Christopher Mwimba & 16 Ors v Lafarge Cement Zambia Plc (APPEAL NO. 146/2018) (9 July 2025) – ZambiaLII

IN THE COURT OF APPEAL OF ZAMBIA APPEAL NQ 146/2018 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: CHRISTOPHER MWIMBA & 16 ORS UCO [ AND -~ -- . ' LAFARGE CEMENT ZAMBIA PLC REG IST·~ ~ ~~~ X 50067, CORAM: Chashi, Lengalenga and Siavwapa, JJA th th On 27 March, 2019 and 9 July, 2019 For the Appellants: Mr. T. T. Shamakamba - Messrs Shamakamba & Associates For the Respondent: Miss C. Ngulube - In House Counsel (Lafarge) JUDGMENT LENGALENGA, JA delivered the Judgment of the Court. Cases referred to: 1. HENRY NSAMA & ORS v ZAMBIA TELECOMMUNICATIONS COMPANY LTD (2014) ZR 85 2. TROLLOP AND COLLS LTD v NORTHWEST METROPOLITAN REGIONAL HOSPITAL BOARD (1973) 2 ALL ER 260 3. ATTORNEY GENERAL v CHIBAYA & ORS- SCZ APPEAL NQ 70 OF 2011 • Jl 4. PADDY KAUNDA & ORS v ZAMBIA RAILWAYS LTD-SCZ APPEAL NQ 13 OF 2001 Legislation referred to: 1. INDUSTRIAL AND LABOUR RELATIONS ACT, CHAPTER 269 OF THE LAWS OF ZAMBIA 2. THE EMPLOYMENT ACT, CHAPTER 268 OF THE LAWS OF ZAMBIA This appeal arises from the judgment of the High Court, Industrial Relations Division, by which it dismissed the Appellants' claims for an order that they were unfairly treated and discriminated against in the payment of their terminal benefits, and for a recalculation of their dues based on the period when they served on contract. The brief background of this appeal is that the Appellants were initially employed by the Respondent on fixed term contracts. According to the evidence on record, at the end of each fixed contract, the Appellants were paid their dues which included gratuity for the period served, leave pay and pay for all shifts worked up to the end of fixed term contract. Before renewal of the new fixed term contracts, the Respondent ensured that every condition of service under the expired contracts was settled. J2 The Appellants were later placed on permanent and pensionable employment and when their employment was terminated, they were paid their terminal benefits based on the period served during the permanent and pensionable engagement. However, the Appellants learnt that there were two former employees who were declared redundant in 2014, two years before they were declared redundant, who were paid terminal benefits that covered the period they served both on fixed term contract and permanent and pensionable employment. According to the evidence adduced by the Respondent in the Court below, when the error was discovered, it was corrected as it affected thirty other employees. With regard to the two named former employees, there was an explanation from the Respondent's witness, why they were unable to recover the overpayments that were erroneously made. The explanation was that the error was only discovered long after the payments had been made and, therefore, the recoveries were not pursued based on humanitarian grounds. Consequently, the Appellants were aggrieved and contended that they were unfairly treated and discriminated against and they filed a Complaint in the Court below, claiming the following reliefs: J3 y (a) An order that the Complainants were unfairly treated and discriminated against in the payment of their dues; (b) An order that the Respondent recalculate the Complainants' dues to incorporate the period they were on contracts; (c) Interest; and (d) Costs. The Court below, ,n its judgment found that the Appellants had not established any grounds for discrimination as set out in the provisions of section 108 of the Industrial and Labour Relations Act, Chapter 269 of the Laws of Zambia. The grounds for discrimination set out herein are based on race, sex, marital status, religion, political opinion or affiliation, tribal extraction or status of the employee. The Court below found that the former employees referred to by the Appellants, namely Elizabeth Ntema and Felicity Mbulo had their employment with the Respondent terminated at different times and on different terms from the Appellants. It was also the observation of the Court below that the Appellants did not show that they were serving under the same terms and conditions of employment as the two former employees in order to prove unfair treatment. Besides that, the Court below found that there was evidence that the Appellants were duly paid .. J4 their gratuity at the end of each fixed term contract and that consequently, they were not unfairly treated as alleged. The Court below was further of the view that the fact that the Respondent did not pursue the recovery of the erroneous payment from its former employee based on humanitarian grounds, did not amount to discrimination and unfair treatment of the Appellants. The view of the Court below on the Appellants' claim for recalculation of the amounts due to include the period served under fixed term contracts, when they had been paid for that period, was that it would amount to unjust enrichment of the Appellants. Consequently, the Appellants' complaint was found to be devoid of merit and it was, accordingly, dismissed. Dissatisfied with the said decision, the Appellants have now appealed to this Court advancing the following sole ground of appeal: The Court below erred in law and fact when it held that the Appellants were not entitled to have their dues recalculated to include the period when they were on contracts. Heads of argument were filed into Court to support their sole ground of appeal. At the hearing of the appeal, their advocate, Mr. Shamakamba entirely relied on the said arguments. JS The gist of the Appellants' arguments in support of the sole ground of appeal is that one of the terms of their redundancies was that they would be paid two and half (2.5) months basic pay for each year of service completed. It is their contention that, that was the agreement the Respondent entered into with the Appellants, even though the agreement did not specify which period would be paid for, whether one was on fixed contract or permanent service. It was submitted that all the agreement stated was that each employee would be paid two and half basic pay for each year served. It was submitted that the Court should, therefore, uphold the agreement entered into by the parties. Mr. Shamakamba argued that the Respondent cannot be seen to take a side that is less favourable to the Appellants, when it was the basis of the Appellants leaving employment. He relied on the case of HENRY NSAMA & ORS v ZAMBIA TELECOMMUNICATIONS COMPANY LTD 1 wherein , the Supreme Court in citing the case of TROLLOP AND COLLS LTD v NORTHWEST METROPOLITAN REGIONAL HOSPITAL BOARD2 , stated that: "The basic principle that the court does not make a contract J6 for the parties will not even improve the contract which the parties have made for themselves, however desirable the improvement might be. The court's function is to interpret and apply the contract which parties have made for themselves. If the express terms are perfectly clear from ambiguity, there is no choice to be made between different possible meanings; the clear terms must be applied even if the court thinks some other terms would have been more suitable. An unexpressed term can be implied if and only if the court finds that the parties must have intended that term to form part of their contract; it is not enough for the court to find that such a term would have been adopted by the parties as reasonable men if it had been suggested to them; it must have been a term that went without saying, a term necessary to give business efficacy to the contract a term which, although tacit, formed part of the contract which the parties made for themselves." Mr. Shamakamba submitted that in this case, the Respondent is bound by a condition that the Appellants are to be paid two and half months basic pay for each year of service. He further submitted that there is evidence that other employees were paid for the period they were on fixed contract and permanent service. He argued that the payment of two and half months basic pay should be upheld as it was a term of the conditions agreed upon by the parties. He submitted that the issue of whether one was on fixed contract or permanent and pensionable service was not part of terms of the conditions of redundancy. J7 He, therefore, urged this Court to set aside the findings of the Court below and to hold that the Appellants are entitled to the payment of two and half days basic pay for each year served as agreed. In response to the sole ground of appeal, Miss C. Ngulube the Respondent's In-house Counsel, submitted that the Respondent paid the Appellants all their dues and that, therefore, they are not owed any further amounts. She further submitted that there was no violation of any agreement between the parties. She submitted that it is trite law that the issue of whether one was on fixed contract or permanent service is to be considered from the conditions of redundancy. To support this position, Miss C. Ngulube relied on section 26B( 4) of the Employment Act, Chapter 268 of the Laws of Zambia which provides that the redundancy benefits shall not apply to employees engaged on fixed term contracts and the redundancy coincides with the expiration of that term. She submitted that this is not the case with those employed on permanent conditions of service. She further submitted that a fixed term contract cannot be considered once it has come to an end. She stated that as such, the issue of whether one was on a fixed term contract or permanent conditions of J8 service ts part of the terms of the conditions of redundancy as it determines who should be paid the redundancy benefits and how they should be paid. To fortify her submission, Miss C. Ngulube relied on the case of ATTORNEY GENERAL v CHIBAYA & ORS3 where the Supreme Court held that: "It is settled that an employee on a fixed term contract is not entitled to pension benefits or redundancy pay as such employee can only be entitled to gratuity at the end of his contract." She submitted that 1n the present case, the Appellants were initially employed on fixed term contracts and at the end of each contract, they were paid all their dues which included gratuity, leave pay and pay for all shifts worked before renewal of any contract. She noted that this fact was not disputed and she, therefore, contends that no redundancy pay is due to the Appellants for the time they worked on fixed term contracts. Miss C. Ngulube drew this Court's attention to the finding by the Court below that paying the Appellants twice for the period they served on fixed term contracts, after they were paid all their dues at the end of each contract, would amount to unjust enrichment of the Appellants. She further submitted that the Court below found undisputed evidence on record that the Appellants were only declared redundant • J9 during the time that they were all serving on permanent and pensionable conditions of service. She noted that the Court below further found that the Appellants were paid their redundancy packages for the periods they served on permanent and pensionable service conditions, which payment included the two and a half months basic pay for each year of completed service agreed upon by the parties. Counsel drew this Court's attention to the case of PADDY KAUNDA & ORS v ZAMBIA RAILWAYS LTD4 that was cited by the Court below in its judgment. In that case, the Supreme Court held that: "Where there is a known formula for calculating dues, that formula must be used." She submitted that the Court below based its finding on the cited case that the Appellants' dues were correctly calculated excluding the periods served on fixed term contracts for which they had already been paid their respective dues. Miss C. Ngulube, therefore, urged this Court to accordingly, uphold the decision of the Court below and dismiss the appeal for lacking merit. We have considered the sole ground of appeal, respective arguments by Counsel, authorities cited, evidence on record and judgment appealed against. J10 From the arguments advanced on behalf of the Appellants and the evidence on record, it seems that their grievance with the judgment of the Court below arises from their interpretation of Clause 11.3 of the Terms st and Conditions for Non-unionised Staff for the period 1 January, 2015 to st 31 December, 2016. The said Clause 11.3 deals with redundancy benefits and provides that: "Where an employee's contract of service is terminated by reason of redundancy, the employee shall be given one month's notice and shall be entitled to redundancy benefits of two and half (2.5) months basic pay for each completed year of service. Employees eligible to receive redundancy benefits shall be those eligible to do so under existing Zambian legislation. The employee shall also be entitled to the benefits in accordance with Chilanga Pension Trust Scheme rules. All benefits are subject to the provisions of the prevailing tax legislation." According to the Appellants' interpretation it is their contention that the provision does not specify which period would be paid for, whether it is the fixed term contract or permanent and pensionable service. From their arguments, it is clear that they chose to interpret Clause 11.3 as meaning that the Respondent is required to pay redundancy benefits for both periods, fixed term contracts and permanent and pensionable service. Jll We are of the view that the Appellants are trying to vary the terms of the contract of employment or, alternatively, to imply that the Respondent had unilaterally varied the terms of their contracts of employment by not including the period they served under fixed term contracts in calculating their redundancy benefits. From the evidence on record and the respective arguments by Counsel, it is not disputed that the Appellants were initially engaged on fixed term contracts of service and that the said contracts came to an end by reason of effluxion of time and were subsequently renewed. That was in accordance with section 36(1)(a) of the Employment Act which provides that: "(1) A written contract of service shall be terminated - (a) by the expiry of the term for which it is expressed to be made; or " We also had occasion to peruse the contract of employment for Derrick Kampabwe which was for a duration of two years and which appears at pages 39 to 44 of the record of appeal. Clause 11.0 of the said contract provided for the payment of gratuity at the expiry of the said period of two years at the rate of fifteen percent (15%) of the annual basic salary. • .. I ' J12 Consequently, upon the expiry of the said fixed term contract, he was duly paid his gratuity, leave pay and all shifts worked for. This was the position with all the other Appellants, they were duly paid their gratuity, leave pay and for all shifts worked for and it was in accordance with the Supreme Court's guidance in the case of ATTORNEY GENERAL v CHIBAYA & ORS that was cited by the Respondent's Counsel. It is common cause that the Appellants were subsequently engaged on permanent and pensionable conditions. The evidence on record indicates that the Appellants' payment of terminal benefits changed with their engagement on permanent and pensionable service as they were governed by Terms and Conditions for Non-unionised Staff. Our perusal of the said conditions of service which are contained in the record of appeal, indicate that the payment of gratuity was no longer applicable to the Appellants as they were eligible to other terminal benefits, such as retirement and redundancy packages. J13 The said conditions and approach to payment of terminal benefits, in our considered view are supported by section 268( 4)( c) of the employment Act. Therefore, the applicable conditions of service for the Appellants are those that provide for redundancy packages as opposed to gratuity at termination of fixed term contract. Finally, having considered all the issues raised in the Appellants' arguments, and having satisfied ourselves from the evidence on record, that the Appellants were paid all their dues, we find that the formula agreed upon in Clause 11.3 of the Terms and Conditions for Non-unionised Staff, does not include the period served by the Appellants under their fixed term contracts of employment. With regard to the issue of discrimination raised by the Appellants, from the evidence on record, it is clear that the former employees who were erroneously paid for the period they were on fixed term contract, had the calculations reversed before the payments were made. Furthermore, with reference to the two former employees who received the payments almost two years before the Appellants, there was evidence on record, to justify the Respondent's non-recovery of the overpayment. The ..,.. J14 explanation by the Respondent's witness in the Court below was that they did not pursue the recovery based on humanitarian grounds because of the passage of time from the time the payment was made. In the circumstances, the Appellants cannot be perceived to have been discriminated against within the context of section 108 of the Industrial and Labour Relations Act. We, therefore, find no element of discrimination against the Appellants on the part of the Respondent in declining to pay the Appellants twice for the fixed term contracts. J. Chashi COURT OF APPEAL JUDGE . . . . . . . . .. . . . .. . .. . . .. . . .. .................... . F. M. engalenga M. J. Siavwapa COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE