Yara Tanzania Limited vs Eseko Mafuru (Civil Appeal No. 105 of 2024) [2026] TZCA 611 (1 June 2026)

IN THE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM CORAM: LEVIRA. J.A.. MASHAKA. 3.A. And NGWEMBE. J.A.l CIVIL APPEAL NO. 105 OF 2024 YARA TANZANIA LIMITED........................................................... APPELANT VERSUS ESEKO MAFURU.....................................................................RESPONDENT (Appeal from the decision of the High Court of Tanzania, Labour Division at Dar es Salaam) (Mlvambina. 3.1 dated 15th day of December, 2023 in Labour Revision No. 224 of 2023 JUDGMENT OF THE COURT 28m April 8c 1st Ju n e, 2026 NGWEMBE. JA.: YARA TANZANIA LIMITED, the appellant herein, is before the Court faulting the judgment and decree of the High Court of Tanzania (Labour Division) (the Labour Court) sitting at Dar es Salaam (Mlyambina, J.) in Labour Revision No. 224 of 2023, which partly quashed the award of the Commission for Mediation and Arbitration (the CMA) of Temeke in Labour Dispute No. CMA/DSM/TEM/72/2021/43/2021. The CMA decided that the appellant had reason to terminate the respondent, thus substantive fairness, but faulted the procedure, thus procedural i unfairness, hence awarded the respondent four months compensation for procedural unfairness. The Revision before the Labour Court found the termination was both substantively and procedurally unfair, hence awarded him twelve months compensation. Being disgruntled, the appellant lodged the instant appeal. The material facts obtained from the record of appeal indicates that the respondent was employed by the appellant on 01/03/2016 as permanent employee performing a duty of Dispatch and Stock Coordinator. Later, on 20/9/2019 he was promoted to a managerial post of Dispatch and Stocks Specialist. But, on 04/09/2020 he was terminated on gross negligence. It was alleged that he negligently occasioned loss of Stock-110 MT metric tons of DAP fertilizer equivalent to 4 trucks causing a total loss of TZS. 100,000,000.00 and failed to account for or report the loss while he was in-charge of the plant stocks in Dar es Salaam. The disciplinary proceedings were initiated by the appellant by serving him with an inquiry letter dated 13/07/2020. The respondent replied by a total denial on 14/07/2020. Consequently, on 20/07/2020 he was suspended on full salary payment to pave way for investigation. A disciplinary Committee was formed and on 10/08/2020 a formal 2 charge was preferred against the respondent with a notice of disciplinary hearing scheduled on 13/08/2020. The result of that disciplinary hearing, the respondent was found guilty as charged and it proposed termination from employment. Unsuccessfully, the respondent on 02/09/2020 exhausted his rights of appeal within the appellant's hierarchy. Immediately after termination, the appellant paid him all his statutory terminal benefits. Being dissatisfied, the respondent contested his termination before the CMA lamenting for unfair termination both substantively and procedurally and claimed for 24 months compensation; statutory benefits; and general damages for lowering his dignity. The total claim amounted to TZS. 188, 843, 921/ 22. However, the appellant maintained that there was fair reason for termination and that the procedure was followed, hence the termination was fair. Upon hearing, the CMA found that there was a fair reason for termination but faulted the procedure for failure to avail the respondent with the investigation report. The termination was declared procedurally unfair, hence awarded him compensation of 4 months remuneration but he was denied the claim for severance pay. 3 The respondent was dissatisfied with the award of the CMA, hence he lodged Revision Application No. 224 of 2023 to the Labour Court. Among the grounds brought before the Labour Court was failure of the CMA to analyse the evidence adduced during trial and questioned the reasons for termination. In determination of the revision, the Labour Court found merit on the grounds of revision and found that the termination was substantively and procedurally unfair. Thus, it enhanced the compensation to 12 months salaries and severance pay to the tune of TZS. 2,717,731/02. That decision offended the appellant, which is the subject of the present appeal. In this appeal, the appellant advanced five grounds, to w it 1) That the High Court Judge erred in taw in not finding that the reason to terminate the respondent was valid given the managerial role and position he was holding. 2) The High Court Judge erred in law in discrediting the investigation report adm itted as exhibit D16 contrary to the law. 3) The High Court Judge erred in law in holding that the reason for termination (misconduct) was not proved/valid for failure to tender evidence during disciplinary hearing while the same falls on procedural unfairness. 4) The High Court Judge erred in law in not upholding the only CMA award o f re lie f for unprocedural termination in the circumstance o f the case. 5) The High Court Judge erred in law in setting aside the CMA award and allow the application for revision No. 224 o f2023 in favour o f the respondent herein. At the hearing of this appeal, Mr. Erick Denga and Mr. Mafuru Marufu, learned advocates entered appearance for the parties respectively. When the Court invited Mr. Denga to address the Court, at the outset, he adopted the appellant's written submission to form part of his oral account and argued briefly on all grounds of appeal. Arguing on ground one, he referred the Court to pages 80 and 288 of the record of appeal and to exhibit Dl, that the respondent being at the managerial position, ought to know the governing rules of the company. In this point, he referred the Court to our decision in Platinam Credit Ltd v. Martin Joaquim, Civil Appeal No. 138 of 2022 [2023] TZCA 17740. Thus, he implored the Court to find the first ground of appeal is merited. On validity of exhibit D 16 which form the second ground of appeal, the learned counsel argued that the investigation report which was discredited by the learned High Court Judge as appears on page 120 of the record of appeal, was authentic and was properly admitted at the trial and was cross examined by the respondent's advocate. He added that, the law did not describe the format of the investigation report. Therefore, to him the format was immaterial so long it could assist the employer to arrive to an informed decision. He also, argued that DW3 was among the investigators and author of the report, hence he testified in accordance with his investigative results as it appears on pages 274 to 280 of the record of appeal. In regard to ground three, the learned advocate argued strongly that the High Court Judge traversed in deciding on substantive fairness while the decision of the CMA was only on procedural unfairness which was not challenged before the Labour Court. He referred the Court to the case of Platinum Credit Limited (supra). He thus prayed for the ground to be allowed. In relation to ground four, the appellant argued briefly that the reliefs granted by the Labour Court was for both substantive and procedural unfairness. The compensation of 12 months without giving reasons faulted the law. He further challenged the use of rule 32 (5) instead of section 44 (2) of the Employment and Labour Relations Act, Cap 366 R. E. 2019 (ELRA) whose contents are different. He buttressed his submission by our decision in Felician Rutwaza v. World Vision Tanzania, (Civil Appeal No. 213 of 2019) [2021] TZCA 2 (2 February 2021). He thus, prayed the Court to sustain the compensation awarded by the CMA. In regard to ground five on appropriate compensation, Mr. Denga aligned his submission with the award of the CMA as fair compensation for procedural unfairness. The reason for termination was well conceived as the respondent's act of negligence caused substantial loss to the appellant as was decided by the CMA. He added that exhibit D16 and the testimony of DW3 confirmed negligence of the respondent which resulted into loss of properties, hence constituted substantive fairness for termination. Finally, Mr. Denga implored the Court to allow the appeal, quash the decision of the Labour Court and restore the decision of the CMA. Mr. Mafuru for the respondent, after adopting the respondent's written submission lodged in Court on 10th June, 2024 to form part of his oral account, conceded that, it was true that the respondent held a managerial position at the appellant's company, but he questioned on whether he committed the alleged gross negligence. He argued that the respondent did not commit any negligence and there was no rules or definitive instructions set by the appellant to be followed which the respondent faulted. He distinguished the decision of the High Court in 7 Amos Richard v. Pangea Minerals Limited, Revision No. 98 of 2015 (unreported), for the following reasons: first, the decision is of the subordinate court of the Court; second, in that case, there was clear guidelines or policy which was contravened contrary to the present case where there was no guidelines or proper instructions; third, the respondent had for the first time held the managerial position contrary to the circumstances in the cited case; fourth, in the instant case there was no previous warning unlike in the cited case. He thus, referred the Court to the decision in Platinum Credit Limited (supra) and rule 12 of GN. No. 42 of 2007. He insisted that in the absence of clear governing rules or instructions to be followed by all employees, the respondent cannot be presumed to know something which does not exist. Arguing on the second ground of appeal, Mr. Mafuru vehemently submitted that the ground does not constitute a point of law capable of being determined by the Court. He impressed the Court to uphold the reasoning of the Labour Court that exhibit D 16 was not authentic piece of evidence worth consideration by the Court. It was invalid and disqualified as an investigation report for court use. Based on exhibit D 16, which suffers inadequacies on probative value of being reliable evidence, he challenged even the evidence of DW3. That, the testimony 8 of DW3 had no evidential value because he was a mere accountant incapable of investigating a loss as alleged. He referred the Court to pages 122 to 124 of the record of appeal. He buttressed his argument with the case of Director of Public Prosecutions v. Sharifa Mohamed @ Athuman and 6 Others, Criminal Appeal No. 74 of 2016 (unreported). He thus, invited the Court to find the decision of the CMA was properly revised by the Labour Court. Responding to ground 3 of appeal, Mr. Mafuru referred to page 732 of the record of appeal that the respondent was substantively and procedurally unfairly terminated from employment. To justify his assertion, he provided the definition of fair as per Black's Law dictionary that, having the qualities of impartiality and honest, from prejudice, favouritism and self-interest, just, equitable, even handed, equal as between conflicting interests. Also, he referred to section 37 (1) (2) (a) of the ELRA which provides unfair termination. He strongly contradicted that there was no valid reason for termination of the respondent. On reliefs entitled to the respondent which is covered in ground 4 of the appeal, Mr. Marufu, argued that the available statutory compensation under section 40 (1) (c) of the ELRA is not less than 12 months wages as decided by the Labour Court and severance allowance. He thus, urged the Court to dismiss the ground for lack of merits. Lastly, on ground 5, the learned counsel urged the Court to dismiss the appeal as a whole and uphold the decision of the Labour Court. In a brief rejoinder, Mr. Denga responded on whether there was defined instructions or rules to govern the operations of the appellant. He referred the Court to page 89 of the record of appeal which were proper instructions to be followed and the Labour Court at page 733 of the record of appeal discussed it. In re-joining to ground 2, he briefly argued that, since the CMA and the Labour Court have different conclusions on this ground, despite of being a mixture of point of facts and law, it is capable of being determined by the Court as it decided in the case of Severo Mtegeki v. Mamlaka ya Maji Safi na Usafi wa Mazingira Mjini Dodoma (DUWASA), Civil Appeal No. 343 of 2019 (unreported). Thus, he invited the Court to re-evaluate the evidence and arrive into its independent conclusion. In regard to investigation report, Mr. Denga was firm that it was done by Accounts Department and DW3 being an accountant testified at the CMA. Moreover, on ground 3, he re-joined that it Is backed by rule 13 (5) of the Rules. Responding to ground 4, Mr. Denga reiterated his 10 submission in chief and referred the Court to section 41 of the ELRA read together with rule 35 (5) of the GN. No. 67 of 2007, as interpreted in the case of Tanga Cement Pic v. Isaack Mandara (Civil Appeal No. 124 of 2023) [2025] TZCA 504 (28 May 2025). He thus, implored the Court to allow the appeal. We have examined the record of appeal and considered the contending oral and written submissions of the learned counsel as well as the authorities relied upon by the parties. First, we appreciate for their detailed and researched submissions; second, we find parties are at one on procedural unfairness as was decided by the CMA; third, the contentious issue which we intend to deal with is whether the termination was substantively fair. In the course of determining this ground, we will deal with other issues raised and argued by the learned advocates. Our starting point will involve a reflection of the law in relation to termination of employment. For clarity, we wish to reproduce the provisions of section 38 (2) of the ELRA hereunder: "A termination o f employment by an employer is unfair if the employer falls to prove- (a) that the reason for the termination is valid; l i (b) th at the reason is a fa ir reason- (i) related to the em ployee's conduct, capacity o r com patibility; o r (ii) based on the operational requirem ents o f the em ployer; and (c)th a t the em ploym ent was term inated in accordance with a fa ir procedure." Furthermore, rule 8 of the Employment and Labour Relations (Code of Good Practice) provides that: "An em ployer m ay term inate the em ploym ent o f an em ployee if he has a fa ir reason to do so as defined in section 38 (2) o f the A ct" Clearly, the above provisions underscore the need of employers to ensure any termination of employment is backed by three conditions; first, the reason for termination must be valid; second, that reason must befair, in other words, there must be substantive fairness; and third, the termination must be in accordance with a fair procedure, in other words, there must be procedural fairness. (See, Joseph Fissoo and 58 Others v. Ithna Asheri Charitable Hospital, (Civil Appeal No. 514 of 2020) [2020] TZCA 1952. In this appeal the learned advocates were in fierce tug of war, each party trying to convince us regarding the termination. While the counsel 12 for the appellant was vehemently convincing us that the termination of the respondent was substantively fair, the respondent's counsel said the termination was substantively unfair. However, on procedural fairness, we view that the learned advocates are in one as decided by the CMA and upheld by the Labour Court. The conclusion of the Labour Court, that the respondent's termination was both substantively and procedurally unfairly, triggered the instant appeal. Otherwise, we view that the appellant was satisfied with the decision of the CMA and was ready to comply with its orders. We have therefore, decided to reserve our energy from discussing on uncontroverted issues of procedural unfairness and deal with reasons for termination. Undisputedly, the respondent occupied managerial position from 1st October, 2019 to the date of termination. As may be seen at page 80 of the record of appeal, is a letter of his promotion which part of it states that: " This position form s part o f management and is categorized as m anagerial role giving you fu ll responsibility o f Dispatch Function , its cost, team and a ll perform ance deliverables." This point is also reflected at page 288 of the record of appeal that in re-examination, the respondent testified under oath as follows: 13 "Kwa m ujibu wa D -l barua ya kupandishwa cheo n i kw eli nilitoka kuwa mfanyakazi wa kawaida na kuingia katika Utawa/a." A brief interpretation of the above excerpt means, the respondent was promoted to a managerial level. Therefore, the position of the respondent at the time of his termination was ascertained that he was at the managerial level. The follow up question is whether at that position of employment he ought to know the rules and guidelines of the company? To answer this question, the learned counsel for the appellant firmly responded that the respondent being at the managerial level knew or ought to know the company rules and guidelines, while Mr. Mafuru, firmly opposed and argued that in the absence of definitive instructions or guidelines, the respondent could not know them. On our part we find no better words than what we stated in Platinum Credit Limited (supra) that rules or regulations or instructions governing employee's conduct may arise either from the express (disciplinary code of the company) or implied terms of the employee's contract as well as from general standards applicable to the workplace. In the above decision, we further observed as follows: " Generally, employees are expected to carry out their duties effectively and conduct themselves in 14 a reasonable manner so that any act sh all a t a ll- tim e be in accordance with the policies and rules existing or im plied within an organization. That said, some o f the rules need not be written but can be presum ed from the nature o f business o f the organization." In the present case there is clear and uncontroverted evidence that the respondent, as Dispatch and Stock Specialist which is a managerial position, was charged with responsibilities as clearly indicated in his job description appearing at page 87 of the record of appeal. He was responsible for all aspects of dispatch and to ensure stock is maintained correctly. Also, he was responsible to ensure integrity and accuracy of the stock management system; dispatch all orders on a timely basis as planned and focus on the leading indicators which will proactively support the performance targets as set by the appellant. Other rules were clearly explained as appears on page 88 of the record of appeal including, to manage a team of Dispatch Operators and to produce daily dispatch report. Despite those instructions in the Job Description, other rules and guidelines are statutory as provided for under the labour laws and their regulations, including rule 12 (3) of the GN. No. 42 of 2007 where the 15 law provides categories of offences which may justify termination including gross negligence and gross dishonesty. In this appeal, the CMA as appears in page 304 of the record of appeal, found that the respondent committed gross negligence which resulted into a big loss to the employer, thus the employer had a good reason for termination. However, the High Court viewed otherwise, which we find: first, the respondent holding a managerial position ought to know the guiding rules or instructions of the company; second, the respondent had no reason to plead ignorance of the guiding rules and instructions of the appellant because among them were attached to in the employment contract referred to above; three, at the managerial cadre, the respondent was assumed to know the governing rules provided for under the labour laws and its rules as cited above. Therefore, we are settled in our minds that the respondent is precluded from alleging ignorance of the guiding rules of the appellant. Next is whether the respondent was negligent and thus caused loss to the employer. It is on record that the appellant complained that the respondent committed a gross negligence leading to the loss of the appellant's property cum fertilizers namely DAP to the tune of 100 metric tons, equivalent to four trucks, worth more than TZS. 100 million. This 16 fact was testified by DW3 and exhibit D 16 which was taken as an investigation report at pages 63 to 67 of the record of appeal and the testimony of DW3 at pages 274 to 279 of the record of appeal. We find; first, DW3 was among the author of exhibit D 16 which indicated imbalance between physical and system reports. Hence, 100 metric tons of DAP fertilizer were found missing. The validity of exhibit D 16 was questioned by the respondent at the trial as it appears at page 277 of the record of appeal. We accede to the reasoning of the trial tribunal that, the appellant was in full compliance with rule 13 (1) of the GN. No. 42 of 2007 since there is no hard and fast rule under the labour laws prescribing format of how an investigation report should look like. We therefore, accede that; first, there is no specific format of report writing, always depends on the purpose of the report; second, this is an audit report which was internally prepared to verify the available materials physically compared to their system. It was not aimed to work as forensic audit for external use; three, DW3 being among the author of exhibit D 16 was qualified to tender and authenticate what he observed during investigation. In the circumstances, we find DW3 was a qualified and competent witness and the exhibit D 16 was valid evidence to be relied upon. 17 Given the circumstances of the available records, undeniably, the appellant suffered loss of 100 metric tons, equivalent to more than TZS. 100 million. Such huge loss, occurred under supervision of the respondent. Rule 12 (3) of GN. No. 42 of 2007 provides reasons for termination of an employee including gross negligence. For clarity subrule 3 of rule 12 is relevant to be reproduced hereunder: 12 (3) "the acts which may ju stify termination are (a) gross dishonest; (b) w ilful damage to property; (c) w ilful endangering the safety o f others; (d) gross negligence; (e) assault on a co- employee, supplier, custom er or a member o f the fam ily of, and any person associated with, the employer; and (f) gross insubordination." In view of the above discussion and the provisions referred thereon we entertain no slight doubt that there was ample evidence proving that the respondent was in-charge of the stock and supplies. He was responsible for the proper keeping of the stock and that there was a loss of stocks under his supervision. He was responsible to report the loss but he failed. Thus amounted to gross negligence which was a good reason for termination of his employment. Conclusively, we depart from 18 the conclusion arrived by the learned High Court Judge and uphold the decision of the learned Arbitrator that the appellant had substantive reason to terminate the respondent. In the final analysis, we hold that the appeal is merited. It is therefore, allowed. We quash the decision of the High Court and uphold the decision of the CMA. Since this is a labour matter, we make no order as to costs. DATED at DAR ES SALAAM this 28th day of May, 2026. Judgment delivered this 1st day of June, 2026 in the presence Ms. Digna Aniseth Jumanne, learned counsel for the Appellant, Ms. Maria Godfrey Elfas, learned counsel for the Respondent and Ms. Janekissa Bukuku, Court clerk, is hereby certified as a true copy of the original. M. C. LEVIRA JUSTICE OF APPEAL L. L. MASHAKA JUSTICE OF APPEAL P. J. NGWEMBE JUSTICE OF APPEAL