Lloyd Mvula v National Institute of Public Administration (2023/HN/IR/14) (30 December 2024) – ZambiaLII

/ / Jl IN THE HIGH COURT FOR ZAMBIA 2023/HN/IR/ 14 AT THE INDUSTRIAL RELATIONS REGISTRY HOLDEN AT LUSAKA (Labour Jurisdiction) BETWEEN: INDUSTRIAL I LABOUR LLOYD MVULA rl!V,~ION COMPLAINANT rl~_DEC_20~ AND Btftlo\11 NATIONAL INSTIT roN RESPONDENT cou A Before Hon. Mr. Justice E. L. Musona on the 30th day of December, 2024 For the Complainant: In person For the Respondent: Mr. K. Chisanga, In-House Counsel JUDGMENT Legislation Referred to: 1. The Industrial and Labour Relations Act, Chapter 269 of the Laws of Zambia. 2. The Employment Code Act, Statutory Instrument No. 3 of 2019 3. The Pension Scheme Regulation Act, Chapter 255 of The Laws of Zambia Cases Referred to: 1. Wilson Masauso Zulu v Avondale Housing Project Limited (1982} Z.R. 172. 2. Colgate Palmolive (Z) Limited v Able Shemu and Others Appeal No. 11 of 3. Zubao Harry Ju.ma v First Quantum Mining & Operations Limited- Road Division Appeal No. 102/2022 4. Standard Chartered Bank (Z) Plc v Willard Solomon Nthanga & Others Appeal 193 of 2016 5. Zambia National Commercial Bank v Evans Hampopwe SCZ Appeal 188/2008 6. ZCCM v. James Matale (1995-1997} ZR 144 7. Konkola Copper Mines PLC and Aaron Chinfwembe v Kingstone Simbayi Appeal No. 195 of 2013 CamScanner J2 1.0 COMPLAINANT'S CASE 1.1 On 17th July 2023, the Complainant filed a Notice of Complaint and an Affidavit in Support of the Complaint pursuant to Section 85 (4) and Rule 9 of the Industrial and Labour Relations Act, Chapter 269 of the Laws of Zambia. 1.2 The grounds upon which the Complaint was presented were · that the Complainant was employed by the Respondent as a general worker on August 2013 to 28th February 2022, as shown by Exhibits 'LMl'. 1.3 The Complainant alleged that the Respondent implemented fundamental changes such as working without cleaning materials ·which affected his work operations. It was alleged that the Complainant was expected to clean the Respondent's premises; including toilets despite management's failure to procure the necessary cleaning implements, and protective clothing such as gloves, work suits, respirators and safety boots. Thereby, exposing him to various diseases. 1.4 Further, it was deposed that the Respondent threatened to charge the Complainant whenever he complained about the conditions under which he was subjected to work. Therefore, on 24th October 2021 he submitted a 90 days resignation CamScanner J3 notice in accordance with the terms and conditions in his contract of employment as shown by Exhibits 'LM2-4'. 1.5 It was alleged that the Respondent did not pay the Complainant his terminal benefits despite several reminders. Consequently, the Complainant reported the matter to the Labour Office. See Exhibits 'LMS-10' 1.6 Aggrieved by the Respondent's actions, the Complainant commenced the suit herein seeking the following reliefs: i. Payment of terminal benefits; ii. Payment of salary arrears from 1st March 2022 to the date of Judgment; iii. Damages due for non-payment of terminal benefits which caused physical stress, mental and psychological torture and anguish; iv. Costs; v. Interest; and vi. Any other relief the Court may deem fit; 2.0 RESPONDENT'S CASE 2.1 On 14th August 2023 the Respondent filed an Answer and Affidavit in support to the Complaint in which it admitted to having employed the Complainant and that the Complainant resigned from employment by a letter dated 24th October 2021. 2.2 It was deposed that the Respondent acknowledged the resignation and computed the amounts due to the Claimant CamScanner J4 via a letter dated 16th November 2024 as shown by exhibits "KMGCl" and "KMGC2". 2 .3 The deponent stated that the Respondent honoured its obligations and paid the Complainant the amounts due to him as shown by exhibits "KMGC3-6". Thus, the Complainant exhausted his claim against the Respondent. 2.4 Lastly, in the supplementary affidavit filed on 15th October 2024, the deponent stated that the Respondent received confirmation from the Pensions Fund regarding the settlement of the Complainant's claims as shown by exhibit "KC2". 3.0 THE HEARING 3.1 The matter came up for hearing on 14th October 2024 and the parties elected to rely on their affidavit evidence. 4.0 SUBMISSIONS 4.1 The Complainants submitted detailed arguments to support their claims. I have taken account of the various arguments made. I will not repeat them but will make references as appropriate in my decision. 5.0 ISSUES FOR DETERMINATION CamScanner JS 5.1 I have considered all the evidence and arguments on record. I garner that the issue for determination is whether the Complainant is entitled to be paid terminal benefits provided for in the employment contract, in the circumstances. 5.2 It is necessary to state that in the case of Wilson Masauso Zulu v Avondale Housing Project Limited1 the Supreme Court reiterated the principle that "he who alleges must prove". It was stated that where a party makes any allegation, it is generally for him to prove those allegations. Based on this decision, the Complainant bore the responsibility of proving that he was entitled to the terminal benefits he seeks. 5.3 Terminal Benefits 5.4 Terminal benefits are sums of money paid to a person for services rendered to an employer during the course of employment. They usually include outstanding money due to the employee at the time of cessation of employment. 5.5 It is not disputed that the Complainant was entitled to terminal benefits when he resigned. What is in dispute is that he was paid in full. The Complainant claims that he did not CamScanner J6 exhaust his claim for terminal benefits while the Respondent argues that it paid the Complainant in full. 5.6 According to the case of Colgate Palmolive (Z) Limited v Able Shemu and Others2 a party is bound by an agreement, in the absence of fraud, mistake or misrepresentation, which he freely and voluntarily executes. 5.7 In the current case, the Complainant was employed by the Respondent from 3rd September, 2013 to 28th February, 2022 on permanent and pensionable basis. Paragraph four of the Complainant's letter of appointment states that the terms and conditions of service communicated to the Complainant in the offer were applicable to their employment relationship. 5.8 The offer letter stated that the Complainant was offered the position of general worker in the administration department and that other terms and conditions of service applicable to the Complainant were contained in the Respondent's terms and conditions of service for general staff. 5. 9 In Clause 1.11 of the Respondent's terms and conditions of service for professional and administrative staff, that was exhibited by the Respondent, an employee was entitled to all statutory benefits on termination of employment. Secondly, CamScanner J7 permanent and pensionable employees were entitled to receive a pension. Further, gratuity was to be paid on completion of the contract or on a pro-rata basis if the contract was fixed-term. I find that the contract of employment provided for the Complainant's benefits on resignation. These benefits included gratuity, pension and all statutory benefits applicable such as accrued leave days. 5.10 It is worth stating that this matter involves two cardinal periods; the first being the period from 2013 to 2019 before the enactment of the Employment Code and the period from 2019-2022 when the Complainant's resignation became effective. The principles applicable to such a situation were discussed by the Supreme Court in the case of Zubao Harry Juma v First Quantum Mining & Operations Limited3 when it stated as follows; "The appellant's contract ran from 2014 to 2016 when it was converted to permanent and pensionable and he was dismissed on 30th November 2020. He was thus entitled to the provisions under the employment contract up to 2019. During the currency of the employment contract, the Employment Code Act came into force in 2019. As Acts of Parliament do not operate retrospectively, he was not entitled to the severance pay benefits in the new Code prior to its enactment. This is because there was no valid contract entered into between the parties at the time they contracted and the respondent was within the provisions of the law. After the Code came into effect in 2019, it meant that it had CamScanner JS provided for the basic minimum for all employment relationships." 5.11 My understanding of the decision above is that an employee, on termination of the contract of employment, is entitled to the benefits agreed upon in the contract of employment and/or those provided for by the employment laws, where the employment relationship came into existence prior to the enactment of the Employment Code. In this case it is the period from 2013 to 2019. 5.12 After, the enactment of the Employment Code, the Complainant became entitled to the minimum benefits provided for by the Code and/ or his contract of employment whichever provides more favourable benefits. I am guided by Section 127 of the Code. Section 127 of The Employment Code, Act No. 3 of 2019 states as follows; "Where a contract of employment, collective agreement or other written law provides conditions more favourable to the employee, the contract, agreement or other written law shall prevail to the extent of the favourable conditions." 5.13 From the foregoing, I find that the Complainant is entitled to be paid all terminal benefits and accrued benefits by virtue of his contract of employment from 2013 to 2019 and thereafter, nothing less favourable than those provided for in the Employment Code. CamScanner J9 5.14 According to the contract of employment, the benefits on termination of the contract included all statutory benefits payable, gratuity payable on completion of the contract, pension benefit, and accrued leave days. 5.15 Gratuity 5.16 As regards gratuity for the period 2013 to 2019, the contract determines whether the Complainant is entitled to gratuity. It is my considered view that prior to the enactment of the employment code, gratuity was payable if it was a term of the contract. In the current case, the contract states that the Complainant was employed on a permanent and pensionable basis and that gratuity was payable on completion of the contract. This means that gratuity would be paid when the contract is completed. 5.17 I find it necessary to distinguish "completion" from "tennination". Completion of a contract generally refers to fulfilling the agreed duration such as working until retirement age or the end of a specified fixed-term contract. Termination refers to cessation of the contract either by completion or before its completion by way of resignation, dismissal or redundancy. In this case the Complainant CamScanner JlO resigned. It is my view that since resignation is voluntary termination of the contract of employment, it has a tendency to disqualify an employee from certain benefits tied to completion such as gratuity. 5.18 Further, it is my understanding that an employee employed on a permanent and pensionable basis completes their contract of employment on retirement. Therefore, if such an employee resigns rather than retiring, they are considered to have terminated the contract rather than completed it. In other words, an employee employed on a permanent and pensionable basis and entitled to gratuity on completion of the contract, cannot claim for payment of gratuity if he resigns. In the case m casu, the complainant resigned. Therefore, I find that he is not entitled to gratuity for the period 2013 to 2019. 5.19 As regards the period from 2019 (the effective date of enactment of the Employment Code) to 28th February 2022 (the effective date of resignation), I am fortified by Section 73 of the Employment Code which provides as follows: "(1) An employer shall, at the end of a long-term contract period, pay an employee gratuity at a rate of not less than twenty-five percent of the employee's basic pay earned during the contract period. CamScanner Jll (2) Where an employee's contract of employment is terminated in accordance with this Code, the employee shall be paid gratuity prorated in accordance with the period of employment." 5.20 I am guided by Section 3 of the Employment Code defines gratuity and long-term contract as follows: "gratuity" means a payment made to an employee in respect of person's service on the expiry of a long-term contract of employment based on basic pay earnings that have accrued to the employee during the term of service; long-term contract" means a contract of service for- (a) a period exceeding twelve months, renewable for a further term;" 5.21 The definition of long-term contract above refers to contracts with a duration exceeding one year. It is my considered view that this definition includes employees who are permanent and pensionable. I say so because their employment is intended to continue indefinitely, subject to termination by either party with notice. Therefore, the classification of a permanent and pensionable job aligns with the concept of a long-term contract. 5.22 Further, I find that Section 73 of the Employment Code applies to employees on permanent and pensionable contracts as this section relates to termination of long-term contracts. I have examined the evidence on record and do not find any that shows that the Respondent paid the Complainant any gratuity. Therefore, I order that the CamScanner J12 Respondent shall pay the Complainant gratuity for the period 2013 to 2019 at a rate of 25% of his basic salary. 5.23 Pension Benefit 5.24 Section 18 of The Pension Scheme Regulation Act, Chapter 255 of The Laws of Zambia provides as follows: "(1) A pension scheme shall- (f) grant to members leaving the scheme before a benefit has become payable full portability of the accrued retirement benefits at the time the member leaves the scheme. (2) For the purposes of this section and the defined contribution schemes "portable benefits" means the total of the retirement contributions paid by the employee and the employer on the leaving member's account, plus interest during his participation under the plan. (3) Where a member leaves a scheme under paragraph (f) of subsection (1), in the case of- (a) a defined contribution scheme, the portable benefits shall be the total of the retirement contributions paid by the member and the member's employer on the leaving member's account, plus interest during his participation under the plan; and (b) a defined benefit scheme, the portable benefit shall amount to the present value of the accrued retirement pension." 5.25 The authority above gives the Complainant the right to claim his pension benefit. This is confirmed by the Respondent's letter acknowledging the complainant's resignation. In the case of Standard Chartered Bank (Z) Plc v Willard Solomon Nthanga & Others4 the Supreme Court stated as follows: CamScanner J13 "In the earlier appeal, we said, in interpreting section 18(1)(f) and 18 (3)(b) of the Pensions Scheme Regulations Act No. 28 of 1996, that the appellant [employer] was compelled by law to give full statements to the respondents and pay out on separation and that deferred pension was abolished by law, what this means in relation to this case is that at the time the Act came into effect, the deferred pensioners in the DBS became entitled to full portability of their pension benefits. For the active pensioners or active members, they were entitled to full portability of their benefits as and when they separated from employment." 5.26 It is my understanding that previously, pensions could be deferred, meaning pension benefits were withheld until a member reached retirement age or fulfilled specific conditions. This system was abolished by the Pension Scheme Regulation Act, thereby allowing members immediate access to their pension benefits upon separation from employment. Further, this decision entitles employees still contributing to the pension scheme to full portability of their benefits upon separation from employment. Similarly with the Complaint. 5.27 The authority also places an obligation on the employer (the Respondent herein), to provide full statements to employees about their pension benefits and ensure payment upon separation. In the case in casu, the Respondent filed a payment voucher (exhibit 'KMGC4') issued to Prudential Life on 29th June 2022, bearing the sum of KS,313.60 against the CamScanner J14 Complainant's name. Further, exhibit 'KMGCS' shows that the Respondent made monthly contributions of K147. 05 towards the Complainant's pension scheme, presumably, from January 2019 to December 2020, and a monthly contribution of K197.05 from January 2021 to February 2022. There is no evidence or explanation regarding the contributions made from the date of engagement, 19th August 2013 to December 2018. Therefore, I order the Respondent to give the Complainant full statements regarding his pension for purposes of claiming the same from the Pension Scheme. 5.28 In the event that the statements reveal that the Respondent did not make any contributions for the period 19th August 2013 to December 2018, the Respondent shall immediately pay the pension benefits directly to the Complainant. 5.29 Accrued Leave Days 5.30 I order that the Respondent shall pay the Complainant his leave pay stemming from accrued leave days and all other benefits due to him from 13th August 2013 to the 28th February 2022. 5.31 The Respondent claims that it paid the Complainant in full but did hot provide a detailed statement showing the number CamScanner JlS of accrued leave days and how much was due to the Complainant. The Payment statement filed by the Respondent for February 2022 shows that a basic salary of K4, 216.96, leave pay of Kl0,525.53 as, housing allowance of K2,288 and transport allowance of Kl,500. In addition, exhibit 'KMGC6' is document bearing the Complainant's name and the sum of K809.66 with the reference leave pay. it does not bear any date or explanation other than the reference. It is hard to determine the nature of the said document on examination; whether it is a receipt or a bank statement etc. 5.32 Moreover, the amount for leave pay stated on exhibit 'KMGC6' does not tally with the amount on exhibit 'KMGC3'. Therefore, there is no telling what amount was actually due to the Complainant and how much of this amount was paid to the Complainant. 5.33 Therefore, I order that all sums due to the Complainant by virtue of this judgment shall be determined by the Deputy Registrar, in support of relevant evidence. This is not a second opportunity for the parties to prosecute their case but merely an exercise meant to assist the Deputy Registrar CamScanner J16 determine the actual amounts due to the Complainant seeing that the Respondent claims that Complainant was paid in full. 5 .34 Salary Arrears 5.35 I am guided by the case of Zambia National Commercial Bank v Evans Hampopwe5, where the court in dealing with a claim for salary underpayments stated the following; "Where an employee claims underpayment of salary, wages or allowances before the Court, the employee has to plead the issue explicitly and lead evidence to prove the allegation." 5.36 Although the Complainant explicitly pleaded salary arrears from 1 March 2022 to the Judgment, he did not lead any st evidence to prove his entitlement to such claim. Therefore, this claim is dismissed. 5.37 Damages for non-payment of terminal benefits. 5.38 In the case ofZCCM v. James Matale6 we stated among other things that: " ... the Industrial Relations Court has a general jurisdiction - as we will demonstrate - and should be able to award compensation or damages, which are the universal remedy, and any other suitable awards. 5.39 I am guided by the case of Konkola Copper Mines PLC and Aaron Chinfwembe v Kingstone Simbayi7 where the Court held that it is only in deserving cases where it is proved that CamScanner J17 there are exceptional circumstances that the court will depart from the ordinary measure of damages, such as where aggravating circumstances are proved. 5.40 In casu, the Complainant has not provided any evidence to show that he suffered physical stress/mental/physiological torture and anguish as a result of non-payment of terminal benefits. Therefore, he is only entitled to the normal measure of damages, being one month's salary. 5 .41 Interest 5.42 I order that the Judgment sums discussed above shall attract interest at the short-term bank deposit rate from the date of the Notice of Complaint to the date of Judgment and thereafter, at current lending rate as determined by the Bank of Zambia from the date of Judgment until full payment. 5.43 Costs 5. 44 Ordinarily this Court does not award costs in favour of one party. The Court only deviates from this norm, in accordance with Rule 44 of the Industrial Relations Court Rules where one party has been guilty of unreasonable delay, or of taking improper, vexatious or unnecessary steps in any proceedings, or of other unreasonable conduct. None of these exceptions CamScanner Jl8 arose in the current case. For this reason, I order that each party shall bear their own costs. 5.45 Leave to appeal is granted. Dated this 30th day of December, 2024 • ~ . . . .. . . . .. . . . ......'.'. .. . Hon. Mr. Justice E. L. Musona HIGH COURT CamScanner