full functional review which exercise would be managed by the Committee as the exercise affected all members of Executive Management and that Management would only play a facilitating role. 3.29 He said his understanding of a ‘facilitating role’ meant that Management would help in such things as ensuring that the Consultant is able to conference or meet with any member of staff sought, ensuring that the Consultant was furnished any documents requested, ensuring that venues for meetings were available and any such clerical administrative tasks. 3.30 When presented with minutes25 of the Board meeting of 21st December 2020 with a focus on minute number 5.1(ii) thereof, he confirmed that the functional review that was being discussed in the said minute was the ongoing functional review which commenced in the year 2017 and encompassed not just the respondent’s Corporate Office but included the respondent’s subsidiaries too. He said it is this functional review that the Board urged Management to take a comprehensive approach. 3.31 On being asked whether during the period in question the respondent had a Strategic Plan wherein one of the issues was about remuneration costs, he said that he would need to look at the Strategic Plan itself to appropriately answer the question. When probed to confirm if Management reported to the Board at its meeting of 27th November 2020 on what was being done to contain remuneration costs, he responded that he could remember any specific discussions regarding addressing remuneration costs. 3.32 He was referred to the minutes of that particular meeting as exhibited in PCL 5 and it was put to him that the Board’s resolution to place him and the 2nd applicant on fixed term contracts was one way of addressing remuneration 25 Exhibit PCL 6. costs. He categorically disagreed that that was the case stating instead that the discussion regarding the evolution of their contracts to fixed-term contracts was in fact preceded by a discussion to do with changes of senior executives in some subsidiary companies of the respondent including Peoples Trading Centre (“PTC”) and Telekom Networks Malawi plc (“TNM”). That as the deliberations were being had on the contracts of the said executives in PTC and TNM, one of the respondent’s Board directors inquired why the 1st and 2nd applicants were not on fixed term contracts when senior executives at the respondent’s subsidiary companies were on fixed term contracts. It was in that context that the Board actually resolved to have the 1st and 2nd applicants on fixed term contracts and that the resolution’s purpose was not containment of remuneration costs. The Court observes that the foregoing 1st applicant’s testimony is convincingly corroborated by minute 6 in exhibit PCL 5. 3.33 Regarding the issue of changing contracts, he admitted that was not given a fixed term contract, but took it that the Board, through its own resolution communicated to him, had committed to give him one. He confirmed that the memorandum that the 3rd applicant sent to the Committee was for the Committee to consider the draft template of the fixed term contract and recommend, if deemed fit, for the adoption of the Board. Equally, he confirmed that it was at this point that the Committee at its meeting of 8th March 2021 resolved to refer the matter to an external legal counsel for an independent legal opinion. 3.34 He explained that when the opinion was received and shared with the Committee, the applicants did not hear anything from the Committee much less see the Committee’s report to the Board which was submitted for consideration by the Board at its meeting of 26th March 202126. He added that the Board itself met in camera27 to discuss the report from the Committee and that the 3rd applicant was not even part of the said discussions. He emphasized that he did not know what happened to the contracts negotiation process. 3.35 It was put to him why he is aggrieved together with the 2nd applicant when; (a) the two of them were told that there was a functional review which process 26 Exhibit BN 4. 27 Minute 1821 in exhibit BN 4. replaced the switch to fixed term contracts and; (b) he accepted that he was not offered a fixed-term contract which he accepted as to crystallize into an enforceable contract. 3.36 He reacted as follows: (a) that when the Board directed that there should be a functional review, it was not assumed that there would be retrenchments per se because not all functional reviews result in retrenchments; (b) that his complaint along with the 2nd applicant as regards the abandoned changeover to fixed term contracts was not because there were contracts that had been concluded which the respondent breached, but that the respondent, having; (1) passed a resolution to offer them contracts and; (2) the of them having been approached and; (3) having accepted the Board’s offer despite their initial hesitation and; (4) Management having been led on by the Board to the point of drafting template contracts and; (5) Management having obtained a legal opinion then it followed that legitimate expectations were created that they would be offered contracts or, at a bare minimum, be given reasons for any renunciation of the proposed switch. 3.37 He added that he did not raise any issues regarding his legitimate expectations for a period of seven months until his contract was terminated in December 2021 because he had a subsisting contract for an unspecified period. As such, he did not have any issues as long as he remained in employment. He also confirmed that if his contract had not been terminated on 10th December 2021, he would still be working under the old contract for unspecified period or until retirement. 3.38 He said the part for salary was left blank in the draft template contract because it had not yet been discussed and agreed on. Upon being questioned whether it would have been possible and lawful for the respondent to put lower remuneration in the fixed term contract, he said it would if this was done with his consent. He said it was precisely for that very reason that the issue of remuneration would have been discussed and agreed upon by the parties that the space for salary was left blank in the draft template contract. RE-EXAMINATION 3.39 In re-examination, the 1st applicant essentially maintained his evidence-in- chief clarifying the following matters: 3.40 With regard to the legal opinion the respondent sought on the shift to fixed term contracts and the report from the Committee to the Board on the same, he said he does not know what happened to those two documents and did not see the Committee’s report to the Board. That even when the Board came back and pronounced that there was going to be a functional review conducted by the Consultant the Board had identified, he assumed that the issue of switching to fixed term contracts was not forsaken and that it would be included in the functional review exercise. 3.41 Clarifying his earlier response that he would have taken a lower pay if asked to do so when migrating to a fixed term contract, he explained that this would not have been new at all as the Board had earlier removed his bonus and international medical insurance which significantly reduced his remuneration but he still stayed in his job. He insisted, therefore, that had the Board approached him and offered him a lower pay in his new fixed term contract, he would have accepted it without a qualm as he had previously done so. 3.42 Shedding light on why he described the completion of the Consultant’s questionnaire as “data collection” as distinct from “consultation”, he said the questionnaire did not make provision or ask him for information such as his remuneration or whether he would take less pay; the nature of his position or whether his department would function with more or fewer employees; or whether he would take a lower position or a position with truncated responsibilities; or, indeed, any other options available to him. That the questionnaire simply asked for basic run-of-the-mill information which could not, in all honesty, be considered consultation. He said there was absolutely nothing in the questionnaire about retrenching some positions or, indeed, any criteria for any choices made or to be made on retrenchments. 3.43 Clarifying further on the data collection issue, he said that while the term ‘data collection’ does not appear under section 4 of the TORs, the fact remains that collecting all the key documentation stated in that section necessarily meant collection of data for use. 3.44 He said there was further information he just heard from the grapevine but confirmed by the 3rd applicant that there was an inception report authored by the Consultant. That he never saw the said report nor was he asked to comment on it. 3.45 As regards the final report produced by the Consultant, he similarly said he just heard that one had been submitted to the Board. He never saw it let alone was he requested to comment on its contents in respect to his position. He said it was his expectation that if any report was made which affected or would possibly affect his position, he would necessarily be given an opportunity to comment on it and that the Board would not take a decision without consulting him or giving him an opportunity to engage it. 3.46 On how he understood the Board’s decision as communicated to Management in the 24th May 2021 meeting of the Committee charging Management with mere facilitation role of the functional review exercise as opposed to the Committee’s role of managing the process, he maintained his response in cross-examination but added that ‘management’ of the process by the Committee meant that only the Committee would engage with the Consultant on meaty and substantial aspects of their exercise including the sufficiency of the consultations as Management was instructed to keep clear of these aspects of the process. 3.47 Pertaining to his prior position that he reviewed the Agreement and the accompanying TORs and was of the opinion that they were in order and why he is now complaining respecting lack of consultation by the Consultant, he said that the Agreement clearly provided for consultations with key stakeholders including Management and staff of the respondent company but that the Consultant decided not to conduct such consultations. 3.48 When he was directed to the minutes of the meeting of the Board of 21st December 202028 and asked to clarify what happened to the Board’s 28 Exhibit PCL 6. imprimatur to Management to take a comprehensive approach to the functional review exercise as recorded in minute 5(ii) of exhibit PCL 6, he explained that the functional review being referred to therein was a totally different exercise to the one in issue now. The earlier one was an on-going functional review at some of the respondent’s subsidiaries as well as the respondent’s Corporate Office. That as it turned out, when Management through the 3rd applicant wanted to make this a key goal for the year 2021, the Board through the Committee decided against it. That it was in fact removed as a KPI for the 3rd applicant because the Board took over the process. As such, Management never had any opportunity to take a comprehensive approach to any functional review exercise. He went on to add that this was reported at the meeting of 24th May 2021 of the Committee where it was recorded that Corporate score card for the financial year 2021 was impacted by the need to firm up on some KPIs. That in particular, the score cards needed to be adjusted to take into account resolutions which the Board had passed on matters which were discussed in camera. And so, the functional review process was taken away from Management. THE 3RD APPLICANT’S EVIDENCE EVIDENCE-IN-CHIEF 4.1 The 3rd applicant, Dr. George Partridge, was the second witness. His evidence went as follows. 4.2 Presently, he is Chairman of the Council of the University of Malawi and Malawi Airlines. He is also a Director at General Alliance Insurance Limited and Old Mutual. For many years he was Chief Executive Officer of National Bank of Malawi Plc, the country’s biggest bank and the respondent’s subsidiary. That changed on 1st November 2016 whereon he was employed by the respondent as its Group Chief Executive. His appointment was on permanent terms in the sense that he was employed to lead the respondent corporation up to the date of his retirement, being 22nd May, 202329. 29 Exhibit GP 1 (Copy of letter of appointment). 4.3 Concerning the issue of functional review as carried out by the respondent, Dr. Partridge’s testimony was identical to that of the 1st applicant, Mr. Ndau. He only augmented the said evidence in the following respects: 4.4 That for the entire period the Consultant carried out the functional review exercise, they never met him nor was he ever engaged by them. He said he was aware of the Agreement and the TORs agreed between the respondent and the Consultant wherein it was agreed that Management would be consulted as he endorsed and authorised that the same be signed off. 4.5 On 8th September 2021, in his role as executive head of the respondent, he issued a memorandum30 to all members of staff to cooperate with the Consultant in their conduct of the exercise . However, the Consultant never consulted him at all regarding any possible retrenchment in the course of the exercise. He said the Board itself never consulted him at all whilst the functional review was underway. At various meetings of the Board, the issue or any updates on the exercise were being discussed in camera and at no point was any update or progress reported to him or any of the applicants. 4.6 Dr. George Partridge’s evidence on how he was orally communicated about his retrenchment and subsequently written31 on the same is indistinguishable from that of the 1st applicant. He only added that at no point did the Board, prior to its decision, consult him on any of the reasons that were cited or even on the recommendations of the Consultant nor were any options discussed with him. He said the report of the Consultant was never shared with him prior to the Board’s decision or even afterwards. He said he was aware that the Committee’s Chairman emailed32 the Consultant to ensure that there were thorough consultations with Management but these were not done. 4.7 He said he did not believe the reasons for his retrenchment were valid at all and he, therefore, considered the retrenchment a dismissal because the applicants’ salaries were not too high, as they were set and approved by the Board itself and at no time was an engagement held with him to consider a review of his salary; that the Board was at this time very aware that the 30 Exhibit GP 2 (Copy of the memorandum). 31 Exhibit GP 3 (Copy of retrenchment notice). 32 Exhibit GP 4 (Copy of the email). respondent had performed exceptionally well; and the Board had already indicated that some of the benefits (bonus) would be removed. That, as a matter of fact, his salary was increased by the Board in the same and immediate past years on account of his performance. He said it was, therefore, surprising and shocking to hear from the same respondent that it could not afford his salary. He exhibited documentary proof of the increments33. 4.8 He thus believed that his contract of employment was terminated unfairly and unlawfully, and in the least transparent and most secretive manner, as he was not consulted nor given an opportunity of being heard. No options were discussed with him. The process that involved his employment and benefits was carried out by a third party without his input and he was not given any opportunity by the Board to verify if the information that the consultant provided to the said Board was correct. 4.9 Dr. Partridge’s evidence regarding the allegations of violation of legitimate expectation and discrimination is also similar to that of the 1st applicant. But he enhanced his testimony on the issue of discrimination by stating that he believed that he was particularly treated unfairly because despite being a member of the Board, discussions were held in camera and he was never given an opportunity to participate in such discussions or to make any representations. He was, therefore, discriminated against in his capacity as a director. In addition, he believes that as head of the respondent, he should have been given an opportunity to make representations regarding the restructuring of the respondent company coupled with the fate of his subordinates. He said upon his dismissal, the respondent proceeded to advertise34 his position in the local press and employed Professor Ronald Mangani as his replacement and its Group Chief Executive. 4.10 On the issue of wrongful calculation of car allowances, he said from the payments that were made to him, he noticed that the respondent wrongfully calculated the applicants’ car allowances. It was his evidence that the respondent had a clean wage policy and employees received cash in lieu of the car benefit. That this being the case, for the purpose of calculating severance, 33 Exhibits GP 5, GP 6, GP 7 and GP 8. 34 Exhibit GP 9 (copy of the advertisement). the actual amount of allowance should have been used and not the 15% of the employees’ (applicants’) car entitlement that was used. He additionally said that his leave days on the last month of work were never paid for. He exhibited the respondent’s response35 to his queries in this regard. 4.11 He concluded by stating that he believed that he was treated most unfairly and in breach of well-established principles of conducting a retrenchment exercise, in violation of fair labour practices and his legitimate expectations. He, therefore, claimed all the reliefs spelled out hereinbefore. CROSS-EXAMINATION 4.12 The cross-examination of Dr. George Partridge yielded the evidence thus: 4.13 He acknowledged that the respondent company is regulated by the Memorandum and Articles of Association (“Memarts”) which were exhibited in court plus other applicable laws such as the Companies Act. He also agreed that the respondent is also guided by other corporate governance codes such as the King Code and the Malawi Code. However, he stated that the respondent’s Memarts were outdated and needed to be updated. 4.14 He confirmed that the contents of his letter of appointment36 and the CoS37 form the terms and conditions of his employment contract with the respondent. He acknowledged that some of his duties as Group Chief Executive included, among other responsibilities, providing overall leadership of the management team; implementation of the Strategic Plan while bearing in mind the needs and expectations of shareholders; executing plans set out in the Strategic Plan; carrying out periodic reviews of the Strategic Plan; ensuring that the Corporate Office is appropriately staffed; and providing advice to the Board. 4.15 He further confirmed that his salary was increased from time to time. He said these increments were performance-based as the Board looked at his KPIs using the Balanced scorecard38 to determine whether to raise his remuneration. 35 Exhibit GP 10. 36 Exhibit PCL 4A. 37 Exhibit PCL 4D. 38 Exhibit PCL 4C(i). He was made to read clause 28.3.1 of the CoS39 which is in the following terms: “The Company may terminate the services of an employee at any time by giving him the appropriate notice or salary in lieu thereof for misconduct, capacity, conduct or for reasons connected with the operational requirements of the Company or its subsidiaries. Provided that the employment of an employee shall not be terminated before the employee is provided an opportunity to defend himself against the allegations made, unless it cannot reasonably be expected to provide such opportunity.” When interrogated on whether this was a standard clause or whether it was lawful, he stated that he was aware that this was a standard clause in the CoS but he could not vouch for its lawfulness because he is not a lawyer. He was then asked whether the clause includes the need to consult an employee before their employment contract is terminated. His response was that the proviso to the clause talks about the need to provide an employee with an opportunity to defend himself against allegations made against him and, in his opinion, this included being consulted before a decision to retrench is made. He said while indeed the word ‘consult’ is nowhere in the cited clause, from his standpoint it may be a thing of semantics because consultation constitutes a lot of things, including the right to defend oneself. That defending oneself is a subset of consultation. He also said he expected to be consulted even concerning his subordinates who do not report to the Board because he was the one who reported to the Board. 4.16 On his evidence that he never met nor was he engaged by the Consultant regarding his employment, he said he was never given an opportunity to be heard as regards the allegations that his remuneration was too high yet that was one of the grounds used to terminate his employment contract. He also said, naturally, he was expecting to be consulted regarding the employment 39 As above n.37. contracts of the 1st and 2nd applicants simply because he was responsible for them per his job description as Group Chief Executive. 4.17 He confirmed he was a member of the Board by virtue of his employment as Group Chief Executive or an Executive Director of the respondent. He also said the duties of an executive and non-executive director were the same as far as company law is concerned. However, he stated that if Management and the Board were to be taken as a hierarchy, the other members of the Board were his superiors as he reported to them. 4.18 He admitted that by the provisions of the King Code and the Malawi Code, the responsibility of running a company lies with the Board and that the Board has an oversight function. That corporate governance rules distinguish between oversight and operation. In that regard, he said the Board cannot take on operational responsibilities as operational issues are left with management as led by the Executive Director and to that end, there are usually what are called “board reserved matters” being matters that are the exclusive province of the Board which management can merely advise on. 4.19 Concerning his note40 to the Committee recommending the adoption of the draft template fixed term contracts pertaining to Executive Management positions, he agreed that his was only a recommendation for the Committee’s consideration and onward recommendation to the Board for adoption. He also admitted that in the final analysis it was up to the Committee to take it up to the Board. That he was not a member of the Committee but he attended its meetings and it was possible for the Committee to meet and deliberate on issues without his involvement if they affected him. He continued to state that it was possible for a meeting to be held without his physical presence in which case he would make a presentation in person in a meeting on an issue or he would simply send a note for the Committee to pass a resolution on and in that scenario, the Committee would make a resolution by round-robin. 4.20 He admitted issuing a memorandum41 wherein he informed all members of staff that the objective of the functional review exercise was to restructure the 40 Exhibit BN 6. 41 Exhibit PCL 12. Corporate Office and the organizational setup of the respondent. He also explained to all members of staff at a town hall meeting how the process would be carried out. That he said the Consultant had adopted a consultative approach to carrying out the assignment and that the consultations would involve members of management and the general members of staff. Further that because it was COVID-19 period, most of the consultation would be done in strict compliance with the COVID protocols at that time. That, therefore, face-to-face interactions would be limited in the course of the consultation and most of the exchanges would be done electronically. 4.21 When he was questioned why he stated in his Witness Statement that the Consultant did not consult him when it is in evidence that he actually completed a form or questionnaire and submitted the same to the Consultant, he responded that he considered filling out the questionnaire as mere data collection as it was a basic form sent to all members of staff. He added that it could not, in all honesty, be regarded as consultation. That it could, at best, be described as partial consultation. He also admitted that the functional review exercise had a timeframe and was supposed to take place between August 2021 and October 2021. 4.22 Regarding the respondent’s Strategic Plan42, he explained that the issue of remuneration costs was not to be dealt with regardless of the financial performance of the respondent. That the history of the Strategic Plan was that in his headship of the respondent company, he had insisted that all performance contracts of either the respondent’s Corporate Office or its subsidiaries, should invariably contain an element of tackling not only costs generally but also revenue matters. Thus, the Strategic Plan was addressing both issues of cost and revenue. That the aspect of remuneration costs as covered in the Strategic Plan should be viewed in the context of the respondent company as a whole and not necessarily just the Corporate Office. That remuneration costs at the Corporate Office was an issue that needed to be dealt with alongside other matters which even included the issue of the functional review. He agreed that the issue of control of remuneration costs was critical and was an ongoing process. 42 Exhibit PCL 3. 4.23 He confirmed that in each of the three years under review in the Strategic Plan, the trajectory as regards financial performance of the respondent had been satisfactory. Furthermore, he stated that despite the said satisfactory financial performance, it did not dissuade him from recommending – through the Strategic Plan which was approved by the Board – that remuneration costs be regularly managed as the respondent had potential to still generate more revenue. He also confirmed a passage in the Strategic Plan to the extent that even in the face of a dividend growth, the respondent’s immediate outlook appeared precarious and that that precarious situation required a consideration of managing remuneration cost. He further admitted that the Strategy Plan was a general guidance to point to the direction of the respondent in the relevant period. RE-EXAMINATION 4.24 On being re-examined, Dr Partridge’s testimony went as follows. 4.25 He made clarifications on his functions as Group Chief Executive stating, in respect of the 1st and 2nd applicant, that they reported to him on all aspects of their job and he was responsible for their performance contracts in the sense of managing their balanced score cards as well as anything coming across including changes in their job descriptions and any duties he felt he could assign to them from time to time. 4.26 Regarding clause 28.3.1 of the Conditions of Service vis-à-vis his assertion that he was not given an opportunity to defend himself against what he deemed an allegation that his salary was too high, Dr Partridge said the following: 4.27 He maintained that he understood clause 28.3.1 to mean that an employee cannot be dismissed unless presented a chance to respond to any allegation. Applied to his own circumstances, he said that he was not even granted occasion to defend himself with regard to his alleged high remuneration package and he was prepared to so defend himself. It was his understanding that being offered such opportunity is part and parcel of a consultative process for the Board to try to understand his position regarding the issue of the alleged excessive salary. 4.28 He lamented that he was a whole Group Chief Executive responsible for 14 subsidiaries and yet he was simply given a form to fill and information therein sufficed to have him called to a boardroom and be orally informed that he had been dismissed because his salary was too high or unaffordable. He went on to state that he felt at the particular point of his dismissal that, even if the Board was going to dismiss him, he should have just been given the opportunity to defend himself or to explain. That part of the solution to arrest remuneration costs was captured in the prevailing Strategic Plan namely, to increase income and the Strategic Plan actually spoke to this aspect in terms of how to achieve growth of revenue. 4.29 That even when the Board said that his remuneration was too high, the conclusion was based on the total remuneration and it was a question of proportion of costs regarding remuneration versus income and in that regard two issues were conflated that could have been explained. He said the Board having cited the reason for his retrenchment as his apparent unaffordable remuneration did not proceed to clarify that it was too high in connection with what particular aspect. He further stated that it should be recalled that the TORs in relation to the functional review conducted by the Consultant made reference to comparisons with other companies and he never saw the Consultant’s report to the Board as to satisfy himself that the said comparisons were done. He added that he sits on many companies’ Boards and has information of other Chief Executive Officers with salaries higher than the one he was getting. 4.30 In the end, continued Dr Partridge, the opportunity to explain these things was never granted. He stated that the foregoing was just part of the explanations he would have proffered had he been given a platform to ventilate the same. 4.31 Making a clarification specifically on why he insisted that he was not consulted by the Consultant when he actually completed a form which the Consultant had sent for him to fill out, he adduced the evidence thus: 4.32 He maintained that the questionnaire he filled was just in keeping with data collection a thing which is done by each and every consultant. He stated that in his experience Consultants collect data but to qualify such a process as consultation would be stretching definition of the word “consultation”. He stated that his expectation was that consultations would go beyond mere data collection. He further recalled expressing anxiety to the Chairman of the Committee during the functional review exercise when morale and productivity was down among staff as nothing was happening with the Consultant. That it was only because of the complaint he lodged with the Chairman of the Committee that the Chairman was prompted to email43 the Consultant informing the Consultant that he hoped thorough consultations with Management and the Board would take place. That, as a matter of fact, the Chairman had undertaken to blind copy him the said email which he did. That his construction of thorough consultations with Management, as per the email, meant more than mere data collection. 4.33 He carried on to say COVID-19 restrictions could not be the reason for not conducting consultations as technology was readily available to conduct meetings or consultations by employing online meeting platforms such as Zoom. He further decried that he could not confirm the data collected. He was not even availed occasion to see the Consultant’s draft or final report to confirm the issues therein or ascertain that contents thereof were factually accurate. 4.34 Rendering clarification on what he meant by saying that management of costs both in the respondent’s subsidiaries and at the Corporate Office was an ongoing process, he testified that: 4.35 The process was ongoing because sometimes the Strategic Plan is an expansion strategy and sometimes an efficiency strategy. He said implementing a Strategic Plan may most of the times actually entail increasing costs providing it is commensurate with increase in revenue. That in that context management of costs can be taken together with management of revenue. He said if you have enough revenue to manage those costs then you will still be deemed to be managing costs. He said in the respondent’s situation, its revenue was increasing and there was a strategy in place for expansion. He acknowledged that as captain of the ship, he had to make sure that the respondent operated efficiently while also conscious of the costs. 43 Exhibit PCL 10. 4.36 He went on to unpack the workings of strategic plans generally explaining that just because something is in the strategic plan does not necessarily mean that it will be implemented. He said strategic plans are wish lists or guides in terms of how a particular company wishes to operate. That prescriptions of strategic plans are not cast in stone and whatever is spelled out in strategic plans may be abandoned or carried forward. 4.37 Finally, he clarified on how the respondent moved from the general policy positions in the Strategic Plan to the hiring of the Consultant. He said that like in most companies and just like in their previous restructuring process, Management, consistent with the respondent’s Strategic Plan, undertook to conduct a functional review. In that regard, the Board directed Management to carry out the exercise comprehensively. He stated that the respondent’s practice was that the functional review exercise was to be incorporated in a balanced score card or a corporate score card or his own personal score card. However, this was abandoned by the Board in May 2021 because there were other things that the Board wanted to consider as per the representations of the Chairman of the Committee. 4.38 He said, additionally, the Board gave up a proposed new incentive issue that was meant to drive the respondent’s Strategic Plan. The respondent also abandoned a rights issue to raise money to properly fund things that Management had proposed in the strategy. He stated that equally abandoned was the implementation of fixed term contracts emanating from the Board’s decision in December 2020. Ultimately, on the abandonment of the functional review exercise, he testified that the Committee informed Management that it would manage the exercise itself as it affected all members of executive management. He said the Consultant came in because the exercise was going to affect executive Management members. 4.39 He continued to say that the foregoing statement was surprising and made him question how the Committee was aware that members of Executive Management were going to be affected even before the exercise had taken off. He said he was astonished because, ordinarily, an organisation embarks on a functional review exercise with an open mind thus encourages people to participate for transparency purposes. He said the absence of transparency tends to indicate that decisions were already made. THE 2ND APPLICANT’S EVIDENCE EVIDENCE-IN-CHIEF 5.1 The 2nd applicant, Mrs Elizabeth Mafeni, was the third and final witness for the applicants. 5.2 She started giving her evidence by stating that her employment history with the respondent dates from 1995 when she initially joined Malawi Pharmacies Ltd, the respondent’s subsidiary. In 2000 she moved to the respondent’s head office as Chief Accountant. This was a permanent pensionable position or a contract for an unspecified period. 5.3 In 2004, she was promoted to the post of Group Financial Accountant. For this position, she was entitled to gratuity in lieu of pension, since on being placed on contract with gratuity, one ceased to be on pension. In 2010, her job title was re-designated44 to become Group Financial Controller. On passing of the new Pension Act 2011, her position was moved back to a pensionable one in September 201145. In 2015 and 2020, she received long-service awards46 from the respondent. 5.4 She said having read the Witness Statement of the 1st applicant, Mr. Ndau, she was in agreement with its contents to the degree or extent that it relates to matters in which she was involved. She, in that regard, endorsed the testimony therein. For the avoidance of doubt, she stated that she, in particular, endorsed the facts relating to the following: (a) That she attended the meeting referred in Mr. Ndau’s Statement regarding the respondent’s Board meeting of November 2020; 44 Exhibit EM 1 (copy of letter of appointment). 45 Exhibit EM 2. 46 Exhibit EM 3. (b) That she was approached by the Board to consider changing her employment status from open-terms to fixed-term contract, a proposal which she accepted in principle, as detailed in Mr. Ndau’s Statement; (c) That she participated in the review of the draft contract which was exchanged with the Board as stated in Mr. Ndau’s Statement. 5.5 Her evidence on the abandonment by the Board of the foregoing engagement, with no reason given to her, was also in conformity with that of Mr. Ndau. She also testified the same as Mr. Ndau on the hiring of the services of the Consultant by the Board. 5.6 Peculiar to her, she added that she never met nor engaged the Consultant to discuss her employment. She said the only contact she had with the Consultant was pertaining to their request for information with regards to employees’ salaries which she submitted. The rest of her evidence on her interactions or lack thereof with the Consultant is identical to that of the 1st and 3rd applicants. So is also her testimony respecting the circumstances she was verbally informed about her retrenchment and subsequently written47 on the same. She only additionally stated that at no point did the Board, prior to its decision, consult her on any of the reasons that were cited or even on the recommendations of the consultant nor were any options discussed with her. That the report of the Consultant was never shared with her prior to the Board’s decision or even afterwards. 5.7 She said she did not believe the reasons for terminating her services were valid at all and that she, therefore, considered the retrenchment a dismissal because the applicants’ salaries were not too high; the Board was at this time very aware that the respondent had performed well. Moreover, the Board had already indicated that some benefits (bonus) would be removed. The respondent had also increased48 her salary during the year as it did her for fellow applicants and other employees’ prior to the retrenchment. 47 Exhibit EM 4 (copy of retrenchment notice). 48 Exhibit EM5. 5.8 She said she believed her contract of employment was terminated unfairly and unlawfully, and in the least transparent and most secretive manner, as she was not consulted nor given an opportunity of being heard. That no options were discussed with her and the process that involved her employment and benefits was carried out by a third party without her input and she was not given any opportunity by the Board to verify if the information that the consultant provided to the said Board was correct. She further stated that the whole process lacked transparency and was conducted in a hush-hush fashion. 5.9 Her testimony with respect to her belief that the decision of the respondent to terminate her services was made in violation of her right to legitimate expectation coupled with her evidence that the respondent discriminated against her and her fellow applicants in the way it carried out the functional review exercise, is not different from the testimony of the 1st applicant. And so, it shall not be repeated here. 5.10 On the claim for wrongful calculation of car allowance, she, just like the 1st applicant, stated that she had seen the Witness Statement of the 3rd applicant, Dr. George Partridge, and she would wholly rely on his evidence on that particular aspect. 5.11 She carried on to say she noted that in the calculation respecting her severance allowance, the sum of MK15,684,255.99 was unilaterally deducted from her severance allowance. When she enquired, she was told that the amount related to gratuity which she had been paid in lieu of pension between 2004 and 2011 when she was on fixed term employment. She said she believed this was a clear but deliberate misunderstanding by the respondent of the difference between severance due entitlement or severance generally payable under the Employment Act and gratuity entitlement, payable under the Employment Contract. 5.12 She progressed to say the money that she was paid between 2004 and June 2011 was based on the contractual gratuity she was entitled to at the time. In support, she exhibited the following documents: (a) the respondent’s schedule of the calculations done in 201149; (b) the respondent’s calculations of her 49 Exhibit EM 6. terminal benefits50; (c). her email querying the respondent’s calculations51; and (d) the respondent’s response52. She stressed that she, therefore, considered the unilateral deduction of the said sum of MK15,684,255.99 as unlawful and unjustified. 5.13 In wrapping up her evidence, she said it was her conviction that she was treated most unfairly, in breach of well-established principles off conducting a retrenchment exercise, in violation of fair labor practices and her legitimate expectations and, therefore, claimed all the reliefs common to the three applicants as enumerated hereinbefore as well as damages for rescission of promise to offer contract or, in the alternative, damages for breach of legitimate expectations created by the respondent’s offer to change his employment status to fixed term contract. Her further claim, individualistic to her, is for the earlier stated sum of MK15,684,255.99 which was unlawfully deducted from her severance allowance and interest thereon at 10% above National Bank of Malawi base lending rate compounded from 1st February 2021 to the date of payment. CROSS-EXAMINATION 5.14 Mrs. Mafeni confirmed that at one point the respondent had 24 subsidiaries and that by the year 2020, it had 13 subsidiaries. 5.15 She agreed that she was initially employed on open-term pensionable contract which was later changed to fixed term contract. She was on a number of these fixed term contracts which were renewed until 2011 when she went back to open-term pensionable contract starting from 1st June, 201153. She confirmed two fixed term contracts she signed with the respondent for the period 2008 to 201154 and 2010 to 201355. She admitted that such fixed term contracts were being renewed from time to time. She also did not dispute that the fixed term contracts used to have their own terms and would expire at the agreed time. She further did not disagree that the fixed term contracts had provisions for 50 Exhibit EM 7. 51 Exhibit EM 8. 52 Exhibit EM 9. 53 Exhibit EM 2. 54 Exhibit PCL 23 A. 55 Exhibit PCL 23 B. gratuity in lieu of pension which gratuity would be paid every time the relevant contract expired. 5.16 She said she was familiar with calculation of severance allowance on account of her experience. She confirmed that her employment contract that was terminated in 2021 was the one that commenced on 1st June 2011 meaning she had served under this particular contract for ten years. She also confirmed that when calculating her severance allowance, the respondent used 26 years and not 10 years but maintained that there was nothing wrong with using 26 years as it was based on her total period of service with the respondent. 5.17 She confirmed that her responsibilities included (a) faithful and diligent performance of duties; (b) use of best endeavours to promote the respondent’s goals; (c) not to make misleading statements concerning the respondent; (d) financial management; and (e) providing financial input into the respondent’s Strategic Plan. She also did not dispute that she contributed to the development of the respondent’s Strategic Plan and would render advice on financial matters. 5.18 She agreed that the subject of remuneration costs was central in the Strategic Plan. She, however, stated that the issue was not necessarily on top of the list. Rather, it featured in the context of general cost management. She added that her perspective and based on the financial strategy part of the overarching Strategic Plan, there was need to not just look at the denominator, namely the issue of cost management but even the revenue side of things because when one is tackling financial management, it is the cost to income ratio that is key. She thus said that if the respondent’s income were to be grown, it may have required elevating costs and that approach sat well with her. She thus said focus should not just have been on remuneration as an issue, but the whole cost aspect. She further disagreed that it was her responsibility to control executive remuneration as the same was determined by the Board with her role being that of maintaining the payroll. 5.19 Answering questions in relation to how the Consultant conducted the functional review, she admitted that the exercise had a timeframe or deadlines. She also did not contest that she filled out a questionnaire she was asked to complete by the Consultant. She further admitted that she and her fellow Executive Management members did not at any point raise an issue with the Consultant specifically about inadequacy of the questionnaire as a consultation device. However, she qualified her response by stating that members of Executive Management did not voice out such a particular reservation because the process was still progressing despite their knowledge of the deadlines in terms of submission of the final report to the Board by Consultant. 5.20 She added that Executive Management members were aware that time for submitting the report was approaching but there was dearth of information in terms of updates on what was going on with the process. In this regard, her testimony surrounding the anxiety and concerns among staff about the Consultant and progress of the functional review exercise is consistent with that of Dr. George Partridge (3rd applicant) and I shall, therefore, not continue to restate her specific evidence on this point. 5.21 When she was interrogated regarding the agreement that the report was meant for the consumption of the Board, she said that while that was indeed the case, she was of the opinion that the Board was supposed to verify with Executive Management the information in the report submitted to it by the Consultant. She also said if the Board did not want her or her fellow applicants to verify the data that was given, it was perfectly within the Board’s power and right to make that decision. She, however, carried on to emphasize that as an affected employee (regardless of the agreement that the report was to be presented to the Board) her expectation was that once the report was ready, the Board would – as regards implementing what was in the report – invite her and say to her “Look here Mrs Mafeni, the Consultants are now through with their work on the functional review exercise and these are their recommendations. And now this is how the Board intends to go about implementing the recommendations. Now give us your views?” 5.22 She said this was the sort of consultation she was expecting as it would have allowed her to weigh in on the Consultants’ report and in the process verify that the Consultant managed or did not manage his job vis-à-vis the agreement made with the respondent’s Board. That the only way the Board could have verified the information in the report was by talking to her and the rest of the applicants because they were the ones affected. RE-EXAMINATION 5.23 She gave the following clarifications in re-examination: 5.24 When asked about the lawfulness of how her severance pay was calculated using 26 years as distinct from 10 years and further the identity of the person who computed the same, she said her deputy, Maureen Mbeye, was tasked to reckon her severance pay. She said the calculations were lawful as the law is clear that severance is paid based on period of service. That whether one moves from fixed term contract to open ended or unspecified contract or vice versa, like her contracts, did not change duration of service which remained. And that in her case she served the respondent for a total period of 26 years. She said it was for that reason that when her employment status changed from fixed to open term contract, the gratuity aspect was rolled into her salary and that was her remuneration and not severance. 5.25 On the question that Executive Management remuneration was determined by the Board and not by her as Group Financial Controller, she explained that what she meant was that even at the time of engaging the executives, remuneration is decided at that time and it is not the responsibility of the Group Financial Controller. She stated that her job was that when an employee was recruited, she made sure that they got paid the right amount with correct deductions which was basically just maintenance. That at the time of budgeting, she could propose a given percentage of salary increase based on inflation and what was happening and so on and so forth. She said other than that all she did was just manage the payroll. 5.26 Concerning her failure as well as the rest of the applicants’ failure to raise issues with the efficacy or sufficiency of the consultation conducted by the Consultant, she explained that she was fully aware of what was agreed in the contract with the Consultant. She said the Consultant requested information from her such as staff salaries for the last five years and other items which she duly provided. She said when she was given a questionnaire, she filled it out. She said all along she thought this was just the beginning of the Consultant’s data gathering process as she did not know she would lose her job as to prompt a full engagement with the Consultant. 5.27 She said if she had imagined that she would be among the employees that were going to be affected by the exercise in terms of termination of employment contracts, she expected the Consultants to meet with her whether in person or virtually before concluding their exercise or even before making their recommendations as her input in that regard had potential to inform the Consultant’s basis for making whatever recommendations they needed to come up with. 5.28 Clarifying further on this point, she said the Consultant could have approached her as Group Financial Controller and pause to her such questions like: “Mrs Mafeni you are the respondent’s head of the Finance Department, how would your department function if we removed you?” “Or how many people can you work with?” “Or how would the respondent as a group perform if position ‘x’ or position ‘y’ was removed?” 5.29 She said the foregoing suggested elements were never discussed. She said the applicants kept on holding to hope that the right time would come for them to query these issues despite the blackout of information. She said the suspense was real and very stressful as the applicants had no idea of what was going to come. Further to that, she lamented that the environment was actually more stressful in that even Dr Partridge who sat on the respondent’s Board as a Director did not appreciate what was happening. In the end, she was astounded that the next thing which happened was being summoned to the boardroom to receive the news that she had been fired. 5.30 Finally, clarifying on whether there was any consultation with the Chairperson or any member of the respondent’s Board, she explained that the only time she met the Board was when she was summoned to the boardroom whereat she was told that her job had been terminated. She said she had very many questions to ask including all the matters the applicants are raising in this Court but she felt it was pointless as a decision on the fate of her job had already been made. She added that the Chairperson of the Board spoke at some great length explaining in detail to her things which she felt should have been ventilated way before the Board had arrived at its decision as this would have allowed a consideration of her views to inform the said decision. In the end, she simply thanked the Chairperson of the Board and walked out of the boardroom. THE RESPONDENT’S EVIDENCE EVIDENCE-IN-CHIEF 6.1 Mr. Stewart Malata is the non-executive director of the respondent’s Board and Chairman of the Committee (that is the Board’s Appointments and Remuneration Committee). He was the respondent’s sole witness. 6.2 It should be pointed out that Mr. Malata’s Witness Statement had a total of 21 pages and was the longest in comparison to the applicants’ Witness Statements which added up to 17 pages for the three of them. Mr. Malata also presented the most exhibits (24 in number). In summary, he testified thus: 6.3 Currently, the respondent has 13 subsidiaries, a reduction from the 27 it had at its peak in 1994. As a holding company within the conglomerate, the respondent’s remuneration costs derive from the dividend income received from its subsidiaries. He said it, thus, became necessary for the Board to step in to preside over the restoration of the respondent’s growth trajectory of the past and for the Board and Management to champion a more innovative strategy aimed at re-growing the business portfolio while initiating sustainable turn around interventions to resuscitate the ailing subsidiaries towards a growth path. He said, therefore, restructuring across the group and downsizing of staff component at the conglomerate’s Corporate Office became inevitable and was adopted in the respondent’s Strategic Plans implemented from time to time especially in 2017 and 2021. 6.4 He said in February 2017, Dr Partridge, in his capacity as the respondent’s Group Chief Executive, submitted a report to the respondent’s Board confirming that there was a high head count at the respondent’s Corporate Office which was incompatible with the respondent’ structure as a holding company and that there was need to carry out a functional review56. The Board advised Management to address this issue. In May 2017, Management submitted a report to the Board on the functional review exercise which showed that the staff numbers would be reduced from 78 to 4057. 6.5 He said as the efforts of the meetings of February and May 2017 captured above did not complete the turnaround strategy, and following on from a Strategic Plan of the previous 5 years; on 27th November 2019, the respondent’s Board approved and has since seen to the implementation of a Strategic Plan for the period 2020-202458 as proposed by Management as led by the applicants herein. 6.6 He said in the key parts relevant to the issues in the matter herein, the Strategic Plan found and strategized, inter alia, that: (a) most of the respondent’s investments did not and failed to meet most of the respondent’s key investments considerations including sustainable revenue growth; (b) the respondent’s immediate outlook appeared precarious with projected dividends for 2019 estimated to grow marginally by 1%; (c) while downsizing of staff numbers had contributed to a significant reduction in the respondent’s staff costs in recent years, in 2018 the respondent’s total remuneration cost remained high and still accounted for 14.0% of total dividends received in the year and more still needed to be done if the respondent was to become a best-in-class organization; (d) should the respondent’s dividend income streams remain compressed while the respondent was unable to check growth of its remuneration costs, the said remuneration costs would become a source of discomfort for some shareholders; (e) in order to align organizational structures and people to new processes and while recognizing that remuneration was a critical factor for attracting, retaining and motivating talent, the respondent would seek to manage its remuneration costs and keep its executive remuneration policy consistent with industry standards and seek to attain ratios and measures that are sustainable for both the respondent and its employees. 56 Exhibit PCL 2A (Copy of minutes of special Board meeting held on 14th February 2017 – minute 3.7). 57 Exhibit PCL 2B (Copy of minutes of 150th meeting of the Board held on 26th May 2017 – minute 700 (5)). 58 Exhibit PCL 3 (Copy of the 2020-2024 Strategic Plan). 6.7 He went further to state that at the time of developing and implementing the Strategic Plan, each of the applicants had a subsisting employment contract with the respondent. Thus, he exhibited the applicants’ employment contracts and job descriptions which were received in evidence and marked PCL 4A, PCL 4B, PCL 4C, PCL 4C(i), PCL 4C(ii) and PCL 4(Ciii)59. He also exhibited the applicants’ General Terms and Conditions of Employment marked PCL 4D. 6.8 He further said that at its meeting of 27th November 2020, the Board, upon receiving a report from the Committee, directed Executive Management in respect of employment status of senior members of staff to consider and explore the possibility and implications of all members of senior management being on contract effective 1st January 2021. I must immediately comment that Mr. Malata’s foregoing account sounds as though the discussion was a recommendation or suggestion by the Board while the actual minute on page 7 of exhibit PCL 5 unequivocally states “the Board directed [Executive] Management that [..] [i]n respect of employment status of senior members of staff, that all members of senior management should be on contract effective 1st January 2021.” He also said that it was further directed at this very meeting that there should be a functional review exercise at the Corporate Office in 2021. 6.9 He carried on to state that, at a special board meeting convened on 21st December 202060, Executive Management updated the Board on various staff issues covering the following: (a) [Executive] Management was working on the matter concerning contracts for Executive and Senior management and would consider all relevant factors to ensure seamless transition and report to the Committee early the following year; (b) functional review was part of the ongoing exercise that Executive Management was carrying out at Corporate Office and also in some subsidiary companies; 59 For the 2nd applicant, her applicable contracts are exhibits marked PCL 24B and PCL 25. 60 Exhibit PCL 6. (c) considering the need for the exercise to be thorough and detailed and in order to align the exercise with goals set out in the Strategic Plan, it was expected that the exercise at the Corporate Office would likely be concluded by June, 2021; (d) on its part, the Board advised Executive Management to take a comprehensive approach in pursuing and championing the strategic reforms at the respondent corporation. 6.10 His testimony – concerning a number of meetings as well as the attendant decisions vis-à-vis the applicants’ anticipated changeover to fixed term contracts; procuring independent legal opinion on issues to do with the said transition; the discussions in camera by the Board and the Committee; the ultimate resolution by the Board that the Corporate Office should first carry out a full functional review on how best the said Corporate Office should be restructured to ensure it delivers on its mandate – matches the evidence of all the three applicants herein on that aspect. I shall, therefore, not regurgitate the said evidence. 6.11 Except to add that he explained that on the back of the Board’s decision to pursue a full and comprehensive functional review of the respondent, the Board through the Committee further requested Executive Management to, as usual, play a facilitating role to ensure that the restructuring exercise was done seamlessly in accordance with best practices61. 6.12 Mr. Malata’s evidence in relation to the content of the TORs informing the Consultant’s assignment is akin to the evidence adduced by the 1st applicant, Mr. Ndau. The only difference in the evidence about the TORs is that Mr. Ndau testified that the Board asked him to review the TORs while Mr. Malata states that Mr. Ndau was asked to develop the TORs. As will be appreciated later in this judgment, whether Mr. Ndau was requested to develop or review the TORs is inconsequential. 6.13 Proceeding, Mr. Malata said that soon after an Inception Report from the Consultant was reviewed, he emphasized to the Consultant not only to keep to 61 Exhibit PCL 9 (Copy of the minutes at p.3). the agreed timelines but also the need to thoroughly consult with Executive Management and the Board62. He said following this framework, the Consultant and Executive Management conducted the consultation between them and ultimately the Consultant submitted the final report to the Board in November 2021 through him. He, furthermore, said that he reviewed some records showing how Executive Management led by the three applicants herein conducted the consultation process as follows: (a) in early August 2021, Executive Management called a Town Hall meeting at which all the staff were informed about the decision for a functional review exercise to be carried out at the Corporate Office to help restructure the organisation to ensure that it properly delivers on its mandate. Management then set up a team assigned to collect information required by the Consultant; (b) on 12th August 2021, the 1st applicant issued an email63 to all members of staff advising that the company would undergo a functional review and required everyone to co-operate with the Consultant and the team that Executive Management had set up to collect information and to submit updated Curriculum Vitae; (c) on 8th September 2021, the 3rd applicant issued a memorandum64 to all members of staff describing the manner and nature of consultation in light of the Covid-19 situation prevailing at the time and calling for cooperation with the Consultant as they conducted the consultation and collect further data to inform their final report which would be submitted to the Board; (d) on 14th September 2021, the 1st applicant wrote an email65 to all members of staff to which a questionnaire was attached which was sent to Executive Management by the Consultant. Members of staff were required to complete it with no need to append signature and email it directly to the Consultant not later than Wednesday 15th September 2021 at 2:00 pm. And that if there was any query the same was to be referred to Ms Rose Chitera, a member of the team Executive Management had set up to collaborate with the Consultant; 62 Exhibit PCL 10 (Copy of an email sent to the Consultant on 31st August 2021). 63 Exhibit PCL 11. 64 Exhibit PCL 12. 65 Exhibit PCL 13. (e) on the same 14th September 2021, the 1st applicant wrote an e-mail66 sending another questionnaire specifically for senior managers to fill out and send to the Consultant in the like manner as advised in the earlier email of 14th September 2021; (f) on 21st September 2021, the 3rd applicant wrote an email submitting his completed questionnaires67 to the Consultant. The 1st applicant equally submitted his completed questionnaire68 to the Consultant. 6.14 Mr. Malata stated that he did not come across any query raised by any of the applicants with the Consultant in the period of the consultation regarding the process developed and executed as earlier stated. That it was after the said processes and in keeping with clause 5 and 8 of the TORs that in November 2021 the Consultant finally submitted to him their final report which he further submitted to the Board. 6.15 Mr. Malata progressed to state that the functional review undertaken culminated in a consolidated structure with a 23-member staff component in the process downsizing the staff component by 12 and downgrading the positions as well as remuneration cost of the Corporate Office. In that regard, he exhibited the respondent’s original and new structures and these were received in evidence and marked PCL 17A and PCL 17B respectively. 6.16 He added that after full implementation of the functional review, K92,374,762.00 per month is the remuneration cost of the top three Executive Management team which now consists of a Chief Executive Officer, a Chief Finance and Administration Officer and a Chief Operating Officer as per the new organogram (PCL 17B). On the contrary, K118,412,246.95 per month was the remuneration cost of the top three Executive Management members under the old or original structure. He also stated that assuming the status quo was maintained, the total cost of employment for only the three applicants herein would have been approximately K178,903,143.56. 6.17 Moreover, continued Mr. Malata, the total cost of employment for all employees immediately prior to the functional review in January 2022 was 66 Exhibit PCL 14. 67 Exhibit PCL 15A-D. 68 Exhibit PCL 16. K233,083,981.93 while immediately after functional review in March 2022 was K59,091,442.39. That as of June 2024 (after filling the vacancies in the final organogram) the same totals K169,872,854.94 (after increases due to economic conditions such as inflation and devaluation) which represents an average of 7% of the dividend income from the respondent’s subsidiaries. He further asserted that assuming the status quo was maintained and all the changes made by the respondent were not made, the total cost of employment as at June 2024 would have been at an estimated sum of K353,110,033.9269 taking into account the annual salary increments, actual increases by service providers, inflationary increases among other things. 6.18 Mr. Malata then testified that in light of the aforesaid background, as well as the processes, discussions, consultations and engagements undertaken as previously explained, the Board ultimately decided to adopt and implement the new corporate structure and modified the earlier recommendation by placing some of the remaining or the new senior managers on fixed term contracts but at a much lower cost as a way of achieving the broader strategic direction towards a lean and cost efficient Management team at the Corporate Office with prospects of finally achieving the strategic results summarised hereinbefore. He said the respondent concluded the restructuring envisaged in its 2020-2024 Strategic Plan in the following manner: (a) on 1st December 2021, the Board duly notified the Ministry of Labour70 of the organisational structural changes at the respondent company and the process undertaken thus far; (b) on 10th December 2021, the respondent’s Board Chairman accompanied by Mr. Malata had individual meetings with each of the applicants as members of Executive Management whereat it was explained to each one of them that after reviewing the total circumstances, reports and options, the Board was taking a direction that would lead to adoption of the structure as exhibited in PCL 17B and as a result their respective subsisting contracts were untenable cost wise and would have to be terminated in accordance with the applicable terms and conditions in order to ultimately achieve the resultant lean and cost efficient 69 Exhibit PCL 17C. 70 Exhibit PCL 20 (Copy of letter to the Ministry of Labour). Corporate Office. He said all the applicants understood and agreed with this turn of events and the outcome given the circumstances of the company that led to the adoption of the Strategic Plan 2020-2024; (c) on 13th December 2021, the respondent issued a Press Release71 announcing to the general public commencement of the implementation of the functional review findings and Consultant’s recommendations; (d) on 20th December 2021, the Board issued letters72 of termination to each of the applicants; (e) through the remaining Management team, on 1st March 2022, the Board completed the restructuring exercise and issued termination letters73 for the rest of the members of the Corporate Office affected by the restructuring; (f) that other employees retrenched from the respondent Corporation as a result of implementation of the restructuring decision included a switchboard operator, secretaries, a commissionaire, some IT specialists, a messenger, the Group Internal Audit Manager and the Group Information Systems Manager. 6.19 Mr. Malata then invited this Court to observe that given the differences in the positions, status and involvement with the reform process within the Corporate Structure, all the employees affected by the restructuring were not and could not be treated exactly the same in the implementation of the strategic reforms. 6.20 He further stated that for example, only where the situation was that there was more than one employee to potentially occupy a position, interviews were conducted to choose one of them and retrench the rest on the basis of the interview results while others were retrenched as allowed under the respondent’s CoS such as clause 28.3.1 as previously covered by the evidence of Dr George Partridge. 6.21 Concluding his evidence on the applicants’ claims for unfair dismissal, unfair labour practices, discrimination and breach of legitimate expectation, Mr. 71 Exhibit PCL 18. 72 Exhibits PCL 19A, PCL 19B and PCL 19C. 73 Exhibit PCL 21 (Final retrenchment letters issued on 1st March 2022). Malata stated that in the totality of his foregoing testimony, the respondent denies any liability for the said claims. 6.22 Tackling the applicants’ allegation of wrongly calculated terminal dues, Mr. Malata testified that the respondent’s retrenchment notices to the three applicants in exhibits PCL 19A, PCL 19B and PCL 19C included an outline of the terminal dues payable to each of the applicants. That further to that, the respondent fully explained its position and basis of calculating the applicants’ terminal benefits in its response74 to the applicants’ various written communication wherein they sought additional dues by way of notice pay, severance pay and car allowance. 6.23 Coming to the 2nd applicant’s claim for the sum of K15,684,255.99 allegedly unlawfully deducted from her severance allowance, Mr. Malata again referred the Court to the respondent’s explanations in exhibit PCL 22 but further invited the Court to bear in mind the following observations: (a) that the 2nd applicant served the respondent under fixed term contracts from time to time dating back to 1995 until September 2011 when her employment status was changed to a pensionable one as per exhibits PCL 23A and PCL 23B. And further to that, these contracts had their own terms which included provision for payment of gratuity at the end of each contract and the terms thereof were fulfilled with no contentions from the 2nd applicant; (b) that following change in pension law in 2011 and given the prevailing understanding of that law then, it was agreed75 between the 2nd applicant and the respondent that effective 1st July 2011, the 2nd applicant would cease to be on fixed contract and be on pensionable employment under which 25% gratuity that she used to get at end of each fixed contract would be absolved into her earnings bringing her monthly salary then to K1,870,535.72; (c) that notwithstanding the commencement date of 1st July 2011 for the new unspecified term contract, when the 2nd applicant’s termination76 by way of retrenchment happened in December 2021, the calculation of 74 Exhibit PCL 22 (Copy of letter from the Board’s Chairperson). 75 Exhibit PCL 24. 76 Exhibit PCL 19C. severance allowance against 2nd applicant’s period of service was erroneously counted from 1995 and that this generated a severance pay of K392,366,155.50 when the correct calculation counting from 1st July 2011 should have been K110,215,212.25. (d) that, as a result, the 2nd applicant was paid a total sum of K282,150,943.35 in excess her severance allowance entitlement at the termination of her employment in December 2021 notwithstanding the deduction of the K15,684,255.00 which she was paid during the transition and migration period in 2011; (e) that the Board was prepared to forego this oversight or overpayment out of Court but since the matter is now being determined before a Court of law, the respondent contests the point and counterclaims the sum of K282,150,943.35 from the 2nd applicant for the overpayment of severance allowance. CROSS-EXAMINATION 6.24 Cross-examination of Mr. Malata by Counsel for the applicants started with questions on Mr. Malata’s corporate governance experience or credentials. He stated that he currently heads the Roads Fund Authority since 2014. He said he was previously an employee in the Ministry of Finance. Additionally, he is presently a Board member respecting Boards of the following companies; SeedCo Limited, Ufulu Finance Limited and Zamara Insurance. 6.25 In respect of the respondent, he has been its non-executive director sitting on the respondent’s Board and has chaired its Appointments and Remuneration Committee since 2019. 6.26 He confirmed that he is familiar with corporate governance agreeing that owners of a company (shareholders) – whose resolutions as members in general meetings are supreme decisions of the company – are situated at the very top of the corporate governance structure. That below them is the Board of Directors responsible for policy issues and major governance and management issues. That Executive Management and general members of staff responsible for operational matters are situated at the bottom. He went on to confirm that when shareholders pass a resolution in a general meeting – particularly a shareholder-reserved matter – the Board of Directors cannot pass a contrary resolution. Similarly, that once there is a resolution by Board of Directors, the same binds Management and staff. 6.27 When taken to clause 60 of the respondent’s Articles of Association77, Mr. Malata confirmed that the said clause provided that, inter alia, the Board shall record minutes of the names of the directors present at each meeting of the directors and of any committee of the directors and of all the resolutions and proceedings at all meetings of the company, and the directors, and of committees of directors. 6.28 When further taken to clause 52 of the Articles of Association, Mr. Malata confirmed that the provision provides for appointment of the directors of the respondent and that the 3rd applicant herein was appointed in pursuance of the said clause coupled with clause 86 which empowers the Board to appoint one of their own to be an executive director. He also read clause 87 of the Articles of Association which provides that “an executive director shall receive such remuneration as the directors may determine subject to confirmation by the company in general meeting” and confirmed that the clause applied to the 3rd applicant but clarified that a practice had developed at the respondent company whereby shareholders in general meeting would authorize the Board to set the remuneration of the Executive Director. 6.29 In his capacity as Chairman of the Appointments and Remuneration Committee, Mr. Malata confirmed the following as being the Committee’s TORs stating that no other responsibilities were left out: (a) confirming, in consultation with the Group Chief Executive, the appointment of members of Executive Management. The Group Chief Executive shall not appoint or terminate the service of a member of Executive Management without the approval of the Committee; (b) considering and making recommendations to the Board for the confirmation of persons nominated for appointment to fill vacancies on the Board as and when such vacancies arise as per clause 68 of the Articles; 77 Exhibit PCL 1. (c) managing the recruitment process for the position of Group Chief Executive and making recommendations to the Board for the appointment of successful candidates for the said position following due process; (d) overseeing the existence and implementation of succession plan for position of Group Chief Executive; (e) determining and recommending for approval the company's general remuneration policy including any specific remuneration policies for executive and senior management; (f) determining specific remuneration packages for executive directors of the company, including and not limited to basic salary, benefits in kind, any annual bonuses, performance based incentives, share incentives, pensions and other benefits. To ensure effective management of information, the Committee may delegate its duty in this regard to the Chairperson of the Committee and or the Chairman of the Board; and (g) determining any criteria necessary to measure the performance of executive directors in discharging their functions and responsibilities and determine targets for any performance- related pay schemes operated by the company; (h) reviewing (at least bi-annually) the Conditions of Service and the Company's governing policies and making any necessary recommendations to the Board for any amendments, taking into account information from comparable companies where necessary; (i) reviewing annually the quantum of sitting allowances and directors' fees and making recommendations to the Board for any changes; (j) receiving, considering and recommending to the Board for approval names of persons nominated by Management for appointment to the boards of Group companies; (k) periodically reviewing the constitution and composition of committees of the Board and making recommendations to the Board for any changes; (l) handling disciplinary complaints and hearings in respect of members of Executive Management as well as hearing and determining appeals that may be referred to it. 6.30 Mr. Malata confirmed that responsibility for all staff issues at the respondent company below Executive Management was left in the hands of the 3rd applicant as Group Chief Executive or Executive Director except to the extent of the limitations clearly stated in the Committee’s TORs as earlier cited. He further confirmed that responsibility over the performance and other issues relating to the Executive Management including the 1st and 2nd applicants rested in the hands of the 3rd applicant as Executive Director or Group Chief Executive. 6.31 Likewise, he confirmed that shareholders in general meeting cannot terminate the contract of any member Executive Management. Similarly, that the Board cannot terminate the contract of any employee other than the 3rd applicant as termination of services for such cadre of employees is the responsibility of the Group Chief Executive. 6.32 In connection with minutes of meetings wherein the Board discussed matters in camera, Mr. Malata confirmed that there were no minutes of the actual discussions held in camera. That one needed to consult other minutes where it was just being reported to Executive Management of the resolutions taken following the Board’s discussions in camera. Absence of minutes of the actual Board’s discussions included minutes of discussion of the report of the Committee by the Board at its meeting of 26th March 202178. That there was indeed no record of the discussions that led to the Board’s decision to abandon the transition of the 1st and 2nd applicants to fixed term contracts. 6.33 Specific to the issue of the shift to fixed term contracts in respect of the 1st and 2nd applicants, Mr. Malata confirmed that the decision to stop the transition was made without involving the 1st and 2nd applicants as affected individuals and neither were they communicated to on the reasons for the abandonment. 6.34 On the legal opinion sought by the Committee after deciding that the 1st applicant was conflicted in terms of originating the fixed term contracts, Mr. Malata stated that there was nothing the Committee disagreed with in the legal 78 Exhibit BN 4. advice from Messrs GK Associates as articulation of the legal matters therein was trouble-free. 6.35 In relation to the functional review carried out at the respondent company, Mr. Malata admitted that not all functional reviews inevitably lead to retrenchments. He added that retrenchments could possibly ensue as a result of functionally reviewing an organisation. He further agreed that following the functional review, the Consultant’s recommendations to the Board were not cast in stone; that whatever the Consultant recommendations, the Board needed to firstly accede to the same before any implementation; that notwithstanding the Consultant proposing some retrenchments, ultimately it was within the Board’s power whether or not to action those proposals or proceed in any manner it elected as it knows its work force particularly its Executive Management and so either agree wholesale to the recommendations; or reduce the extent of the retrenchments; or not to retrench at all. 6.36 Mr. Malata also confirmed that it was the Board’s call or role and not the Consultant’s to engage members of staff, including the applicants, on the proposed retrenchments. 6.37 When asked whether the Board ever consulted or engaged the Applicants on the proposed retrenchments after receiving the report from the Consultant, the witness admitted that it did not do so. 6.38 Mr. Malata further admitted that sometime in November 2021, he received the functional review report from the Consultant and he forwarded it to the Board. He stated that he has never shared the report or any part of it with any of the applicants in this case and in particular the 3rd applicant. He went on to say the 3rd applicant was not availed the report whose contents were the basis of restructuring the company he headed because the 3rd applicant was conflicted. He said that only certain aspects of the report were disclosed to the applicants when the Board summoned them to individual meetings on 10th December 2021. 6.39 He said that when the report was submitted to the Board towards the end of November 2021, a meeting was convened by the Board to deliberate on the report and the said meeting occurred with all members of the Board turning up but in the absence of the three applicants herein who were not invited to attend especially the 3rd applicant as an Executive Director. He stated that the Board exhaustively went through the entire report focussing on the recommendations and exercised its mind on the merits thereof then adopted the recommendations after which it was agreed that the same be implemented in two phases. Mr. Malata went further to say that in proceeding in the manner so stated, the Board considered the matters of remuneration costs and the structure of the respondent’s Corporate Office. 6.40 Upon being asked whether he had brought to Court the Consultant’s report to enable the Court appreciate the basis whereon the decision to terminate the contracts of the applicants was based, Mr. Malata’s response was in the negative proffering no explanation as to why such a report which the applicants viewed as critical in the determination of the issues before the Court was not presented forth. 6.41 When he was also asked whether minutes were taken at the meeting whereat the Consultant’s report was discussed and the decision to terminate the applicants’ contracts reached, Mr. Malata answered in the affirmative but stated that he did not have the minutes with him in Court. Relatedly, he could not recollect the date whereon the meeting that deliberated on the Consultant’s report took place. It should be disclosed that, at this stage, Counsel for the applicants offered Mr. Malata a brief option to briefly consult his fellow directors and the secretariat to enable him be reminded on the date whereon the meeting took place. He accepted the offer and a short adjournment was granted by this Court. 6.42 However, when the Court reconvened, Mr. Malata still maintained that he could not remember the exact date of the meeting and even his colleagues whom he contacted could not remember the said date except that the meeting took place sometime in November 2021. He gave further details that it was a physical meeting in Lilongwe with the venue being Sunbird Capital Hotel and that Board members were booked at the same hotel. Probed further by Counsel for the applicants as to why he still could not remember the date considering that hotel bookings are invariably recorded, Mr. Malata stuck to his guns that he could not recall the date of such a consequential meeting. 6.43 Carrying on with his responses in cross-examination, Mr. Malata said that the next meeting of the Board came about on 10th December 2021 at which the applicants were individually orally notified of the decision to terminate their contracts. He confirmed that despite the fact that the 3rd applicant was the Group Chief Executive of the respondent company and responsible for 13 subsidiaries, he was informed of termination of his contract by word of mouth. Further to that, he confirmed that in between the dateless Board meeting of November 2021 whereon the decision to terminate the applicants’ contracts was made to the meeting of 10th December 2021, neither he as Chairman of the Board’s Appointments and Remuneration Committee let alone the Board or its Chairman met any of the applicants. 6.44 Mr. Malata confirmed that there were no consultations held with the applicants before the 10th December 2021 meeting on which date the Board verbally broke the news to them that they had been retrenched. According to the question by Counsel for the applicants and the answers Mr. Malata gave to the said interrogations, the consultations did not happen in the following sense: (a) Mr. Malata confirmed that it was not explained to the applicants that the respondent had a new structure respecting the Corporate Office; (b) Mr. Malata confirmed that none of the applicants was told beforehand that their remuneration was too high and therefore unsustainable; (c) Mr. Malata confirmed that no offers were made nor were the applicants permitted to suggest taking alternative or lower positions; (d) Mr. Malata confirmed that the 1st applicant, Mr. Benard Ndau, was never offered or allowed to suggest taking a lower position of Legal and Administration Officer which is currently being occupied by Miss Clara Khakhi; (e) Mr. Malata confirmed that the 3rd applicant, Dr George Partridge was not offered or given room to propose maintaining his position on lower remuneration or that occupied by Professor Mangani under the respondent’s new structure; (f) Mr. Malata confirmed that whatever is in the job description of Professor Mangani was not offered to Dr George Partridge as to present him the option whether to accept the said job description or not; (g) Mr. Malata confirmed that the 2nd applicant, Mrs Elizabeth Mafeni, was not offered or allowed to make an offer to stay on lower pay or position; (h) Mr. Malata confirmed that the 2nd applicant, Mrs Elizabeth Mafeni, was not let the option to take the position created in the new structure of Chief Finance and Administration Officer presently occupied by Moureen Mbeye who was the 2nd applicant’s deputy before she was retrenched; (i) Mr. Malata confirmed that, generally, the new organogram79 was not shown to the applicants at all. 6.45 Mr. Malata equally stated that there was no extraordinary general meeting of the respondent’s shareholders to appraise them of the developments nor one to engage them on the fact that the Board had made the decision that the Executive Director’s remuneration which is confirmed by the company in general meeting per clause 87 of the Articles of Association was now deemed too much for the company and for that reason, the Board was terminating the Executive Director’s employment contract. 6.46 Concerning minutes of the Board meeting of 10th December 2021, Mr. Malata stated that these were recorded but had not similarly been brought to Court but had one agenda item of specifically informing the applicants of the Board’s decision to terminate their services. 6.47 On the provisions of clause 28.3.1 of the respondent’s CoS80 which he was asked to read, after initially asserting that saying a given employee’s pay is too high is not an allegation but a fact and thus not amenable to a defence, Mr. Malata eventually admitted that the clause provides that an employee an opportunity to defend themselves when an allegation is made against them before their employment contract is terminated that their remuneration is too high particularly when the said unstainable remuneration was set by shareholders through the Board. He, therefore, further admitted that the 79 Exhibit 17B. 80 Exhibit PCL 4D. applicants never had an opportunity to defend themselves against the allegations that their remuneration was too high for the respondent company. He admitted that the Board never met the applicants to discuss the issue regarding affordability of their salaries. 6.48 Subsequently, Mr. Malata’s attention was drawn to Appendix 8 of the CoS81 being The Disciplinary Code and Procedure Manual. In particular, he was asked to look at clause (i) whose heading reads “Termination on the Grounds of Retrenchment/Redundancy”. Thereunder the clause reads as follows: “An employer has an undoubted right to terminate the employment of his employees for economic, technical, structural or similar reasons. The full procedure, which must be followed when retrenching employees, or declaring them redundant is described in the Industrial Relations Policy attached to the Conditions of Service.” Mr. Malata admitted that reading the foregoing provision, it followed that the Industrial Relations Policy was part of the respondent’s CoS. However, he could not recall the provisions of the Industrial Relations Policy and did not bring it to Court. He stated that he was not in a position to state what the Board did with reference to the Industrial Relations Policy in respect of the applicants and was unable to confirm if the Board followed the provisions of the Industrial Relations Policy in terminating the applicants’ employment by way of retrenchment. 6.49 Mr. Malata was referred to exhibit PCL 20 being a letter the respondent wrote the Secretary for Labour on the anticipated organizational changes at the respondent company. He was made to read the second paragraph of the letter which reads as follows: “The Board will endeavour to ensure that it follows a transparent process of selection of staff into affected position based on performance and suitability for the job. In the event that all efforts to absorb affected staff into the revised structure failed, the Board will be left with no alternative 81 As above. but declare the remaining staff redundant and will pay their terminal due in accordance with the relevant labour laws.” He was then asked whether, in the absence of any disclosed criteria for choosing who was to remain and who was to be retrenched and devoid of all the other undisclosed information which was only known to the Board, it could still be claimed that the process was a transparent process or that it was only transparent to the members of the Board who knew the criteria being used for the retrenchments. He answered that the transparency being spoken of in the letter was the transparency after the applicants had left. He later changed his response to say the transparency referred to the period during retrenchment but went on to admit that the same was not extended to the applicants herein in the manner addressed in the letter to Secretary for Labour. 6.50 Regarding the 2nd applicant’s claim in respect of deduction of her severance allowance, Mr. Malata was emphatic that the Board’s Committee did not disagree with any part of the legal opinion82 it got from Messrs GK Associates. He was asked to read part 5 of the legal opinion entitled “If the proposed change of employment status from continuous employment to fixed-term contracts is effected, should the effective date of appointment be the date they were appointed at PCL or the date of switch from continuous to fixed-term contracts?” and, in particular, he was asked to read paragraph 5.4 wherein the independent Counsel concluded his opinion of the law on the matter as follows: “According to section 41 above, continuous employment begins from and include the first day on which an employee begins work for an employer. It continues up to the date of termination of employment. Further, under Section 41(2) of the Employment Act, the employee is on continuous employment even if he/she moves from one job to the other say within the same group like PCL. So long as the employee is working for the employer, she will be deemed to be on continuous employment. What this means is that if the proposed changes have been effected and a member of EXCO is dismissed unlawfully after the cross over to a fixed term contract, he/she can successfully sue for severance under Section 35 of the Employment Act 82 Exhibit BN 7. even if he/she has done 3 terms of the 3 years’ contract. The court will calculate the severance from the date they were appointed in PCL. As such, if the proposed change of employment status from continuous employment to fixed term contracts is effected, the effective date of appointment will be the date EXCO members were appointed at PCL.” Mr. Malata confirmed that the issue the opinion advised on is the very issue subject of the 2nd applicant’s claim on severance allowance underpayment. He confirmed that the 2nd applicant first joined the respondent in 1995. That she was not part of the team which calculated her terminal dues and the decision to pay her the said terminal benefits was made by the respondent. 6.51 Mr. Malata ended his testimony in cross-examination by asserting that when all is said and done, in his opinion, the respondent’s Board did its best to deal with the applicants fairly. RE-EXAMINATION 6.52 In re-examination, Mr. Malata addressed the following matters emanating from the areas he was cross-examined on: 6.53 On why he did not present minutes of the meetings of the Board whereat consequential decisions were made as well as the Consultant’s report whereon the Board based its decision to retrench the applicants, Mr. Malata responded by stating that, going by the applicants’ pleadings and particularly their Amended Statement Claim, the applicants’ complaint had nothing to do with the absence of the minutes or the Consultant’s report. Rather, in his understanding, the substance of the applicants’ complaint is entirely based on lack of consultations in relation to the functional review exercise with no reference to the actual functional review report. 6.54 Making a clarification on the Board not consulting the applicants, Mr. Malata refuted that there was any such failure stating that the way he saw things was that Management, shepherded by the 3rd applicant, would facilitate the process and that the Board would simply receive the report at the end of the said process and decide the way forward. He further stated Management indeed facilitated and managed the process since, after all, they also reviewed the Consultant’s TORs and considered that they would address the issues that were requested for the functional review. He added that it was his conviction that the consultation was done by Management and the Board received the report which was the final product. 6.55 Clarifying about management of a company vis-à-vis the Board’s responsibilities and how the same applied to the functional review process, Mr. Malata said that the Board has overall responsibility of managing a company. That, however, such responsibility can be delegated to Management led by the Executive Director and this is why they delegated to Management to facilitate the functional review as is envisioned under clause 88 of the respondent’s Articles of Association. 6.56 Mr. Malata continued to state that concerning the functional review, the Board delegated all responsibility of managing the functional review process to Management and all the Board was interested in was a complete report which was the outcome of the whole process. 6.57 On the provision in the CoS83 that the full procedure to be followed when retrenching employees or declaring them redundant is described in the Industrial Relations Policy attached to the CoS, Mr. Malata stated that his understanding of the said clause is that the Industrial Relations Policy so described in the CoS Policy is a reference to the entire CoS document which speaks to issues of industrial relations and not that there was a standalone Industrial Relations Policy lying somewhere. 6.58 When Mr. Malata was asked to weigh in on the 3rd applicant’s testimony that he approached Mr. Malata querying the lack of consultations by the Consultant and that there was an information blackout at the Corporate Office which made the situation tense among members of staff, Mr. Malata stated that he gave the 3rd applicant the benefit of doubt on such an encounter with him. 6.59 Regarding the email84 he sent to the Consultant on 31st August 2021, Mr. Malata stated that he dispatched the same not as a result of a complaint from 83 Exhibit PCL 4D. 84 Exhibit PCL 10. the 3rd applicant but after the Board had received an inception report from the Consultant. That in that email he urged the Consultant to have thorough consultation with Management and the Board. Further that, it was after this point that Management handled the rest of the consultations and in his view the same were done. 6.60 Concerning the allegation of lack transparency in the retrenchment process by the Board, Mr. Malata stated that it was expected that upon receipt of the Consultant’s report, the Board would simply proceed and make decisions. That any prior consultations were to be handled by Management. 6.61 Mr. Malata was also asked to clarify why shareholders in general meeting were not involved in the process. His response was that members in general meeting give mandate to the Board to set remuneration for the Executive Director. That when the Board does so, it reports back to the members at the next Annual General Meeting (AGM). As such, stated Mr. Malata, the Board saw no need to report to the members the action it was taking as it would, either way, report to the members at the next AGM as it eventually did. 6.62 On the issue of the proposed migration to fixed term contracts in respect of the 1st and 2nd applicants, Mr. Malata reiterated that the process was abandoned as the Board opted for a functional review which would look at the respondent company in totality stating further that the Board’s powers allows it to change its mind or position on any issue or resolution which is normal. He also stated that the Board advised the 3rd applicant that functional review was taken off as one of his key performance indicators in his balanced score card as the Board took the decision to review the entire structure of the Corporate Office and not just look at the employment status of the 1st and 2nd applicants. 6.63 He added that even though his Committee obtained a legal opinion and made a submission to the Board, the Committee was not bound to adopt the said opinion neither was the Board bound to adopt it or any report that may have come from the Committee. He said that in all these reversal processes, there was no need to consult the 1st and 2nd applicants because the matter was not conclusive. In his judgement, they 1st and 2nd applicants were only going to be consulted if the contracts had been concluded. 6.64 This concludes all the evidence adduced before me in this action. THE APPLICABLE LAW 7.1 This being a civil action the burden of proof is on the party who asserts the affirmative,85 namely the applicants. As regards the standard of proof in civil cases, the same is on a balance of probabilities. As to meaning of “balance of probabilities”, this is best exemplified by interrogating the difference between succeeding on the balance of probabilities and failing on the balance of probabilities. In Miller v. Minister of Pensions86 Denning J said: "If the evidence is such that the tribunal can say 'we think it more probable than not' the burden is discharged, but if the probabilities are equal it is not." 7.2 To articulate the foregoing statement in simple percentage terms, if a tribunal concludes that it is 50 (fifty) percent likely that the applicant's version is true or right, then the applicant loses. Contrastingly, if the tribunal comes to the conclusion that it is 51 (fifty-one) percent likely that the applicant’s version is true or right, then the applicant carries the day. 7.3 Section 57 (1) of the Employment Act provides that the employment of an employee shall not be terminated by an employer unless there is a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirement of the undertaking. Section 57 (2) of the Employment Act provides that the employment of an employee shall not be terminated for reasons connected with his capacity or conduct before the employee is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide the opportunity. 7.4 Section 61 (2) of the Employment Act provides that in addition to proving that an employee was dismissed for reasons stated in section 57 (1), an employer shall be required to show that in all circumstances of the case he acted with justice and equity in dismissing the employee. 85Chipiliro Banda v Southern Bottlers Ltd [2012] MLR 53 (HC). 86[1947] 2 All ER 372. 7.5 Section 31 (1) of the Constitution provides that every person shall have the right to fair and safe labour practices and to a fair remuneration. This Constitutional provision supports section 57 of the Employment Act but it does not stipulate the definition of fair labour practice and neither does it provide any instances that could be deemed to constitute unfair labour practices. Thankfully, case law has interpreted fair labour practices to mean practices that are even handed, reasonable, acceptable and expected from the standpoint of employer, employee and all fair minded persons looking at the unique relationship between employee and employer and good industrial and labour relations87. 7.6 Essentially, what amounts to unfair labour practices will invariably depend on circumstances of the case. In Kachinjika v Portland Cement Company88, the Court made the following sound guidance on what would qualify as fair labour practices and correspondingly be deemed unfair labour practices: “[….] giving adequate notice is a fair labour practice. Non-discrimination is a fair labour practice. Giving a fair hearing to a worker before taking disciplinary action is a fair labour practice. Terminating for a justifiable reason is also a fair labour practice. The reverse of the foregoing would, we think, be equal to unfair labour practices”. [Emphasis added]. 7.7 No doubt, these Courts have the discretion – upon valuing the facts at hand and employing good judgement or sense – to determine whether or not a particular set of circumstances amount to an unfair labour practice. 7.8 I undertake to cite, where relevant, the rest of the applicable statutory and case law in appropriate places in the “Analysis-and-Disposal” segment of this judgment. ISSUES FOR DETERMINATION 8.1 Observably, what the applicants and the respondent have presented as issues for determination are somewhat different. Counsel Suzi-Banda for the applicants cited the minutes drawn up by the parties following a Pre-hearing 87 Kalinda v Limbe Leaf tobacco Ltd Civil Cause No. 542 of 1995 [Unreported]. 88 [2008] MLLR 161. Conference they conducted whereat they agreed on matters still in dispute for the Court’s resolution. 8.2 On the contrary, the issues for determination presented by Counsel Mpaka for the respondent emanate from the Statement of Claim, Defence, Minutes of Pre-hearing Conference and the evidence before the Court. It is unnecessary that I detail the conflicting issues for determination. Nevertheless, having such different sets of issues is symptomatic of the fact that formulation of the same as captured in the Pre-hearing Conference left a lot to be desired. 8.3 Then again, that is not to say the matters in dispute as cited by both Counsel are way off the mark or irrelevant. Rather, with the benefit of hindsight, there was room to articulate the same in a better and more focused expression. That said, the situation before me is not at all fatal. I am by no means hamstrung from deciding on the issues in a manner that I factually, evidentially and legally appreciate them. Clearly and most of the time, questions for resolution in cases before these Courts became much more well-defined after the entire evidence is adduced. 8.4 In this vein, it is small wonder that Counsel Mpaka did not, justifiably, wholly quote contents of minutes of the Pre-hearing Conference. For instance, what has been captured in the Pre-hearing Conference minutes as the first question to be determined is “whether or not the applicants were employed on permanent terms [or more aptly contract of employment for an unspecified period of time]”. With the advantage of having now heard the full evidence, that is certainly a non-issue in this matter and therefore pointless for this Court to waste its time responding to the question. 8.5 And so, with the foregoing sentiments in mind, having conscientiously engaged with all the papers as well as the evidence heard in this matter, the material issues this Court must really resolve are simply as follows:  Whether the respondent had any legal obligation to consult the applicants before termination of their respective employment contracts based on the respondent’s operational requirements;  Whether the respondent consulted the applicants before termination of their employment contracts on the ground of retrenchment;  Whether, if the second question above is answered in the negative, the failure to consult the applicants in the circumstances of this matter amounts to unfair dismissal/unlawful dismissal;  Whether, if the second question above is responded to in the negative, the failure to consult the applicants in the circumstances of this matter amounts to unfair labour practices and whether the respondent subjected the applicants to any other unfair labour practices;  Whether the applicants are entitled to compensation for unfair dismissal and damages for unfair labour practices;  Whether the 1st and 2nd applicants are entitled to damages for rescission of promise to offer contract or, in the alternative, damages for breach of legitimate expectations created by the respondent’s offer to change their employment status to fixed term contract;  Whether the respondent wrongfully calculated the applicants’ car allowance, notice pay and leave days; and  Whether the respondent unlawfully or unjustifiably deducted the sum of MK15,684,255.99 from the 2nd applicant’s severance allowance. 8.6 No doubt, as will be discovered, some of these questions will have sub questions. I shall answer them all. ANALYSIS AND DISPOSAL 9.1 It is this Court’s tradition not to place parties in what I call “gratuitous suspense” regarding the Court’s final determination. Accordingly, for the reasons I shall be setting out soon, it is my decision – on a preponderance of probabilities – that, firstly, the applicants’ claims for compensation for unfair and/or unlawful dismissal and damages for unfair labour practices are well founded. Secondly, the 1st and 2nd applicants’ claim, as pleaded in the alternative, for damages for breach of legitimate expectations created by the respondent’s offer to change their employment status to fixed term contract is successful only to the degree that the action taken by the respondent in aborting the migration to fixed term contract without the decency of providing the 1st and 2nd applicants reasons is an unfair labour practice. 9.2 Thirdly, I equally find in favour of the 2nd applicant in respect of her claim for MK15,684,255.99 being the figure unlawfully deducted from her severance allowance and I order interest thereon at the prevailing National Bank of Malawi base lending rate compounded from 1st February 2021 to the date of payment which payment must be effected by the respondent within 7 (seven) days from the date of this judgment. 9.3 On the other hand, I disallow the applicants’ claim for wrongful calculation of their car allowance, notice pay and leave days. Also, the 1st and 2nd applicants claim for damages for rescission of promise to offer contract is unmerited and disallowed. Similarly, the respondent’s counterclaim for the sum of K282,150,943.35 in respect of an alleged overpayment of the 2nd applicant’s severance allowance is declined. 9.4 I have so decided following a careful scrutiny of the questions formulated formerly in the “Issues-for-Determination” section of this judgment and, importantly, in light of the relevant facts and applicable law which I now proceed to fully ventilate as follows:  Whether the respondent had any legal obligation to consult the applicants before termination of their respective employment contracts based on the respondent’s operational requirements: 9.5 This is invariably a question of law. Seeing that Counsel for the applicants’ arguments are congruent with the position that this Court will take in ruling on this first issue, I conveniently delve straight into the respondent’s arguments. 9.6 Putting it pithily, learned Counsel Mpaka for the respondent argued that as the law stands at the highest level of legal precept – and if sections 28(1), 57(1), 57(2) and 61(2) of the Employment Act coupled with decisions of the Supreme Court of Appeal for Malawi89 in First Merchant Bank Limited v. Eisenhower Mkaka and Ors90 (colloquially known as “Mkaka One”), Airtel Malawi v. Komiha and 38 Ors91 and First Merchant Bank Limited v Eisenhower Mkaka & Ors92 (colloquially known as “Mkaka Two”) are anything to go by – there is no legal obligation to consult an employee when terminating for operational requirements such as in the result of implementation of the reforms and restructuring at the respondent’s Corporate Office that occurred in this matter. That the employer’s only legal obligation when terminating for operational requirements is the obligation to show a valid reason and to act with justice and equity in all the circumstances of a given case. 9.7 Fortunately for this Court, these very arguments were similarly raised by the respondent in the case of Alex Malikebu & 3281 Ors v. ADMARC Limited93. It is my own decision and I proceed to rehearse at full length my reasoning94 as follows: “[W]hen one deeply engages with the reasoning of the majority in Mkaka One, it comes out clearly their Lordships did not have due regard to section 31(1) of the Constitution and sections 57(1), 57(2) and 61 of the Employment Act in the manner that Chikopa JA, in the minority, conscientiously engaged with the said provisions. I believe had their Lordships in the majority done so, they would certainly have joined Chikopa JA in effortlessly holding that consulting an employee prior to retrenching him or her is a fair labour practice. The reverse would obviously be deemed unfair labour practice hence a contravention of section 31 (1) of the Constitution. Relatedly, on terminating an employee’s contract under section 57 (1) of the Employment Act and particularly on the ground of operational 89 That is the correct terminology for our apex Court as per the dictates of section 104(1) of the Republican Constitution. The supreme law of this land never established in this country a Malawi Supreme Court of Appeal but a Supreme Court of Appeal for Malawi. All credit to Honourable Justice Mambulasa for disabusing me of this, admittedly inconsequential, anomaly when he was my lecturer in the recent past in a post-graduate academy. 90 [2014] MLR 105. 91 MSCA Civil Cause 59 of 2013 92 MSCA Civil Appeal Cause No. 19 of 2017 [unreported]. 93 Matter No. IRC 554 of 2023 [unreported]. 94 As above at paras. 6.27 to 6.37. requirements, in Chifundo Chioko and 59 Others v First Capital Bank95 the learned Chairperson of this Court had this to say96: “[On terminating an employee’s contract by way of operational requirements] the employer is required to follow certain protocols and procedures before and in the period leading to termination. In that regard, ensuring justice and fairness for the employee underpin the law’s requirement for the employer to follow these specific protocols and procedures when carrying out terminations based on operational requirements. This is because, for operational requirements, an employee’s contract is ordinarily terminated without any fault on the part of the employee. As such the law’s objective in requiring specific protocols and procedures is to mitigate and minimize, as much as possible, any hardship and suffering the employee may endure, given that they are not at fault when such terminations occur” Further relatedly, in Justin Chikaonda and Ors v Malawi Savings Bank Ltd (FDH Bank Ltd)97 the learned Deputy Chairperson remarked98 as follows respecting Mkaka Two: “It is clear to this Court that the [Supreme Court of Appeal for Malawi] is saying that failure to consult offends “the justice and equitable” principle provided for in section 61 (2) of the Employment Act. Accordingly, this holding, in our view is a departure from the clear holding in the earlier case [Number 199]. In fact, it is in line with the holding of Chikopa JA who gave a minority opinion. In our judgment, this is correct position of the law.” [sic] I continued thus: [….] Mkaka One is markedly brittle despite its ground-breaking introduction to the employment or labour law jurisprudence and the clear advantage [it] grants employers who are considering retrenching their work force. I observed the fragility of Mkaka One through my reading of a number of decisions rendered by the High Court. In the 95 Matter No. IRC 10 of 2020 (Mzuzu Registry) [unreported]. 96 At p.20. 97 IRC Matter No. 222 of 2016 (Principal Registry) [unreported]. 98 At p.22 para 55. 99 That is Mkaka One. said decisions, judges have, at best, employed ways to unchain themselves from the binding status of Mkaka One or, at worst, given [it] absolute negative commentary. This is exemplified by the case of Premium Tama Tobacco Ltd and Others v Frank Mambala and Others100, in which Mkandawire J. (as he then was) avoided the dictates of Mkaka One and distinguished it by stating that Mkaka One is applicable where the reasons for retrenchment are valid. Another example is the case of Limbani Msosa and Ors v FDH Bank Limited101 in which Kamwambe J. expressly aligned himself with the thinking of Chikopa JA who was in the minority in Mkaka One because “[s]ection 31 of the Constitution should be put into reality rather [than] let it dwell on paper without any useful purpose”102. Finally, in the case of BM Phiri and Ors v Sunbird Mount Soche103, Tembo J. equally approved of the minority opinion of Chikopa JA and categorically disapproved the majority opinion which he said was arrived at without considering section 31 of the Constitution. [….] basing on all what I have outlined above, I form the view [….] that the reasoning in Mkaka Two is consistent with the minority opinion of Chikopa JA in Mkaka One. As a result, I reason that this is the correct position of the law, to wit, the law saddles the employer with an obligation to consult employees before effecting retrenchments and/or redundancies. 9.8 I concluded my rendition in the Alex Malikebu & 3281 Ors v. ADMARC Limited104 case with the following remarks: If it was ever in doubt that the foregoing is the correct position of the law; and if there were ever any doubts that the majority opinion in Mkaka One has always been suspect, a recent decision of the High Court rendered by Muhome J. in Eric Thomson and 53 Ors v Telekom Networks Malawi 100 Civil Appeal Number 103 of 2015 [unreported]. 101 Civil Cause No. 181 of 2016 [unreported]. 102 As above at p.3. 103Civil Appeal Cause Number 15 of 2015 [unreported]. 104 As above n.93. Plc105 (henceforward referred to as the “Eric Thomson case”) brings to a close any such doubts at least until the Supreme Court of Appeal for Malawi is presented with an appropriate case to comprehensively revisit its majority opinion in Mkaka One. Briefly, in the Eric Thomson case the learned judge excitingly held that Mkaka One was made per incuriam and, significantly, that the true position of the law is that consultations are obligatory in all instances where termination of employment is due to operational requirements and not only when it is provided for in the Terms and Conditions of Service”. 9.9 Reverting to the matter at hand and responding to the first question for determination, I see no foundation to undermine or renounce my foregoing thinking. I continue to be of the same mind. Consequently, I equally reason that the correct position of the law is that the law saddles the employer with an obligation to consult employees before effecting retrenchments and/or redundancies. 9.10 If the losing party in these proceedings were to escalate this judgment to the higher Courts on appeal and thereat my foregoing reasoning was found to be flawed, I would, on the facts before me, alternatively find that the respondent’s duty to consult the applicants is not merely rooted in law but also it is importantly provided in both the ToRs which guided the Consultant in carrying out the functional review exercise as well as the respondent’s own CoS. 9.11 I first tackle the TORs aspect. The Consultant had specific instructions from the Board to consult the applicants who were members of Executive Management. Further to that it is a fact that Mr. Malata penned the Consultant impressing on the Consultant to conduct thorough consultations with Management and the Board. Whether the Consultant complied with the said edict is a question I take care of shortly. 9.12 Concerning consultations under the CoS, recourse to Clause 28.3.1 thereof is important. The Clause reads: 105 Civil Appeal No. 9 of 2023 (Being IRC Matter No. 739 of 2019) (Principal Registry) [unreported]. “The Company may terminate the services of an employee at any time by giving him the appropriate notice or salary in lieu thereof for misconduct, capacity, conduct or for reasons connected with the operational requirements of the Company or its subsidiaries. Provided that the employment of an employee shall not be terminated before the employee is provided an opportunity to defend himself against the allegations made, unless it cannot reasonably be expected to provide such opportunity.” 9.13 It is should recollected that Mr. Malata asserted in his evidence that the Consultant’s report (which was not made available to the applicants) recommended that the applicants’ employment contracts be terminated on account that their remuneration was too high. Now, for the applicants who had not been furnished any grounds for such a recommendation or conclusion, saying their remuneration was high basically qualify as an allegation. 9.14 In these circumstances, I accept – hook, line and sinker – Counsel Suzi- Banda’s submission on behalf of the applicants that if an employee is to have his employment terminated based on one fact that relates specifically to him, such as his salary being too high, that fact is an allegation that must be tested and verified. I am also won over by the applicants’ further submission that Clause 28.3.1 of the respondent’s CoS clearly requires that the applicants ought to have been given an opportunity to defend themselves before their contracts were terminated. 9.15 And so, even going by the case of Mkaka One which presently, as earlier reasoned, does not command absolute authority, the case would still be very much useful on the facts of the instant matter since where the obligation to consult is provided for in a contract either through the CoS or any other policy of the company, then such consultations would be mandatory. 9.16 To wrap up this point, in the case of the applicants in this matter, the right to be consulted was equally provided for both under the respondent’s CoS and contractually contained in the Agreement signed between the Consultant and the respondent. I so alternatively find.  Whether the respondent consulted the applicants before termination of their employment contracts on the ground of retrenchment: 9.17 This is always a question of fact and degree. In the instant case, it also happens to be the most critical question which was heavily contested by the parties. Lying in wait – on the way to determining the ultimate issue of whether the respondent consulted the applicants before termination of their employment contracts on the ground of retrenchment – are a litany of factual issues, in some respects, coalesced with legal issues. 9.18 Once more, because the arguments of Counsel for the applicants are mostly in harmony with my standpoints on this second question, it is convenient that I only outline the respondent’s arguments. And so, in analytical terms, there are chiefly two aspects respecting the respondent’s arguments with perhaps some few inconsequential ancillary points to be randomly referred to wherever necessary. 9.19 First of all, learned Counsel Mpaka argued, with crusading zeal, that if there was any obligation to consult, it was the applicants along with the Consultant who were supposed to conduct the consultation. He went on to contend that with the full knowledge, involvement and participation of the applicants, the respondent had arranged that the consultation be conducted by a private firm of consultants in liaison with senior Management to facilitate a compliant process and that the Board would only receive a report of the functional review after the consultation. 9.20 If I may respectfully say so, there is a significant distortion of the evidence adduced before this Court in this argument. The irrefutable minutes of the meeting of the Board’s Appointments and Remuneration Committee held on 24th May 2021 are very clear. Therein it is recorded that after the Board resolved that there should a full functional review of how best the respondent’s Corporate Office should be restructured, it was unambiguously stated that the Board would assume the role of procuring Consultants to carry out the functional review which process had in fact already been set in motion by the Board. The Committee would also go on to manage the exercise. The Committee’s rationale for taking the responsibility of managing the exercise was that it reckoned that the exercise affected all members of Executive Management. Therefore, Management was merely requested to play a facilitating role to ensure that the restructuring exercise proceeded seamlessly. 9.21 I can understand Counsel Mpaka’s misrepresentation of the facts as it seems he was befuddled by the contradictory evidence of the respondent’s witness, Mr. Malata, who in one breath testified that the Committee tasked Management with a facilitation aspect of the exercise which is exactly noted in the minutes. Yet, in another breathe Mr. Malata asserted that the Committee delegated all the responsibility of managing the functional review to Management. On account that he blew hot and cold, I am entitled to take a dim view of the evidence of the respondent’s witness on that aspect. 9.22 On the meaning of “facilitating role”, I accept the 1st applicant’s testimony that his understanding of that expression meant that Management would help in such things as ensuring that the Consultant was able to conference or meet with any member of staff, ensuring that the Consultant was furnished any documents requested, ensuring that venues for meetings were available and any such clerical administrative tasks. This makes total sense in view of the fact that the Board’s communication to Executive Management was that the exercise affected all its members. 9.23 Put differently, the Board was saying that members of Executive Management were conflicted and could therefore only be involved in the exercise for purposes of themselves being consulted as well as facilitating the process of consultations for themselves and the respondent’s workforce. In the like vein, this Court is also persuaded by the 1st applicant and accepts his understanding in terms of the Committee managing the functional review process to mean that only the Committee would engage with the Consultant on meaty and substantial aspects of the exercise including the adequacy of the consultations in view of the fact that the Committee or the Board determined that the exercise affected all members of Executive Management. 9.24 Further on this point, it should be recalled that under the heading “Scope of Work” in the TORs which guided the Consultant, it is stated that there would be consultations with key stakeholders including Management and staff of the respondent. Further, in an email106 to the Consultant authored by Mr. Malata, it was written to the Consultant that it was Mr. Malata’s hope that the Consultant’s consultations with Management and the Board will be thorough. None of the applicants herein were put in copy of that particular email. In these circumstances, it would have been utterly unreasonable and preposterous to expect the applicants to consult themselves since they were conflicted as members of Executive Management as per the Board’s resolution duly communicated to them. 9.25 Additionally, this time around the instructions from the Board’s Committee were different from those it conveyed during the period Management was managing a functional review exercise which was supposed to be completed in June 2021 which time the Board precisely impressed on Management for the exercise to be thorough and detailed. 9.26 All these considerations congregate to prompt me to make an emphatic finding that the role of conducting the consultations fell squarely on the Consultant. 9.27 Second of all, Counsel Mpaka contends that if the respondent failed to meet the scope of any legal obligation to consult, such legal shortfall(s) in the consultation framework and process should be laid at the applicants’ door since it was a breach of their legal duty of fidelity to the respondent as their employer at the time of all the processes leading up to the new structure deriving from the report to the Board and consequent termination of the applicants’ employment contracts in implementation of the functional review report and new corporate structure as received by the Board. 9.28 Counsel Mpaka continued to argue that the applicants would have misled the Board regarding the legality of the underlying consultation process and to that extent the applicants are disentitled from relying on any alleged inadequacy of consultation process triggered at their own infidelity to their employer and the law as to advance a case of unfair dismissal or discrimination against the respondent. 70 9.29 The manner I deal with and jettison these arguments will not demand citation of the legal principles put across by learned Counsel Mpaka to support the position the respondent takes. 9.30 I begin reacting to these arguments by stating that they are way off the mark and nothing could be further from the truth. The respondent seems to conveniently unremember the contextual background of the functional review conducted by the Consultant under the aegis of the respondent’s Board. 9.31 First, it is important to recall that in 2017 the respondent’s Management, under the leadership of the 3rd applicant, skillfully managed a functional review exercise. Management even reported to the Board that staff numbers would be reduced from 78 to 40. That is how systematic, methodical and professional the exercise was handled by Management in 2017 such that no reported issues ensued from the reduction of staff numbers from 78 to 40 during that particular period. 9.32 But this time around, not only did the Board single-handedly procure services of a Consultant to conduct the functional review, it further took up the role of managing the exercise which suggests that the Board had confidence in members of its Appointments and Remuneration Committee that they had unquestionable expertise and were capable of managing the functional review exercise. Besides informing members of Executive Management that they would be affected by the exercise, neither did the Board nor its Committee divulge any further information especially regarding the precise or expected upshot of the exercise. It actually begs the question how the Board determined that the applicants would be affected well before commencement of the functional review exercise. 9.33 In my view, using the word “affected” was ambiguous and indifferent in the circumstances of the said functional review. “Affected” could simply mean a general change in the nomenclature of positions; changing an employee’s job description or responsibilities; altering reporting structures or; deploying an employee from the respondent’s Corporate Office to any of its subsidiaries which is a flipside of what happened to the 2nd applicant, Mrs. Mafeni, who was moved from the respondent’s subsidiary (Malawi Pharmacies Limited) to the respondent’s Corporate Office in the year 2000. 9.34 Further, unlike what Management did during the 2017 functional review where the precise number of employees to be laid off was stated, the Board did not make any such signposting as to the likely number of job losses this time around. Actually, it was the 1st applicant’s evidence that for someone like him who was about to be placed on a fixed contract, he had no inkling that his job was endangered in the sense of losing it by way of retrenchment. Related to the point, I accept as believable the 1st applicant’s testimony that even when the Board pronounced that there was going to be a functional review conducted by the Consultant it had identified, he assumed that the issue of switching him and the 2nd applicant to fixed term contracts was not forsaken and that it would be included in the functional review exercise. 9.35 Consequently, when one considers Management’s mere facilitating; when one bears in mind the managing role of the Board’s Committee; when one takes into account the Consultant’s role of carrying out the exercise; when one pays regard to the conflictedness of members of Executive Management and the dearth of precise information to Management vis-à-vis what the Board was ultimately trying to achieve in terms of a prospect of job losses, it would, in my view, be completely unfair to have expected Executive Management members to have exercised the so-called legal duty of fidelity by diving deep into a functional review process and advising the respondent’s Board and its Committee on the shortfalls of the exercise in circumstances where the Board had firmly informed them they would be affected and, significantly, that the Board’s Committee would manage the exercise itself. 9.36 Next, I turn to the respondent’s argument that the applicants misled the Board on the legality of underlying consultation process in terms of adequacy or lack thereof. 9.37 Here, as a matter of fact, the 1st applicant was asked to review (and did in fact review) the Agreement as well as the Consultant’s TORs. He found them to be in order. Being an affected member of Executive Management and therefore conflicted as priorly deemed by the Board, the 1st applicant could have recused himself from the task of reviewing the Agreement and the TORs. Indeed, it must be recollected that the last time it was reckoned that the 1st applicant was an interested or conflicted party with regard to conversion of the status of his employment contract to fixed term, the Board decided to obtain independent legal advice. On this particular occasion, the Board did not do so and the 1st applicant magnanimously obliged to review the Agreement and the TORs. Of significance and relevance to the question presently in issue, the TORs expressly and pronouncedly state – under the heading “Scope of Work” – that the Consultant would hold consultations with key stakeholders including Management and Directors of the respondent’s Board. 9.38 Surely, the applicants as members of Executive Management were not expected to be overbearing to the Consultant by defining to the Consultant the concept of consultation. Consultation is not some esoteric or abstruse term of art. It would not take a rocket scientist to unpack the term according to the particular context. In my estimation, it was for the Consultant to figure out or seek clarifications on the sort of consultations he was supposed to conduct in the circumstances of the undertaking informed by the TORs. After all, the Consultant was not conducting the process free of charge. The applicants’ role was to simply facilitate the process and, importantly, they were conflicted. Perhaps the Consultant could have sought those clarifications, if any, from the Chairperson (or members) of the Board’s Committee who were managing the exercise. 9.39 Indeed, having appreciated the entire events in this matter and having also assessed them in the round, I repeatedly asked myself what the Board’s Committee was really managing if the Consultant’s – and by extension the Board’s Committee’s – (mis)handling of the exercise is anything to go by. I must also add that I have read the Consultant’s experience profile as captured in exhibit BN 10 (Technical Proposal: Restructuring of PCL PCL). After so reading, I entertain no doubt about the Consultant’s proficiency judging by his involvement in functional review and restructuring assignments at very big companies like ADMARC, Auction Holdings and Sunbird Hotels to name a few. 9.40 At the pain of saying too much, it is noteworthy that after the 1st applicant reviewed the Consultant’s TORs, the latter produced an Inception Report which was never availed to the former. It was only consumed by the Board and its Committee. As it turns out, the 1st applicant only heard from the grapevine and confirmed with the 3rd applicant that such a report was sent to the Board. 9.41 Now, my very rudimentary research has unearthed that an Inception Report is a very important document in exercises like the one the Consultant was tasked with. Such a report ensures that there is common understanding on the TORs and that there is clarity on scope and approach of the evaluation or undertaking107. The Inception Report is a means of ensuring mutual understanding of the consultant’s plan of action and timeline for conducting the evaluation or undertaking. It also provides additional guarantee of adherence to, and interpretation of the TORs. Key components of an inception report include the undertaking’s or evaluation's objectives, scope, approach, methodology, data analysis, and reporting structure. Such is the value of an Inception Report. 9.42 Again, rhetorically expressed, how then was the 1st applicant expected to weigh in or advise the Board or its Committee on the contents of the Inception Report and ascertain that whatever he reviewed in the TORs was understood by the Consultant when the Inception Report was not made available to the 1st applicant. 9.43 To conclude the debate on the respondent’s second two-pronged argument, I proceed to find no merit in them in light of the foregoing discussion. On the facts, the applicants did not breach any of the purported legal duty of fidelity. That issue does not even arise in the very clear circumstances of this matter. The applicants are thus entitled to rely on any inadequacy of the consultation process to advance their claim of unfair dismissal and unfair labour practices against the respondent. 9.44 I should point out that I found the respondent’s arguments on these preceding points to be a very desperate attempt by the respondent at overcoming a herculean task before it of defending the indefensible insofar as the absence of 107 https://www.ilo.org/media/391056/download consultation with the applicants, as will be demonstrated shortly, is concerned. I would go far as to venture that these arguments were meant to muddy the waters or an attempt by the respondent to create a cumulonimbus cloud to confuse this Court as the arguments do not assist the respondent in any way, shape or form. 9.45 Getting this far and upon my appreciation of the evidential terrain as analyzed earlier, it is a fact that an element of consultation was imbedded in the functional review exercise the respondent’s Board tasked the Consultant with. However, the burning questions are whether the said consultations were done and, significantly, whether the consultations were adequate to extent that the respondent’s Board could use the recommendations placed in the resultant report as a basis for effecting retrenchments of the applicants herein. This Court’s emphatic answers to both questions are in the negative. 9.46 To begin with, I find as a fact that the Consultant conducted the functional review exercise entirely from the comfort of their offices in Lilongwe. All the applicants resoundingly and incontestably stated that, to their knowledge, at no point during the functional review exercise did the Consultant ever visit the respondent’s offices at PCL House in Blantyre. It is clear that the process was rather depersonalized and was almost unbelievably robotic. That is absolutely despicable and reflects very badly on the Consultant, the respondent’s Board and its Committee considering the respondent’s status in the country’s corporate domain and the reason for which the respondent company had commissioned the functional review. 9.47 Secondly, apart from getting furnished with various documents the Consultant requested from the respondent’s Executive Management, the only other way the Consultant interacted with the applicants in terms of consultation was through a form or questionnaire sent to be completed by all members of staff including the applicants. I have keenly studied the relevant questionnaires provided to the applicants. They are incredibly basic and I find as a fact that they cannot, in all sincerity, be regarded as consultation the basis of which could ground the applicants’ retrenchments. 9.48 Reading the questionnaires, I accept the applicants’ testimonies that completion of the same can, at best, be described as mere data collection. Completing the questionnaires seem to have been enough for purposes of the functional review exercise and for the Consultant to produce a final report thereof with recommendations therein. 9.49 It is a fact that not all functional reviews lead to retrenchments. Thus, consultations in functional reviews where retrenchments/redundancies are not expressly envisaged may not be as intense as in functional reviews where retrenchments/redundancies are a given. In the present matter, it is hardly unsurprising that Dr. George Partridge described the Consultant’s consultations as partial consultation at best. 9.50 Actually, on the trite fact that not all retrenchments give rise to retrenchments/redundancies, this very Court dealt with the consolidated cases of Wilson Kaphuka & 2 Ors v. Malawi Bureau of Standards and Chisomo Mombanya & Ors v Malawi Bureau of Standards wherein a functional review conducted by Malawi Bureau of Standards resulted in certain employees getting promoted with others having their remuneration boosted. Some new positions were also created. I also take judicial notice of a functional review conducted in the Malawi Judiciary which has had similar effects in that certain cadre of judicial officers got promoted by virtue of the changes brought about by such an exercise. In short, outcomes of functional reviews ultimately depend on what a particular organization is trying or has set out to achieve. 9.51 Reverting to the facts of the instant matter, I reiterate that the questionnaires were inadequate – in terms of content – as a consultative device employed in a functional review whose recommendations were meant to be used as justification or foundation to dismiss the applicants herein by way of retrenchment. It is important that I zero in on the inadequacy of the Consultant’s consultation which was portrayed in the following light: 9.52 It should be remembered that the reasons for the applicants’ retrenchment as undeniably orally communicated to them on 10th December 2021 by the respondent’s Board were, among others, that their salaries were too high and that the respondent would no longer have positions exercising group responsibilities. Yet, none of these issues appear anywhere in the questionnaires as to allow the applicants address them. The questionnaire simply asked for run-of-the-mill information. There was absolutely nothing in the questionnaire about retrenching some positions or, indeed, any criteria for any choices made or to be made on retrenchments. 9.53 The applicants’ evidence, which I readily accept, was that the questionnaire did not ask them about their remuneration or whether they would take less pay; the nature of their positions or whether their departments would function with more or fewer employees; or whether they would take a lower position or a position with truncated responsibilities; or, indeed, any other options available to them. 9.54 With all what I have captured above, what is seriously confounding about this matter pertains to the actions of the respondent’s Board once it was in receipt of the Consultant’s report. I must, very briefly, repeat what the Board did as per the testimony of Mr. Malata. The Board proceeded as follows: 9.55 It met in the absence of the applicants as Executive Management members. An important aside is that it was quite a momentous scene when, sitting in the witness box, Mr. Malata could not even remember the date of such a critical and far-reaching meeting. Again, that is a regrettable indictment of the Board’s reprehensible conduct every time it conducted its meetings in camera or without the presence of the applicants as Executive Management. And so, when the Board met, it exhaustively went through the entire report from the Consultant. The Board then focused its attention on the Consultant’s recommendations. It thereafter exercised its mind on the merits of the recommendations and proceeded to adopt them after which it was agreed that the same be implemented in two phases. 9.56 On 10th December 2021 the Board, through its Chairperson and the Board’s Committee Chairperson, orally communicated the retrenchment of the applicants to the applicants individually. Never mind that Mr. Malata says that the Board exercised its mind on the virtues of the recommendations, I find that the Board effectively just endorsed the Consultant’s recommendations. And that was truly a quintessential case of the tail wagging the dog. In other words, looking at the manner the Board conducted itself upon receiving the final report, there is no question that it was majorly influenced or controlled by the Consultant’s recommendations. Quite frankly, the Board did not have to implement the Consultant’s recommendations wholesale and without sounding out at least Dr George Partridge and have him verify them as the respondent’s Group Chief Executive. 9.57 Considering all what has been exposed by this Court in respect of the insufficiency of the Consultant’s consultation, the Board – at its dateless meeting of November 2021 whereat it deliberated the Consultant’s report – missed a great opportunity to retrieve the situation and redeem itself. In my very respectful opinion, all was not lost. If the Board members were conscientious in their review of the Consultant’s report, it would have been very clear to them – based on the inadequate consultations as earlier found – that the Consultant’s report could not be used as a basis to retrench the applicants herein. 9.58 And once the Board valued the inadequacy of the Consultant’s report, the Board could have opted to do several things. 9.59 Firstly, the Board could have availed the report to the applicants or at least Dr. George Partridge as the respondent’s Group Chief Executive to allow him weigh in on the report’s contents in terms of the accuracy and coherence of the information that was supplied to the Consultant by Management and other staff. Importantly, this would have allowed Dr. Partridge to react to or have a say on the recommendations which obviously affected him. In my humble estimation, it is clearly common sense and evenhandedness of the most elemental kind for the Board to have permitted Dr. Partridge and his Executive Management team to examine the Consultant’s report. 9.60 In any event, as Group Chief Executive, I would also opine that Dr. Partridge and his fellow Executive Management members were better placed, compared to the Board, to understand the Consultant’s report from an operational perspective since they were in charge of the day to day operations of the respondent conglomerate. 9.61 Moreover, in allowing the applicants the chance to reflect on the Consultant’s report and recommendations thereof as they affected them, the applicants could have: (a) appreciated the respondent’s new structure respecting the Corporate Office; (b) proffered their responses or views on the finding that their remuneration was too high and therefore unsustainable; (c) made offers or suggest taking alternative or lower positions; (d) the 1st applicant, Mr. Benard Ndau, could have, as he stated in his acceptable evidence, suggested taking a lower position of Legal and Administration Officer which is currently being occupied by Miss Clara Khakhi; (d) the 3rd applicant, Dr George Partridge, could have proposed maintaining his position on lower remuneration or that occupied by Professor Mangani under the respondent’s new structure; (e) the 2nd applicant, Mrs Elizabeth Mafeni, could have suggested to stay on lower pay or position; (f) the 2nd applicant, Mrs Elizabeth Mafeni, could have also suggested and opted to take the position created in the new structure of Chief Finance and Administration Officer presently occupied by Moureen Mbeye who was the 2nd applicant’s deputy before she was retrenched; (g) the applicants could have suggested taking an early retirement package; (h) the applicants could have opted to be deployed to any of the respondent’s subsidiaries at a lower grade or pay. 9.62 One can think of a litany of permutations which the applicants could have presented to the Board for its consideration before making the ultimate decision of terminating their contracts by way of retrenchment. With all the suggestions the applicants could have made to the Board, the applicants were by no means round pegs in square holes. Stated another way, on the evidence adduced and the facts found in this matter, the applicants cannot be said to have been misfits in the respondent's new organizational structure. There is no question that the applicants had a wealthy of expertise, experience and gravitas to be assigned any role in the respondent’s new organizational structure if only the Board had listened to them before coming to the decision(s) the Board made. 9.63 What it means is that there was never any opportunity to discuss the prospects of a different approach to the one chosen by the Board of out rightly retrenching the applicants. The absence of consultation at this particular stage when the applicants had the potential to impact on the Board’s decision with their views, suggestions or representations is indicative of an extremely unfair process or one devoid of justice and equity. 9.64 Let me state that the process of listening to the applicants as stated above is just one of the many diverse consultation methods employers may employ before effecting retrenchments or redundancies. Simply, there is no prescriptive way of conducting consultations. Some consultations may occur with individual employees and others collectively and sometimes depending on whether the workplace is unionized or non-unionized. What is important is the opportunity to have views, suggestions or representations from employees or employees’ representatives or, in other words, an opportunity to propose other means by which the employer could minimize the impact of a retrenchment or redundancy state of affairs. 9.65 The Board in the present matter would not have been obliged to adopt any of the applicants’ views, suggestions or representations except to, I think, reasonably or conscientiously reflect on the said views, suggestions or representations and not to simply dismiss the applicants’ views, suggestions or representations out of hand. Indeed, the Board could have still arrived at the exact decision it made of retrenching the applicants but this time having also reasonably or conscientiously considered the applicants’ representations or views as employees who were going to be affected by the Board’s decisions. 9.66 I move on to the second option the Board could have availed itself. This is that if the Board still strongly held the view that the Consultant’s report was exclusively for its eyes and also surmised that all the applicants as interested, affected or conflicted parties could not examine the report, it could have procured an independent legal opinion to be decisively advised on the legality of retrenching the applicants based on the processes which culminated in the Consultant’s recommendations in the report. 9.67 I firmly believe that the option of seeking a legal option should have been the most effective and easy one considering that the Board had done similarly in the recent past when it was reflecting on the implementation of the 1st and 2nd applicants’ transition to fixed term contracts. Furthermore, I think that getting legal advice would have been most appropriate for the Board to truly assure itself of the legality of the career-changing or indeed career-ending decisions it was going to visit on the applicants. Indeed, the functional review consequences were going to herald a seismic change – to use a geological metaphor – not only to the respondent corporation as a whole but also to the individual professional lives of the applicants. Also, the legal opinion could have potentially assisted the respondent to avert the applicants’ suit herein. 9.68 This Court cannot help to also observe an irony which happened in this matter. It is an undeniable fact that it is actually Dr. George Partridge who – using experience from many years of his impeccable professional managerial prowess at various companies as a non-executive and executive director – made a recommendation to the respondent’s Board for a functional review to be carried out at the respondent company. This he did when in February 2017, (which is barely three months after he had taken control of the respondent company as its Group Chief Executive in November 2016) he submitted a report to the respondent’s Board detailing his initial impressions and observations of the respondent conglomerate noting therein, inter alia, that there was a high head count at the respondent’s Corporate Office which was incompatible with the respondent’s structure as a holding company. 9.69 There is no evidence, at least adduced before me in the trial in this matter, that any other Group Chief Executive before Dr. Partridge had such progressive acumen as to make a similar proposal. One cannot question, in that regard, that Dr. Partridge had the respondent’s best interests at heart to make the corporation achieve great financial strides by having such numbers of staff as were absolutely required to attain the goals he was required to fulfil in his KPIs or balanced score card as he led Press Corporation PLC. Surely, that is why he made no bones about reporting to the Board to say there were many unneeded bodies in the respondent corporation. 9.70 Yet, ironically and bizarrely, the Board deemed Dr. Partridge and his irreproachable Executive Management team consisting of Mr. Benard Ndau and Mrs. Elizabeth Mafeni to be such superfluous employees deserving to be rid of in utterly disgraceful and unlawful circumstances and manner. These were Group Executives holding positions of Group Chief Executive, Group Administrative Executive & General Counsel and Group Financial Controller responsible for 13 subsidiaries and yet they were simply given a form to fill and the information therein sufficed to have them called to a boardroom to be orally – and I dare say unceremoniously – informed that they had been dismissed because their salaries were too high or unaffordable. 9.71 When all is said and done, all these points add to the concatenation of unmitigated cockups committed by the respondent’s Board. It may actually be regarded as either chickens coming home to roost or poetic justice that the appalling treatment of the applicants by the respondent’s Board triggered the claims herein and the respondent will now be ordered to compensate the applicants which compensation may potentially be more than what the respondent would have had to pay the applicants had its Board not been impatient and acted lawfully. 9.72 Before I conclude on the third question, I find it very appropriate to say a bit more by way of mostly obiter on the “process”, for lack of a better word, of consultation. Short of defining what “consultation” is; which word is conceptually very broad and, therefore, does not lend itself to a prescriptive definition, I opine that consultation in the industrial relations sphere generally entails providing employees or employees’ representatives sufficient and accurate information about the subject matter of the consultation (for instance, proposed changes in operational requirements) as to permit an informed consideration and meaningful counter-proposals, responses, views, options or suggestions to minimize the effects of any proposed changes in operational requirements which may culminate in retrenchment or redundancy. 9.73 If I were to apply the foregoing to the within matter, no such information was ever communicated to the applicants in the sense of affording them, firstly, an opportunity to knowledgeably consider what the Consultant had found and recommended to the Board and, secondly, to enable the applicants consider informedly and go on to offer meaningful counter-proposals, responses, views, options or suggestions to minimize the effects of any proposed changes in operational requirements of the respondent as would culminate in retrenchment or redundancy. By failing to give such information and, by failing to invite such counter-proposals, responses, views, options or suggestions, the respondent Board’s impetuous decision to retrench the applicants is vitiated as it suffers an irreparable flaw of failure to consult. Surely, on the facts of this case, seeking views or comments on the Consultant’s findings or recommendations ought to have been an essential pre- condition or ingredient of the consultation process. 9.74 I hope that my foregoing sentiments will go out loudly and clearly to employers planning to effect retrenchments or redundancies and afford them a little gratuitous guidance. 9.75 Concluding on the third and fourth questions, in very simple terms, Mkaka Two clearly decides that an employer is required to act with justice and equity when dismissing an employee as provided for in section 61(2) of the Employment Act. By the same token, it is my firm view that consultations are what animate the statutory concept of justice and equity in termination of an employee’s contract by way of operational requirements. You simply cannot terminate an employee’s employment contract by reason of operational requirement devoid of consulting him/her. “Operational requirements dismissals” and “consultations” are a package deal – like thunder and lightning! It is wholly necessary for the ends of justice and equity to require consultation when the reason for termination is operational requirements of the employer’s undertaking. 9.76 It follows, therefore, that the respondent’s conduct in terminating the applicants’ contracts of employment on the ground of retrenchment without complying with the legal requirement of consulting them, is squarely tantamount to unfair dismissal by the respondent. I so determine. 9.77 Yet again, on the authority of the Kalinda case,108 the respondent’s failure to consult the applicants before terminating their contracts of employment on the ground of retrenchment is an unfair and unsafe labour practice. Later in this judgment, I shall also unmask further instances where I find that the respondent perpetrated unfair and unsafe labour practices. Consequently, as I earlier signposted, the third and fourth questions are all responded to in the affirmative. 108 n.87 or n.113 9.78 Before I rest on the finding of unfair dismissal, my conclusion in ruling that the applicants were unfairly dismissed is additionally fortified by the following points: 9.79 First of all, Appendix 8 of the respondent’s CoS109 (being the Disciplinary Code and Procedure Manual) provides at clause (i), whose heading reads “Termination on the Grounds of Retrenchment/Redundancy”, that: “An employer has an undoubted right to terminate the employment of his employees for economic, technical, structural or similar reasons. The full procedure, which must be followed when retrenching employees, or declaring them redundant is described in the Industrial Relations Policy attached to the Conditions of Service.” [Emphasis mine] 9.80 The respondent’s witness, Mr. Malata, admitted in cross-examination that reading the foregoing provision, it followed that the said Industrial Relations Policy was part of the respondent’s CoS. However, he could not recall any provision of the Industrial Relations Policy. Significantly, he conceded that he was not in a position to confirm if the Board complied with the provisions of the Industrial Relations Policy in terminating the applicants’ employment by way of retrenchment. 9.81 However, in re-examination Mr. Malata inexplicably stated that his understanding of the clause in question is that the Industrial Relations Policy so described in the CoS is a reference to the entire CoS document which speaks to issues of industrial relations and not that there was a standalone Industrial Relations Policy lying somewhere. 9.82 Frankly speaking, that is quite a farcical understanding of something that should be undoubtedly obvious. Actually, Mr. Malata’s explanation in that regard paints his testimony in very bad light and discredits him as a witness. Surely, a very ordinary reading of the clause means that the Industrial Relations Policy is an attachment to the respondent’s CoS. An Industrial Relations Policy and the CoS document cannot be a reference to one and the same document when it is clear that one is an attachment to the other. 109 As above. 9.83 I find as a fact that in terminating the applicants’ employment by way of retrenchment, the respondent’s Board was supposed to have recourse to or follow the procedure spelled out in the Industrial Relations Policy. Evidently, the Board did not have such a policy in place and therefore did not comply with its own clear Terms and Conditions applicable to retrenchment of the applicants. That in and of itself is an instance of an unfair labour practice since it is trite law that this Court has discretion – upon valuing the facts at hand and employing good judgement or sense – to determine whether or not a particular set of circumstance(s) amount to an unfair labour practice. 9.84 In my judgement, as per the dictates of the case of Kalinda110, the conduct of the respondent in not having in place or applying the procedure in the Industrial Relations Policy cannot be described as even handed, reasonable, acceptable and expected from the standpoint of employer, employee and all fair minded persons looking at the unique relationship between employee and employer and good industrial and labour relations111. In any case, the CoS to which the Industrial Relations Policy was supposed to be attached are supposed to be generated by the respondent as an employer. The absence and non-consideration of the Industrial Relations Policy is likewise a damning indictment of a corporation as monumental as the respondent further buttressing my finding of unfair dismissal. 9.85 Second of all, it is a fact that one of the principal justifications for terminating the applicants’ employment contracts is that their salaries were too high and unaffordable. However, keeping in mind that it is an uncontested fact that the applicants do not determine their own salaries; further considering that the respondent variously increased the applicants’ remuneration in 2018, 2019, 2020, 2021 on account of the applicants’ satisfactory performance; also cognizant of the fact that the Board was at that particular time aware that the respondent, under the outstanding leadership of Dr George Partridge, had performed exceptionally well to the extent that – in the previous year – the Board in fact approved a screaming MK701,746,050.00 bonus to all employees; it cannot now lie in the mouth of the respondent to turn around and say the applicants’ salaries were too high or unaffordable when it was the self- 110 As above n.87 111 As above. same Board which approved the increments just a few months before the applicants were retrenched. 9.86 To be brutally frank, one has to be an inhabitant of an extra-terrestrial planet not to appreciate how the Board’s conclusion or assertion that the applicants’ remuneration was too high is exceptionally irrational in light of the fact that the Board itself raised the said remuneration in the previous years which included the years the issue of high remuneration costs was featuring highly in the respondent’s Strategic Plan and other pertinent documents. 9.87 Counsel for the respondent’s resistance on this point was that the increase in the applicants’ salaries was inevitable because their existing contracts as well as their performance entitled them to annual increments. That the respondent acted in good faith treating its executives in line with their contractual framework when due notwithstanding the precarious situation and strategic direction to reform and restructure the Corporate Office. 9.88 On the facts on this matter, I find these to be very weak arguments because, it must be recalled, and there was no contest on this fact, that the applicants previously acceded to forgo some of their contractual benefits in form of bonuses and international medical insurance just to remain in employment. Rhetorically put, what could have inhibited the Board from bringing the applicants to a round table and thereat renegotiate the terms of their contracts of employment including salaries. And in respect of the 1st and 2nd applicants, the chance for such further bargain presented itself following the Board’s resolution to migrate them to fixed term contracts. Moreover, and as I have already mentioned earlier on above and I am only too happy to repeat, it is a fact that the applicants were prepared to offer options to the Board regarding their perceived high salaries including the reduction thereof. 9.89 I am compelled to spend a little more time on the issue of remuneration costs as the respondent went to town about the subject of remuneration costs. It has been stated that in its 5-year strategic direction, the respondent needed to reduce remuneration costs at the Corporate Office and that on the options explored for a period of 2 years, the strategic objective of minimizing remuneration costs could only be achieved by terminating certain employees’ employment contracts including those of the applicants. 9.90 This Court verily appreciates that as a holding company, the respondent derived its remuneration costs from dividend income received from its group companies. Nevertheless, if the evidence of the 2nd and 3rd applicants (which I unreservedly accept as cogent) is anything to go by, a mere reduction of remuneration costs is not the be-all and end-all of tackling the issue. 9.91 In the foregoing regard, Dr. Partridge’s testimony, which I have no reason to doubt as acceptable, was that part of the solution to arrest remuneration costs was captured in the prevailing Strategic Plan namely, to increase income and the Strategic Plan actually spoke to this aspect in terms of how to achieve growth of revenue. He said the satisfactory financial performance of the respondent company did not dissuade him from recommending – through the Strategic Plan which was approved by the Board – that remuneration costs be regularly managed as the respondent had potential to still generate more revenue. He said, and I further accept Dr. Partridge’s evidence on these points as true, that even when the Board said that his remuneration was too high, the conclusion was based on the total remuneration and it was a question of proportion of costs regarding remuneration versus income and in that context there were two issues which were conflated that were explainable. That the Board having cited the reason for his retrenchment as his apparent unaffordable remuneration did not proceed to clarify that it was too high in connection with what particular aspect. 9.92 Relatedly, I call to mind the unassailable evidence of Dr George Partridge that the TORs in relation to the functional review conducted by the Consultant made reference to comparisons with other companies and he never saw the Consultant’s report to the Board as to satisfy himself that the said comparisons were done. That he actually sits on many companies’ Boards and has information of other Chief Executive Officers with salaries higher than the one he was getting. 9.93 In the like token, the 2nd applicant, Mrs Mafeni was clear in her evidence, which I also wholly accept as cogent and unimpeachable, that while the subject of remuneration costs was indeed central in the Strategic Plan, it was not necessarily on top of the list. Rather, it featured in the context of general cost management. That in her view which was based on the financial strategy part of the overarching Strategic Plan, there was need to not just look at the denominator, namely the issue of cost management but even the revenue side of things because when one is tackling financial management, it is the cost to income ratio that is key. Thus, if the respondent’s income were to be grown, it may have required elevating costs and that approach was acceptable in financial management. That with all that in mind, focus should not just have been on remuneration as an issue, but the whole cost aspect. 9.94 From these lucid and informed explanations, it is tolerably plain that treated in isolation and out of context, the issue of remuneration costs is not an adequate reason to base the applicants’ dismissal by way of retrenchment. I so further find. 9.95 I should make it clear that these preceding sentiments and findings are there to just reinforce my earlier findings. Nonetheless they also, in a way, cumulatively substantiate the said findings. 9.96 On the fifth question concerning compensation, the applicants – having made out their case that the manner their contracts of employment were terminated by the respondent amount to unfair dismissal – are entitled to compensation under this head based on section 63 (1) (c) of the Employment Act. On the violation of their right to fair and safe labour practices as spelled out in section 31 of the Constitution, the applicants deserve to be compensated pursuant to the combined effect of the provisions of the Constitution in sections 41 (3), 46 (2) (a) and 46 (4).  Whether the 1st and 2nd applicants are entitled to damages for rescission of promise to offer contract or, in the alternative, damages for breach of legitimate expectations created by the respondent’s offer to change their employment status to fixed term contract; 9.97 As I deal with this sixth question, it is important that I briefly set out these unarguable facts. 9.98 In November 2020, the Board directed that all members of senior management at the respondent’s Corporate Office should be on contract effective 1st January 2021. In stating this fact on the strength of what is captured in the relevant minutes112, I also accept the 1st applicant’s evidence that this resolution was made in the context of a discussion on changes affecting senior members of staff at the respondent’s group companies (including TNM and PTC) and I reject the testimony of the respondent’s witness that the direction to transition to fixed term contracts was made as one way of mitigating and managing remuneration costs. 9.99 On 24th February 2021, the 3rd applicant sent a draft template contract respecting the applicants’ directed switch to fixed term contracts. The draft template contract included many salient terms except for salary. 9.100 On 8th March 2021, Management updated the Board’s Committee that it had consulted the 1st and 2nd applicants who had agreed in principle to the change regarding the Board’s resolution to place them on fixed term contracts. However, the Committee sought an independent legal opinion as it was felt that the applicants were interested parties and the Committee needed to obtain objective advice. In the opinion obtained, it was concluded that the transition to fixed term contracts could take place but their needed to occur termination of the 1st and 2nd applicants’ services first as well as payment of their dues. 9.101 On 26th March 2021, the report of the Board’s Committee which tackled issues of change of the 1st and 2nd applicants’ contracts to fixed term was discussed in camera by the Board in the absence of the applicants herein. 9.102 As the 1st and 2nd applicants were waiting to hear of what had befallen the draft template contracts, it transpired that on 24th May 2021, devoid of furnishing any reasons to the 1st and 2nd applicant, the Board abandoned the process of changing the 1st and 2nd applicants’ employment status and resolved that it would carry out a functional review. 9.103 Pausing there, it is plainly clear that there was, in law, no concluded fixed term contract between the respondent on the one hand and the 1st and 2nd applicants on the other as the ball was still in the Committee’s court, as it were, since the 112 Exhibit BN 2. Committee was requested to consider the draft template and, if deemed fit, recommend it to the Board for adoption. 9.104 Nonetheless, considering all the steps that had been taken thus far as detailed above up to the point of procuring a legal opinion which also essentially sanctioned the migration to fixed term contracts I find, on these facts, that the respondent breached the expectation that had been clearly generated in terms of not necessarily placing the 1st and 2nd applicants on fixed term contracts but to at least furnish them with reasons for any abrupt variation to or abandonment of implementation of the said decision. 9.105 In case my above reasoning is found wanting elsewhere, I would alternatively find that the respondent’s conduct of abandoning the migration to fixed term contract without the decency of affording the 1st and 2nd applicants reasons is an instance of an unfair labour practice. In my judgement, the conduct of the respondent in those circumstances cannot be described as even handed, reasonable, acceptable and expected from the standpoint of employer, employee and all fair minded persons looking at the unique relationship between employee and employer and good industrial and labour relations113. After all, it was the respondent’s own initiative to transition the 1st and 2nd applicants to fixed term contracts and very meaningful steps were taken to implement the decision made by the Board in November 2020. It was thus very unconscionable for the respondent to just be messing about with the 1st and 2nd applicants who were Executive Management members. 9.106 On the basis of the foregoing evaluation and closing my discussion on this question, I find that the 1st and 2nd applicants’ claim, as pleaded in the alternative, for damages for breach of legitimate expectations created by the respondent’s offer to change their employment status to fixed term contract is successful only to the degree that the action taken by the respondent in aborting the migration to fixed term contract without the decency of providing the 1st and 2nd applicants reasons is an unfair labour practice. 9.107 Also to mention that since on the facts, I have not found legitimate expectation simpliciter but rather, I have only unearthed an expectation breach of which 113 Above n.87. substantiates a finding of an unfair labour practice, it will, therefore, be a futile exercise to consider the parties’ arguments on the principles of legitimate expectation properly so termed.  Whether the respondent unlawfully or unjustifiably deducted the sum of MK15,684,255.99 from the 2nd applicant’s severance allowance. 9.108 On this question, firstly, it is a fact that the respondent unilaterally deducted MK15,684,255.99 from the 2nd applicant’s severance allowance. The respondent through its witness, Mr. Malata, justified the deduction by asserting that the amount related to gratuity which the 2nd applicant had been paid in lieu of pension between 2004 and 2011 when she was on fixed term employment contracts. As will be explained shortly, I find the respondent’s position to be completely misguided in law and in fact. 9.109 It is indisputable that the 2nd applicant started working for the respondent in 1995. This was well before commencement of the Pension Act 2011 which required that an employer who was not providing pension before the Act’s operationalization must calculate severance due entitlement for each employee from the date of employment and proceed to recognise the same as pension pursuant to the dictates of section 91 of the Act. Thus, to resolve the question under consideration, it is of the utmost importance to distinguish between severance allowance payable under section 35 of the Employment Act, severance due entitlement mentioned in section 91 of the Pension Act and gratuity entitlement payable under the terms of a given employment contract. The respondent clearly failed to grasp the distinction. 9.110 Happily, Acting Chairperson DeGabriele (as she then was) effectively dealt with this very issue in the case of Hotel, Food Processing and Catering Workers’ Union v. Bakhresa Grain Milling Company114. Analyzing relevant provisions of the law, she said the following in a passage occurring at pp.4 and 5 of her judgment: “On reading of section 91(1) it is clear that severance due entitlement is to be calculated by every employer for every employee as part of pension 114 Matter No. IRC PR 408 of 2012 [unreported]. dues, and the severance due entitlement is that which is accrued from the date of commencement of employment to the coming into effect of the Pension Act. The law emphatically states that the said severance due entitlement is to be recognized ‘as part of an employee’s pension dues’ and not the general allowance payable under section 35 of the Employment (Amendment) Act, 2010…” She proceeded to articulate the legislative intent as follows: “Once the severance due entitlement has been calculated, it has to be transferred to a pension fund of the employee’s choice as stated in s 91 (4) and (5) above. The intention was to make sure that all those employees who were not on a pension scheme should not lose out on this important social security aspect. The employer who would otherwise have had no fund at hand to begin a pension scheme/fund would get that money from calculating the severance due entitlement of each employee. Such money is then recognised as the employer pension contribution. After June 2011, the employer and the employee would contribute to the fund in the prescribed manner. Therefore, severance due entitlement as provided for in s 91 of the Pension Act, 2011 is not severance allowance, but contribution by the employer to the fund.. […..] Therefore, severance due entitlement must be recognised and treated as part of the employee’s pension dues. It becomes the employee’s pension benefit and it is no longer treated as severance allowance. The position at law is that severance allowance should still be paid when it is due in accordance to s 35 of the Employment (Amendment) Act, 2010, as shown below.” (sic) [Emphasis supplied] The learned Acting Chairperson (as she then was) proceeded to disagree with the respondent’s argument that her foregoing reasoning would constitute double benefits or double payment. At p.6 of her judgment she said: “I strongly believe that by making provision of pension compulsory for every employer (Pension Act, 2011) and by clearly stating that severance allowance can only be paid on redundancy or retrenchment, or due to economic difficulties, technical, structural or operational requirements of the employer, or on the unfair dismissal of an employee by the employer (Employment (Amendment) Act, 2010) the matter of double payment of benefits at retirement was resolved and the mischief created by the Employment Act, 2000 was cured.” Rendering her resounding conclusion on the back of her methodical and in- depth evaluation of the two pieces of legislation and how they impact benefits due to employees, she stated thus at p.7 of her judgment: “Therefore, I find that the severance due entitlement that was calculated and remitted as part of the pension dues of the employee’s cannot be treated as severance allowance. The respondent is required by law to provide pension which he did and the start-up fund for his employer contribution consisted of the severance due entitlement. The respondent is by law required to pay severance allowance to employees who have been redundant or retrenched as was the case here. This is a statutory provision and he cannot opt out of it. The fact that the period under question overlaps is understood but there is no explicit provision in the law on how to manage the overlapping periods. What is clear in the law is that severance allowance is calculated based on the years of service and not the coming into force of any Act of Parliament. It is true indeed that the respondent will be required to pay out twice for the same period, meaning severance allowance and pension dues (severance due entitlement). Until a contrary intention of Parliament emerges, the law will have to be implemented as it is.” 9.111 I have absolutely nothing useful to add to the learned Acting Chairperson’s (as she then was) flawless and straightforward interpretative rendition of the law on the issue presently being discussed. This interpretation leaves no doubt in this Court’s mind that the respondent calamitously, and I dare say disingenuously, misconstrued the difference between severance allowance payable under section 35 of the Employment Act and severance due entitlement payable under the Pensions Act. 9.112 I equally dismiss the respondent’s argument that the correct period of service for purposes of calculating the 2nd applicant’s severance allowance is 10 years as distinct from 26 years. It is my finding on the evidence in this matter that the respondent was unquestionably aware that the correct period of service ought to have been 26 years. My finding is piggybacked on two reasons. 9.113 In the first place, it is in evidence that Management advised the respondent’s Committee in a meeting115 which occurred on 8th March 2021 in a minute recorded as follows: “Continuous Employment vs Fixed Period: Members sought clarification on the implication of a provision in the draft contract which sought to retain the period of service for the concerned staff from the date they were appointed as opposed to having their employment terminated and a new fresh contract being agreed to. Management responded that the provision was meant to provide assurance that such continuous period would be taken into account in the event of severance pay being made payable, amongst other reasons. It was further stated that continuity of service is generally recognised and upheld by Courts in such circumstances.” [Emphasis mine] 9.114 In the second place, the above standpoint given by Management to the Board’s Committee was further corroborated by the independent legal opinion the Board’s Committee procured, obviously at a monetary expense, from Messrs. GK Associates which reads in part thus: “According to section 41 above, continuous employment begins from and include the first day on which an employee begins work for an employer. It continues up to the date of termination of employment. Further, under Section 41(2) of the Employment Act, the employee is on continuous employment even if he/she moves from one job to the other say within the same group like PCL. So long as the employee is working for the employer, she will be deemed to be on continuous employment. What this means is that if the proposed changes have been effected and a member of EXCO is dismissed unlawfully after the cross over to a fixed term contract, he/she can successfully sue for severance under Section 35 of the Employment Act even if he/she has done 3 terms of the 3 years’ contract. The court will calculate the severance from the date they were appointed in PCL. 115 Exhibits PCL 8 and BN3 at Minute 5.3. As such, if the proposed change of employment status from continuous employment to fixed term contracts is effected, the effective date of appointment will be the date EXCO members were appointed at PCL.” 9.115 It is already in the respondent sole witness’s categorical evidence in cross- examination that the Board’s Committee did not disagree with any part of the legal opinion rendered by Messrs. GK Associates. It, therefore, defies all reason as to why the respondent disregarded cogent advice emanating from two reliable sources. 9.116 At the risk of overkill, the law is also clear on the point in section 41 of the Employment Act which provides that: (1) For the purpose of this Act, “continuous employment” shall begin from and include the first day on which an employee begins to work for an employer and shall continue up to and including the date of termination of employment. (2) It shall be presumed, unless the contrary is shown, that the employment of an employee with an employer is continuous whether or not the employee remains in the same job. 9.117 Moreover, in the case of Auction Holdings Ltd v. Mrs. Vella Shela116, Mrs. Shella worked with AHL from 15th May 1984 until 31st December 2011. Between May 1984 and December 2008, she was engaged on a contract for unspecified period which was changed to a three years' contract effective 1st January 2009 to 31st December 2011 and was subject to renewal. When the 3- year contract expired, it was never renewed. She sued for (among others) her withheld severance payment for the initial period of unspecified employment contract which was upheld at first instance in the Industrial Relations Court. 9.118 AHL appealed to the High Court contending that the lower court erred in upholding the claim for severance allowance since there had been no termination of the initial unspecified-term contract (and that if there had been, Mrs Shela had been offered another contract on better terms). Thus, AHL 116 Civil Cause Number 18 of 2014 (Unreported). argued that the decision of the Court a quo be reversed as there was no basis for awarding her severance pay. 9.119 In dismissing the appeal, Dr. Kachale J. said the following in extracts which I quote in extenso as taken from pp. 3 and 4 of the judgment: “This court is unable to accept the interpretation of the situation that has been canvassed by the appellant: in the first place, there was a clear acknowledgement on its part that the nature of its contract with Mrs. Vella Shela had changed when they agreed to pay her the accrued pension benefits prior to 1st January 2009. It is almost laughable to propose that this subsequent fixed term contract had better terms when in reality it removed the benefit of continuity which Mrs. Shela had enjoyed in her job for over 24 years. In that vein it is quite remarkable to note that although the fixed term contract gave the option of extension upon her expression of interest to so carry on, her overture to that effect in early October 2011 was never responded to. Instead in December 2011 she was simply informed that her contract would not be renewed without any reasons. In this court's opinion that was a clear breach of the expectation that had been created that the same could be renewed if she expressed an interest for continuation. It would be quite unconscionable to assume that the employer would be entitled to ignore such an expression of interest to extend the contract without some obligation to explain its decision to not further engage the affected employee. The purported promotion did not extinguish the clear statutory right to severance which accrued upon termination of the contract [....] Indeed the mere fact that Mrs. Vella Shela consented to that change did not oust her right to a severance payment by operation of law. What she agreed to was the change of status of her contract; she did not thereby also waive her right to the benefits which had been earned through 24 years of uninterrupted service. [...] Hindsight might suggest that the employer 'tricked' a long-serving employee into accepting a 'promotion' which effectively curtailed her otherwise impeccable service through the device of a fixed term contract. In considering this situation it might be pertinent to reiterate some fundamental jurisprudential imperatives undergirding employment law generally: it has been recognized historically that the power imbalances between employer and employee impact upon the capacity of the latter to negotiate favourable terms of an employment contract. Such dynamics therefore should inform the assessment of any such contract in order to promote and uphold fair labour practices and social justice generally. Applied to this case, this means that the long service of Mrs. Vella Shela created a right to severance allowance when the unspecified-term contract was ended on 31st December 2008. It might have been difficult to claim or insist upon those in a scenario where the respondent continued to work for the appellant, albeit in a changed legal context i.e. under a fixed-term contract. By merely describing the development as a promotion it should not obscure the legal reality that her previous contract of employment was thus ended; this court has found this to be a sounder interpretation of what transpired. It would be quite absurd to allow the employee to be deprived of her legal rights in the manner proposed by Auction Holdings Ltd. This court declines such an approach to the situation.” 9.120 Once more, I respectfully adopt the learned Judge’s reasoning and I think it would achieve nothing useful for me to say more. It is, therefore, on the basis of all the foregoing exposition of the law in light of the established facts that I reject the respondent’s argument, which argument sounded majestic at first blush, that since by operation of law a contract of employment for a specified period of time automatically terminates on the date specified for its termination, there cannot be continuity of the employment under section 41 (1) and termination under section 28 (2) of the Employment Act at the same time. 9.121 It is for all I have reasoned above that I have allowed the 2nd applicant’s claim for MK15,684,255.99 being the figure unlawfully deducted from her severance allowance. 9.122 The 2nd applicant’s claim for interest on the said amount of MK15,684,255.99 is equally allowed. It so granted on the combined effect of section 53 of the Employment Act and the cases of Gwembere v. Malawi Railways Limited117 and Madinga v. Nedbank118. 9.123 These two decisions hold that interest is awardable on money that is due but wrongfully withheld by the other. The holding is furthermore bolstered by the very recent case of Jeremiah Kazunguza v. Malawi Airline Limited119 wherein Sikwese J. on 29th January 2024 ordered that interest based on the prevailing National Bank of Malawi lending flat rate of 29.7 per cent be paid to the applicant vis-à-vis the sum of money withheld by the respondent. 9.124 Moreover, bringing section 53 of the Employment Act to bear, it is an undeniable fact that the 2nd applicant in the matter under consideration was supposed to receive her entire severance allowance together with the illegally deducted MK15,684,255.99 within seven days of the same becoming due to him after her contract of employment with the respondent was terminated effective 31st January 2022 meaning that the respondent wrongfully withheld the 2nd applicant’s severance pay in breach of the aforementioned statutory obligation which is in peremptory terms. Relatedly, there is no question that the respondent, being the country’s largest business corporation, is in a profit- making business. And so, by withholding the 2nd applicant’s severance allowance, the respondent is presumed to have made profit from the said funds. 9.125 I thus order interest on the said figure of MK15,684,255.99 but merely at the prevailing National Bank of Malawi base lending rate compounded from 1st February 2021 to the date of payment which payment must be made by the respondent to the 2nd applicant within 7 (seven) days from the date of this judgment.  Whether the respondent wrongfully calculated the applicants’ car allowance, notice pay and leave days; 117 [1978–80] 9 MLR 369. 118 [2009] MLR 386. 119 IRC Appeal No. 31 of 2022 (Being Matter No. IRC 723 of 2018, Blantyre Registry) [Unreported]. 9.126 Concerning wrongful calculation of the applicants’ car allowance, the 1st and 2nd applicant adopted the 3rd applicant’s evidence on this point. The long and short of the said evidence is that the respondent had a clean wage policy and employees received cash in lieu of the car benefit and, therefore, for the purpose of calculating severance, the actual amount of allowance should have been used and not the 15% of the applicants’ car entitlement used by the respondent. 9.127 The respondent witness’s simple response as captured in exhibit GP 10 is that the respondent calculated and used a car allowance amount pursuant to section 35(2)(a)(iii) of the Employment Act as read with Section 35(2)(b). That these sections expressly provide that notwithstanding the definition of wage elsewhere, for purposes of severance allowance calculation, car allowance shall be determined as the taxable value of the car calculated in accordance with the provisions of the Taxation Act. That it was this legal guidance that the respondent relied on to determine the value of car allowance payable as part of severance allowance. 9.128 I must confess that I had challenges to fully appreciate the issue under the question being discussed as put forth by the applicants through the 3rd applicant’s testimony. But going through Counsel Suzi-Banda’s final written submissions on behalf of the applicants, I cannot help to observe that the issue has been amply clarified to the degree that this Court now fully understands what is at stake. 9.129 For example, details have been supplied on the workings of fringe benefit tax in relation to the applicants’ car allowance given wholly in cash as part of what is called a “clean wage”. Furthermore, information has also been volunteered on how car allowance is paid as part of payroll with the whole amount added to an employee’s income and that all is taxed at a given employee’s marginal personal rate of taxation. Also, that the applicants suffered a total 40% tax on the allowance and so on and so forth. Though I noted absence of citation of the pertinent provisions of the Taxation Act. 9.130 I would have also thought that the applicants would have presented precise figures of what they viewed as the right calculations (in the way the 2nd applicant did about her severance allowance) since they were convinced of what went wrong with those of the respondent. In my view, there was no need to wait for such computations to be reckoned in an assessment trial. 9.131 Now, the applicants’ explanations as brought forth in their final written submissions were all good. Indeed, they assisted this Court to clearly get to grips with the dispute under this head. Be that as it may, I firmly believe that with the amplification of the evidence popping well after trial, it would be improper for this Court to decide on the issue through the prism of the said elaborations which the respondent did not have the opportunity to challenge in the manner Counsel Mpaka for the respondent could have in cross- examination had these further explanations been presented through any of the applicants in their testimonies. 9.132 And so, despite this Court’s conviction that the applicants have a viable contention on the issue of wrongful calculation of their car allowance as to affect their severance allowance, I proceed to disallow the said claim for the reasons I have just laid bare including the impropriety of the misplaced amplifications to the applicants’ evidence. 9.133 I turn to the issue of leave days which, I observe, only affects the 3rd applicant who testified that leave days on the last month of work were never paid for. That was all the evidence he adduced on the point with no particularisation of the same in any way, shape or form. This leaves this Court with no choice but to summarily dismiss the claim in that regard. 10 COMMENTS ON CERTAIN EVIDENTIAL ASPECTS 10.1 There are so many angles from which this Court would have made many other findings in favour of the applicants herein on the evidence adduced by the parties. I proceed to make some superficial passing comments on one issue and render proper reasoned analysis on another. 10.2 In point of fact, it was unbearably mentally draining for this Court to keep on effortlessly locating illegality after illegality sometimes bordering on, I dare say, sheer incompetence in the conduct of the Board and its Appointments and Remuneration Committee particularly in their core corporate governance functions. 10.3 Some of these abominable conducts included where the Board’s Executive Director, Dr George Partridge the 3rd applicant herein, was – to all practical intents and purposes – wrongfully removed from the Board as he was constantly sidelined in the sense that he was not being included in or invited to Board meetings even those Board meetings where the overall subject matter pertained to his fellow Executive Management members whom he had superintendence over and by virtue thereof was entitled to be part of the deliberations. In the process, the Board was clearly driving a coach and horses through its own charter and contravening certain dictates of the Companies Act. 10.4 I briefly tackle one more issue in a little more depth. 10.5 The issue revolves around the principle in the Mpungulira case120 that failure to call a crucial and material witness works against the party who has so failed because the Court assumes that the only reason why such a witness is not called is that the evidence is adverse to the party who should have called him. 10.6 It was argued by the respondent that the whole functional review process was developed and managed by the applicants with the Board only receiving a report out of which it adopted the new structure such that it was appropriate for the Board to assume that consultation was done according to the Agreement. 10.7 Counsel for the respondent went on to argue that the fact that the applicants did not call the Consultant as a witness reveals that they were aware that, in fact, they were fully consulted. 10.8 In contrast, the applicants’ flipped this very same argument by contending that it should have been the respondent calling the Consultant to have the 120 Mpungulira Trading Ltd v. Marketing Services Division [1993] 16(1) MLR 346 respondent’s evidence that the consultations were sufficient and adequate tested through cross-examination of the Consultant by the applicants. 10.9 Relatedly, the applicants further contended that adverse inferences should be drawn from the respondent’s failure bring certain critical documents to court particularly (a) the report by the Consultant which recommended that the applicants’ jobs be retrenched because their remuneration was too high; (b) minutes of the Board meeting which allegedly took place towards the end of November 2021 at which the Board decided to accede to and implement the recommendations allegedly put forward by the Consultant and; (c) minutes of the Board meeting of 10th December 2021 at which the applicants were notified of the terminations of their contracts. 10.10 In short, I resolve both issues in favour of the applicants. Taking into account all the Court’s earlier findings, it is of no contest that the Consultant was solely procured by the Board and the Consultant had no interaction with the applicants as in ever setting his foot at the respondent’s PCL House in Blantyre. In that respect, I find it unreasonable that the respondent – much less any person – would expect the applicants to call the Consultant as their witness. 10.11 On the other hand, not only did the Board solely procure services of the Consultant but also the Consultant’s report was submitted exclusively to the Board. Clearly, if the Board had absolutely nothing to hide, it would not be curious to have expected the Board to readily parade the Consultant as its witness and also have the report as well as all the minutes in question exhibited as part of Mr. Malata’s evidence. 10.12 In the face of the formidable claims launched by the applicants and their strong evidence buttressing their said claims, these specific pieces of evidence would certainly have bolstered the respondent’s feeble defence (s) as earlier set out. In these circumstances, I conclude that the only reason the respondent did not activate such pieces of evidence is because the evidence was adverse to the respondent’s case. 11 CONCLUSION 11.1 For all I have articulated above, I reiterate my pronouncement earlier rendered as follows: (a) The applicants’ claims for compensation for unfair and/or unlawful dismissal and damages for unfair labour practices are well founded and succeed. The parties are at liberty to agree on appropriate compensation out of court. If the parties do not avail themselves that choice, this Court shall preside over the remedy hearing to assess compensation on a date and time to be fixed upon the parties filing pertinent assessment papers and the applicants filing a pertinent notice. (b) The 1st and 2nd applicants’ claim, as pleaded in the alternative, for damages for breach of legitimate expectations created by the respondent’s offer to change their employment status to fixed term contract is successful only to the degree that the action taken by the respondent in aborting the migration to fixed term contract without the decency of providing the 1st and 2nd applicants reasons is an unfair labour practice. (c) The 2nd applicant’s claim for the sum of MK15,684,255.99 being the amount unlawfully deducted from her severance allowance is made out and I order interest thereon at the prevailing National Bank of Malawi base lending rate compounded from 1st February 2021 to the date of payment. Such interest to be assessed by this Court in default of agreement by the parties. Further, on the dictates of section 53 of the Employment Act, the said payment to be effected by the respondent within 7 (seven) days from the date of this judgment failing which the 2nd applicant is at liberty to bring to bear any applicable lawful enforcement measures or process as shall attain compliance by the respondent. (d) The applicants’ claim for wrongful calculation of their car allowance, notice pay and leave days is dismissed. (e) The 1st and 2nd applicants claim for damages for rescission of promise to offer contract is unmerited and disallowed. (f) Finally, the respondent’s counterclaim for the sum of K282,150,943.35 in respect of an alleged overpayment of the 2nd applicant’s severance allowance is declined. 11.2 It bears stating that this being a modularized trial, the liability issue was just the first instalment. In that respect and on the authority of the case of JTI Leaf (Malawi) Limited v Kad Kapachika121, the decision herein is inchoate for appeal purposes. It can only be escalated to the High Court subsequent to this Court rendering its order on assessment of compensation or the parties settling pertinent quantum of compensation out of court. To avoid potential confusion, I am saying the right of appeal remains and within the dictates of section 65 (2) of the Labour Relations Act but, at this stage, caveated by my sentiments just conveyed. Pronounced this 22nd day of October 2024 at IRC, PRINCIPAL REGISTRY Tamanda Chris Nyimba DEPUTY CHAIRPERSON 121 MSCA Civil Appeal No. 52 of 2016 [unreported]. 104