Timothy Hamundu Muuka Mudenda v Tobacco Board of Zambia (Appeal 32 of 2002) [2003] ZMSC 170 (15 May 2003)

IN THE SUPREME COURT FOR ZAMBIA APPEAL NO. 32/2002 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: TIMOTHY HAMAUNDU MUUKA MUDENDA APPELLANT AND TOBACCO BOARD OFZAMBIA RESPONDENT Coram: Ngulube, CJ, Chirwa and Chibesakunda JJS on 9th May 2002 and 15th May 2003 For the Appellants: Mr F C Kongwa of Kongwa and Company Advocates For the Respondents: Mr H Silweya of Silweya and Company JUDGMENT Chibesakunda, JS, delivered the Judgment of the Court This is an appeal against the High Court’s decision dismissing the Appellant’s claim against the Respondent, his former employers, that the termination of his employment with them was premature and therefore null and void. The Appellant’s prayer was for reinstatement as well as payment of salary arrears and other perks which he was entitled to as an employee of the Respondent up to the time of the purported dismissal. He had also prayed that he be allowed to purchase the house he used to occupy as and incidence of his employment - house number 5036 Kwacha Road, Olympia Park, Lusaka. The Appellant’s evidence before the High Court was that he was employed as accountant in charge of Accounts Department. J2 According to his conditions of service he was to retire at the age of 60 in the year 2008. He joined the Respondent Company in 1974. Contrary to his expectation he was given early retirement in 1995. The letter of early retirement to him dated 9th November 1995 reads inter alia:- “Following the letter MAFF/53/7/7 of 22nd September 1995 from the Ministry of Agriculture and Fisheries and our subsequent discussion, I wish to confirm that you will go on early retirement with effect from 31st December 1995 to allow for a smooth handover. Your retirement package in view of the years you have served would be based on ten (10) years as follows:* a) b) c) d) In lieu of Notice - 3 months Retirement Benefits - 20 months Repatriation Allowances - K200 000 00 Leave Days earned- 61 days The Board shall deduct any amounts owed by you and you will be allowed to stay in the Board House for six (6) months from you last working day of 31st December 1995.” This letter quotes another letter from the Ministry of Agriculture, Food and Fisheries dated 22nd September 1995. The letter which is quoted came from the Permanent Secretary and it states:- “RESTRUCTURING OF MAFF AND ITS PARASTATALS.. Please refer to our discussion this afternoon (Simumba/Mukutu) with regard to the restructuring of this Ministry. As the Ministry proper is being restructured, by implication there is need for the restructuring of its Parastatais. J3 In this regard, staff positions must be regarded as vacant and incumbents in these positions have to reapply for appointments. To do this applicants must indicate their qualifications both academic and professional and why they think they are the best persons to occupy the positions. With the foregoing background you are instructed to do the following: a) Re-examine and draw up the organizational structure of Tobacco Board, which you think may best serve the objectives for which it was created. Please indicate both the structure and the minimum staff numbers required. b) The serving officers must indicate their qualifications together with attachments of their certificates. c) The incumbents must outline briefly the main functions of their positions and indicate why they think they are the most suitable to occupy the positions. The foregoing applies to all serving officers in your organization including Mr Nyirongo, Accountant in the former National tobacco Company. This is required very urgently in order to assist my office strengthen the Tobacco Board and improve its efficiency.” The Appellant told the High Court that he was prematurely retired because he had not yet attained the age of 60. He was not eligible for early retirement because according to the conditions of service, one had to apply for early retirement and the approval of the early retirement arrangement had to be in writing. He referred to Clause 8 of the Tobacco Board of Zambia Pension and Life Assurance Scheme Rules, which was on early retirement, which states inter alia: J4 “With the employer’s consent a member may retire from their permanent service at any time before the normal pension date but after his 55th birthday or at an earlier date if such retirement is on account of any infirmity of body or mind...” The Appellant told the court below that he was only 47 years old and he had not applied for early retirement. He went on to confirm to the court that no reasons were given for sending him on early retirement except to refer to the letter from the permanent Secretary, Ministry of Agriculture, Food and Fisheries. He went on to state that his employer was the respondent and not the government. He testified however that as a result of this retirement he was now not receiving a salary, allowances or other benefits. He was evicted from the house. He went on to say that had he worked up to 60 years he should have planned his life effectively. He should have qualified for pension, to receive it until his death. Because he was retired early he was only paid his pension contribution minus his employer’s share. He went on to say that had he served his full term he would have bought the house in which he was staying as a sitting tenant. He referred to the Board of Directors’ resolutions given on 29th July 1997 approving sale of houses to sitting tenants and deserving members of staff. He further stated that as a result of this resolution the Defendant sold his house to a member of staff another tenant who was living in the house after he left his employment. The Defendants employed another accountant by the name of Chisala. He urged the court to order that this house be sold to him. In cross-examination, he denied ever having discussed with the Respondent on his early retirement. According to him the early retirement was decided by the Board of Directors’ secretary and the Ministry of Agriculture, Food and Fisheries. That is why they wrote that minute to the Respondent. He insisted that the pension rules were part of his condition of service. J5 Being referred to clause 34 (iii) of the Tobacco Board of Zambia Service Regulations which stipulates that an officer is eligible to be discharged owing to the abolition of office or re-organisation or readjustment of department or office, or if his removal will facilitate improvement in the organization or department or office to which he belonged, he maintained that his employment was not terminated in accordance with that clause because this clause was not announced in this letter of termination. On the counter claim he maintained that a sum of K6 576 000 00 had been spent on renovations and not the repairing of the house. He went on to state that the kind of house he was living in as an incidence of his employment was worth K300 000 per month as rentals. However he denied the suggestion that he had to pay the rentals for that house he lived in during his employment. The Respondents on the other hand testified that the Appellant’s contract of employment was rightly terminated. They argued that the Ministry of Agriculture, Food and Fisheries gave instructions for the reorganization of the Respondent and that his letter was in line with what was happening in the rest of the Ministry. According to them Clause 34 (iii) of the Service Regulation stipulated that the Respondent had a right to terminate employment of any of its employees on account of restructuring, reorganization or readjustment of departments. As such, although the Appellant could have worked up to the age of 60 years however because of certain factors that was not possible. So the Respondents were right to have offered early retirement on account of reorganization and restructuring in accordance with the instructions from the Ministry of Agriculture, Food and Fisheries. On the question of selling him the house which he lived in as part of conditions of service, the Respondents argued that they had already paid him all his terminal benefits by the time there J6 was Presidential direction to sell of houses to civil servants and public workers. Their argument is therefore that he ceased to qualify to buy the house under that scheme. They also testified that there was a discussion between DW3, Mr Simumba, and the Appellant and that the Appellant agreed to have his employment terminated under Clause 34 (iii) of the conditions of service. It was further stated in the evidence by the Respondents that at the time the Appellant’s employment was terminated there was no Board of Directors in place so the operations of the Board had reverted to the Ministry of Agriculture, Food and Fisheries. Now before us Mr Kongwa for the Appellant argued on five (5) grounds:- 1. That the learned trial Judge misdirected herself in making her findings that the Respondents’ pensions and life insurance scheme were not integral part of the main conditions of service and that the main conditions of service did contain a clause on termination by early retirement. According to him the learned trial Judge erred in law in making such a finding. 2. That the learned trial Judge erred in law in accepting the Respondents’ position and holding that early retirement fall under Clause 34 (iii) of the conditions of service and that the early retirement was alternative to a discharge. 3. That even if the court was right in holding that early retirement fell within the letter and ambit of Clause 34(iii) of the conditions of service the learned trial Judge nonetheless erred in not dealing with that specific provision of restructuring programme stated in the circular letter by the Ministry of Agriculture, Food and Fisheries. J7 According to him had the learned trial Judge done so she could on the balance of probability have come to the conclusion that the Respondents did not comply with the procedural requirements. According to him failure to comply with the procedural requirements should have made the learned trial Judge hold that the termination of the Appellant’s employment was null and void. 4. That the learned trial Judge erred in law and fact in agreeing with the defence on the counter claim for mesne profits and the costs for repairing the house in the absence of documentary proof. 5. He argued that the learned trial Judge erred law in holding that at the time of the purported termination of employment the Appellant did not have accrued right to purchase the house he occupied by virtue of employment. Mr Silweya on the other hand argued that the court below did not err in holding these findings. On ground one, he responded that since the termination of employment was done under Clause 34 (iii) of the conditions of service and on negotiated terms the separation was not null and void. See Africa Association Limited vs Allen 1919 1KB 396 and Contract Haulage Limited vs Mumbuna Kamayoyo 1982 ZLR page 13. On ground two Mr Silweya argued that the letter of separation clearly spelt out to the Appellant the reason for separation. According to him the separation under Clause 34 (iii) has the effect of shortening the period of employment. He argued that the learned trial Judge must have accepted that there were good reasons for restructuring which necessitated an early retirement for the Appellant. He went on to say that although payment of pension to an employee who is leaving employment on early retirement may be implied, in this case, however, the Appellant did not plead this. - J8 - Therefore it was wrong for the Appellant to have referred to this issue when they did not plead that. On ground three, it was Mr Silweya’s argument that they were not to refer to the specific programme on restructuring. On ground four, Mr Silweya’s response is that the Appellant himself testified that the house he lived in, on the given market value, would have gone for more than K300 000 00 per month as rental. So it is surprising that the same person now says that there ought to have been documentary evidence to support the K300 000 00 rentals for that house. On ground five, Mr Silwya argued that since there was evidence that the Appellant was separated from his employment before the Presidential decree to sale houses to sitting tenants, he had no accrued right to purchase the house from Tobacco Board of Zambia. These were the arguments before us. We have considered the arguments and the record before us. We note that the learned trial Judge accepted the evidence of the Respondent that Clause 13 (iii) of the Tobacco Board of Zambia Service Regulations provide for an officer to be discharged if his office has to be abolished or reorganized or re-adjusted to facilitate improvement in the organization or department to which he belongs. He also accepted that Clause 8 of the Tobacco Board of Zambia Pension and Life Assurance Scheme which deal with early retirement, allowed an employee of the Tobacco Board of Zambia to retire with the consent of the employer from his/her permanent service at any time before the normal pension date which is 55th birth day or at an earlier date if such retirement was on account of infirmity of body or mind. The learned Judge held that DW3 negotiated the early retirement package with the Appellant. Because of all these facts which the learned trial Judge accepted, the court below held that the Appellant was properly given an early retirement. We cannot fault the lower court on such findings of fact. J9 Also As Mr Silweya correctly pointed out the Appellant never pleaded to be awarded pension contribution. The arguments before us on this point could not be entertained by us. Coming to the issue of purchasing the house, the Appellant lived in as part of his conditions of his employment, the court below found as a fact that the Appellant ceased to be a sitting tenant because of being offered early retirement package before the Government decided to sell houses to sitting tenants. The court below therefore held that the Appellant’s application to purchase the house in question was made after he ceased to be an employee of the Tobacco Board of Zambia. As such there was no legal basis for him to purchase the house in question. On the counter claim by the Respondent although we agree that there was no documentary evidence to support the rentals of K300 000 00 per month for the house in which the Appellant lived as part of his Conditions of Service, however we agree with the Respondent that the Appellant himself was the one who suggested the figure of K300 000 00 per month as a market value rentals for such a house. Consequentially when the court ordered K300 000 00 as rentals at the end of the day this should not have surprised the Appellant. We cannot fault the trial Judge’s reasoning on any of these grounds of appeal. We therefore find no merit in the appeal. We dismiss the appeal. However taking into account the fact this matter has gone on for sometime we order no costs. M M W S Ngulube CHIEF JUSTICE D K Chirwa SUPREME COURT JUDGE L P Chibesakunda SUPREME COURT JUDGE