Zambia Industrial and Mining Corporation (In Liquidation) v Chimanja and Anor (Appeal 90 of 2000) [2001] ZMSC 152 (18 May 2001)

IN THE SUPREME COURT OF ZAMBIA HOLDEN AT KABWE AND LUSAKA APPEAL NO. 90/2000 (CIVIL JURISDICTION) Zambia industrial and mining corporation appellant (IN LIQUIDATION) AND CONSTANTINE B CH IMAN JA CONTRACT HAULAGE LIMITED 1st RESPONDENT 2nd RESPONDENT Coram: Sakala, Ag. DCJ, Lewanika and Chibesakunda, JJS on and 8th November 2000 and 18th May 2001 For the Appellant: For the 1st Respondent: For the 2nd Respondent. Mr R Mainza of Messrs Makala and Company, Lusaka Prof. M P Mvunga of Mvunga Associates with Mr A M Kasonde of Kasonde and Company N/A ___________________________ JUDGMENT___________________________ Chibesakunda JS, delivered the judgment in Court Authorities referred to: 1. 2. 3. Contract Haulage Limited v Mumbuwa Kamoyoyo (1982) Z R 13 Gerald Musonda Liimpa v Maamba Collieries Limited (1988-89) ZR 217 Kafiic District Council v Chipulu (1995-97) ZR 190 In this appeal, for convenience sake, we will be referring to the parties as they were referred to before the High Court. The defendant Company now in liquidation has appealed to this court challenging the High Court’s findings in favour of the plaintiff. The plaintiff had sought before the High Court the following reliefs:- 1. 2. 3. A declaration that the termination of his employment by the 1st Defendant through a letter dated 3 1st December, 1991 is null and void, A declaration that he should be reinstated in his employment with the defendant with effect from 31st December, 19991, A declaration that the termination of his employment aforesaid was contrary to his conditions of service; - J2 - 4. 5. In the alternative, damages for wrongful dismissal, and Damages for mental distress and inconveniences. The court below granted him damages equivalent to his salary and allowances for 12 months, i.e. up to 31st December 1992, with such interest rate at the average short term deposit rate from the day of issuance of the writ up to the date of judgment and thereafter at the interest average lending rate as determined by the Bank of Zambia. In addition, the court granted him the sum of KI0,000,000.00 as damages for mental distress and inconvenience. The facts before the lower court on which the court made its findings in favour of the plaintiff are that the plaintiff had worked for the Defendant’s Group of Companies since 1969. He started at INDECO, which he joined after responding to an advertisement in the newspapers. He was appointed as a Company Accountant for Zambia Clay in Kitwe. Whilst in Zambia Clay, again in response to an interna! advertisement within INDECO he got appointed to a Trainee Manager’s post then underwent training as a manager both at home and abroad and was later appointed Deputy General Manager for Crushed Stones Sales in Lusaka. From Crushed Stones Sales he went to Agrigate Industrials in Kitwe. Later there was a rationalization programme within Indeco. The plaintiff was then transferred to Timber Merchants of Zambia as General Manager. From Timber Merchants he was transferred to Kapiri Glass Products Limited to replace an expatriate who had resigned. His evidence was that he found a lot of problems at Kapiri and managed to put them right within the four (4) years he was there. He was then transferred to Mornarch and later Refined Oil Products as General Manager in both places. He was at Refined Oil Products until 1984. He was promoted and transferred to Tazama Pipe Lines as Managing Director. At Tazama Pile Lines, he initiated the rehabilitation programme of the Pipe Line and sourced funds from the European Investment Bank and the World Bank. From Tazama Pipe Line he was transferred by Z1MCO to Zambia Cold Storage to convert it into a board. Cold Storage later became a Corporation. According to him the stint at the Board was his worst assignment because he found a finished company, which lacked even a bank account. J3 Due to his past experience he was able to reform the Board and put it on a right footing. From there he was transferred to Contract Haulage as Managing Director and this was his last posting. On 31st December 1991 he received a letter terminating his services with immediate effect. The letter did not say the reasons for terminating his services neither did it spell out his separation package. According to the letter, he was only to receive three (3) months salary in lieu of notice and other terminal benefits. He was given five minutes in which to pack all his belongings. He was led out of his office at gun point by paramilitary officers. His evidence also before the lower court is that he had been employed on permanent and pensionable conditions. The letter mentioned nothing about his conditions. He, however, told the court below that he was entitled to gratuity, leave pay, holiday allowance, three (3) domestic servants, free electricity and telephone expenses and subscription to professional institutions. He had been with ZIMCO for 22 ’A years and these were not mentioned in the letter. The evidence before the court was that up to the date of hearing before the lower court, all these entitlements had not been paid to him. It was also his evidence that he did not owe the defendant company the amount they claimed he did, but he was indebted to them in some smaller amount and that he did not owe any company in the name of Rotran. The defendant company’s evidence was to the effect that the letter of 31st December 1991 was not a dismissal letter but a termination letter. It was also stated that ZIMCO conditions of service gave either side a condition to terminate the agreement with notice. Therefore, the defendant company was correct to pay three (3) months in lieu of notice. The learned Trial Judge found in favour of the plaintiff and held that the letter of 31st December 1991 in the way it was handed to the plaintiff amounted to summary dismissal. She went on to hold that the dismissal by the defendant was unlawful and as such the plaintiff was entitled to damages as stated supra in our judgment. J4 The defendant company before us has urged that the learned trial Judge erred in holding that the letter of 31s' December 1991 was a letter of summary dismissal for disciplinary reasons. They argued that the letter in question was for terminating the contract of employment between the defendant and the plaintiff. According to them, it is an established principle of law that in an ordinary master and servant relationship a master can terminate a contract of employment of his employee at any time for any reason whatsoever. This was the principle established in the Contract Haulage Limited v Mumbuwa Kamoyoyo (1) and Gerald Musonda v Maamba Collieries Limited (2) Also, it was argued that the award of 12 months salary plus other perks as damages for loss of job was erroneous, as it had no basis in law. The distinction between the case of Janies Matale and the case before us, they pointed out to us, that in that case the contract between Matale and Z1MC0 did not have a provision for terminating the contract whereas in the case before us there was such a clause. In their view, the correct measure of damages in such a case must always be a period of notice. Their last argument is that the award of KI0,000,000.00 for mental distress was not supported by any evidence and as such it was wrong They urged the court to adopt the court’s attitude in the case of Kafue district Council v Chinulu (3), where the court awarded the sum of K 1,600,000.00 as damages for mental distress. The plaintiff in response argued that the learned trial Judge was on firm ground in holding in favour of the plaintiff. They argued that the sum of K10,000,000.00 awarded for mental distress and hardship would not strike the court with any sense of shock. We have considered the arguments before us and looked at the evidence before the lower court. In our considered view, the learned trial Judge was on firm ground when she held that the letter of 31st December 1991 amounted to summary dismissal. This is so because of the manner and conduct by the defendants in delivering that letter to the plaintiff and the way the plaintiff'was led out of his office at gun point, having been given only five minutes in which to pack his personal belongings from his office. J5 In our view, the learned trial Judge properly and rightly concluded that the termination of the plaintiff’s appointment was punctuated by malice and it amounted to deep humiliation of the plaintiff. The plaintiff was treated like he was on a disciplinary charge or at worst like a criminal. The dismissal was wrong since the disciplinary code was not followed. The 2nd Defendants having been a public company ought to have had some good reasons or basis for such termination. We therefore confirm the award of 12 months of salary and other perks with interest as stated by the lower court. Coming to the award of KI0,000,000.00 we are attempted even to increase the KI0,000,000.00 because of the most unconventional approach by the defendants in terminating the contract with the plaintiff. We confirm the award of KI0,000,000.00 as damaged for mental distress and inconvenience. We also award costs for this appeal to the plaintiff. E L Sakala ACTING DEPUTY CHIEF JUSTICE D M Lewanika SUPREME COURT JUDGE L P Chibesakunda SUPREME C OURT JUDGE