Zambia Revenue Authority v Chilumba and Anor (SCZ Appeal 83 of 2000) [2001] ZMSC 154 (27 June 2001)

IN THE SUPREME COURT OF ZAMBIA SCZ APPEAL NO. 83 /2000 HOLDEN AT KABWE & LUSAKA (Civil Jurisdiction) ZAMBIA REVENUE AUTHORITY APPELLANT AND SHADRECK CHILUMBA FELIX HARA 1st RESPONDENT 2nd RESPONDENT Coram: Sakala, AG. DCJ., Chirwa and Chibesakunda JJS 18th April and 27th June, 2001. For the Appellant: Mr. A. M. Wood of Wood and Company. For the Respondents: Mr. N. Mubonda of D. H. Kemp and Company. JUDGMENT Sakala, JS., delivered the Judgment of the Court. Cases referred to: 1. DPP VS Ng’andu & Othrs SCZ Judgment No. 50 of 1975(unreported). 2. DPP VS Chibwe SCZ Judgment No. 54 of 1975 (unreported). 3. ZCCM VS Matale (1995-1997) ZR 144. This is an appeal against the decision of the Industrial Relations Court which found in favour of the employees on their joint complaint brought under Section 85(1) and (4) of the Industrial and Labour Relations Act Cap 269. The two subsections read as follows:- 85.(1) The Court shall have original jurisdiction in all industrial relations matters. (4) The Court shall have the jurisdiction to hear and determine any dispute between any employer and an employee notwithstanding that such dispute is not connected with a collective agreement or other trade union matter. The cause of action, as endorsed on their joint complaint form, was that the restructuring leading to the abolishing of the complainants’ positions of Deputy Commissioner (Compliance and Operations) and the subsequent terminations of employment was motivated by bad faith, : J 2 : victimization, unfair, unlawful and discriminatory and was also in breach of the contract of employment between the complainants and the respondent. The complainants sought the reliefs of reinstatement without loss of grading or benefits, damages or compensation for loss of employment and to be deemed as redundant or retrenched. The material facts were not in dispute. Both complainants joined the respondent at its inception on 1st April, 1994 on an initial contract of three years. Sometime in 1995 there was a divisional restructuring in the Customs and Excise Division of the respondent. On I2111 December in the same year, after the divisional restructuring, the respondent advertised two positions of Deputy Commissioners. Both complainants were short-listed and interviewed. On 4th June, 1996 both complainants were appointed Acting Deputy commissioner- Customs and Excise (Compliance and Operations) respectively, with immediate effect. They were both subsequently confirmed in the said appointments on 5th February, 1997. In the same month of February, 1997, a new Commissioner for Customs and Excise Division, one Kevin Donovan was appointed by the respondent. Again, a restructuring of the Division was effected reaffirming three positions of Deputy Commissioner by a circular No. 9 dated 7(h February, 1997. In the circular, the respondent gave assurances that no redundancies would occur as a result of the said restructuring. On 1st April, 1997, the complainants’ contracts of employment as Deputy Commissioners were renewed for a further period of three years. The contracts specifically provided that other terms and conditions contained in the Staff Administration Manual and the Grievance and Disciplinary Procedure Code as applicable to contract staff of the respondent would apply mutatis mutandis. After the contracts were renewed, the respondent carried out another restructuring exercise. This exercise caused anxiety and apprehension on job security among the employees. To calm the employees’ fears, the respondent issued a memorandum dated 21sl July 1997, addressed to all members of staff assuring them that no retrenchment or : J3 : retirements will occur and that where there will be excess staff, they will be assigned other duties or redeployed. In October, 1997, Mr. Darryn Jenkins was appointed new Commissioner of Customs and Excise. Barely two months after his appointment, another restructuring was carried out. There was evidence that during this restructuring the complainants’ responsibilities were clipped. There was also evidence that in mid January, 1998 Mr. Jenkins informed the complainants that he had structured the Customs and Excise Division. The three positions of Deputy Commissioners were to be abolished and replaced by two positions to be advertised and that the complainants’ contracts of employment would be terminated and that the complainants could apply for the new positions. On 22nd January, 1998 Mr. Jenkins issued a circular addressed to all Customs and Excise Staff which in part read as follows:- “ There has never been any intention of Customs and excise staff losing their jobs (unless, of course, this happens as a result of disciplinary action, but such cases are few and must happen ifproper standards of behaviour are not maintained). You all know that we are about to recruit more staff, so why would serving staff be ceased?” On 26th January, 1998, the two complainants received letters dated 23rd January, 1998 with similar contents. The letters read:- “CONTRACT TERMIN A TION NOTICE” Following a restructuring of Customs and Excise Head Office, the position for which you are contracted has been abolished In accordance with your terms I hereby give you three months notice of the termination of your contract. Two new positions of Deputy Commissioner are to be advertised in the near future and there is no barrier to your applying for those positions. ” There was evidence that the third Deputy Commissioner, Mr. Murray on same level with the complainants, did not have his contract of employment terminated. The respondent deployed . J4 : him at same level to a new position of Customs Advisor. He was not asked to apply for this job of customs Advisor. There was evidence that the respondent advertised the two new positions of Deputy Commissioner. The two complainants testified that they did not apply for the positions because there was an orchestrated plan or conspiracy within the respondent to get rid of them. There was also evidence that a Mr. Lin’gomba, a Deputy commissioner, was transferred from VAT laterally and took over one of the advertised positions of Deputy Commissioners. He did not apply for it. The complainants’ second contract of employment had over two years to run when they were terminated. Mr. Jenkins, the Commissioner of Customs and Excise and Mr. Bowa, the Director of Human Resources testified on behalf of the respondent. According to Mr. Jenkins, after the respondent carried out a restructuring exercise, they had legal advice that the complainants’ contracts had to be terminated because they were contracted to specific positions which no longer existed. The Industrial Relations Court made a finding that during the restructuring, the two complainants’ posts were never abolished or even “technically abolished” because these were the same positions which were subsequently advertised. This finding was supported by the fact that a Mr. Sonny Lin’gomba, Deputy Commissioner VAT, asked for a lateral transfer to Customs and Excise Division in the same capacity which was approved. He was never asked to apply for the job and never underwent interviews. The court pointed out that the complainants should not have been treated differently from Mr. Lin’gomba. The court found no evidence suggesting anything wrong in the complainants’ performance of their duties. The court noted that they received steady and deserved promotions and their good performance was attested by Mr. Jenkins. The court also made a finding that the respondent was not genuine and that the termination was a sham and a waste of resources. The court held that the respondent had no grounds to : J5 : terminate the contracts of the complainants and that the terminations were in bad faith and in breach of contracts of employment. On reliefs, the court noted that the positions had already been filled although unfairly but that it would be impractical to order reinstatements and declined to do so. The court awarded each complainant K40 Million as compensation. The respondent appealed against the findings and the awards. The whole issue in this appeal centred on the findings and awards made by the trial court. We heard submissions by Mr. Wood on behalf of the appellant that the appellant was perfectly entitled to rely on the contractual clause relating to notice. It was argued that even assuming that the dismissals were wrongful, which was denied, the trial court erred in law when it ordered the payment of K40 million to each complainant as compensation for loss of employment. It was submitted that the complainants were only entitled to three months salary. A number of this court’s decisions were cited in support of the arguments and submissions. In reply to these arguments and submissions, Mr. Mubonda on behalf of the complainants, pointed out that while it is accepted that an employer is entitled to rely on a contractual clause relating to notice, the Industrial Relations Court is not restrained under the Act from delving into or behind the reasons given for termination in order to redress any real injustices discovered. In considering this appeal, we bear in mind that in terms of Section 97 of the Industrial and Labour Relations Act and our decisions based on that section, parties can only appeal to this court on a point of law or any point of mixed law and fact. Indeed, a finding of fact can be a question of law. In D. P. P. PIS' NG’ANDU AND OTHERS (1) , this court made the point that a finding of fact becomes a question of law when it is a finding which is not supported by the evidence or when it is one made on a view of the facts which cannot reasonably be entertained (See also D. P. P. VS CHIBWE (2)). : J6 : In the instant appeal, the court made a number of findings of fact based on evidence not in dispute. There was evidence that despite restructuring, the complainants were assured that they would not loose their jobs, unless for disciplinary reasons. The court found no evidence of poor performance of duties by the complainants. On the facts not in dispute, the court found the notice to be a sham. These were all findings of fact on which this appeal must fail as incompetent. We are satisfied in this appeal that on the authority of Z. C. C. M I<V MATALE (3) , the court was entitled to go behind the notice clause to find the reasons for restructuring. On 22nd January, 1998, the complainants, among others, were assured by a circular minute that no one would loose his job unless for disciplinary action. The following day, the 23rd January, 1998, the appellant wrote the complainants informing them that their positions had been abolished and giving them three months notice of termination of contract. In the same letter, the complainants were advised to apply for the new positions to be advertised in the future. This letter was, in our view, a contradiction in terms. There was, however, evidence that one position was filled by mere transfer without application. On the facts not in dispute, the court was on firm ground to hold that the notice was not genuine but a sham. The terminations had nothing to do with restructuring. We uphold the trial court that the terminations were in bad faith and in breach of the contracts of employment. On this ground this appeal is bound to fail. As regards the awards of compensations, the court took into account the complainants’ salaries per month and loss of benefits. The complainants held senior positions. As we said in MATALE case, the normal measure of damages at common law in the Industrial Relations Court is ousted by the requirement to do substantial justice. The court declined to order reinstatement. We find no justification to interfere with the quantum awarded. This appeal is therefore dismissed with costs to be taxed in default of agreement. E. L. Sakala, SUPREME COURT JUDGE. D K. Chirwa, L. P. Chibesakunda, SUPREME COURT JUDGE. SUPREME COURT JUDGE