Athuman Ismail and 4 Others vs PIL (Tanzania) Limited (Civil Appeal No. 644 of 2023) [2026] TZCA 600 (22 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM (CORAM: LEVIRA, J.A., MASHAKA. 3.A., AND NGWEMBE. J.A.^ CIVIL APPEAL NO. 644 OF 2023 ATHUMAN ISMAIL ....................................................... PROTASE PROJESTUS ....... BARAKA THOMAS LWILA... JOHN ANDERSON MUNISI . AARON GABRIEL HABASH .. PIL (TANZANIA) LIMITED .. VERSUS (Appeal from the decision of the High Court of Tanzania, Labour Division at Dar es Salaam) (Mqanga, J.) dated 23r d day of August, 2023 in Labour Revision No. 138 of 2023 JUDGMENT OF THE COURT 7th & 22nd May, 2026 NGWEMBE. JA.: The appellants, in this appeal, were employees of the respondent, PIL (Tanzania) Limited, a shipping agency. They were employed on diverse dates holding various positions including, Operation Executive; Senior Operation Executive; Documentation Executive; and Head of IT. They worked for several years, receiving periodic salary increments and promotions, indicating that their performance was appraised. However, l

in July 2020, all five appellants were retrenched due to financial difficulties of the respondent and occurrence of COVID 19 pandemic. It is on record that prior to the retrenchment, a comprehensive financial assessment was made, including profit-and-loss reports showing a decline in revenue from TZS. 4.7 billion in 2018 to TZS 3.7 billion in 2019. Also, the company incurred losses for several consecutive months in 2020. As a result, the respondent resorted to other measures including cost-cutting, tax reduction, negotiations with landlord and managing daily operational expenses. However, at the end, reduction of workforce through retrenchment became inevitable. The record of appeal further indicates that, retrenchment process commenced on 1s t July 2020, a notice of intention to carry retrenchment was displayed at the workplace, inviting all employees to attend a consultative meeting which was scheduled on 8th July 2020. The notice outlined the agenda; reasons for retrenchment; measures taken to avoid or minimize job losses; selection criteria; timing; severance entitlements; and steps to mitigate adverse effects. The meeting was attended by all employees and management with facilitation of an external Human Resource (HR) consultant, one Damian Victus. At the end of the meeting, a retrenchment agreement was prepared and signed by all 2

employees on one side and the General Manager Finance and Administration Manager on the other. Finally, on 14th July 2020, the appellants received formal retrenchment letters and were paid their terminal benefits together with certificate of service. Having signed the retrenchment agreement as it appears in pages 186 to 191 of the record of appeal and being paid their entitlements, signed clearance forms and received certificate of service, later the appellants claimed to be dissatisfied, thus filed a complaint of unfair termination before the Commission for Mediation and Arbitration (the CMA) in Labour Dispute No. CMA/DSM/645/2020 which was dismissed. Aggrieved thereof, the appellants unsuccessfully, applied for revision before the High Court of Tanzania, Labour Division (the Labour Court) at Dar es Salaam in Labour Revision No. 138 of 2023. The High Court, found the respondent had valid economic reasons for retrenchment and by receipt of terminal benefits without objection, the appellants were estopped from challenging the fairness or unfairness of their retrenchment. In law, they were required to refer any grievances or disagreements to the CMA before they accepted the retrenchment package. The Labour Court observed that, acceptance of retrenchment package precluded the subsequent complaints, 3

consequently, the revision was dismissed, hence the present appeal which advanced 5 grounds as follows: (1) The High Court Judge erred in iaw by reaching to the decision that ; disclosure o f relevant information under section 38 (1) (b) o f Cap 366 R.E. 2019 did not require the respondent to tender annual report and other important documents for discussion during retrenchment exercise; (2) Upon being finding that the Arbitrator was in error in deciding that section 38 (1) should not be complied in a checklist fashion > it was a grave error to the High Court Judge for failure to rule that the requirements enshrined under section 38 o f Cap 366 R.E. 2019 were not met by the respondent; (3) The High Court Judge erred in iaw and in fact by failure to rule that there was no retrenchment agreement executed between the appellants and respondent; (4) In absence o f proof that the appellants were consulted by the respondent before termination ; the High Court erred in iaw by holding that the appellants were required to comply with section 38 (2) o f Cap 366 R. E. 2019 by filing the dispute to the CMA before receiving retrenchment package; and 4

(5) The High Court Judge erred in iaw by failure to hold that the entire retrenchment exercise was faulty and redundant for failure to afford the appellants the chance o f being represented during retrenchment exercise. At the hearing of the appeal, the appellants were represented by Mr. Sylivanus Mayenga, learned advocate, whereas the respondent had the services of Mr. Sisty Benard, also learned counsel. Upon being invited to address the Court, Mr. Mayenga adopted the appellants' written submissions lodged in Court on 15th December, 2023 to form part of his oral account. He argued that the fundamental provision of the law which is subject of the Court's determination is section 39 of the Employment and Labour Relations Act, Cap 366 of 2019 (the ELRA), which provides procedures for retrenchment. He added that, the epicenter of the appellants' complaints is on failure of the respondent to comply with the legal requirements as itemized in section 39 of the ELRA. That, the employer did not disclose all relevant information, including the annual financial report of the company which led the retrenchment exercise to unfair termination. Moreover, Mr. Mayenga submitted that the names of the intended retrenches were not mentioned at the workers and management consultation meeting. Mr. 5

Mayenga also, questioned the non-disclosure of the number of workers subject to retrenchment in the consultation meeting. At the end, only seven (7) out of many employees were retrenched, he emphasized. Despite being paid their terminal benefits, he contended that was not a bar for the appellants to challenge legality of their retrenchment. Finally, he implored the Court to allow the appeal and order payment of 24 months compensation for unfair termination. In turn, Mr. Bernard argued jointly grounds 1 and 2 which both relate to the claimed failure of the respondent to give all relevant documents. He referred the Court to exhibit D4 at page 187 of the record of appeal which comprised minutes of the meeting between the workers and the management. He emphasized that all information related to the financial position of the Company was disclosed during that meeting. He also, referred the Court to page 519 of the record of appeal where the High Court Judge discussed in detail on the reasons for retrenchment, hence the appellants were well informed on the reasons for retrenchment. Thus, no one among them either raised any qualms at the meeting or refused to sign the retrenchment agreement. 6

In respect of signing the agreement, Mr. Bernard argued that all appellants signed as appears in page 522 of the record of appeal together with pages 54 and 55 which comprise proceedings at the CMA. In relation to ground 4, Mr. Bernard argued briefly that the selection of retrenches was based on skills, performance and experience as indicated on page 188 of the record of appeal. Finally, on ground 5, Mr. Bernard was brief that there is no legal requirement for representation on retrenchment process; further that, under section 39 (2) of the ELRA, had the appellants' disagreed with the retrenchment, the matter would go to the CMA for determination. He emphasized that the consultative meeting was held on 8/7/2020 while the retrenchment agreement was signed on 14/7/2020. In conclusion, he submitted that the appellants were paid all their entitlements and they never complained. Hence, urged the Court to dismiss the appeal entirely for lack of merits. In a brief rejoinder, Mr. Mayenga reiterated his submission in chief and insisted that, despite the disclosure of the reasons for retrenchment, the question remained as to whether those reasons were detailed enough to make the appellants with informed decision. Also, he argued 7

that the contract was signed prior to the selection of persons subject to retrenchment, hence unfair termination. We have carefully considered the arguments by the learned counsel for the parties, the grounds and record of appeal together with the written arguments of the appellants. We observe that, the crucial issue for our determination in the five grounds of appeal under consideration is, whether the retrenchment of the appellants followed the laid down procedures and whether the concurrent decisions of the CMA and the Labour Court was backed up by acceptable reasons and the law. At the outset, we wish to state that, retrenchment is a consultative process of ending up employment of a person or group of employees due to financial difficulties or operational requirement of the business of the employer. In our country, retrenchment process is governed by labour laws including section 39 (1) (2) and (3) of the ELRA. For clarity the provisions are reproduced hereunder: "39 - (1) In any termination for operational requirements (retrenchment), the employer shall comply with following principles, that is to say he shall- 8

(a) Give notice o f any intention to retrench as soon as it is contemplated; (b) Disclose all relevant information on the intended retrenchment for the purpose o f proper consultation; (c) Consult prior to retrenchment or redundancy on- (i) The reasons for the intended retrenchment; (ii) Any measures to avoid or minimize the intended retrenchment; (iii) The method o f selection o f the employees to be retrenched; (iv) The timing o f the retrenchment; and (v) Severance pay in respect o f the retrenchment; and (d) Give the notice, make the disclosure and consult, in terms o f this subsection with- i) any trade union recognized in terms o f section 68; ii) any registered trade union which members in the workplace not represented by a recognized trade union; 9

iii) any employee not represented by a recognized or registered trade union. (2) Where in the consultations held in terms o f subsection (1) no agreement is reached between the parties, the matter shall be referred to mediation under Part VIII o f this Act. (3) Where the mediation has failed, the dispute shall be referred to arbitration which shall be concluded within thirty days during which period no retrenchment shall take effect and, where the employees are dissatisfied with the award and are desirous to proceed with revision to the Labour Court under section 92 (2), the employer may proceed with their retrenchment." The above provision is read together with rule 23 of the Employment and Labour Relations (Code of Good Practice) Rules, GN. No. 42 of 2007 (the Code of Good Practice) specifically, rule 23 (4) which provides that: "... the purpose o f the consultation required by section 39 o f the Act is to permit the parties, in the form o f a joint problem - solving exercise, to reach agreement on - (a) the reasons for the intended retrenchment; 10

(b) any measures to avoid or minimize the intended retrenchment such as transfer to other jobs, early retirement, voluntary retrenchment packages, lay off; (c) criteria for selecting the employees for termination, such as last in first out (LIFO), subject to the need to retain key jobs, experience or special skills, affirmative action and qualifications; (d) the timing o f the retrenchments; (e) severance pay and other conditions on which terminations take place; and (f) steps to avoid the adverse effects o f the terminations such as time o ff to seek work." The above provisions set mandatory conditions to be observed for proper retrenchment. The above provisions have received a comprehensive interpretation by the Court including the following decisions; Haider Mwinyimvua and Others v. Deposit Insurance board and Another, Civil Appeal No. 250 of 2018 [2022] TZCA 97, Sharaf Shipping Agency (T) Ltd v. Bacilia Constantine and Others, Civil Appeal No 56 of 2019 [2022] TZCA 291 and Shita Mohamed Kanuka v. Freigh in Time (T) Ltd, Civil Appeal No. 657 of 2024 [2026] TZCA 511. At the first case, the Court observed that: "In our view it is dear that subsection (1) (a) (b) and (c) above creates three preconditions for 11

retrenchment, firstly, that it imposes on the employer the onus to give notice o f any intention to retrench as soon as it is contemplated; secondly, it requires the employer to disclose all relevant information on the intended retrenchment for the purpose o f proper consultation; and thirdly, it enjoins the employer to consult prior to retrenchment or redundancy on the matter." Reverting to the instant appeal, our careful perusal to the record of appeal, leaves us with no doubt that the respondent complied with the requirements prescribed under 39 (1) (a) (b) and (c) of the ELRA. Despite the fact that the appellants' counsel stood firm to argue that the respondent did not comply with that legal requirement, such argument is defeated by the record of appeal on page 520, the High Court Judge discussed extenso on this issue and concluded that the employer was not obliged to table the annual financial report or similar documents for discussion. The documents tabled therein were enough for proper consultations. We agree with the learned High Court Judge that annual financial report is not part of the legal requirements enshrined in section 39 of the ELRA. The rationale of section 39 of the ELRA is to ensure that employees are placed in a position to engage in a meaningful discussion 12

with the reasons for the intended retrenchment, to suggest alternatives, and to mitigate its effects. Since the respondent demonstrated economic difficulties as the ground for retrenchment, the financial statements and profit-and-ioss reports demonstrated that difficulty and constituted relevant information to engage the employees into a meaningful discussion (See exhibits D1 and D2). In this ground we pay homage to our decision in the case Richard Eusebio v. NCBA Bank Tanzania Ltd (Civil Appeal No. 622 of 2023) [2025] TZCA 1289, where we held that: 'We also consider it necessary to emphasize that the law does not require consultations to result in an agreem entrather, it requires a genuine and meaningful engagement aimed at exploring alternatives and mitigating the adverse effects o f retrenchment. "(Emphasis added) We therefore, find that the respondent provided all necessary documents for a meaningful engagement of the employees in the intended retrenchment. Thus, we find the first and second grounds of appeal not merited. In regard to the third ground, in the cause of hearing, the learned counsel for the appellant abandoned it because it is evident that the 13

retrenchment process resulted into an agreement which was signed by both parties as it appears on pages 186 to 191 of the record of appeal. In the circumstances, we need not to burn our energy on this issue. On whether the appellants were estopped from instituting a dispute after receiving their terminal benefits which is the fourth ground of appeal, we find this should not tie us much for the following reasons: first, it is a legal requirement that in the consultations held in terms of section 39 (1) of the ELRA if there is no agreement between the parties, the matter should be referred for mediation in terms of subsection 2 of section 39 and Part VIII of the ELRA. Second, since parties did not have any disagreement during and after the consultative meeting until both signed the retrenchment agreement, followed with payment of all entitlements, under normal circumstances, it was not expected to have subsequent labour dispute like in this appeal. Third, the stance of this Court on subsection 2 of section 39 of the ELRA is that the subsection creates a right of access to an impartial forum; it does not lay down a time bar linked to receipt of payment. In an akin situation in the case of Richard Eusebio (supra), we observed as follows: "White we are mindful that receipt o f terminal benefits does not automatically bar an employee from challenging termination, the High Court merely observed that the appellant's conduct o f 14

receiving the package was inconsistent with his subsequent claim o f protest. We therefore see no misdirection on the part o f the High Court in referring to the principle o f estoppel." In the present appeal, the appellants by receiving their retrenchment payments before lodging the dispute at the CMA, were not precluded from challenging the fairness of their retrenchment. We view that the High Court Judge merely observed that the appellants' conduct of receiving the package was inconsistent with their subsequent claim of protest. We therefore find no misdirection on the part of the High Court in referring to the principle of estoppel. In our critical review of ground 5 of the appeal, the appellants' complaint on failure of the respondent to afford the appellants a chance of being represented during the retrenchment exercise. It is evident on record that at the consultation meeting held on 8th July, 2020 both parties were present together with Mr. Damian Mosha an expert of Human Resources from HR Experts Limited. In that meeting there was no indication that there was any representative of the appellants. On page 426 of the record of appeal, among the issues complained before the Labour Court was; " whether it was proper for the learned arbitrator for her failure to rule that the applicants were duly 15

represented during retrenchment process. "The learned Judge discussed in details as appears in page 524 that the issue was not raised before the CMA and the appellants did not adduce evidence on it during trial at the CMA that, they were members of a Trade Union to justify their complaint. Since there is no evidence to that effect, the High Court could not receive new evidence at the revision level, thus it found the issue was not maintainable. We have reviewed the record of appeal including the proceedings of the CMA to find if the issue of representation was among the issues raised and determined by the Arbitrator. We view that it is undeniable fact that the appellants were notified on the retrenchment consultation meeting on 1s t July, 2020 as appears on page 192 of the record of appeal and that the meeting was held on 8th July, 2020 while the actual retrenchment was effectively implemented on 14th July, 2020. We have also reviewed exhibit D4 which was a minute of the consultation meeting. We find logical that, despite the appellants having a legal right of representation, they failed to request it from the respondent; second, the appellants did not testify if they were members of any Trade Union for them to be represented; third, the issue of representation was raised at the application for revision instead of raising it at trial. We therefore, find the High Court did not fault the law. 16

In view of the evidence on record of appeal, we find no reason to depart from the concurrent findings of the High Court and the CMA. We find there was due process of law prior to the retrenchment and the respondent complied with the legal requirement enshrined under section 39 of the ELRA and rule 23 (4) of the GN. No.42 of 2007. We also find that the High Court properly re-evaluated the evidence and correctly held the retrenchment of the appellants substantively and procedurally fair. Consequently, we find no merit in this appeal and we dismiss it with no order as to costs. DATED at DAR ES SALAAM this 21s t day of May, 2026. M. C. LEVIRA JUSTICE OF APPEAL L. L. MASHAKA JUSTICE OF APPEAL P . J. NGWEMBE JUSTICE OF APPEAL Judgment delivered this 22n d day of May, 2026 in the presence of Ms. Habiba Katwe, holding brief for Mr. Sylivanus Mayenga, learned counsel for the Appellants, Mr. Sisty Bernard, learned counsel for the Respondent and Ms. Janekissa Bukuku, Court clerk, is hereby certified