Phiri Valentino v Mr.Unis and Anor (2016/HP/0139) [2017] ZMHC 525 (27 April 2017)

IN THE HIGH COURT FOR ZAMBIA 2016/HP/0139 ·· AT THE PRINCIPAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN PHIRI VALENTINO AND • MR. UNIS KAUSHA INVESTMENT LIMITED 1st DEFENDANT 2nd DEFENDANT Before the Hon. Mrs. Justice N. A. Sharpe-Phiri on this 27th day of April 2017 For the Plain tiff: A . A _J ~or. Jp.e De fend a n ts: , . .,,. Mr. V. Phiri, in Person A No qppe ar.ance . ,, . A · ...... . A . ....... .. ..... - , JUDGMENT Authorities referred to: • 1. The Min imum Wages & Conditions of Employment, A ct, SI No. 1 of 2011 2. The Minimum Wages & Conditions of Employment, Act, SI No. 4 7 of 2012 The Plaintiff comme n ced this action by way of writ of summons and statement of claim on the 25th J a nua ry 2013. Jl The claim endorsed on the writ is for: 1. An order that the Defendants pay the Plaintiff's social security funds to National Pensions Scheme Authority (NAPSA) and pay Tax for the Plaintiff to Zambia Revenue Authority (ZRA) from 30 January 2009, the month he was first employed to June 2015, the month he stopped work; 2. Payment of severance benefits and allowances; 3. Payment of accrued leave day; 4. Payment of repatriation allowance; 5. Payment of arrears, being salary, transport, lunch and housing ·• 6 . Damages for inconvenience and trauma suffered by the Plaintiff; 7. Costs and incidental to this proceedings plus interest on the amount found due; 8. -1\.ny other relief\he court may deem fit . . . . .... . ,, . ... The contentions of the Plaintiff in the statement of claim are that on 5th January 2009, he was e ngaged as a Shop Worker in the employ of the 2nd Defendant, a com pa ny registered under the Laws of Zambia and • owner of a trading shop at Ka mwala. The 1st Defendant was a Sole Director of the 2 nd Defendant Company. That he served diligently for the 2 nd Defendant until his resignation on 1st July 2015. Throughout the period of his employment, h e earned a monthly salary of K700 and the 2 nd Defendant ref used to increase his salary in the years of 2011 and 2012 in line with the minimum wages prescribed by Law. In 2011, the prescribed minimum monthly salary for a shop and general worker was Kl,445= 10. The Plaintiff also contended that he was entitled to receive transport, lunch and housing allowance but that the Defendant deliberately neglected to provide this. He alleged further that the 2 nd Defendant subjected him and the other workers to poor working conditions, thus forcing him to resign from employment. The Plaintiff also contends that the Defendants have failed to pay him his salary, transport, housing and lunch allowance, arrears of leave days, benefits or gratuity, repatriation allowance plus remittances of taxes to Zambia Revenue Authority (ZRA) and Social Security funds to National Pensions Scheme Authority (NAPSA) despite repeated reminders to do so. Lastly, the Plaintiff contended that he had suffered injury, inconvenience and trauma as a • result of the Defendants' actions. The Defendants responded by way of a defence filed on 8 th April 2016 in wl'li_ch they admit fhat the Plaintifr'\vas paid .. a mafithly salary of moo ;nd that the Pl;i~riff resigned f;o·~-~~~ployment '-~~ ·his own acc~rd.-~he Defendants denied paragraph 9 of the statement of claim that the Plaintiff's condition~ of employ ment entitled him to a payment of transport, lunch a nd h ousing allowance. They averred that the Plaintiff accepted the cond ition s of service offered to him and that he was never coerced into entering inlo a contract of employment . The Defendants d enied paragraph 10 of the statement of claim that the Plaintiff is entitled to gratuity, severance benefits, leave pay and allowances from the Defendants. They contended that all payments were made to the Plaintiff. They a lso denied paragraph 11 of the statement of claim that they forced the Plaintiff to resign from employment and the • J3 ·a llegations that they had subjected him and other workers to inhumane treatment or slavery during their employment. They further denied defaulting in submitting social security contributions for their workers or owing the Plaintiff allowances and benefits as alleged. Finally, the Defendant's denied that the Plaintiff had suffered any inconvenience as a result of their actions. The trial of the matter was scheduled for comn1.encement on the 2 nd December 2016. It was rescheduled to the 6 th December 2016. On the said date, both the Plaintiff and Counsel for the Defendants were before court. Counsel for the Defendants applied to withdraw as Advocates representing the Defendants, she notified the court that the proprietor of the 2 nd Defendant had left the country. The application was granted. ,.t,. _,, A . . . .. . A A · ... •. - . . ..... .. . .,, ·-· .. ..,, The trial was scheduled for hearing on 21 st February 2017. On the said date, the Plaintiff was present, in person but there was no attendance for the De fendant. The Pla intiff informed the court that the notice of hearing was served on the 2 n d Defendant. My attention was drawn to an affidavit of service of 17th Februa ry 20 17 which showed service of process on the 2 nd Defendant. Being satisfied that the 2 nd Defendant was duly served with the notice of hearing and thus was aware of the hearing date. I accordingly allowed the Plaintiff to proceed with the trial. J4 The Plaintiff testified on his own beha lf as PWl, his evidence was that, he was employed by the 2nd Defendant in 2009 to undertake stock takes for the compa ny. In or about 2015, he had complained about his salary and his boss had threatened to fire him. The Plaintiff concluded by contending that he was dismissed from employment and urged the court to grant the reliefs claimed. Timothy Mwamba was the second witness for the Plaintiff, PW2. His evidence was that he was a relative of the Plaintiff and that following the Plaintiff's termination of employment he had accompanied the Plaintiff to meet with his former employers. He confirmed that the Defendants had • been served with the court process. At the end of the testimony of PWl and PW2, the matter was adjourned . . - . . .... .,- to the 231~ · February 2011"'1for continued ~ -a.ring. On the s'fud date, oµly . the Plaintrff was in attend~nce. Counsel fo•t the Defendant·was absent I .. : - .. ·- .. . ·-.. ~-.; - ' . - . - - . -·........ . . . ... . .. . : . ~ -. . . ..... . .,, a llowed the trial of th e ma tter to continue as a notice of hearing of the matter h ad been issued. Kancholi Emmanuel Mwewa was the third witness for the Plaintiff ' PW3. He testified that he was a shop keeper of the 2nd Defendant and .'(I that he h ad worked with the Plaintiff a t the company. He confirmed that the Plaintiff had h a d a n a rgument with the boss over his salary and that soon thereafter the Plaintiff had stopped working in June 2015. He confirmed that their initial boss h a d passed away and that the 1 s t Defendant had replaced him in 2014. JS PW3 concluded by stating that he was still employed by the 2 nd Defendant and did not know why they had not paid the Plaintiff. Lovemore Phiri was the fourth witness for the Plaintiff, PW4. His evidence was that he had joined the 2na Defendant's company in 2009 the same year that the Plaintiff had joined and they had worked together for the company until 2014 when the Plaintiff stopped working being aggrieved over his salary. He concluded by naming his employers as Mr. Unis and Mr. Tabis. That marked the close of the Plaintiffs case. The Plaintiff intimated that • he did not wish to file submissions. The Defendants not being in attendance, I closed the defence. At the tinfu of writing this ~udgm ent I had 1i~t receive_d subfuissions fr_om . ,- either of tlfe parties. • ' ~ .,, . ~ r • .._ • ~ . ..:. - • • ..._ • • ·, . I have carefully consider ed the evid ence of the Plaintiff. The contention of the Plaintiff is that durin g the period of his employment with the Defendant, h is salary was below the minimum wage and the Defendant • did not provide him with transport, lunch and housing allowances as required by Law. He a lso contended that the Defendants did not remit statutory contributions to ZRA a nd NAPSA and that following the termination of his employment, the Defendants have failed to pay him his benefits, accrued leave d ays a nd r epatriation allowances. In response, the Defendant denied owing the Plaintiff any monies as a lleged. J6 • ' . From the contentions of the parties, the issues for my consideration are:- 1. Whether the Defendants have breached their statutory duty to pay social security contributions to NAPSA and Taxes to ZRA in respect of the Plaintiff for the period of 2009 to 2015; and 2. Whether the Plaintiff is entitled to amounts of money in respect of severance benefits, accrued leave days and repatriation allowances; 3. Whether the Plaintiff is entitled to payment of arrears of salary, transport, lunch and housing allowance from January 2009 to June 2015; 4. Whether the Plaintiff is entitled to damages for the inconvenience and trauma. As a starting point, I wis~to address the cf~m again?t the)l_i"st Defend_an~. A . , .... -. . ........ The Plain.fiff contends tha.1: he was employed by the 2 nd IYefendant and that th e 1 s t De fe ndant was at all material times a Director of the 2nd Defendant but there is n o evidence that the 1 st Defendant is indeed a Director of the 2!1<~ Defendant. Also, the evidence of PW3 and PW4 contrad icts that of the Plaintiff. The Plaintiff stated that the 1 st Defendant was at all materia l times a sole director of the 2 nd Defendant whereas PW3 testified that the 1 s t Defendant had only joined in 2014 following the death of their original boss. Further, the Plaintiff does not appear to have made any claims against the 1st Defendant. The specific claims are directed at the 2 nd Defendant as his employer, a limited liability company under the Laws of Zambia. Even assuming that the 1s1 Defendant is a director of the 2 nd Defendant, which fact was not proved, the 1 st and 2nc1 \, • Defendants have separate and distinct lega l personalities. In view of the foregoing, the 1 st Defendant ought not to have been made a party to action. I find that there is no valid claim against the 1 st Defendant and I dismiss the case against him accordingly. I now turn to address whether the 2°c1 Defendant has breached its statutory duty to remit social security contributions to NAPSA and Taxes to ZRA on behalf of the Plaintiff. The Plaintiff contends that the Defendant has failed to remit social security contributions to NAPSA. NAPSA was constitute d under Chapter 256 of the Laws of Zambia for the purpose of collecting pension contributions on behalf of employees and to pay out the same at some later point: Section 12 (a) of NAPSA Act states: A A A ,)1_ 'Subject to subsection (2) of section ·"eleven, contrilJil.ting employer shall mean - A person, association, institution or firm registered as a tax payer with a contract of service with an employee ... ' • The above authority, stipulates that a ny person, firm or association havin g a contract of service with an employee and registered as a tax p ayer is considered to be contributing employer . The 2nd Defendant being a company required to pay tax a nd having a contract of service with the Plaintiff, is a contributing employer within the meaning of Section 12 of the NAPSA Act. J8 In relation to the obligations of a contributing e1nployer, Section 14(1) and 15( 1) of the Act r equire a contributing employer to pay to the Scheme a contribution in respect of an employee at the end of each month. Further, Section 15(2) of the NAPSA Act states that if a contribution is not paid within the prescribed period, a penalty shall be applied and the amount and penalty shall be recoverable as a debt owing to the scheme by the employer. Clearly therefore an employer is required to make monthly contributions to NAPSA on behalf of its employees. In order to succeed with this claim, the Plaintiff must demonstrate that whilst in employment with the 2nd Defendant, it failed to remit monthly • contributions to NAPSA on his behalf. A statement of contributions from the NAPSA Service Centre would show whether or not contributions were made on the Plaintiff's account by his employer. The Plaintiff has not -provided any cfocumentation t-d prove this ai'legation ~:ti-at tfie 2nd • - • ._, - - .. • • . . · - .. • • ... #' • ~ .. " . . - • CTc.. • ... 1'efendant has ndt remitted monthly contributions on his behalf for the period of his e mployment with it. I find therefore that the Plaintiff has failed to prove this claim and it fails accordingly. The next question 1s lh e whether the 2 nd Defendant has failed to pay taxes to ZRA, a statutory body constituted under Chapter 321 of the Laws of Zambia. The core function of this governing board is to assess charge, levy and collect all revenue due to the Government under the respective laws. An employer is required by law, to deduct from an employee's salary, such taxes that are due and payable to the Government of the Republic of Zambia and to remit to ZRA on behalf of the GQY.ei:nmenCofThe· Rep1ibTic1IT Zambia. s.2 ~ L -y1. l. J9 The Plaintiff alleges that the 2 nd Defendant has not paid taxes to ZRA on his behalf for the duration of his employment. In considering whether the 2nd Defendant has failed to remit taxes to ZRA, the starting point is to ascertain whether the Plaintiff is liable to pay tax and whether taxes were deducted from the Plaintiff's salary. It is trite law that salaries less than K3,000 are not subjected to taxation as Pay As You Earn (PAYE). The Plaintiff would not therefore be liable to tax on a monthly salary of K700. Further, there is no evidence whatsoever that the 2 nd Defendant deducted taxes from the Plaintiff's • salary. In any event, the Plaintiff is not and would not be a beneficiary of such taxes. It would be due and payable to the Commissioner General of Taxes on behalf of the Government of the Republic of Zambia. In view of the foregoing, I find tha t the Plain tiff has failed to prove that the 2nd -f)·efendant h a d c.feduc ted taxes f~m his sal~ wrfi~h it has __ not rth:litted ..... .. t'o ZRA. This cla im the refore fails and I dismiss it accordingly. . • . . ~ .. ....... .,, . .. ·. - . : .. =. -. ,- ..... .. . .. The n ext questio n is w h eth e r the Plaintiff is entitled to severance pay, leave day s a nd rep atria tio n a llowance. The Plaintiff contends that he is entitled to these be nefits but that the 2 nd Defendant has failed to settle the same. The 2 nd De fenda nt d enies that the Plaintiff is entitled to these dues. • Severance pay is defined by Bla ck's La w dictionary as: 'the amount paid to an employee on termination of his work contract'. J10 Severance package is p ay a nd b enefits an employee receive s when h e terminates employ m ent with a company. This may include a payment based on the duration of service, leave days or any oth er b e n efits due to the employee at the time of termination of employment. This is usually determinable by the employment contract. Normal circumstances that warrant the payment of severance pay is where the employee has been laid off or where the termination is by mutual agreement. In the present case, the evidence of the Pla intiff is that he did not h a ve a formal contra ct of employment and that he had resigned from employment and his services were not terminated by the 2nd Defendant. There is therefore no legal basis upon which the Plaintiff is entitled to severance pay following his resignation from employment. I find therefore that the Plaintiff has failed to prove an entitlement to severance pay and this claim fa ils . ,,,. '" .. With r egard to t he claim for p ayment of outstand1ng leave days due and . - · ·'-• ,. ... .. . ........ .. _:,.; ... . :-. _,,. owing to h im, the claim by t h e Plaintiff is that he is entitled to leave days. The par ticula r s of this claim h ave not been specified and the Plaintiff has not in dicated the number of leave d ays unpaid or the amounts due and owing by th e 2 n d Defendan t to him. This claim therefore fails . On the question of rep a tria tion b enefits, Order 12 of the Minimum Wages and Conditions of Employment Statutory Instrument No. 1 of 2011 on Shop Workers provides a s follows: 'An employer shall transport an employee the employee's family and their personal effect to the employees' place of recruitment Jll or pay the employee a repatriation allowance sufficient to cover the cost of fares for the employee, the employee's family and their personal effects if the employee is (a)discharged on medical grounds, (b) is declared redundant, (c) retires or (d) dies in service, in which case the benefits shall accrue to the family of the deceased employee'. (underlining mine for emphasis only ) By the foregoing prov1s10n, an employer is a t the termination of a contract of employment required to r ep atria te an employee, the employee's family and their personal effects to the employee's place of recruitment or to pay a repatriation a llowa nce sufficient to cover the cost of fares for the employee, his family a nd personal effects if s uch employee falls within the category of persons provided for under the section. Fur th ef,- r epatriation i§. d efined by BTa:~k's Law Dicfion_ary a~. 't_he,.. A. -_ . ..... return ·6r someone to ·their country'. ·'Therefore, the obligation by an., ·-· , ., ·· - · ,· ... • .... _ ... "" .. ..... . _ employer to transport a n e mployee only arises where the employee was recruited from a diffe rent location. In such a case, an employer is obligated to retu rn the employee, his family and p ersonal belongings to such place or to pay him such a llowance to cover the cost of fares for the employee, his family a nd personal effects to return to their place of recruitment. In lh e present case, although th e Plaintiff h a s contende d that he is entitled lo a repatriation allowance, h e has not demonstrated that he was recruited from a place that was differ ent from the location of his work and that he r equires repatriation back to such place. H aving failed to prove this, his claim for r epatriation a llowance therefore fails. J12 The next question is whether the Plaintiff is entitled to arrears of salary, transport, lunch and housing allowance from the date of his employment to the date of termination of employment. The Plaintiff contends tha t he is entitled to these allowances plus arrears of salary. I will start with the question of allowances. Order 14 of Statutory Instrument No. 1 of 2011 of the Minimum Wages and Conditions of Employment Act provides on transport allowance as follows: 'An employee whose duty station is beyond a three kilometre radius from the employee's area of residence shall be paid a monthly allowance of one hundred and two thousand, four hundred Kwacha for transport expenses, unless the employer provides transport for that employee'. A A A )1_ . . .,, . ....... The foregoing provisio·n clearly stipulates that where the place of.,, 't '"; • ..... . - . • . . -.. - .. employment is furthe r th an three kilometres away from the employee's place of reside nce , the e mployer is required to provide the employee with transport to and from his place of work or a monthly transport allowance in lie u thereof. With regard to lunch a llowances, Order 15 of Statutory Instrument No. 1 of 2011 r eads as follows: 'An employee shall be entitled to a lunch allowance of one hundred and twenty thousand kwacha per month unless the employer provides a canteen at which the employees may J13 obtain wholesome and adequate meals provided free of charge'. What is clear from the above provision is that an employer is required to provide its employees with wholesome and adequate meals free of charge. In default thereof, the employer shall provide the employee with a lunch allowance. Turning to the question of housing allowance, Order 19 of Statutory Instrument No. 1 of 2011 provides a housing allowance as follows: 'An employer shall, where the employer does not accommodate an employee pay the employee a housing allowance at the rate of thirty percent of the employer's basic .,,_ A . A salary'. . ... . ...- -... . -.. - . A . ,;,.. . ....... . .,, . ,. Clearly from the forgoing prov1s10n, an employer is required to accommodate an employee or to pay the employee a housing allowance in default thereof. In the case at h a nd, the Plaintiff claims to be entitled to transport, lunch and housing a llowances from the 2nd Defendant. On the transport allowance, the Plaintiff has not a lleged that his place of employment was more than three kilometres from his residence. He has also not stated that the 2 nd Defendant failed to provide transport to him to his place of work if such distance was more than 3km away. J14 Similarly, in relation to lunch allowance the Plaintiff is only entitled to lunch allowance if the employer has failed to provide a canteen to obtain meals. In the present case, the Plaintiff has not indicated whether or not the 2nd Defendant had a canteen at which its employees could obtain regular meals. He has also not stated the basis on which he is entitled to a lunch allowance. Further, in relation to the housing allowance, the Plaintiff has not stated whether the 2nd Defendant provided him with accommodation or not. There is no evidence of the location of his place of residence or what arrangements existed with the 2 nd Defendant in relation to his accommodation. From the foregoing, I am not satisfied that the Plaintiff has demonstrated that he was entitled to transport, lunch and housing allowances from the 2nd Defendant during his period of employment. . .,, The 1/st question relafe~ to the cla im fci~ arrears of safary. The Plaintifr ' ..... .... . : - . conten·ds that his montnly salary was K700 and that this sum was belo\\t ' .: -. . 4~... . . - . -.. -. . .... • -- - .... . .. the m inimum monthly wage prescribed by Government for a shop and genera l wo r ker. He contended that in 2011 and 2012, a shop worker ought to h ave been paid Kl,445 = 10 per month with effect from 2012 but the 2 nd Defendant refused to increase his salary from 30th January 2009 to the date of his termination in June 2015 to this amount, forcing him to resign from c m ployment. A review of the evidence before me reveals that although the Plaintiff h as intima ted that his monthly salary was K700 from 2009 to 2015 h e did not provide any documentary proof in the form of payslip or pay statement of his en1ployment to show his actual monthly salary with the 2nd Defendant. JlS Notwithstanding the above, the 2 nd Defendant has admitted at paragraph 3 of the defence that the Plaintiff was employed by the 2 nd Defendant and that he was paid the monthly salary as alleged. I am the ref ore satisfied that the Plaintiff was indeed employed by the 2nd Defendant as a shop worker from 2009 to 2015 and that during the period of his employment with the 2nd Defendant, he earned a monthly salary of K700. Statutory Instrument No. 1 of 2011, which took effect on the 30th December 2010, the date of publication prescribes in Schedule 1 (c) (iv) the minimum wage for shop worker, particularly a shelf packer as K600. The Plaintiff's monthly salary in 2011 was K700. This was in excess of this minimum wage. Therefore, the claim for salary arrears for 2011 1s misconceived and I dismiss it forthwith . . A. Further, the 1'Iinimum Wag/·and Con.ditiorls. of Employm/nt (Shop .. . ... . ,, Workers) Statutory Instrument No. 47 of 2012 is applicable to persons employed in any shop or in connection with the business of any shop. It . . - . : •. - , ....... . .... . . ... . . , .. ; .... .. ... sets out the minimum monthly wage to be paid to employees. Order 5( 1) (c) of Statutory Instrument No. 47 of 2012 reads as follows: 'The minimum monthly wages shall be as follows: (c) grade III - One million two thousand, three hundred and eighty-six Kwacha (Kl,002,386.00) per month, for a person engaged in any of the following occupations: (iv) Shelf packer .. ' J1 6 .. The provision above vvhich came into effect in July 2012 prescribes that a person employed as a shop worker particularly one engaged as a shelf packer should earn a minimum monthly wage of Kl,002,386.00 (rebased Kl,002.39) . The evidence of the Plaintiff was that he was engaged as a shop worker from 2009 to 2015. His main job description was to pack goods on the shelves. During the period of his employment with the 2 nd Defendant he earned a monthly salary of K700. Despite the coming into effect of a Minimum Wage for shop workers, his salary was not increased as prescribed by law. The Defendant admitted that the Plaintiff only earned K700 per month. It is clear that with the effect from July 2012 (the publication of Statutory Instru1nent No. 47 of 2012) the minimum wage payable to a shop worker (shelf packer) was Kl,002.39. Following the coming into effect of this Order in July 2012, the Plaintiff ought to . h a ve been paid a minimum wage as prescribed by law. Despite the introduction tf the minimum ~wage for shqp ~rkers, the 2nd $~fendant .- ,,,,._ .,, continued to Jfay the Pla intiff a sum of K700 per month in contravention of the provision s of the la w. Clearly, therefore the Plaintiff earned a . . '"; -. . . - , .... .. - ... . . . - . - - ,,, . ... .. """· -- .... . - - m on thly sum of K302.40 below the prescribed minimum wage for the period from 4 th J uly 20 12 to June 2015 . The Plaintiff is entitled to salary a rrears of K3 0 2=40 fo r 35 m onths for the period from July 2012 to June 2015. I find the refore tha t the 2 nd Defendant is truly indebted to the Pla intiff in the s um of K 10,58 2.25 being the short fall of salary paid to him. I a ccordingly e nte r judgm e nt in favour of the Plaintiff against the 2nd Defenda nt for the sa id s um of Kl0,582=25 plus interest at the short term average bank rate from d a te of writ to date of juclgment and thereafter interest shall accrue on any unpaid sums at the bank lending rate from date of judgment to date of full pay1ne nt. J17 r A • The last claim is for damages for inconvenience and trauma suffered by the Plaintiff. In order to succeed with a claim for damages, the Plaintiff must prove that he has suffered inconvenience and trauma. In the present case, the Plaintiff has not provided any particulars whatsoever of the inconvenience and trauma that he has purportedly suffered at the hands of the 2 nd Defendant. I therefore find that the Plaintiff has failed to prove that he has suffered any inconvenience and trauma. This claim for damages therefore fails. The Plaintiff h aving succeeded in one of his claims against the 2 nd ~ Defendant, I accordingly order that the 2nd Defendant shall bear the Plaintiff's costs of this action, to be agreed and in default to be taxed . Delivered at Lusaka this 27th day of April 201 7 . A ,,f. A A .. - - . .... .... . .,, A . ..... . '\ • · · - .. -: SHARPE-PH~ HIGH COURT JUDGE J18