Victoria Chileshe Sakala v Spectra Oil Corporation Limited (Appeal 2 of 2016) [2018] ZMSC 320 (7 September 2018)

I N THE SUPREME COURT OF ZAMBIA &PPEAL NO. 02/2016 HOLDEN' AT BUOL ICivil Jurisdi ion) BETWEE,N1 VICTORIA CHILESHE SA. KALA AND SPECTRA 10IL CORPORATION LIMIT'ED RESPONDENT . - CORAM Hamau11idu I Kaome. 21-11d Kabuka, JJ S. On 4 h Septemb r ~O l " and 7 -1 September FOR THE- APPELLANT ,n Person FOR THE RESPONDENT Mr. Lmyam~ Messrs. Eri.c SHwam ba J ,alasi & Linyama. Legal Pra,cti · one rs. JUDG,MENT KABUKA, JS; deHv red the Judgi:p.ent of the Cour . Cues refer-red to = l. Chilanga Cern n. Plc v Kas,o" e ,. Jn.gog l:l009J ZR 122 (SC), 2 . Kabwe v BP jZam.bia,. . Lirr(tcd j 995 - 1997) ZR 2 18, 3. Mususu Kalen.g~ Bwlding Lfm-ited and Ano her v Riehman 1s Mon ·. L nd,ers-Enterpr·s (1999J ZR 27. 4 Zamb·a Privatisati,on Ageocyv J::tmes Mata. I 199S.-l1997) ~R S7 , 5 , Redril2a Lirnired v Abuid Nkaz ... and ther fSCZ ulgm n No. 1 2011) . ·- J2 6, Contract Haulage· Lim1ted v M umbuwa Karnayoy(, (I 9821 ZR 13. (SC), "t, Mllmba (Musonda Gerald) v Maamba Collieries Ltd {l.989) ZR (SG) , S. Barclays Bank PLC v Zambia Un icJn of F'inaodal Institution and Allied Workers SCZ !'2 of 2007. 9. Shamwana and 7 Others v The· P~ople (l 985) ZR 41 (SC), Legislature and Other Works referred to: l, The Employment Act, Cap. 268, SS.261\, 268 , 36. I. Employment (Amendment) Act No. 15 c,f 2015 Q. The Minimum Wagt,!s and Conditions of Employment ,(Genetal) Order, 2011, S.l No.2 .of 2011 :,3. 'fhe Industrial and Labour Relations Act. Cap 269, SS. 63( 1 ); I 08 (I). 4. Pension Regulations Act No. 28 of 1996. 5. Ha.lsbury's Laws of E:ngl.inct 4 111 Edilion, Vol ume 16, parsgl'aphs 572 and 607. By a judgment da Uvered on 111h September, 2015 the High Court dismissed the appellant's claim that she was terminated by reason of redundancy and entitled to redundancy benefits . The· court found that in terminating tbe appellant, the respondent properly 111.voked the termination clause in her contrac t. of .employment, by paying the appellant three months' salary in lieu of .notice. Aggrieved by that fi.ndiJ.1g, the appellant has now appealed to this Court . ' l . . J3 The relevant facts of the matter are that on 20111 June, i 998 the appellant. was offered employrnent as secretary to the respondent's Deputy Managing Director. The conditions of service were set out on a. one paged document attached to the offer letter and provided for a sa!ai:y of Kl ,050.00 rebased inclusive· of aJI allowances; thirty leave days per calendar year; and three months' termination notice by either side. There was no provision for early retirement or reduhda1ioy. The appellant indicated her acceptance 0f employment. on those terms, by appending her signature on the said documeht. Some ten yea.rs later, on 1sr May, 2008 the respondent enhanced the conditions of service for all its employees. b y introducing pension benefits managed by the Saturnia Reg1n·a Pension 'Prust. After working as secretary to the Deputy Managing Director for thirteen years, the latter passed away on 6111 Novernber 1 201 l " Followin g his d.eath, the appellant was re-assigned to work as secretary for the Chief AccountcU1t.. On 30th January. 2012 whilst the appellant was working for t.he Chief Accountant. her contract of employment was terminated with effect from 31'" January, 2012. The letter of termination advised the appellant that she would be paid tbree months' salary irl lieu of notice; her January, ~ ' . J<l 20 l 2 salary; the cash equivalent of her accrued leave days, less tax aud monies owed to the respondent in respect of advances and loans. The appellant was further advised that she would be paid Jler pension entitle1nents from Saturnia Regina Pension 1'rus1., in accordance with the Trust rules. The record shows that 1n her evidence given at tli t! b-!al of the matter, the SJ>pellant admitted that she was paid a pension of K44,000.00 by Satumia Regina Pension Trust. Although the appellant was paid all tenninal benefits in line with w1:J.at the respondent believed was due to her, It was still her contention that she had been terminated by reason of redundancy;· and underpaid her benefits in the sum of Kl92 ,780.45 rebased. The appellant also claimed she was entitled to payment of a long service moneta.ry award given to all the respondents' employees upon c}()cki.ng ten years of service , as provided for in the respondeot 's Manual on General Conditions of Service. In pursuit of her clajms, the appellanl issued a Writ of Summons frorn the High Court against the respondent. seeking an order that her employ111ent was terminated due to a redundancy after the death of lhe Deputy Managing Dirc.:ctor; ond •• • "I \. J5 Was· entitled to the sum of ~192, 780.45 red'undancy monies t1nderpaid to her for the 13 years that she worked for the respondent; a long service award; repatriation allowance; interest on the sums found due and costs. The respondent tb defence, denied the appellant was entitled to her said claims and contended that, it merely exercised lts right to terminate her services in line with her conditjons of service which provided for tenuination by either pany givin.g tbe other three months' notice. The respondent also den1ed that the appellant was tenninated due to redundancy on the oasis or the demise ·of the Deputy Managing Director, as aft~r his death, she was r e--assigned to work as secretary for the Chief Accountant for about three months before her said termination. The underpayment claim was also denied on the ground that, the appellant was only entitled to 1-efund of her en1pI0yers and her owo pension contributions from tJ1e Pension Fund. The respondent further denied the appellant's claim of entjtle-ment to a long service award. on the basis that it had nothing to do with the termination of her employment. ,, • ' . J6 The respondent however, confirmed that. tht: appellant was emp!oyed on a permanent and pensionable basis and was entitled to certain allowances that accrued when need arose, such as working out of her station or when attending training workshops. The respondent also confirmed that the appellant's basic salary was inclusive of housing and other allowances. After healing evidence , th e trial court cons-idered the argumen ts by the appeUant, U1at in terminating her employment the respondent did not comply with the redundancy procedurs.l requirements of section 26B of the Employment Act Cap 268 . Numerous auth.orit.ies from other jurisdictions were cited by the a ppella nt. which set out the test to be usea by the oou rts In detennirting whether or not there was a redundancy. 'Tbe teamed judge observed that the r esponsibility of djscharging the burden of proving her drums, on a balahce of probabilities, was that of the appellant. In this regard, she noted rba t the only conditions of service filed on record relating to the appellant's contract of employment were those contained in the document attached 1o her ofter letter, ln terms of her srud conditions and the evidence adduced 1 the court found th.e J7 appellant was paid three months' salary in lieu of notice; other accrued entitlements as well as her pension benefits, The court however, found the main thrust of the appeUaru.'s case was that she had been rendered redundant on account of the death of the Deputy- Managing Director, following which according to her, that position was aboHshed . On t hat evidence, the finding of the trial judge was that, even if lt were ac;cepted that the position of Deputy Managing Dfrector had indeed been abolished, that fact alone did not a.uto1natlca.lly render the appellant· redundant. 'l'he trial judge referred to the case of Chilanga Cement Plc v ltasote Singogo 1 where this Court held that section 26B of the Employment Act providing for redundancy did not apply to wi,itten contracts but was intended to safeguard the interests of lhose employees who were on oral coTitracts of service, As this was tbe sectton which the appellant had sought to rely on, the trialjud,ge found it did not apply to her situation. tn the absence of any evidence produced by the appellant to show that in terms of ber substan{ive condJtions of service, her t enntnation was dite to redundancy, the trial. judge found that the respondent had I • J8 sirnply e.xercised its right to tenninate the appellan~'s employment by ordinary notice. pursuant to section 36 of the Employme-nt Act , which is a lawful way of te-rminatiog a contract of employment, The teamed judge further considered thcr r esponde nt's defence. that the appellaut had been paid atl lhat was due to her which the appellant did not counter by producing any evidence to prove that h er pension contributions were indeed underpaid. Accordingly, the trial judge found the appeltanl had fatled to prove her claims· of entitlen1ent to redundancy b~nefits ana dismis sed her action. Dissatisfied with those findings , the appellant has brought her grievance to this Court on a ppeal, citing four grounds whtch are couched in th e following terms; 1. the trial judge mis<Urected herself in fact and law by not determining the termination of e mployment as a redundancy in the face of overwhelming evidence; Z. the trial judge misdirected herself in law and fact by holdin_g that the employment was contractual when this was not so; 3. t.he bial judge mi.sdirected herself in law and fact ln finding that there were conditions of service inclusive of a pension scheme in existence; 4 . the tr,ial judge misdirected herself in fact and law in f'indin_g that the termination of employment was lawful, agafni.t the laws of natural' justice. ,, J9 In the heads of argu1nent filed in support of her grounds of appeal, the appellant in grounds one and fow: 1 anchored her arguments on the premise that she was rendered redundant by reason of the death of her unrnediate boss, the Deputy Managing Director-. She also argued that the respondent in dismissing her had contravened the rules of natural justice, She relied on the case of Kabwe v B . P. Zambia Limited2 which prohibits the tem1inatlon of an employee's contrac t on grounds related to conduct or p erformance, without affording the employee with an opportunity to be heard. From those arguments, i1 appears the appellant's contention is premised on unfair termination on the basis that, she was not charged w-ith any offence and neiU1er was she .afforded a hearing prlor to her said termination. ]n the event, that the learned judge erred in he!' finding that her contract had been 1ermlnated lawfully and on the basis of which she did not award her any compensation. Tbe appellant further argued that, the judge erred tn law and fact when she did not consider the Minimum Wages and Conditions of Service, Statutory Instrument No. 2 of 201 1 atr1d thereby failed to find that the respondent was In cohtraven tlon of .. \ . 4.', • JlO sections 63(11 and 108 (1) of the Industrial an.d Labour Relations Act. We are at a loss to appreciate this argument In grounds two and three, the appellant faults the trial judge for referring to the Singogo 1 case. The argument here, was that there was a formal contract of employment in that case, which was not there in her case. That as the appelhtnt was selv'ing on 'permanent terms' of employment, the1•e could be· no lawful termination of her employment before she attained the then, statutory retirement age of 55 years. The appellant's submission on the point was that, the trial judge erred in finding she had conditions of service when the docun1ent in issue, upon which the judge. re!led was 1lot even authenticated by ilie Labour Commissioner. The appellant went on to argue that, the judge also failed to consider that she was wrongly paid her pension by Satum1a Regina Pension Trust .as the said entity was not duly registered and licenced as required by law. The submi:;sion was that. the learned judge ought to have taken judicial notice of a Notice issued by the Pensions lnsurance Authority listing tt,e registered pension managers in accordance with the Pension Regulations Act No. 28 of 1996. That as the respondents' Pension Fund was • . ' r Jll rtot so listed, tbe sum of K16) 190.22 rebase.d, ,-..,ithhold:ing ta.'t, was unlawfully deducted from her pension benefits and ought to be paid back to her. In their response, the gist. oi the argwnent by counsel for the respondent was that grounds one, three and four of the ap pellarit's appeal essentially raise the same issues: (i) that tl~e jud_ge did not consider :redundancy as a reason fo r termination; (ii) she conclu ded that there ,vere conditions of service when there were nonci and that, (iii) the n1les of rtat1.ual justice were not observed , The respondent sub,niltcd that, the test. f<,r rcdl.l.ndancy is essentially that the employee's work rnus1 not be available, at all, and that this was not the case with the appellanl's situation as the respondent was still in the same business and the work force had not been reduced. What the respondent s imply chose to do, was to exercise its right to terminate the existing relationship and the onus was on the a ppel)ant to prove, based on her contract of service, that she was terminated by reason of redundancy, Counse1 argued that, the appellant cannot rely on section 26B of the EDi-ployment Act which applies to o-ral contracts, as she was employed on the basis of a written contract. 'The case of - . '.. Jl2 Si0gogo 1 , amongst others. was cited in suppon of !l1e respo11dent's submission that, the appellant's claims should be disregarded for not being supported by any law. That it was a lso misleading for the appellant to now contend that there were no conditions of service when in her evidence given at the trial she admitted her conditions of employment were attached to the letter of offer. On the appellant's assertions that the learned judge should have taken j u dicial notice of a public notice issued by the Pensions lnsUTaoce Authority, the respondent's positJon was that the appellant. was now seelang to adduce fresh evidence she did not present before {.he trial court. Vaiious authorities mcluding Mususu Kalenga v Building Limited and Another v Richman·s Money Lenders ~nterprise3 were cited iu support of the principle tJ1at, where an issue is not raised for adjudication before the trial courL, It cannot be relied Upon on appeal. It was further argued that the said notice could, in any event, not apply to her case as It. was bnly released in January, 2015 long after the appellant was terminated, on 30th Jru:iuary, 2012 . The respondent's submission was that, as her lertnination was purely based on payment made in lieu of notice pursuaot to .. j ' ,section 36 o~' e Gmpleyment. Act- the purported requiremefft to hear the app,ell nt did t v · rise. The respondent cited several English cas,es and sorne from ow J i-isdictiiein, in arguin ,. h point · hat he ap ellan t was bound b- th · contractual terms _on ai d in h _r _pointinen · le··ter whoie accept -nee . 1-;e , pending her signature to the attached d-0cument ~o taining ·h conditions of se:rvice. It was fur 'ber submitted a . ·n p u re master erv-11 rel tior1ship, Lt th, appellan -h espo nd n had lawfully ace c· s.ed j ts rigt rminate he - ployme· t n ·. a t and t: , l . "TI d Judge o ld On. gr nd ' w h r -p,on -\ · 11t-= hs gr ou nd a pre ented by th a:ppeUan wa in oherent and misl ading. Thal ·h _ ppeU n .h re was 1 o u· tract afemp yment when clau e 3 of · o t: nn nat~ by giving the othe.r three - · n - o _e The resp ond _nt su _rn ·_.ted tha i is e writ en contract. lha t •. fully f the app lla mp1oym n b payrng he three lS salary . ~ ·1, u - no · -e.. We. \. Ii. ere a.ocordjngly ,J14 At. (be heaJing of the appeal, both parties indicated to the Court that they would entirely rely on their written heads of argument lileq on record . We further granted the appellant leave to file her written reply to the respondent's h eads of argument and. submissions. We have oonsidered the evidence on record, the heads of argument filed by the a_ppellat1c iD person and those by counsel for the respondent. l n our vi.ew, the only q uestion arising for determination in this appeal oti which aU tJile grounds and argwnents ,vill stand or faJJ , is whether the a ppellant 's employment was la\vfully terminated in accordance with her contract of employment. The relevant facts in determining that question as earlier highlighted, s h ow the a ppellant was employed on 22nd Jw1e, 1998. Her offer leu.er dated I 2th June, I 998 at pages 32 - 33 of the record, refers to her co ndition s of service, appeaiing on page 34. The said conditions of service provided for her responsibilities; commencen1ent date of h er employment; conditions of service relating to her salary; leave days; probation period: and termination of employment by either si de giving three months' notice to the other. Through a lette r d a ted 3 0 1h January, .. , ·~ \ Jl5 the respondent chose to tenninatt: the appellant's employmen t without notice by paying her three months; salary, ins,ead. The appellant's grievance 1s hinged on tbe· fact tha,t. no reasons were given for the termination of her employment. Suffice in this regarcl to .state that, parties to a contact are always at liberty ,to terminate it. This is a trite legal position, which obtains even at comrnoll law, that any con tract of employme-nt is terminable by the givi,ng of reasonable notioe. According to learned aulh-01:s of Halsbu.ty's Laws of England 4 t11 Edition, Volume 16 paragraph 572 every contrac;t of employment however dest.-ribed, is terminable for a variet.y of reasons: 'l In general, a contract of employment may be discharged by per-fonnance, mutual agreem.ent. by impossibility of perfo1::mance or by death of either the empl oyer or e mployee." This Court has s imilarly restated that position of the law in past decisions incllllding the case of ZamJ>ia Privatisation Agency v Matale4 which was cited by the learned trial judge, that· "The payment in lieu ot notice was a proper and a lawful way of terminating t he respondent's employment on t:he basis , . I _. J16 that, in the absence of express stipulation, every c onµact of employment is determi nable by reasonable notice ... We have reinforced thar position in various other decisions, including lhe case of Redri1za Limited v Abuid Nkazi and Anothet5 where we stated that:· ••rn th.is case, the. appellant was within its right, to terminate· by notice as provided in the contract. If" the appellant had terrohiated ou-tside the contract, our views 'Would hav.e been different," Further, the case of Contract Haulage Limited v Mumbuwa Kamayoyo6 is authority for the proposition thal in .a pure master and servant relationghip, an e1nployer could terminate an employee's contract of employment for any reason or no reason at all. pn~vided they complied with the notice period or paid the employee in lie1.1 of givi.tlg ~ucb notice. In line with that reasoning, in a later case of Gerald M\lsonda Mumba v Maamba Collieries Ltd7 we stressed the point th at, it Is the giving of notice or pay1nent for the notice period which terminates a contract of employment, in the following words: ''The employer, in this case the respon dent, was perfectly entitled to give notice for no reason whatsoever. In this respect, we djsag:ree with the learned trial commissioner that, if a reason is given for termination of e~ployment, that reason must be substantiated; that is not the l aw. It is the giving of notice or- pay • . ,\ • > Jl7 in lieu that terminates the employment:, A reason is only necessary to justify summary dism1ssal without notice or pay in lieu. " (llnderlining for emphasis only) That position notwit.hstancling, we are alive to the fact. that since the coming into effect of the Elllployment (Amendment) Ac t No. 15 of 2015, which amends section 3 6 o( the Employment Act, Cap 268, an employer is now required to give a valid reason for termination of an employment contract. Unfortunately for the appellant, as the law does n ot generally apply retrospectively, she cannot -rely on this change iFJ th e law as her termination was effected three years prior t.o the enactment of the said amendment. In the even t., we are left with no legal basls fot rever sing the finding made by the trial judge, that the respondent was wi.thin its right to terminate her contract by payment in lieu ef notice without giving atly reasons, at all. The record shows the triaJ judge's finding had both the support of clause 3 of the appellant's contract 0f service as well as section 3 6 of the Employment Act, as it existed at the time . Accordingly, our answer to the real question raised in this appeal of whether the appellant's employment was properly ten ninated by payment of three 1nonths ' salary in lieu of notice, is in the affirmative. •• \ • ,l J18 We will now proceed to consider the four grounds of appeal and for oonveniencc. will s tart with gr0ut1d one, go on to ground four, after Which we w111 tackle ground two and conclude wlth ground three. Haviog determined that the appellant's contract was lawfully terminated by payment in lieu of notice, the issue of redundancy as the reason for termination, constit uting ground on,e of the appeal falls away. Even assuming we were to consider the question whe ther the a.ppeUant's terrrtlnation was infact a redundancy, there i-s no evidence whatsoever on record to support that propositioa. ln our view, the mere abolishing of the position of Deputy Managing Director did not mean abolishing the position of ·secre.tary in which the appellant was employed. To the contrary, evidence on record shows her posttion continued to exjst as confirmed by her re-assigning to the Chief Accountant to whom she continued rendering the sarne secretarial services after the death of the Deputy Managing Director. Th e truth of the matter is that the appellant was never declared redundant, and h er conditions of employmen t did n ot provide for redundancy, She could also not rely on sections 26A and 268 of the Employment Act, Cap 268 which only apply to or al contracts • l ·• " Jl9 when her contract was written. l'hls was our decision in Barclays Bank v Zambia Union of Financial Institution and Allied Wotkers8 • The same fate befalls ground four, in which the appellant alleges that she was not heard. Suffice lo state that., when a contract is detennined by notice. there is no obligation 0 1, the employer as the party termiJ~ating, to hear the employee . Coming back to ground two which seems to suggest that there was no contract, counsel for the respondent has s1._1bmitted that this ,ground is incompetent and incoherent, We agree. At the most, this is a_ misplaced argument and not a ground of appeal. The .appellant herself in her evidence appearing at page 47 of the record of appeal admitted that, she µhad a written conr.ract of employinent." Unless, of course, the appellant's a.rgument is mat th~ contract was oot valid. [f lhat. be the case·. r.herc is s till 110 evidence to support that proposition on record. The Minimum Wages and Conditions of Service Statutory Instrument No. 2 of 2011 which the a,ppe llaht s oug.ht to rely on ln default of a valid contract, does not apply to employees serving on written con tracts and we have already accepted the learned tria.1 judge's finding on the evidence, that the appellant was serving under a ·~ •• J20 v.alid written contract of erriptoyrnenL Section. 63(1) or the Indus trial and Labour Relations Act, cited by the appellant also relates ro collective agreements normally negotiated by Unions on behalf of Employees and provides for l:he registration of employers. Section 108 (1) provides restrictions on various modes of discriminations in em131oyment. It is not clear how lhe appellant intended these sections to assist her in arguing her appeaL Both sections however, apply to matters commenced before the lndustrial Relations Court and have no relevance ·whatsoever, to matters began in the f-fig'h Court, where the appellant cornmencedhermatter, subject ofthls appeal. Lastly, on ground three of the appeal attacking the trial Judge for not taking judicial notice of the fact that Saturnia Pension Trust was nol a re,gistered entity. Again, this is not a competent ground, as the m att.er was not raised before the trial court, lt is also worth noting, tJ1at a party is not precluded from requesting the judge to iake note of whatever the party wishes to bring to t.be. court.'s attention by way of judicial notice. J\s we sa.id in Shamwana and 7 OtheTs v The People9 : ~, Judicial notice refers to facts which a judge can be c alled upon to receive and to act upon either from his ·g e neral knowledge ,of t'hem or from inquiries to be m ade by himself :1 '·· •• J2l for his own information or from sources to which it is proper for him to refer" (underlining for emphasis only) Having indulgently a ddressed all the appellant's 'suppogerl ' grounds of ap peal and dJsco1.1nted them, we uphold the learned Judge on his fincting of fact, that the appellant's termination of e1nployment by payment of three months· salary in lieu of notice was 1n accordance with her conditions of service and also supported by the relevant law as it stood at the time_ tn sum, the evidence on record shows redundancy was not the reason for termination: the appellant had valid conditions of service:; there was oo evide nce that Saturrtia Regina Pensions Trust was not registered, in 2012 on the basis of which the court cou ld have taken judicis. J notice that it was an unla,vfu l .entity: arid the rules of natu ral justice did not apply for tem1lnadng a contract by payment in lieu of notice. It does not also assist the appellant to a,rgue that s he could not be terminated before altaining the age of 55 as she wns employed on 'permanent terms; as such an argument is not supported by the law. The lea.rned authors of Halsbury's Laws of England aptly stat~ that position in the following words: "It seems tb.at the employment offered to and accepted by :$ ·~ •• J22 an employee is described as "permanent employment"' does not in itself normally create a promise of life employment the o r disentitle employee's contract on reasonable notice" terminating employers from the J\U in all, we find no merit, at all, tn aJl the appellant's arguments raised in support of her four grounds of appeal and we dismiss it, in its entirety. In passing, we wish to note that, it appears the appellant·s real grievance is premised on allegations of unfair termination of employment after rendering 13 years of service and barely eight months away from reacbiI1g the retirement age of 55 , There are also connotations of discrimination on the part of the respondent, as former employer.. These grievances clearly fall within I.he mandate of the Industrial Rel'ations Coun (now Labour· Division of the High Court). This is U1e only trial court mandated with powers to delve behind tlie surface of the matter and establish the real reasons behmd the acts complained of, in order lo dispense substantial justice to a complainant. The High Court in which the matter was commen ced, does not have such powers. In conc1usion, on the issue of costs . 111 tbe circumstances of this matter we find an appropriate order on costs, is for each party to bear its own costs of the appeal and we so order. J23 App e.al dismissed. .................. ~ /cJ:fr::yv (... ..... . E. M .. HAMAUNDU SUPREME COURT JUDGE ,.;:;:;. --!:9-~: ... ~~ .. R. M. C. KAOMA SUPREME COURT JUDGE ~ ......................................... J. K. KABUKA SUPREME COURT JUDGE ··