TAP Zambia Ltd v Masongo (Appeal 69 of 2007) [2011] ZMSC 38 (18 January 2011)

Jl IN THE SUPREME COURT OF ZAMBIA HOLDEN AT NDOLA , (Civil Jurisdiction) APPEAL NO. 69/2007 re BETWEEN: TAP ZAMBIA LIMITED AND JOSEPH MASONGO APPELLANT RESPONDENT Coram: Chirwa, Chibesakunda and Mwanamwambwa JJS. January 2011. 1st December, 2009 and 18 For the Appellant: For the Respondent: Mr Nchito of Messrs MNB. Mr Messrs K. B. F. & Partners. JUDGMENT Chibesakunda, JS Delivered the Judgment of the Court. Cases referred 1. GERALD LUMPA V MAAMBA COLLIERIES LIMITED (1988 - 1989)Z. R. 217 2. ZAMBIA PRIVATIZATION AGENCY V MATALE (1996)Z. R. 81. 3. ZAMBIA AIRWAYS V GERSHOM MUBANGA SCZ NO. 5 OF 1992. 4. RIDGE V BALDWIN (1963)1 QB 539. 5. CONTRACT HAULAGE LIMITED V. MUMBUWA KAMAYOYO(1982) ZR 13 (SC). Legislation referred: 6. SECTION 85 OF THE INDUSTRIAL RELATIONS ACT, CAP 269. Other Authorities: 7. EMPLOYMENT LAW IN ZAMBIAN ZAMBIA: CASES AND MATERIALS BY W-. S. MWENDA AT PAGE 48. This is an appeal against a High Court Judgment in a claim by the Respondent against the Appellant for damages for wrongful dismissal from employment by the Respondent. The brief history in this case is that the Respondent was employed initially as Marketing Manger on a two year contract. This ended on the 22"4 of September, 2002. In the second contract he became Export Manger. It was an express or implied term of employment that the Respondent had a contract of J2 two years subsequent after probation period. The contract also indicated that the probation period commenced on the 9t September, 2002. Another term of. * contract was that he was entitled to accrued leave days. The rest of the teriits of the agreement were standard. His case before the High Court was that his first contract ended on 22nd September, 2004. He continued working although his contract was not renewed in writing. So there was by implication a renewed contract of employment for two years. In September, 2005, he was written a letter terminating his employment. According to his testimony, before this letter was written to him, he was charged with a disciplinary offence and then suspended from duty for three days. He was cleared of the charge by the disciplinary tribunal. That clearance disturbed the Management and the Managing Director was upset when he saw that the Respondent was on duty after his suspension was over. As a result, the Appellant withdrew certain benefits, like personal to holder vehicle from the Respondent but the Respondent remained resilient and continued working. He was then charged with another offence. He was charged with an offence of which he was not aware of as he was not given any document or any charge sheet relating to it. When the disciplinary committee hearing took place, the Respondent asked for some documents for him to get to know what offence he was charged with. He was denied this. He was subsequently written a letter terminating his employment with one months’ salary paid to him in lieu of notice. J3 The Appellant’s in their evidence relied on their defence filed in Court. According to their defence, the Respondent’s contract of employment was * terminated in accordance with his terms and conditions of employment. Ay The High Court having listened to the evidence addressed its mind to the first argument which was that the High Court had no jurisdiction to hear employment cases. The learned trial Judge rightly concluded that under Section 85 of the Industrial Relations Act,® the High Court had jurisdiction to hear employment cases. The learned trial Judge rightly concluded that claims for damages for wrongful or unlawful dismissal are common law issues and as such the High Court has jurisdiction. Next the High Court ruled that the Appellants were in breach of contract of employment as they terminated his renewed contract of employment and gave him 24 hours notice which could have been the case, had the Respondent still been on probation which status he enjoyed or had at the beginning of his contract. Since it was common ground that the Respondent was not on probation, the Appellants therefore wrongfully dismissed the Respondent. It is against this Judgment that the Appellants have come to this Court on appeal raising 2 grounds of appeal: - (1) That the learned trial Judge erred in law and in fact when he found that there was wrongful dismissal when there was no evidence on record to support such a finding. J4 (2) That the learned trial Judge erred in law and in fact in awarding 12 months salary as damages for wrongful dismissal when the. circumstances of the case did not merit such an award. a - At the hearing of the appeal, both parties relied on their filed submissions. Mr. Nchito, Counsel for the Appellant in his written argument referred to the High Court portion of the Judgment at J9 —- JS which says: “ On the contrary, the letter of employment which runs from page 7 to 8 of the Defendants Bundles provides 24 hours notice hich either party may be given while the Plaintiff was on probation of the first three months on 9th September 2002. The letter of termination was written on 29th September 2005. This demonstrates succinctly that the Plaintiff was not on probation. Resulting, the Plaintiff was wrongfully dismissed as there were no such provisions in his contract.” It was Mr. Nchito’s argument that there was no evidence to support such finding. He went on to argue that before the High Court, there was evidence of a termination letter which letter made no reference to the Respondent’s probation period. According to Mr Nchito, that in itself did not imply that the Appellants gave the Respondent only 24 hours notice. He cited the case of Gerald Lumpa v Maamba Collieries Limited: and argued that where there was no specific period of notice mentioned in the contract of employment, any contract of employment is determinable by giving a reasonable notice taking into account the circumstances of the case. He went on to submit that it is the giving of notice or payment in lieu of notice that terminates any contract of employment. J5 Counsel therefore pointed out that the termination letter to the Respondents mentioned one month pay as payment in lieu of notice. That was a reasonable. . period. He argued that, in fact the Appellant were within their rights “#6 terminate the contract as this was purely master/servant relationship. He cited the case of Zambia Privatization Agency v Matale?2, in which this Court said: “....... What is reasonable notice depends on the facts of each case”. He argued that one month’s notice given the facts of the case, was a reasonable period. On ground2 Mr Nchito argued that the learned trial Judge erred in law and in fact in awarding 12 months salary as damages for wrongful dismissal when the circumstances of the case did not merit it in the alternative. It was argued on behalf of the Appellants that the Court below applied wrong principles in awarding damages for unlawful termination of the contract. Again he cited the case of Matale?, where this Court said: “The measure of damages in the absence of any express terms must be reasonable notice period. What is reasonable notice depends on the facts of each case” According to him, one month’s salary paid in lieu of notice was sufficient for a person in the position of the Respondent. Counsel’s submission is that in the circumstances of the case, twelve months salary pay in lieu of notice was extravagant and unreasonable. Counsel for the Respondent, in his written heads of arguments, argued that the Court was on firm ground in holding that one month’s salary was sufficient in view of the fact that the Respondent was a senior employee serving J6 as a Marketing Development Manager under contract for two years. He pointed out that one of the leading Zambian text Book, “Employment law in Zambian... * Zambia:”7 states “....... Wrongful dismissal is the product of the contin law. Wrongful dismissal is one at the instance of the employer that is contrary to the terms of employment. When considering whether a dismissal is wrongful or not, the form, rather than the merits of the dismissal must be examined. The question is not why but how the dismissal was effected. The commonest inclilence of wrongful dismissal is where the employer fails to give the requisite notice.” He cited the case of Ridge v Baldwin‘+ and argued that in the Contract Haulage Limited v. Mumbuwa Kamayoyo’ the Court enunciated this principle that “insufficient notice amounted to wrongful dismissal.” The notice in this case was 24 hours. He therefore urged this Court to endorse the views of the learned trial Judge. On ground 2 he argued that the learned trial Judge was equally on firm ground when he awarded 12months salary as damages for wrongful dismissal because the circumstances of the case did merit such an award. He argued that in the case before us, the contract was silent on the notice period and therefore the notion of reasonable notice had to be invoked. In the case before us, the Appellants gave 24 hours’ notice to the Respondent. He cited the case of Mubanga® where this Court said that: “the Respondent should have mitigated his loss by obtaining alternative employment within a reasonable period. We regard reasonable period for a person in the Ji management position of the respondent as twelve months” and argued that according to this authority, it is well settled principle that for a person in. management position a 12 months notice is reasonable period of notice. “He therefore argued that the lower Court was on firm ground in awarding 12 months salary as damages. We have looked at the issues raised in the appeal. We have also considered the record of appeal and submissions before this Court and before the High Court. We will deal with the 2 grounds of appeal together. Firstly, we agree with both Counsel that in a master/servant relationship, the common law position is that a contract of employment can be terminated by either sides. It is also trite law that either side can give notice to terminate a contract of employment or pay a lump sum in lieu of notice equivalent to the period of notice. The Court in these cases of termination of employment has to ask how, not why the dismissal was carried out. In this case, it was argued that Respondent was give 24 hours notice but the evidence before us is that he was given one months’ salary in lieu of notice. It is also common ground that the contract between the Appellant and the Respondent was silent on the period of notice. So, the reasonable period principle has to be invoked. A reasonable period has been defined by this Court in the Matale?, quoted supra, as a period depending on the circumstances of a given case. In that case, this Court held thats ass the measure of damages in the absence of any express terms must be reasonable notice period. What is reasonable notice depends on the facts of each case...” In the case before us, the notice period was not we J8 indicated. Therefore the common law measurement applies. In the case of Mubanga’, this Court held that, “a reasonable period for a person in Management was 12 months.” The question therefore which this Court has An to determine is whether or not one months’ pay in lieu was sufficient notice because if not, that would amount to wrongful dismissal if the principle in the Kamayoyo? case has to be followed. We have weighed and considered the evidence and facts before us. We hold that this was insufficient notice. The act by the Appellants amounted to wrongful dismissal of the Respondent. However, since the Respondent only worked for the Appellant for a period of two years, although he was in Management position and since by implication he continued working after his contract was renewed, the award of 12 months’ salary would be disproportionate to service. We therefore find partial merit in the appeal. We set aside the award of 12 months, we substitute it with the award of 6 months as we take into account that he was in the management scale. We make no order on costs. D. K. Chirwa SUPREME COURT JUDGE eee emcee hee seen eee eee c ene eeesenes L: P. Chibesdianda SUPREME COURT JUDGE