Zambia Breweries PLC v Mwale and Ors (Appeal 104 of 2000) [2001] ZMSC 148 (1 June 2001)

APPEAL NO. 104/2000 IN THE SUPREME COURT OF ZAMBIA HOLDEN AT KABWE (CIVIL JURISDICTION) BETWEEN: ZAMBIA BREWERIES PLC Appellant and FATIMA MW ALE & OTHERS Respondent CORAM: Sakala, Ag. DCJ, Chirwa and Chibesakunda, JJs on 9th August 2000 and 1st June 2001 For the Appellant: For the Respondent: Mr. M. C. Ngenda; Christopher, Russell Cook & Co. Prof. P. M. Mvunga, Mvunga Associates JUDG MENT Chirwa J. S. delivered the judgment of the Court: - This appeal arises from an action in the Industrial Relations Court against the appellant by the respondents. The action was brought under Sections 85 (4) and 108 of the Industrial and Labour Relations Act. The claims against the appellant were that the appellant had neglected or refused to pay the respondent the remaining 15% of the 40% salary and wages increase which was with effect from 1st April 1994 to 31st March 1995 when the respondents retired from the appellants on various dates from 31s1 May 1994 to 31s' August 1994. The respondents further alleged that they were discriminated against as the appellant paid out the said 15% to some workers who retired much earlier. The award of 40% increase in salary and wages was reached upon after negotiations between : J2 : the appellant and National Union for commercial and Industrial Workers (hereinafter referred to as the “Union”), representing the respondent and others. It is pertinent that we quote in full this 40% increase in salary and wages agreement which became incorporated into the existing collective agreement between the parties. The agreement is dated 24th June 1994 and it reads as follows: - "ZAMBIA BREWERIES LIMITED and NATIONAL UNION FOR COMMERCIAL and INDUSTRIAL WORKERS hereby agree that the wage/salary levels for the period Ist April 1994 to 31s' March 1995 shall be enhanced by an overall percentage increase of 40% which shall be implemented as follows: - (i) Effective Ist April 1994 all wages/salaries shall be increased by 25%o across the boardfor the Schedule A attached. (ii) The other fifteen percent (15%) shall be implemented immediately the company registers improvement in sales volume against budgeted levels, but not later than 1st October 1994". In the main, the case depended on the interpretation of this agreement and the trial Court was seized of this fact and it went further that this agreement was clear and unambiguous, holding that the agreement was for 40% salary increment covering the period of 1st April 1994 to 31st March 1995 and that this position was confirmed by the payment of the initial 25%. The Court then went on to award the 15% increase to respondents to be paid proportionate to their months in service during the period in issue, i.e. between 1st April 1994 and 30th March 1995 depending on when each respondent retired during that period. The Court then went on to consider the question of payment of 6 months salary in lieu of notice and on going through the letters of notice of some workers and observing that some workers were paid 6 months salary in lieu of notice even where these periods were abridged, awarded the respondents 6 months salary in lieu of notice. It is against these awards that the appellant has now appealed to this Court. There are three grounds of appeal which were supported by detailed written heads of argument. : J3 : On behalf of the respondents, Prof. Mvunga also filed detailed written heads of argument. For the first two grounds of appeal, both counsel are agreed that the case depended on the interpretation of the memorandum of agreement dated 24th June 1994. Both Counsel are further agreed that a party to an agreement which agreement is reduced into writing must be bound by that written agreement and the written agreement must be given its ordinary meaning. As we said earlier, the trial court was aware of these factors. What is the understanding of this agreement if words are given their ordinary meaning. It has to be ordinary meaning because there is no technical usage of the words. Looking at the document as a whole we are of the opinion that the catch word in the agreement is “overall”, giving an overall percentage increase of 40% to be implemented in two stages. The Concise Oxford Dictionary gives the word as to mean “from end to end (overall length); total, inclusive of all; taking into account all aspect.” With this ordinary sense of the word “overall” as used in the agreement we understand it to mean that the total, inclusive of all increases of salary and wages shall be 40% for the period of 1st April 1994 and 31st March 1995 but implemented in stages. From Ist April 1994 to 1st October 1994 the salaries were to be increased by 25% and from 1st October 1994 to 31st March 1995 increased by 15% giving an overall, total and inclusive increase by the end of the agreement 40% increase in wages. It follows therefore that those employees who resigned before 1st October 1994 cannot benefit from the ’’overall percentage increase of 40%”. Having said this we will now consider each respondent to see if he/she is entitled to the overall increase in salaries. (1) FATIMA MWALE: Her separation form is at page 157 or 186 of the record. Her last working day is given as 30th June 1994. She is therefore not entitled to the overall 40% wage increase; she is only entitled to 25%. (2) EDWARD L. MW ANZA His application letter for early retirement is at page 55of the record and he states that his last working day would be 30th June 1994. There is also : J4 : copy of a letter from the appellant accepting Mwanza’s suggestion to bring forward the retirement dated to 31st May 1994 at age 57 and this conforms to his separation form at page 187 of the record. He is not entitled to the overall 40% increase of salary. (3) FESTO MWANZA His separation form is at page 159 and another copy at page 188. The last working day was 30th June 1994. He is not entitled to overall 40% increase. (4) CH ILA Bl ABRAHAM His separation form is at page 189 of the record and the last working day was 30th June 1994. He is not entitled to overall 40% increase in salary. (5) KOSAM MWANZA His separation form is at page 190 and his last working day was 31s1 May 1994. He too is not entitled to overall 40% increase in salary. (6) ALEXANDRIA BANDA Her separation form is at page 191 of the record and her last working day was 30th June 1994. She is not entitled to the overall 40% increase. (7) AUSTIN MOOMBA His separation form is at page 192 of the record and his last working day was 31st May 1994. He is not entitled to the overall 40% increase. (8) EMMANUEL MUKUKA His separation form is at page 193. His last working day was 31st August 1994. He is not entitled to the overall 40% increase. (9) LAMECK SAKALA His separation form is at page 193. His last working day was 31st August 1994. He is not entitled to the overall 40% increase. (10) MISHECK KABWE His separation form is at page 195 of the record and his last working day was 31st May 1994. Not entitled to the overall 40% increase. : J5 : We have not been able to find separation forms for the other respondents but for ISAAC BANDA he gives his last working day as 31st May 1994. He is therefore not entitled to the overall 40% increase. ALICK BANDA wrote a letter to retire early and his last working day was September 1994, not therefore entitled to 40% overall increase. Taking into account the exhibits attached to the additional affidavit sworn by Potipher Phiri on behalf of the appellant, which was not challenged, it is clear that all respondents left employment before Ist October 1994 and therefore not entitled to the 40% overall increase in salary. In our conclusion, because of the wrong interpretation given to the meaning of the memorandum of agreement dated 24th June 1994 by the Industrial Relations Court, as a result of which those employees who retired before 1st October 1994 were awarded the overall 40% salary increase, that award by the Court is set aside. The 1st and 2nd grounds of appeal therefore succeed. Coming to the second award of 6th months salary in lieu of notice, it was argued on behalf of the appellants that the early retirement was taken by individual employees and this was done under clause 6 of the Collective Agreement. It was further argued that, the management never forced anybody to abridge the notice. It was submitted that the award of 6 months salary in lieu of notice was therefore wrong and it should be set aside. On the other hand, on behalf of the respondent it was submitted that the respondents were induced to abridge the period of notice by management as a result of which they were not paid 6 months salary in lieu of notice. Further if the management did not promise to pay the respondent 6 months salary in lieu of notice, the respondent would not have volunteered to go on unprofitable venture. We have considered the arguments under this head and also the evidence on record. We bear in mind that we are dealing with a matter that is covered in the collective agreement and nothing oral can alter that agreement. In doing so, we also bear in mind the separation forms on the record and some correspondence between the appellant, some of the respondents and some other employees on the record. Clause 6 of the Collective Agreement is the one that deals with retirement. We note from this clause : J6 : that there is no designated period of notice required of an employee. It is only the employer who gives 6 months notice under Clause 6.3.3. A quick glance at the separation forms and letters on record supports this. The periods given by employees, including some respondents, varied from immediate separation, like the first respodent, to six months. We accept that some employees after giving whatever notice they wanted to give, the notice was abridged. This has been explained by DW1 in his evidence. The time was abridged on mutual understanding between management and the particular employee. In such cases it would have been inequitable for management to deny such an employee his 15% if the period would have covered October 1994 and afterwards. Equally it would be unfair to deny such an employee his pay during the period the notice would have covered. The respondents did not adduce any evidence to the effect that they did not serve their notices and that in lieu of that they were entitled to any pay. If there were any verbal assurances from the management, those cannot override the Collective Agreement and with the explanation given by DW1, that should be the position. The award of 6 moths in lieu of notice was a misdirection and we set it aside. The appeal therefore succeeds and we set aside the awards. It is usually the practice that a successful party gets his costs unless some special circumstances prevail. In the present case, we note that the respondents were ex-employees of the appellant who left on their own; they were not dismissed after any disciplinary offence. They are now retirees struggling to survive. We fell these are special circumstances to depart from the practice. Each party will bear its own costs. E. L. Sakala ACTING DEPUTY CHIEF JUSTICE D. K. Chirwa SUPREME COURT JUDGE L. P, Chibesakunda SUPREME COURT JUDGE