Time Trucking Limited v Kipimpi (Appeal 25 of 2016) [2017] ZMSC 15 (7 July 2017)

IN THE COURT OF APPEAL APPEAL NO. 25/2016 HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN: TIME TRUCKING LIMITED AND KELVIN KIPIMPI (cid:9) COUR OF Avz.kpLLANT '244 0? JUL 261/ LRESPONDENT CIVIL REGISTRY 1 CORAM: Makungu, Chashi, Kondolo SC, JJA On 9th March, 2017 and 7th July, 2017 ,For the Appellant: Mr. K. Chenda of Messrs Simeza Sangwa Associates For the Respondent: In Person JUDGMENT KONDOLO SC, JA delivered the Judgment of the Court CASES REFERRED TO: Katengulwa Mwanakayaya and 3 others v Quicksave (Z) Ltd IRC/ND/16/2015 Chilanga Cement v Kasote Singogo SCZ No. 31 of 2009 Tosonomo v The Credit Organisation of Zambia (1973) Z. R. 347 Yonah Banda v National Drug Company Limited (1980) Z. R. 1 Mule nga v Mumbi, Ex Parte Mhango J2 of 15 Kitwe City Council v William Ng'uni (2005) Z. R. 57 (S. C.) Western Excavating Limited v Sharp [1978]Q. B. 761 Courtland's Northern Textiles Ltd v Andrew [1999] I. R. L. R. Joseph Gereta Chikuta V Chipata Rural Council (1983) Z. R. 26 (S. C.) Wallwork v Fielding [1922] All E. R. 298. LEGISLATION REFERRED TO: Minimum Wages (General Order), 2011 Employment Act, Chapter 268, Laws of Zambia OTHER WORKS REFERRED TO: 1. Atkins Court Forms, Second Edition 1993 Reissue, Vol 23 London: Butterworths This is an appeal against the Judgment of the lower Court in which the Respondent was awarded unpaid salaries, unpaid leave pay, subsistence allowance, severance package, one month's pay in lieu of notice, interest and costs. The backdrop of the case is that the Respondent was employed by the Appellant on 4th January, 2006 as an Auto Electrician with the status of a permanent employee. It was his evidence in the lower Court that he was, on 21st October, 2013 requested to travel and work in Lusaka, which he did but throughout his stay, despite his demands, he was neither given any subsistence allowance nor transport allowance. Sometime in July, 2014, the J3 of 15 Respondent fell ill, travelled to Ndola and was given some days off but unfortunately, whilst visiting the clinic he was hit by a roofing sheet. The Respondent informed the lower Court he reported for work on the 23rd July, 2014 he was called by his Director to explain his absence and he was also reprimanded for his behavior towards others. The Director told him that he would not be paid for the three days that he was absent without leave and was issued warning letters with regard to both issues'. He declined to sign the warning letters because according to him no procedure was followed and for that reason he had refused to accept the Directors decision. He was suspended the same day and has remained on suspension to date as his employment has not been terminated. The Appellant, through RW1, Clement Chasha, told the lower Court that the Respondent was employed on a 2 year verbal contract in Ndola in January, 2006 and in October, 2013 he was informed verbally that he had been transferred to Lusaka. RW1 told the court that the Respondent was given K100 to relocate to Lusaka as he had been informed that the Respondent was not relocating with his family. He confirmed that the Respondent was suspended after he refused to accept management's decision following a disciplinary hearing. RW1 said they were later informed that the Respondent had decided to 1 Record of Appeal, p.60 J4 of 15 take the matter to court and according to the Appellants the Respondent is still on suspension without pay and not entitled to a salary. The trial Court found that the Respondent was indeed on suspension in accordance with a letter dated 24th July, 2014. The Court also found that there was no evidence that the suspension was ever lifted which meant that the Respondent had been on indefinite suspension without pay. The Court further found that there was no evidence of any charge leveled against the Respondent to warrant the suspension and further there was no evidence of his transfer to Lusaka and on that basis awarded the Respondent unpaid salaries as well as subsistence allowance for the period he stayed in Lusaka. Further to these findings, the trial Court found that the conduct of the Appellant amounted to constructive dismissal and relied on the cases of Katengulwa Mwanakayaya and 3 Others v Quicksave (Z) Ltd') and Chilanga Cement v Kasote Singogo(2) and proceeded to award a severance package provided by the Appellant's conditions of service. The Appellant, aggrieved with the Judgment of the lower Court, has advanced three (3) grounds of appeal, namely: 1. That the Court below misdirected itself both in law and in fact when it held that the Complainant is entitled to payment of his full salaries less statutory deductions from 24th July, 2014 to the date of Judgment; J5 of 15 That the Court below misdirected itself both in law and in fact when it held that the Respondent had not been transferred to Lusaka and is entitled to payment of subsistence allowance for the period during which he stayed and worked in Lusaka. That the Court below misdirected itself both in law and in fact when it held that the Respondent had been constructively dismissed and is entitled to payment of a severance package and payment in lieu of Notice. Mr. Chenda on behalf of the Appellant relied on the filed heads of argument, in which it was submitted, under Ground One, that the suspension effectively suspended the mutual rights and obligations of the employee and the employer meaning that there was no work to be done for which remuneration ought to be paid. Counsel buttressed his argument by citing the cases of Tasonomo v The Credit Organisation of Zambia(3) and Yonah Banda v National Drug Company Limited(4). On that basis he argued that the trial courts holding was contrary to the prevailing jurisprudence and the doctrine of stare decisis. J6 of 15 In Ground two, the kernel of Counsel's argument was that the subsistence allowance awarded had no statutory or contractual basis, for the reason that the Respondent claimed the said allowance pursuant to the Minimum Wages (General Order), 2011 which Order the Court found did not apply to him and as such any additional allowances would have only been conferred by contractual agreement. Further to this, Counsel, in referring to the Court's finding that the Respondent was not transferred to Ndola, argued that such a finding amounted to the Court violating the sanctity of the contract and illegally substituting its own terms in place of what was agreed by the Parties. Lastly, in Ground three, Counsel contended that the finding of the lower court that there was constructive dismissal breached the rules of natural justice and moreover the conditions for constructive dismissal had not been established. Mr. Chenda argued this ground twofold. In the first limb, he drew the Court's attention to Atkins Court Forms and the case of Mulenga v Mumbi, Ex Parte Mhango(5) and submitted that the rules of natural justice demand that an individual be given an opportunity to be heard before any order to his detriment is made. He argued that the finding of constructive dismissal by the trial court was erroneous because his client had no opportunity to answer to as it was not pleaded, consequently, the severance package of payment in lieu of notice ordered by the trial court, should fall away. J7 of 15 Equally, the Respondent, in response, relied solely on his written heads of arguments in which he submitted, on Ground One, that the lower Court was on firm ground to award the payment of unpaid salaries on the basis that there was no offence leveled and proceedings instituted against the Respondent to warrant his suspension. On ground two, the Respondent agreed with the holding that he was not transferred to Lusaka and submitted that if there was indeed a transfer, the Appellant was under an obligation to inform the Respondent and facilitate the said transfer in terms of transport of household goods and other requirements. With respect to subsistence allowance, the Respondent contended that the same was pleaded and thus the Court, in furtherance of the finding that there was no transfer, was on firm ground when it awarded subsistence allowance. Finally, on ground three, the Respondent argued that the suspension letter neither indicated the time frame of the suspension nor that the suspension was without pay. He stated that the disciplinary process was never followed and no offence was leveled against him which, according to him, was an infringement on his rights. With regard to constructive dismissal, he submitted that he lost interest in working for the Appellant because of their unreasonable behavior and thus sought relief from the Courts for payment of termination benefits. In reply, Mr. Chenda, with respect to Ground One, contended that the foreign case law quoted was not supported with citations. Further it was J8 of 15 argued that the Respondent was attempting to introduce fresh evidence that he had in fact resigned from the Appellant Company. He submitted that the Court below made a finding of fact that the contract of employment had not been revised. In replying to Ground Three, Counsel submitted that the Respondent did not rebut the issue that constructive dismissal was never pleaded, alleged or argued in the Court below. We have considered the Judgment, the Record of Appeal and the spirited arguments by Counsel for the Appellant and the Respondents arguments in person. We shall begin by addressing Ground 2 and Grounds One and Three shall be addressed concurrently. With regard to Ground Two, the Respondent testified that he was not given any form of allowance when he was asked to work in Lusaka apart from K100 given to him by a Mr. Tembo as transport money. He testified that he kept on asking for subsistence allowance and transport allowance and his demands became a source of conflict with the Appellant. He insisted that he was not transferred as he was not provided with any resources to facilitate relocation and his family remained in Ndola. The Respondent appears to have been engaged on an oral contract with no written down conditions of service. Section 24 (5) of the Employment Act, provides as follows; J9 of 15 Where any dispute arises as to the terms and conditions of an oral contract other than a contract for the employment of a casual employee, and the employer fails to produce a record of such contract made in accordance with the provisions of this section, the statement of the employee as to the nature of the terms and conditions shall be receivable as evidence of such terms and conditions unless the employer satisfies the court to the contrary. We have not seen any documentary evidence to show the conditions of service prevailing at the time of the transfer. In his evidence the Respondent stated that he requested payment of subsistence allowance and transport allowance but to no avail. The Appellant has provided no documentary evidence of transfer and we can all but guess the rate or quantum of subsistence allowance enjoyed by the Appellants employee's when working away from station. We are, in any event, unable to fathom to what extent the K100 given to the Respondent was supposed to cover his expenses for a period of close to one (1) year. The trial court found that there was no documentary proof that the Respondent was transferred to Lusaka and was thus on terra firma when it accepted the Respondents testimony that he was entitled to subsistence allowance. The court however omitted providing the rate at which subsistence allowance should be paid. This ground of appeal therefore fails but on account of the fact that the Respondent did not state how much subsistence allowance J10 of 15 he was entitled to we order that calculation of the rate be referred to the Deputy Registrar. We now direct our mind to Grounds One and Three which are knotted. It is not in dispute that the Respondent was placed on suspension, a fact that the Appellant has admitted, however this entire case is hinged on whether or not the Appellant is still in employment. Mr. Chenda quite elaborately submitted on the effect of suspension and bolstered his argument by citing various authorities. He argued that the Respondent is still in employment and therefore not entitled to the awards pronounced by the lower Court. The nucleus of his argument is that the Respondent is still on suspension and that the Respondent went to Court before the Parties concluded with the disciplinary issues the Respondent was facing. The letter from the Appellant, dated 24th July, 2014 stated that the Respondent was to be placed on suspension until further notice for failing to comply with company rules and regulations. Like all other aspects of this employment contract, read on its own, the letter was bland and quite unhelpful as it does not refer to precisely which company rules and regulations. The testimony of both parties does however confirm that the suspension resulted from disciplinary hearings held on the 23rd and 24th July, 2014. The letter was also unusual in that it carried a seemingly high handed sanction of indefinite suspension. J11 of 15 The Appellant and the Respondent have both made reference to constructive dismissal. The Respondent is of the view that the behavior of the Appellant caused him to institute proceedings before Court which shows that he was no longer interested in working and as such this amounted to termination of the contract by way of resignation via the Court. Conversely, the Appellant contends that the elements of constructive dismissal were not established. We refer to the case of Kitwe City Council v William Ng'uni(6) in which the Supreme Court had occasion to opine on the circumstances under which a contract of employment is terminated by an employee for the reasons of an employer's conduct. Relying on the test for constructive dismissal expounded in the English case of Western Excavating Limited v Sharp(7), which test poses the question; "Did the employer's conduct amount to a breach of contract which entitled the employee to resign?" they found, in that case, that the Employer's conduct did not breach the contract and therefore the plaintiff therein could not have been constructively dismissed. In a recent case of, Chilanga Cement, Plc v Kasote Singogo(2) the Supreme Court stated that: "The notion of constructive dismissal is anchored on the concept that an employer must treat his employee fairly and should not act in a manner that will compel the employee to flee his job". In the cited case, constructive dismissal was discussed at length and the Court considered and analyzed the case of Courtland's Northern Textiles Ltd v Andreas) where the Employment Appeal Tribunal stated that: J12 of 15 "An employer must not, without reasonable cause, conduct himself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between the employer and the employee" The Supreme Court arrived at the conclusion that an employee can claim to have been constructively dismissed if he resigned or was forced to leave employment as a result of his employer's unlawful conduct, which conduct amounts to a fundamental breach of the contract of employment thus it is the employee who makes the decision to leave. Bringing our attention back, to the case at hand, the facts reveal that there was no resignation or termination of employment by notice on the part of the Respondent to satisfy the elements of constructive dismissal. There was therefore no constructive dismissal. There was no fundamental breach of contract when the Respondent was suspended but it is rather odd that he has been on suspension for almost 3 years from 24th July, 2014 to date. The effect of suspension in a contract of employment was discussed in the case of Joseph Gereta Chikuta V Chipata Rural Council(9) in which the Supreme Court concluded, after an analysis of the case of Wallwork v Fielding(10) which case was authority for the proposition that the suspension J13 of 15 operates to suspend the whole operation of the contract for both parties. The Court went on to state that suspension cannot affect the question of termination such as to create any supposed legal impediment which takes away the right of a person not to be forced to work or to continue to work for another. On the issue of salaries paid during suspension, the Supreme Court, in the case of Kitwe City Council v William Ng'uni(6), held, as they have previously stated in many cases, that: "...you cannot award a salary or pension benefits, for that matter, for a period not worked for because such an award has not been earned and might be properly termed as unjust enrichment..." On the strength of the above cases, and indeed those cited by Mr. Chenda, there cannot be any payment by an employer for a period that an employee has not performed his obligations. It is rather unfortunate that there was no disciplinary procedure manual or code produced in court to assist the Court arrive at a firm conclusion, however, the documentary evidence available shows that there was a suspension. The Respondent did or said nothing to show that the sanction levied on him was not commensurate with that indicated in the conditions of service. He cannot therefore be awarded salaries whilst on suspension as this will undeniably amount to unjust enrichment. J14 of 15 This being the case, Grounds 1 and 3 succeed to the extent that the Court misdirected itself and the orders made are set aside. In deciding as we have, we are alive to the fact that the circumstances created by the Appellant's conduct as well as that of the Respondent, shows that the relationship between the parties cannot warrant an order of re- instatement into full time employment or to lift the suspension. We have had the opportunity to peruse the contents of Sections 65 and 70 of the Employment Act, which provisions read as follows: 65. Wherever, upon a report made to him under the provisions of section sixty-four, a labour officer considers that a breach of the provisions of this Act has been disclosed, he may refer the matter to a court. 70. (1) Notwithstanding the provisions of any other law, a court to which any matter is referred under the provisions of section sixty-five shall have jurisdiction- (b) to terminate a contract of service upon such terms as to the payment of damages and otherwise as it thinks fit; J15 of 15 According to a letter dated 8th December, 2014, the Labour Officer did refer this matter to Court and as such we will invoke the provision of Section 70 above. This Court has the power to terminate the contract and award damages. Looking at the circumstances, we believe the period of suspension coupled with the fact that the Respondent has not been receiving any income for over 2 years, was unwarranted. We accordingly terminate this contract of employment forthwith and award the Respondent damages in the sum of 36 months basic pay plus allowances due. Because the appeal has been partially successful, each party shall bear its own costs. Dated this 7-iin day of (cid:9) July, 2017 C. K. MAKUNGU OURT OF APPEAL JUDGE J. CHASHI (cid:9) M. M. KONDOLO SC COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE