Stanbic Bank Zambia Limited v Natasha Patel (SP No.66/2024) (14 February 2025) – ZambiaLII

IN THE COURT OF APPEAL OF ZAMBIA SP No.66/2024 HOLDEN AT LUSAKA (Civil Jurisdiction) Kondolo SC, Majula and Banda-Bobo, JJA On 23rd October, 2024 and 14th February 2025 For the Appellant Mrs. N. Simachela of Messrs. Nchito & Nchito For the Respondent Mr. P. Chulu of Messrs. Patrick Chulu Legal Practitioners. Mr. C. Chungu of Messrs. Nsapato & Co. Advocates RULING MAJULA JA, delivered the Ruling of the Court. Cases referred to: 1. Bidvest Foods Zambia Limited and Export Limited and 4 Others v CAA Import and Export Limited - SCZ Appeal No. 56/2017 2. Astro Holdings Limited & Others v. Edgar Hamulele & Others - SCZ/ 08/ 026/ 2021 3. KV Wheels and Construction Ltd and Others v. Development Banlc of Zambia (2019 ZMSC 364) 4. Hermanus Philipus Steyn v. Giovanni Gnecchi Ruscone Sup. Ct. Appl. No. 4 of2012 R2 5. Midlands Milling v. Lloyd Tembo - CAZ Appeal No. 297/2022 6. Indo Zambia Bank v. R.M. Fumbeshi & Others - SCZ/ 7/06/2024 7. R v. Secretary of State for Trade and Industry, Ex Parte Eastaway (2000) 1 ALLER 27 8. Tanfem Limited v. Cameron Macdonald (2000) 1 WLR 1311 9. Savenda Management Services Ltd v. Stanbic Bank Zambia Ltd - SCZ Judgment No. 10 of 2018 10. Chimanga Changa Limited v. Export Trading Limited (SCZ/8/21/2021) 11. Kingfred Phiri v Life Master Limited CAZ Appeal No. 24/2023 Legislation referred to: 1. Court of Appeal Act, No. 7 of 2016 2. Employment Code Act, No. 3 of 2019 1.0 Introduction 1. 1 This is a Ruling on a motion for leave to appeal to the Supreme Court brought by the Respondent. The motion was made on the basis of Section 13(1) and (3) of the Court of Appeal Act No. 7 of 2016. 2.0 Background 2.1 The matter was before us on appeal against the decision of the lower court. The question that arose for determination was whether an employee who was dismissed while serving on a permanent and pensionable contract of employment is entitled to an award of accrued service benefits and severance pay pursuant to section 54(1) (c) of the Employment Code Act, No. 3 of 2019. R3 2.2 After considering the appeal we rendered a judgment on 22nd August, 2024 in which we held as follows: "1. Section 54(1 )(c) applies only to employees eligible for gratuity specifically those on long term contracts of 12 months or more, renewable for further terms. It does not apply to employees on permanent and pensionable contracts. 2. A permanent contract of employment and a contract of fixed duration are distinguishable. For the avoidance of doubt, they are not synonymous. 3. An employee dismissed under section 51 of the code cannot claim severance pay under section 54." 3.0 The Intended Appeal to the Supreme Court 3.1 The Applicant (who was the Respondent in our appeal) unsettled by the decision has resolved to appeal to the Supreme Court, but can only do so with leave of the court or the Supreme Court in the event that we decline. The following are the intended grounds of appeal: "1. The Court below erred in law and in fact when it held that a permanent contract is not a contract for fixed duration and thus the Appellant was not entitled to severance pay in terms of section 54 (l)(c) of the Employment Code Act. 2. The court below erred in law and in fact when it held that only employees on long term contracts can benefit R4 from section 54 (l)(c) of the Employment Code Act despite long term contracts being excluded from the entitlement. 3. The court below erred in law and in fact when it held that the appellant as a dismissed employee is not entitled to severance pay, despite not being excluded from the entitlement by section 54 (3) of the Employment Code Act. 4. The court below erred in law and in fact when it failed and neglected to make a determination on the meaning of social security scheme and whether permanent employees covered by private pension schemes can benefit in terms of section 54(1)(b) of the Employment Code Act." 4.0 Argument in support of the motion 4.1 In aid of the motion, Mr. Chungu filed an affidavit and skeleton arguments on 2nd September 2024. The thrust of his submission is that the intended appeal is premised on a novel area of law and that there are compelling reasons calling for interrogation by the Court of the last resort in relation the issues raised. 4.2 He cited the case of Bidvest Food Zambia Limited and Export Limited1 where the Supreme Court stated that leave to appeal from the Court of Appeal may be granted where the appeal raises points of law of public importance that extends beyond purely ordinary questions. Counsel argued that in the present case, the issue of severance pay for permanent employees and those who have been dismissed in accordance R5 with section 54 of the Employment Code Act requires pronouncement by the Apex Court. 5.0 Respondent's Case 5.1 The respondents unsurprisingly filed in skeleton arguments in opposition on 9th October 2024. They make reference to Section 13(3) of the Court of Appeal Act No. 7 of 2016 which emphasizes the criteria that the Court must consider to grant leave for appeal. 5.3 The respondents rely on the Supreme Court's decision in Astro Holdings Limited & Others v. Edgar Hamulele & Others2 to support their arguments regarding the form and content of an application for leave to appeal. 5.4 The respondents argue that the Bidvest Foods1 case clarifies the requirements under Section 13(3). It mandates that each ground raised in the intended appeal must satisfy at least one of the listed criteria. 5.5 The further assert that it is insufficient for an applicant to simply allege that their case meets the criteria under Section 13(3). Instead, they must demonstrate how and why each ground meets one or more of the statutory criteria. 5.6 This approach ensures that only well-substantiated appeals are granted leave, thereby preventing misuse of the appellate process. R6 5.6 The respondents argue that the appellants have not demonstrated how the grounds of appeal meet any of the criteria under Section 13(3). 5. 7 As a result, they urge the court to refuse leave to appeal to the Supreme Court, asserting that the threshold for leave has not been met. 5.8 In responding to the appellant's claim of public importance the respondents acknowledge that the appellants claim their appeal raises a fundamental point of law of public importance, specifically regarding severance pay for permanent employees. 5.9 However, the respondents argue that the point of law regarding severance pay is already clear and settled. They contend that the interpretation of Sections 51 and 54 of the Employment Code Act is straightforward. 5.10 The respondents cite KV Wheels and Construction Ltd and Others v. Development Bank of Zambia3 to emphasize the criteria for establishing a point of law of public importance. 5.11 In line with the Bidvest1 case, they reiterate that a point of public importance must meet three conditions: 1. It must be a point of law. 2. It must have public importance. 3. It must be raised in the appeal. 5.12 The respondents contend that the appellants' claim regarding severance pay is not a new or unsettled legal question. They R7 assert that the issue is adequately addressed by a clear reading of Sections 51 and 54 of the Employment Code Act. Thus, the matter does not warrant further adjudication by the Supreme Court. 5.13 Furthermore, that the severance pay issue 1s a private employment dispute between the parties, which does not transcend their individual interests to become a matter of public importance. 5.14 They cite Hermanus Philipus Steyn v. Giovanni Gnecchi Ruscone4 to emphasize that public importance involves matters that affect a wider audience and not just the parties in dispute. Public interest requires the legal issue to have broader societal · impact beyond the specific rights or circumstances of the disputing individuals. 5.15 The respondents maintain that the Midlands Milling v. Lloyd Tembo5 case, cited by the appellants, does not conflict with the current case and therefore does not justify an appeal to the Supreme Court. They assert that the factual and legal circumstances in the Midlands5 case are distinct. 5.16 The respondent has analyzed the Midlands5 case, and explained that in that case the respondent (an employee) was on a permanent and pensionable contract as a Driver/Salesman. He was dismissed for misconduct after a disciplinary hearing. 5.17 The High Court ruled that the respondent was not entitled to notice pay, gratuity, or severance pay, since he was dismissed R8 for misconduct. However, it was also noted that severance pay could apply to permanent employees under certain circumstances. 5.18 The Court of Appeal examined Section 54 of the Employment Code Act No. 3 of 2019 in detail, ultimately concluding that severance pay applies only in cases where the employee's dismissal was without fault. Thus, severance pay under Section 54(1)(a)-(e) arises only when no misconduct is involved. 5.19 The respondents argue that the current case involves clear application of Sections 51 and 54 of the Employment Code Act, and there is no need for further interpretation by the Supreme Court. 5.20 They assert that the issue is settled, and the appeal does not raise uncertain or novel points of law requiring Supreme Court review. The respondents request that the court refuse leave to appeal, as the appellants have failed to demonstrate how the grounds meet the threshold for public importance or public interest. :S.21 It is contended that there is no contradiction between the two decisions of the Court of Appeal concerning severance pay. They argue that the mode of separation applicable in the current case does not fall under the sections being disputed. 5.22 Even if the Court finds a contradiction, the respondents argue that it is not the Supreme Court's role to correct errors in the Court of Appeal's decisions unless the errors involve R9 legal questions of public importance or settled law of significant consequence. 5.23 They cite Indo Zambia Bank v. R.M. Fumbeshi & Others6, where the court stated that the Court of Appeal's errors cannot be a basis for granting leave to appeal unless they raise significant legal questions. 5.24 The respondents emphasize that dissatisfaction with a decision of the Court of Appeal does not justify granting leave to appeal. They refer to the Supreme Court of England's stance in R v. Secretary of State for Trade and Industry, ex parte Eastaway, 7 where it was held that appeals should focus on legal questions of general importance and not simply on alleged errors in the application of established law. 5.25 The respondents argue that the appellants have no reasonable prospects of success in their appeal. They cite Tanfern Limited v. Cameron Macdonald, 8 which held that: "Permission to appeal is granted if there is a real prospect of success or another compelling reason. The term 'real' implies that the prospect must be realistic and not fanciful. " 5.27 Based on their analysis, the respondents contend that the grounds for the appellants' appeal lack cogency and do not present a realistic chance of success. They submit that the appellants have failed to meet the threshold for leave under Section 13(3)(a) of the Court of Appeal Act. RIO 5.28 The respondents argue that, as noted in the Bidvest1 case, even when a case has good prospects of success, this alone is not a sufficient reason to grant leave to appeal. 5.29 They emphasize that Section 13(3)(c) of the Court of Appeal Act requires more than a mere likelihood of success-other criteria such as public importance or compelling reasons must also be present for the appeal to proceed. 5.30 The respondents acknowledge that the appellants argue leave should be granted to allow the Supreme Court an opportunity to develop Zambia's jurisprudence on severance pay. 5.31 However, they cite Savenda Management Services Ltd v. Stanbic Bank Zambia Ltd,9 which clarified that compelling reasons must transcend the personal interests of the parties and focus on broader legal principles. According to the Supreme Court, a compelling reason may exist where: 1. The appeal develops unclear or conflicting law. 2. It addresses a miscarriage ofj ustice that affects the public at large. 3. There is a fundamental misunderstanding of the law by lower courts. 5.32 In light of the foregoing, they conclude by urging us to dismiss the application on account of the failure by the Respondent to met the threshold for the grant of leave under section 13(3) of the Act. Rll 6.0 Appellant's reply 6.1 Upon receipt of the respondent's arguments the appellant reacted by filing a reply on 17th October, 2024. The appellants argue that the enactment of new legislation requires interpretation by the Supreme Court to ensure clarity and prevent inconsistent applications. 6.2 They emphasize that novel legal issues emerging from the new legislation warrant a final determination by the apex court to avoid repeated litigation and ensure uniformity in the law. The appellants reference the case of Chimanga Changa Limited v. Export Trading Limited10 where Malila JS, acting as a single judge of the Supreme Court, guided that the Supreme Court should step in to clarify legal matters when new or unclear legislation is involved. 6.2 The appellants contend that severance pay is a novel issue under the newly enacted legislation and must be definitively resolved by the Supreme Court. 6.3 They cite the Bidvest Food Zambia Limited v. CAA Import and Export Limited1 case, where the Supreme Court emphasized that only issues of public importance and significant weight should be considered for appeal. 6.4 The appellants assert that the matter at hand - severance pay for permanent employees - raises a point of public importance and public interest, meeting the criteria of Section 13(3)(a) and (b) of the Court of Appeal Act. R12 6.5 They argue that since this is the first time the Supreme Court will be interpreting Section 54 of the Employment Code Act, it is essential to resolve the matter with finality for future applications. 6.6 The appellants point out contradictions in recent Court of Appeal decisions regarding severance pay. They emphasize that Section 125(3) of the Constitution of Zambia mandates the Supreme Court to provide clear guidance and develop jurisprudence in the interest of justice. 6. 7 They argue that the appeal presents an opportunity for the Supreme Court to clarify the legal position on severance pay and further develop Zambia's jurisprudence on employment law. 6.8 They reference Hermanus Philips Steyn v. Giovanni Gnecchi-Ruscone4 to underscore that matters requ1nng clarification must have general public importance, transcending individual disputes to ensure legal certainty and public benefit. 6.9 The appellants assert that the question of severance pay for permanent and dismissed employees holds general importance, with implications beyond the current case. 6.10 They argue that clarifying the entitlement to severance pay will have a positive impact on the public and the employment sector as a whole, both now and in the future. Rl3 6.11 In light of the foregoing, the appellants pray that the court grants them leave to appeal to the Supreme Court, as the proposed grounds meet the criteria outlined in Section 13(3) of the Court of Appeal Act. 7.0 Consideration and Decision of the Court 7.1 We have carefully considered the intended grounds of appeal as well as the industrious submissions of counsel. The essence of the applicant's argument is that the intended appeal has raised points that are of significant public interest and public importance. It has been strongly asserted that the grounds are premised on a novel area of law which transcends beyond the private interest of the parties. 7.2 The Respondent on the other hand has vehemently opposed the application contending that the intended appeal does not raise any points of public importance. The Respondent has stated that the intended appeal revolves around settled principles of law. 7.3 In determining this application we shall quickly turn to the provisions of section 13 of the Court of Appeal Act which enacts as follows: (3) The Court may grant leave to appeal where it considers that: (a) the appeal raises a point of law of public importance; R14 (b) it is desirable and in the public interest that an appeal by the person convicted should be determined by the Supreme Court; (c) the appeal would have a reasonable prospect of success; or (d)there is some other compelling reason for the appeal to be heard. 7. 4 In the case of Bidvest Foods Zambia Limited and 4 Others v CAA Import and Export Limited,1 the Supreme Court had occasion to discuss at length the factors that must be considered in deciding whether the applicant has met the threshold set out in section 13 when it held inter alia as follows: "It is in that spirit that Section 13 of the Court ofA ppeal Act, restricting access to the Supreme Court by refe rring to the apex court only weighty issues in the most deserving of cases, should be understood... It is thus absolutely important that an intending appellant should frame the point of law of public importance arising from the judgment of the Court of Appeal if leave to appeal is to be given. That point of law must be on an issue upon which that court has adiudicated. (.Our Emphasis) 7.5 The issue for determination is whether the Respondent has met the threshold set out by the aforecited authorities to enable us to exercise our discretion in her favour. In the case of King/red Phiri v Life Master Limited11 we held as follows: R15 "In the Natasha Patel case, we adequately distinguished between a fixed-term contract and a permanent and pensionable contract. We made the point that while a fixed term contract has a set end date; a permanent and pensionable contract of employment does not. We stand by that decision and the distinction therein." 7.6 In the same case, we went on to hold: "In view of the similarities of circumstances of the three cases we earlier decided upon, and the position of the law as elucidated above, we have no reason to depart from our decisions in the Midlands Milling case (supra) and the Natasha Patel case (supra). Our firmly held position is that employees who are summarily dismissed are dealt with in accordance with Section 50 of the Act and the extent and scope of their benefits are as provided in Section 51 of the Act. For avoidance of doubt, employees dismissed from employment for disciplinary reasons and those terminated otherwise from permanent and pensionable contracts of employment are not entitled to a severance pay under Section 54 (1) of the Act." 7. 7 Based on the foregoing, in our eyes this is not an appropriate case in which leave to appeal to the Apex Court should be granted as the issues that the Respondent wants to appeal on have been settled. Rl6 7.8 In sum we are of the well-considered view that the proposed appeal does not raise any points of law of public importance deserving of the Court of last resort interrogation. 7. 9 In light of the foregoing, the application for leave to appeal to the Supreme Court is declined. 7.10 Each party shall bear its own costs . . .. . . .. .. . . . . . . . . . .. . . . . .. . . . . . . . . .. . . . . .. . . . . .. M.M. Kondolo, SC COURT OF APPEAL JUDGE .· ······~ ··············· ·······~ ·················· B.M. Majula A.M. Banda-Bobo COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE