Zambia National Provident Fund v Mumba and Ors (Appeal 54 of 1998) [1999] ZMSC 80 (15 June 1999)

Appeal No. 54/98 IN THE SUPREME COURT OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: ZAMBIA NATIONAL PROVIDENT FUND APPELLANT AND AUSTIN SERGIO RUMBA 1ST RESPONDENT HENPY NASON CH1WELA 2ND RESPONDENT BERNARD DICKSON CHILA 3RD RESPONDENT Coram: Bweupe, DC J, Chai la, LewanIka, JJS. 16th March and 15th JUne, 1999 For the Appellant: Mrs. M. V. Mulonda, Legal Counsel, Z. N. P. F. For the Respondents: A. J. Mumba, A. J. M. and Associates. JUDGMENT LewanIka, JS. delivered the judgment of the court. For convenience, we will refer to the respondents as "the plaintiffs” and to the appellant as "the defendant" which is what they were at the trial. The plaintiffs were employed by the defendant in various capacities, but were all non-union!sed members of staff serving under the ncn-unionised members of Staff Conditions of Service, Clause 34 (a) of these conditions provided that an employee shall retire on attaining the age of 60 years or on completion of 30 years service. By circular No. IB of 1993 the retirement age was reduced from 6C years to 55 years with effect from 1st April, 1993. By circular No. 21 of 1995 the period of service was reduced from 30 years to 25 years with effect from 1st April, 1995. I m he. ter, t. ■■ fend vl wfGte la tn? ol a jn t i f *« oivf*" ihot'- m ; r ' tc rat! re with effect /l?t w.^rt-', W op ‘.p? crrwi tvi. by that Jal? they wou’C ' <v ? been tn w!cv^ent for c yer 100 ur jXiriods in excess of 2 b yp^rs. In? 3 = SC cjv? £0? ni fi 1 it i f f s 6 ^"itPS IStK.e of r»t I hit.’ effort f ro;r 1st October, lyv set e*mhsc ch cist isw , v?S. me plaintiffs wre v l‘v def Sudani ’ a «:C;skr? sou mstitutpd trochee i ;vs c ’ ? s r i nr , ifliw /Jir, for : - m) ■' Ccc! vv w th-il W iiJV'W ret1 v v-nts -.{ v« ,‘.-■'11 VS tv t'O V V ■• 'y ;• rSS W.w..; ;- its W- . 7t . ■ ■- .i-. ‘''''^ mu; ec’Cv-sv1' *•. ’ r ; I ffs >a« ivl I sne « ’ 1 e# i n\ i-i va< ('0^ I:’ S' r.-3vi :t jc t ' :•;•■ ptgiVli’ffs* C ■•’...' ' sefyijg v .•■■■•':;;■;?•: ri t;- -:v ww’s .■•■.vi:Tt r '■.'! ' '“';* •' I p t ■/.pj d!^G rjrti.’lsr • V c;tr'.’ ’t'* i . nc circular ... i' । ? ’. ' “■ *< ’ ?nc* for , ■'’ ■ ' " t ■ ■ ■ - : ■ • i ; I Vers a').! C rrTH’iS salary to 'OS•■' Ct . J ■ - If* ' A ’ n' f * . !■ eor ■ vii.; s saiarT i t rp the /nr< ivnufv Mi " y-'^rs $;:3 > it “?5 -Ct J V • ' C k 7!”111 f , 5*r • •■- . ' V.'s s’i ■ •■• tr ; v'o cf ■,■• 11 • . ■ ■ uf ’■ ": r'tr'fv V | - retfn ; .-.a .v^Vt - '■ t'-v »-1 f. • ' ■ . .. i . ?p 1 "I ’ f ’ ■ ■' • ' ■ a ; ! amt i»r« <»'i <• t ' • - ■.!;••>:;<»• • ,v ' j- v— » -• tv*e"S . i '■'•IS ' S • • ' •< *% *.6 1 <; v ’ H-.\ ( >■ 11 v - ’ ' ’ J3 against this holding that the defendant has appealed. Counsel for the defendant has filed only one ground of appeal, to wit, that the learned trial Cormissioner erred in law in deciding that the respondents were entitled to be paid for the remaining years of service plus six months salary in lieu of notice and all benefits to which they were entitled for being prematurely retired by the appellants. In arguing this ground counsel for the defendant said that the issue to be determined by the court is whether in a situation where a contract of service is found to nave been wrongfully determined, does the notice that was given for the termination by the employer to the employee also become defective so as to entitle an employee to salary in lieu of notice? She submitted that the law is clear on the point and that the giving of notice is one of the ways for terminating a contract of employment, in cases where it is clear that one has not been employed for life. She said that the question of the plaintiffs being paid six months salary in lieu of notice cannot arise as Ine learned trial Commissioner found that they were written retirement letters on Z7th September, 1994 informing, them that by 31st Haren, 1995 they would be deemed to have been retired, and that tn is was six months notice. On the cuestion of the plaintiffs beinc paid for the remaining years of service together with all benefits to which they were entitled for being prematurely retired by the defendant, she subnatted that an employee or former cm; loya-e cannot claim for loss of expected benefits for v.-hich they have not rendered anv services. She referred us to our decisicn in th!' case of THE ATTORNEY GENERAL VS. KAMOYO WLE, Appeal No. 79 of 1996 on the point. She urged us to allow the appeal ane set cside the iudynunr. of the learned trial Commissioner. In reply counsel for tne plaintiffs fitted chat under the Conditions of Service which were applicable co their ac the time that the defendant wrote the letters ci vino net ice to the plaintiffs of retirement the i^riod of service was 3C years and not 25 years. He said that there was no dispute that the plaintiffs' services were wroncly terminated oy premature retire­ ment. le said that in the normal master and servant cases a breach of contract civas rise to only a claim for ca»ac»s but in the instant case the defendant is a statutory board created by an Act of Parliament and that its Conditions cf Service arv statutory and have the force of law and its employees cannot be created like in the *'<naster and servant1' relationship Lo be dismissed at will. He sair that the case cf the ATTORNEY GENERAL VS. KAROYO MWALE ref?rred to ov counsel for trie defendant can be distinguished from the present case in tiial the defenuo.it hac no authority to terminalor issui the notices of retirpTe.nt as circular Ko. 1 of VZ’ 5 on «t|ti they purrertod re only Cas’-? rite effect f;n 1st .■•■rH, j^d rid oct apply tu f'1 plaintiffs, r? siitmi tt-'d cr at Z ' letter*; ^rr::..?!’ b, c'?fZ'id? to th? plaintiffs CcttC 2/r r rt-'T1 ? -, I < •• .jr.- 6 tullity and of no 1-gal effect and uTcd ’’s Pc cis'-its ti-- arc 'jiroU' the jucgrerit of the 1 earner i rw i ssioner. He heva cons id*r’ d t’.* cp”- •. ss ir n? Kv ours-ji fur t.--' def .jica.’it and fur the p i a i" tH f $ ?s as t?^ -v in., nee on record. 7 .er; cc? no dcf'L in?!, ■ lei-? iffs r^ • rr*TUi. " I'*1 » I' '■ ?S Ct th-? t 1 Tv I : 1 • - ' 1 r ’ 'r- '1 i: \ I r ’ U i j f. ? I 1 re 11 r? k r । *' '■ r j " ■ 11 .-. •: r t i ’ * n1' s L11 i ? ''s n; i. ? vears. V? ??gi r iurs ’■ i? r-i'j t? ;:>1? t >■,? ■■■. }'.. i ■ an; t t-?r w iBintins : • t-?’- < d t । J5 Service would have been entitled to 6 months notice of retirement. We will therefore affirm that part of the learned trial Commissioner's award as relates to the 6 months salary in lieu of notice. However, the part of the judgment ordering that the plaintiffs be paid for the remaining years of service is wrong in principle and not sustainable in law as it is based on the proposition that if an employer terminates the contract before the end of the term of service, he is liable for all benefits accruing thereafter and this despite the fact that the employee ceases to render anv consideration therefore, i.e., to work. We are accordingly setting aside that oart of the award. From the evidence on record we are satisfied that all the other benefits due to the plaintiffs on retirement wt-re paid to them. On the 6 months salary which we nave affirmed we award the plaintiff interest at the average short term ueoosit rate as determined by the Bank of Zambia from the date of issue of the writ to judcment, thereafter at me current lending rale as oetermined by me Bank of Zambia. Wim regard to me (uestion of costs, we note that the apoeai nas succeeded only in part and in me circumstances it is oniv fair that each side bear their own costs. o. K. Bweuoe M. S.u^iio SUPREME COUP! JUDGE r. LewaniKo SUPREME COURT JUDGE