Chizi v Nkhwazi Primary School (Appeal 85 of 2010) [2015] ZMSC 175 (20 March 2015)

J1 IN THE SUPREME COURT OF ZAMBIA HOLDEN AT LUSAKA (CIVIL JURISDICTION) APPEAL NO. 85/2010 BETWEEN: PRISCA KABANSHI CHIZI APPELLANT AND NKHWAZI PRIMARY SCHOOL RESPONDENT Coram: Mwanamwambwa, Ag DCJ, Hamaundu, JS and Lengalenga, AJS on the 12th August, 2014 and the 20th March, 2015 For the Appellant: Mr W. Mweemba, Messrs Mweemba & Co For the Respondent... Messrs Musa Mwenye Advocates JUDGMENT HAMAUNDU, JS, delivered the Judgment of the Court Cases referred to: 1. Attorney General V Marcus Kampumba Achiume[l 983] ZR 1 2. Wilson Masauso Zulu V Avondale Housing Project]1982] ZR 172 3. Gerald Musonda Lumpa V Maamba Collieries Limited[l 988/1989]ZR 217 4. Redrilza Limited V Abuld Nkazt & ORS[2011] ZR 394 5. Ndongo VMoses Mulyango & Roostico Banda[2011] 1 ZR 187 6. Zambia Consolidated Copper mines V Matale [1995/1997] ZR 144 Legislation Referred to: 7. The Industrial and Labour Relations Act, Chapter 269 of the Laws of Zambia. Section 5 Works Referred to: 8. Treitel, The Law of Contract, para 1-007, 13th Edition by Edwin Peel (Sweet & Maxwell) This is an appeal against the Judgment of the Industrial Relations Court dated the 31st March, 2010, in which the court J 2 dismissed the Appellants complaint, which sought to challenge the termination of her employment by the Respondent. The undisputed facts, of, or background to, this appeal, as can be deduced from the record, is as follows: The appellant signed a contract of employment with the respondent on the 28th July, 2008. The contract was for a duration of two years, commencing the 1st September, 2008, and ending on the 31st August, 2008. Initially, the contract was not governed by a collective agreement but by the respondent's conditions of service. Clause 8 of those conditions of service is of particular relevance to this appeal. That clause provided for three important aspects of the contract, namely; (i) that the contract could be extended for a further period of up to two years at the sole discretion of the respondent; (ii) that in order for that discretion to be exercised, the appellant was required to apply for the extension within four months prior to the expiration of the contract; and (iii) that the respondent was to inform the appellant of its decision not less than three months before the contract expired. J 3 On the 17th March, 2008, the appellant and other employees in her category became unionised through a recognition agreement signed between the respondent and a union known as the Basic Education Teachers Union of Zambia (BETUZ). The recognition agreement was approved by the Department of Labour on the 27th March, 2008. Clauses 2 and 3 of the recognition agreement are also of particular relevance to this appeal. Clause 2 provided that the recognition agreement superseded any existing arrangements between the respondent and its unionised employees. Clause 3 provided that any terms and conditions of employment that would be contained in the collective agreement would form part of the contract of employment. The appellant, then, became involved in union activities. The Union started negotiating for improved conditions of service through a collective agreement. On the 28th May, 2008, the respondent, through its Headmaster, reminded the appellant that her contract of employment would come to an end on the 31st August, 2008, and requested her to indicate whether or not she wanted to renew it. The appellant indicated her intention to J 4 renew the contract. This indication was made on the 2nd June, 2008. On the 15th July, 2008, the respondent and the Union were informed by the Labour Commissioner that the collective agreement had been approved and registered. The salient features of the collective agreement were thus: (i) The agreement was deemed to have come into force on the 1st April, 2008, and was to expire on the 31st December, 2008. (ii) Clause 3.4 provided that contracts would have a maximum period of three years for all categories of unionised employees. On the 31st July, 2008, the respondent informed the appellant that it would not offer her another contract after the 31st August, 2008. Having given the appellant insufficient notice of its refusal to review the contract, the respondent paid her two months' salary in lieu of the proper period of notice. The appellant immediately replied by way of a letter, pointing out that the respondent had not given any reason for its decision and that the decision was made at the time that the appellant, as chairperson of the Union's branch at the school, was J 5 spearheading negotiations on some matters that were still outstanding. The appellant concluded by stating that it was her considered view that the non-renewal of her contract of employment was a way of victimizing her for her active participation in the on-going negotiations for salaries and conditions of service. The appellant's response was supported by a letter of intervention from the Union which stated that the respondent's decision would prejudice the discussions on the issues which the appellant had raised. The respondent wrote back to the Union that under the Recognition Agreement, the renewal and non-renewal of employees contracts was non- negotiable. The respondent, further, pointed out that the decision was made in relation to the appellant as an employee of the school and not because she was a union leader. On the 15th August, 2008, before her contract came to an end, the appellant filed this action in the Industrial Relations Court, seeking damages for breach of contract and an order for re-engagement. The appellant, initially, premised the foregoing relief on one broad ground, namely; that although the respondent purportedly exercised its discretion not to renew the appellant's contract, the real reason for its decision was because of the J 6 appellant's involvement in union activities and, therefore, the decision was made maliciously and in bad faith. Subsequently, the appellant amended her complaint to include the ground that, in fact, both the recognition agreement and the collective agreement had, by implication, amended the contract of employment so that it was now for a duration of three years from the 1st April, 2008. According to this ground, the respondent’s decision was, therefore, in breach of the two agreements. The inclusion of this ground necessitated the inclusion of the relief by way of an order directing the respondent to treat the appellant's contract as having not expired until after the expiration of three years from the 1st April, 2008. In its answer, the respondent maintained that it had validly exercised its discretion not to renew the contract. At the hearing, the appellant’s evidence was that she had been employed by the respondent on two-year renewable contracts since 2004. By 2008, she had become involved in union activities and even spearheaded salary negotiations. In June, 2008, she applied to renew her contract which was about to expire on the 31st August, 2008. She received no response until the 1st August, 2008. In the meantime, she had taken part as a J 7 union member in salary negotiations that had taken place in July, 2008. The response on the 1st August, 2008 was a refusal to grant her a new contract. This, effectively, left her with one month’s notice. The respondent, however, said that she would be paid two months' salary in lieu of notice. The respondent’s evidence at the hearing was that, indeed, the respondent had exercised its discretion not to renew the contract but that in doing so there had been a lapse on the respondent’s part. Therefore, the respondent had decided to pay the appellant three months salary in lieu of notice. The court below, after making the undisputed findings of fact which we have set out above, identified and set out the following issues as being the ones for determination; (i) Whether the respondents decision was motivated by the appellant’s involvement in union activities (ii) Whether the collective agreement did automatically extend the appellants contract to three years and whether the respondent did breach that agreement (iii) Whether the appellant was discriminated against on account of her position as chairperson of her union’s branch. J 8 The court held that, while the collective agreement provided that contracts of employment would now be for a period of three years, this did not apply to existing contracts and, therefore, the appellant’s contract was not superseded by the provision in the collective agreement. The court, further, held that since the contract had ran its full course and had not been superseded by a new three-year contract; the respondent was not in breach of the collective agreement, especially that the respondent had offered to pay two months’ salary in lieu of notice of non-renewal of the contract. The court was of the view that it was in the respondent’s discretion, as much as it was in the appellant’s, to renew or not to renew the contract. The court, therefore, declined to find that the respondent’s refusal was due to the appellant’s participation in union activities. The court, then, dismissed the complaint. Before us, the appellant filed two grounds of appeal; The first ground is that the court below erred in both law and fact when it found and held that the respondent’s refusal was not due to the appellant’s union activities, contrary to the evidence on record. J 9 The second ground is that the court below fell into error when it found that the respondent’s refusal was neither in bad faith nor in breach of the Collective Agreement. The appellant filed written heads of argument. In those arguments, the appellant argued that although the first ground was based on findings of fact alone, this Court had stated in cases such as Attorney General v Marcus Kampumba Achiume*1* and Wilson Masauso Zulu v Avondale Housing Project121 that it could reverse findings of fact made by a lower court in certain circumstances. In line with that argument, the appellant stated that had the lower court addressed its mind to the close proximity of the union activities and the timing of the non-renewal of the contract, it would have come to the conclusion that the non-renewal of the appellant's contract was motivated by, or as a result of, her involvement in the said union activities. In the second ground, the appellant argued that, had the court considered the evidence properly, it would have come to the conclusion that the appellants contract, like all the other employee's contracts was superseded by clause 2.1 of the Recognition Agreement. As such, the appellant's contract was not supposed to expire, nor was it due for renewal, on the 31st August, 2008. Consequently, it was not open to the court to ascribe a different meaning to what the parties had intended the agreement to mean. The respondent also filed written heads of argument. J 10 In response to the appellant's arguments in the first ground of appeal, the respondent argued that the court was on firm ground when it held that the non-renewal of the Appellant's contract of employment was not due to the appellant's union activities because; first there was a written contract of employment that was for a fixed term of two years, the expiry of which would result in termination; secondly, according to the case of Gerald Musonda Lumpa v Maamba Collieries Limited,(3) in an ordinary master and servant relationship, the master can terminate the contract with his servant at any time and for any reason or for none whatsoever, the giving of notice or salary in lieu thereof being what terminates the employment; thirdly,the appellants contract of employment stated that either party could terminate the contract by three month's notice or salary in lieu thereof, and; fourthly, there was no need for the court to delve into the appellant's allegations that the contract was not renewed on account of the appellant’s involvement in union activities because the terms of the contract provided the conditions for termination and the allegations were not substantiated. Instead, in line with the decision in the case of Redrilza Limited v Abuid Nkazi and Others*4’ the starting point for the lower court was to consider the terms of the contract between the parties and not to rush into questioning the reasons for the termination. Responding to the appellant's second ground, the respondent argued that the collective agreement did not state that it would be replacing the conditions of service or contracts of employment already in existence but rather that it was to be incorporated into the existing contracts. As such none of the J11 contracts that were in existence were either superseded or abolished. The respondent argued further that the collective agreement formed the basis of the relationship between the appellant and the respondent and the basis for which contractual terms could emerge. The respondent also argued that the recognition agreement was created to give effect to the relationship between the respondent and its employees with regard to negotiations and bargaining for the employee's welfare, including the handling of individual and collective grievances. Citing the case of Ndongo v Moses Mulyango and Roostico Banda,*51 the respondent argued that there was no reason for this Court to interfere with the findings of fact of the lower court. Those were the written arguments. At the hearing, the parties relied on their written heads of argument. We have considered the arguments advanced by the parties. This appeal raises two questions for our consideration. The first question is whether the respondent was required to give reasons for not renewing the appellant’s contract and, if so, whether the Industrial Relations Court could delve behind the decision to find the real reasons and redress any injustice discovered. The second question is whether the collective agreement of the 1st April, 2008, by implication, amended the appellant’s contract in such a manner that it now became a contract of three years duration with effect from the 1st April, 2008. J 12 We shall deal with the second question first. The answer to the second question lies in one of the salient features of the collective agreement which we have set out in the undisputed background to this appeal, namely; the feature introduced by clause 3.4 of the agreement. That clause provided as follows; “The contracts will have a maximum period ofthree(3) years applying for all categories i.e Teachers, Teacher Aides and General Workers”. Clearly, the plain language of that clause meant that the agreement had introduced a ceiling to the duration of contracts, which ceiling was three years. In other words, contracts were not to exceed three years. Therefore, contracts of a shorter duration, such as that of the appellant, were perfectly in order. It follows that, whether by implication or by its plain language, the collective agreement did not in any way affect the duration of the appellant’s contract. Therefore, by declining to renew the appellant’s contract, the respondent did not breach either the collective agreement or the recognition agreement. We wish to point out here that although the trial court arrived at the same conclusion that the respondent did not breach either of the two agreements, it did so using a wrong approach, namely; that clause 3.4 of the collective agreement only applied to future contracts and not existing ones. The clause actually applied to existing contracts by virtue of the recognition agreement which stipulated that any terms and conditions of service in the collective agreement would form part of the J 13 contract of employment. Had the clause, for example, stipulated that contracts would be of a minimum duration of three years, that would have had the effect of extending the appellant’s contract by at least one year. Unfortunately for the appellant, the clause used the word “maximum”. That is why we have come to the conclusion above. Consequently, the second question is resolved in favour of the respondent. With that resolution, the second ground of appeal fails. We now turn to the first question. We did hold in the case of Zambia Consolidated Copper Mines V Matalef6) that there is nothing in the Industrial and Labour Relations Act<7) which stops the Industrial Relations Court from delving into or behind reasons given for termination in order to redress any real injustice discovered. However, there is a distinction between the Matale case and this one. In the Matale case, we were dealing with a case of termination of a contract before it had run its normal course. In this case, as the court below observed, the appellant’s contract had run its full course. What the parties were contemplating was whether or not to enter into a new contract of employment. The question that arises, therefore, is; can the respondent be compelled to enter into a contract with the appellant? With regard to a party’s freedom to contract or not to contract, the learned author TreiteV8), writes; J 14 “Freedom not to contract. In the cases so far considered the parties are free to decide whether or not to enter into the relationship (though the law may fix some or all of its incidents); but there are other cases in which the law to some extent restricts even this freedom. At common law a common innkeeper may be liable criminally or in tort for refusing, without sufficient excuse, to accommodate a guest. Injunctions may be granted and damages awarded against persons whose withholding of supplies from, for example, distributors, amounts to an abuse of a dominant position, contrary to EC or UK competetion law. A person may be forbidden to refuse to contract by legislation on grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race religion or belief, sex or sexual orientation. It is unlawful to refuse a person employment because he is, or is not, a member of a trade union. ” For the last proposition, Treitel cites the Trade Union and Labour Relations (Consolidation) Act, 1992 of the United Kingdom. It is obvious that in other jurisdictions legislation has created inroads into the party’s freedom to, or not to, contract in certain circumstances; and this applies to employment as well. The question is; has our legislation created similar inroads? Our Industrial and Labour Relations Act<7), in section 5 has granted several rights to employees, including the right not to have their contracts of employment terminated on account of their union activities. However, the rights are only available to employees who are already in employment. The Act does not address the J 15 relationship between a prospective employer and a prospective employee. Therefore, if a prospective employer were to refuse to employ a person on account of the latter’s union activities, there is no law which would compel the prospective employer to employ that person. In this case, the recognition agreement between the respondent and the appellant’s Union provided in clause 10(e) thereof that the respondent’s discretion in the renewal or non- renewal of employees’ contracts of employment was non- negotiable. The respondent opted not to enter into a new contract of employment with the appellant and gave no reasons for its decision. There was nothing wrong with the respondent not giving any reason for its decision because neither the recognition agreement nor the collective agreement or any written law compelled it to do so. Even assuming that the undisclosed reason was the appellant’s union activities, there is no law, as we have seen, that would compel the respondent to employ the appellant. In those circumstances, it would have been pointless for the court below to delve behind the respondent’s decision in order to find the real reason for the respondent’s refusal to re-new the appellant’s contract of employment. Therefore, the first question is also resolved in favour of the respondent. Again, with that resolution, the first ground of appeal, equally, fails. The appellant’s appeal has, therefore, failed and is hereby dismissed. Costs to the respondent. J 16 AG/DEPUT IEF JUSTICE wa E. M. Hamaundu SUPREME COURT JUDGE AG/SUPREME COURT JUDGE