Fatuma Mwaimu vs EFC Tanzania Microfinance Bank Limited (Civil Appeal No. 443 of 2024) [2026] TZCA 605 (22 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA ( CORAM: LILA. 3.A., RUMANYIKA, J.A. And MANSOOR, J.A.) CIVIL APPEAL NO. 443 OF 2024 FATUMA MWAIMU ............... ................................................................... APPELLANT VERSUS EFC TANZANIA MICROFINANCE BANK LIMITED..............................RESPONDENT (Appeal from the decision of the High Court of Tanzania (Labour Division) at Dar es Salaam) fMlvambina, 3.) dated the 3rd day of May, 2024 in Revision Application No. 4065 of 2024 JUDGMENT OF THE COURT 3rd December, 2025 & 22n d May, 2026 LILA, 3.A.: The issue for determination by this Court is a narrow one. It is about the rights of a probationary employee whose probation period, before completion, is terminated by the employer. The appellant is challenging the High Court's decision to revise and reduce the six (6) months salaries awarded by the Commission for Mediation and Arbitration (the CMA) to two (2) months salaries as compensation for terminating the appellant who was still under probation.

The matter has a protracted background but, for the purpose of this appeal, these are the relevant facts. It is noteworthy at the inception, that the appellant is not challenging her termination but she is up for her rights thereof. In her letter of employment found at page 118 of the record of appeal, the appellant, Fatuma Mwaimu, was employed by the respondent, EFC Tanzania Microfinance Bank Limited as a Legal Manager on 13/2/2017 and it was on condition that she had to serve a probationary period of six (6) months. She assumed the work but was, on 26/7/2017, which was one month before completing the probationary period, terminated. She preferred the dispute to the Commission for Mediation and Arbitration (the CMA) complaining, in terms of the CMAF1 found at page 89 of the record of appeal, for unfair labour practice and prayed for payment of twelve (12) months salary as compensation and one month' salary in lieu of notice. The CMA found for the appellant and awarded her six (6) months salary as compensation. The respondent was aggrieved by the award leading to institution of a Revision Application No. 4065 of 2024 in the High Court of Tanzania (Labour Division). The High Court reduced the compensation from six months salaries to two months salaries; one month' salary that remained before completion of the probationary period and one month'

salary that will serve as a notice pay of non-confirmation. As it were, the appellant was aggrieved, hence the present appeal. In faulting the High Court decision before the Court, the appellant has fronted three grounds of appeal which essentially and substantially raise two issues; one, the amount of compensation awarded by the High Court was unfair as it was a result of the court relying on the decision in David Nzaligo vs National Microfinance Bank PLC, Civil Appeal No. 61 of 2016 (unreported) which is distinguishable to circumstances of this case which concerned breach of contract while the present appeal is based on unfair labour practice. Arid two; failure to give reasons for its departure from the decisions of the same court in other cases where it awarded twelve months salaries as compensation for unfair labour practice. Before us, the appellant who was present in Court, had the service of Mr. Adam Anosisye Elly Mwambene, learned advocate and the respondent enjoyed the services of Mr. Cleophace James, also learned advocate. Both counsel filed written submissions clarifying and amplifying their respective positions which they fully adopted as part of their oral submissions and were brief and focused in elaborating their respective cases before us.

Mr. Mwambene prefaced his submission by recalling the background of the appeal that the essence of the case is dispute about unfair labour practice as per CMAF1 found at page 86 of the record in which the appellant prayed for one; payment of twelve (12) months' salary as compensation for unfair labour practice and two; payment for one month salary in lieu of notice. That the complaint was not about unfair termination. That, the CMA agreed with the appellant and granted compensation for unfair labour practice for 6 months' salary as compensation as it appears at pages 182 to 193. He further argued that the award aggrieved the respondent who lodged a revision application to the High Court which, at page 361 to 372 of the record of appeal, held that there was unfair labour practice and at page 371 it awarded two months salaries as compensation; one month for notice for non-confirming the employee and one month for the remaining probation period. Looking at the decision, he further submitted, it can be inferred that the High Court found that there was a breach of contract. This is because of section 41A of the Labour Laws Amendment Act of 2025. He asserted that, this was not what was pleaded in CMAF1 by the appellant at the CMA

hence it was legally wrong referring to the Court's decision in Saulo Malima vs Petro Kingoni, Civil Appeal No. 154 of 2022 (unreported) to underscore the point. He continued arguing that, at pages 285 to 306 of the record of appeal, he presented to the High Court the case of Agness B. Buhere vs UTT Microfinance PLC, Labour Revision No. 459 of 2015 (unreported) where, in a similar situation, learned Mipawa Judge, found at page 305 of the record of appeal, awarded twelve (12) months compensation. In respect of ground three (3), it was submitted that, he is aware that the High Court judges are not bound by the decision of another High Court judge but where a judge departs from the decision of another judge, he ought to give reasons but herein, no reasons were given. He relied on the case of Edgar Kahwili vs Ameir Mbarak and Azania Bancorp Ltd, Civil application No. 21/13 of 2017. He also referred to the case of Laurean Rugambwa vs Tanzania Red Cross Society and attorney General, Civil Cause no. 3 of 2013 (HC) which held that compelling reasons for the departure must be given so as to observe the principle of stare decis.

He lastly attacked the learned High Court Judge for, in his decision, following the decision of the Court in the case of David Nzaligo vs National Microfinance Bank PLC, Civil appeal No. 61 of 2016 (CAT) which he said is distinguishable as it is apparent that David claimed unfair termination which is different to present case where the claim was unfair labour practice hence the award would be different. He argued that. Rule 10(1) of the Employment and Labour Relations (Code of Good Practice) Rules, GN. No. 42 of 2007 (the Code) provides for the procedures to be followed before terminating a probationary employee but were not followed. In his rely submission, Mr. James strongly resisted the appeal. He submitted that it was not true that it could be inferred that the learned Judge treated the matter as if there was a breach of contract. Instead, he submitted, the learned Judge based his decision on the law to arrive at a decision which he said is correct He admitted that the learned Judge relied on the case of David Nzaligo vs National Microfinance Bank PLC (supra) which is the most recent decision and is in line with the current law on the right and termination procedure of a probationary employee and is very relevant to

the present case. He insisted that only one month had remained for the appellant to complete her probation hence the Judge was right to award her one months' remuneration. In the end, it was argued, although the appellant did not plead to be paid one months' salary as compensation, after the court's analysis, it was proper to award it. Mr. James prayed the appeal be dismissed with an order that each party should bear its own costs it being a labour matter. In his rejoinder submissions, Mr. Mwambene insisted that the case of David Nzaligo vs National Microfinance Bank PLC (supra) is distinguishable to the circumstances of this case and ought not to have been relied on. He then prayed the appeal to be allowed and the High Court decision be set aside and the award by the CMA be sustained. We have dispassionately read the respective submissions and revisited the authorities cited therein. Without hesitation, we commend both counsel for their lucid submissions. We shall, where necessary, refer to them in the course of this judgment. The Central issue in this appeal, as hinted above, is the right of a probationary employee who is terminated before completion of his

probationary period. To start with, it is settled law and the learned Judge acknowledged so in his reasoned judgment citing David Nzalligo vs National Microfinance Bank PLC (supra), that a probationer cannot enjoy the right and benefit enjoyed by a confirmed employee. It is worthy noting here that a probationary employee is different from an employee who has not attained six months of service with an employer who is barred, in terms of section 35 of the Employment and Labour Relations Act, Cap 366 (the ELRA), from instituting in the CMA a dispute on unfair termination. While a probationary employee is not an employee who is yet to be confirmed but still under what is termed as a practical interview, the employment of which subject to being confirmed, section 35 covers a situation where an employee has already been confirmed but is yet to attain six months in his/her employment. In the ordinary course of things, and this appears to be the practice, an employee is handed a letter showing that he is employed but on a condition that he satisfies the employer his suitability to the job during a set period of time which is termed as a probation period. Unless he is confirmed, he loses his services with the employer. It is on this account that we agree and hold as true the observation by Hamidu Millulu,

learned advocate in his book The Formation of Employment Contracts in Tanzania at page 29 item 2.10.6 that: "The jo b o f a probationary employee is potentially more secure that o f a tem p o ral employee. This is because, right a t the outset, the probationary employee does not in itia lly have the same degree o f security as that o f a perm anent employee. A n em ployee m ay s ta rt o ff a s a p ro b a tio n a ry em ployee a n d becom e a p erm an en t em ployee a t th e e n d o f p ro b a tio n a ry p e rio d i f the p ro b a tio n a ry co n d itio n s have been m et". (Emphasis added) What then is contained in the letter of employment which is conditional to successfully serving the probationary period, the learned author, on the same book and page, observed, in our view correctly, that: "At this point, it is im portant to understand that, there are two employment contracts. The F irst is d u rin g p ro b a tio n a ry p erio d , and if successfully completed, a co n firm a tio n is issu e d to th e em ployee, culm inating in the conclusion o f a second employment contract"

Actually, it is common practice on the ground that prior to the employee's employment being confirmed, the employer issues to the newly recruited employee a letter of employment stipulating therein, among other conditions, to serve a certain probationary period. The appellant is no exception as the contract of employment and its appendix employing her as Legal Manager found at pages 117 tol2,2 of the record of appeal, apart from informing her of her position, duties and remuneration as an employee, under clause 2.5, it informed her that: "The Employee sh all serve a probationary period o f six (6) months. During the probation period, the em ployee's perform ance w ill be closely m onitored and evaluated. Further, during this period the Em ployer w ill carry out a security and credit investigation on the Employee. I f the Employee successfully completes the probation period, and is satisfactorily cleared by the said investigation, the Employee sh all be notified in w riting." As stated above, an employee starts as a probationary employee and, upon a successful completion of the probationary period, he is 10

confirmed in writing to hold the employment position. This validates Mr. Mallulu's view that a letter of employment contains two contracts; that during the probation period and the one after confirmation. Such hard fact justifies a probationary employee, in the event of being terminated before completion of the probationary period, to ciaiiri for, among other benefits, benefits connected with employment such as damages for breach of contract of employment (see a persuasive decision by the Labour Court of South Africa, held in Johannesburg case No: .12752-09 between Kwena Darius Mangope and South Africa Football Association). To pursue such a right, a probationary employee is therefore not barred from accessing the CMA challenging, as did the appellant, unfair labour practice [See Seet Peng Swee vs Total Tanzania Limited, Civil Appeal No. 395 of 2022 (unreported]. Unfortunately, in the present case, the appellant did not claim for damages in her CMAF1. However, for clarity and certainty, settled law, in our jurisdiction, is clear that a probationary employee who is terminated while still under probation, is not entitled to enjoy the benefits and terminal benefits in the same way as a terminated employee who has been confirmed and has attained six months of service with the employer as stipulated under sections 40, 41, 42, 43 and 44 of the ELRA. On this, we

are highly persuaded by the observation by the learned Mganga, 3 in the case of Modesta Jeremia Mafima and another vs Y9 Microfmance Bank Limited, Consolidated revision Application no. 26346 and 29567 of 2024 (unreported) citing the case of David Nzaligo vs National Micrifinance Bank PLC (supra) where he stated that: 'V am alive that, the rem edies available under sections 40, 41, 42, 43 and 44 o f Cap. 366 R E 2019 (supra) does not cover probationary employees because a probationary employee cannot file the dispute relating to unfair term ination as it was held in the case o f D a vid N za lig o vs N a tio n a l M icrifin a n ce B an k P LC ( C iv ii a p p e a l No. 61 o f 2 0 1 6) [2 0 1 9 ] TZCA 2 8 7 (9 S ep tem b er 2019), In sh o rt, th e rem ed ies u n d er th e above p ro v isio n s do n o t co v e r u n fa ir la b o u r p ra c tic e s ." Having laid the above foundation, we now revert to the instant appeal. The main complaint of the appellant is that the High Court erred to reduce the six months salaries compensation awarded by the CMA to actually one month as the other, second month salary is given in lieu of notice. Like the presiding judge of the High Court in this matter and in the 12

case of Modesta Jeremia Malima and another vs Y9 Microfinance Bank Limited (supra), we agree that there is no express provision in the labour laws which provide for the right of terminated probationary employee. Having held that a probationary employee is not entitled to rights of permanent and confirmed employees under section 40 of the ELRA, it is obvious that even the prayer by the appellant in her CMAF1 to be paid compensation of twelve months is untenable. Such compensation is a remedy payable under section 40(l)(c) of the ELRA upon the Arbitrator or Judge being satisfied that the termination was unfair procedurally and substantively. In the circumstances, we entirely agree with the leaned judge of the High Court in his holding at page 370 of the record of appeal (page 10 of the judgment) that the award the appellant claimed and awarded by the CMA is awardable to confirmed employees who are unfairly terminated not probationary employees like the appellant herein. That is not to say that a probationary employee has no right to pursue his right to compensation. But such right is limited by law and accrues when there is contravention of the ELRA or any other labour law, the Code inclusive. That is in terms of section 88 of the ELRA which states That: 13

"88-(l) For the purpose o f this section, a dispute means- (a) A dispute o f interest if the parties to the dispute are engaged in an essential service; (b) A com plaint over- (i) The fairness or law fulness o f an em ployee's term ination o f employment; (ii) A n y o th e r co n tra ve n tio n o f th is A c t o r a n y o th e r la b o u r taw or breach o f contract or any employment or labour m atter falling under common law,\ tortious lia b ility and vicarious liability; (Emphasis added) Based on that position of the law, probationary employees are not exempted from accessing the CMA to challenge the employer's decision, as did the appellant, where it is established that there is unfair labour practice or any contraventions of any labour law save for those rights specifically enacted and designed for confirmed employees. As the complaint by the appellant before the CMA related to the contraventions of the procedure to terminate the appellant who was under probation, unfair labour practice, her claim fell squarely under a dispute arising from a contravention of the Act (ELRA) or other labour laws, that is

rule 10 of the Code. Fortunately, that was the dispute lodged by the appellant in the CMA through CMAF1. Her right to be compensated and the quantum therefor, can be deduced and inferred from the reading of various provisions. Apart from providing the procedure for terminating a probationary employee, Rule 10 of the Employment and Labour relations (Code of Good Practice) Rules, GN No. 42 of 2007 (Henceforth the Code), it, under rule 10(3), provide for purpose of probation to be that: "The purpose o f probation is norm ally to enable the em ployer to make an inform ed assessm ent o f whether the employee is competent to do the jo b and suitable for employment." Actually, Millulu (supra), explains this period in a better way, this way: "During the period on probation , the em ployee's skills, abilities and com patibility are assessed and tested. The probation provides for an opportunity to test one another and to find out whether they can continue working with each other fo r a long tim e in a healthy employment relationship." The more so, the Code imposes a mandatory legal duty on the employer during the probationary period under rule 10(6) of assisting and 15

acclimatizing the probationary employee to cope with the working environment. It provides: "(6) During the period o f probation, the em ployer shall- (a) M onitor and evaluate the em ployee's perform ance and suitability from time to time. (b) M eet with the employee a t regular intervals in order to discuss the em ployee's evaluation and to provide guidance if necessary. The guidance may entail instructions, training and counseling to the employee during probation." The Code imposes a duty of being tolerant to each other between the employer and employee during the probation period under rule 10(7) and (9) in these words: "(7). Where a t any stage during the probation, the em ployer is concerned that the employee is not perform ing to standard or may not be suitable for the position the em ployer shall notify the employee o f that concern and give the employee an opportunity to r espond or an opportunity to improve. 16

(9) A probationary employee sh all be entitled to be represented in the process referred to in sub-rule (7) by a fellow employee or union representative." That is the position of the law in as far as the issue of dealing with a probationary employee is concerned. The legal regime is so much couched and inclined in making termination of a probationary employee the last resort. It is only possible after all the procedure set out under Rule 10 of the Code and the process therein is complied with. The intention is to protect the probationary employees against employers who act arbitrarily and at their own whims. The strict conditions and process set up presuppose that, all other things being equal, the probationary employee will be assisted to familiarize himself with the working environment and be given opportunity to prove to his employer his suitability to the position during the whole probationary period. Closely read and examined, the above provisions of the Code appears, in our strong view, to create an impression on the probationary employee an expectation of his assessment on his compatibility to be assessed at the end of the probation period at which time, the employer, if successful, will confirm him to hold the position or if unsuccessful part with him. Briefly, it is our decided view, the

checklist of processes to be followed as revealed by the cited provisions are not for a peremptory sake but are meant to provide assurance on the probationary employee of completing his probation period (practical interview), which, definitely, creates on the part of the probationary employee a legitimate right not only to complete it and wait, at the end of it, for being confirmed or not depending on the outcome of the assessment, but also be remunerated for that whole period. The period between start of probation period and end of it, it appears, is a period for assessment the outcome of which should be come at the completion of such period. His legitimate expectation is, therefore to work with the employer for the whole period of probation. Flowing from the above, it becomes obvious that termination of the probation period before completion has adverse effects on the probationary employee to which he is entitled to the payment for the remaining period of the probation only. In the instant appeal, it is common knowledge that the appellant's probationary period was halted a month before completion. In view of our above finding, we agree but on the above reason, with the learned Judge that the appellant is entitled to one month's salary as compensation for the remaining period of her probation. As she was not yet a pemanent 18

employee for want of being confirmed, she deserved no right to a pay in lieu of notice awarded by the learned Judge as the same is an entitlement payable to terminated employees under sections 41(5) and 44(l)(d) of the ELRA which, as stated above, they do not apply to probationary employees. We accordingly set aside the order for payment of one month's salary pay in lieu of notice. Grounds 1 and 2 of appeal which formed the first issue, therefore fail and are dismissed. The second issue founded on ground three (3) of appeal, needs not detain us. We have read the contending arguments of the parties' learned advocates and the cases cited to support their respective positions which appear to have treated probationary employees differently where their services are terminated before completion of the probationary period. They are, on our reading, at least, and rightly so in our view, consistent that probationary employees are not employees who are entitled to rights awardable to terminated employees under sections 40, 41, 42, 43 and 44 of the ELRA. They differ on the quantum of compensation awardable. Some awarded compensation for the remaining contractual period, some twelve months remuneration and others, six months' salaries which is not a heathy situation in the administration of justice. Much as unscrupulous

probationary employees would be problematic during the probation period so that they be terminated with intention to enjoy better compensation, the CMA and the courts must strike a balance the interests of both sides, probationary employees and the interests of the employer and other employees in the institution who, if not guarded from such conducts, may affect them heavily in violation of the whole spirit underlying the principle objects of the labour laws as laid down under the provisions of section 3 of the ELRA, in particular sub-section (a), that is, promoting economic development through efficiency and productivity. To achieve that, we are settled in our minds that, the position that a probationary employee whose period of probation is terminated before completion in violation of the law, hence, it is established that there is unfair labour practice, the probationary employee is entitled to remuneration for the remaining period of the probation period only, strikes a balance. In that respect, we think, the conflicting decisions being of the High Court, are a non-issue to us. Much as we know Judges of the High Court have equal status and are not bound by the decisions of other judges, we agree with Mr. Mwambene that courtesy, consistence and predictability of decisions on a matter, call for a need to give reasons in case of departure. However, it cannot validly be

said that any departure without assigning reasons does, in our firm view, invalidate a decision. The complaint is hereby dismissed. In the end, we dismiss the appeal. This being a labour matter, we make no order for costs, DATED at DODOMA this 21st day of May, 2026. S. A. LILA JUSTICE OF APPEAL S. M. RUMANYIKA JUSTICE OF APPEAL L. A. MANSOOR JUSTICE OF APPEAL Judgment delivered virtually this 22n d day of May, 2026 in the presence of Mr. Adam Mwambene, learned counsel for the appellant, Mr. Cleophace James, learned counsel for the respondent and Mr. John Banene, Court Clerk; is hereby certified as a true copy of the original. D. P. KINYWAFU DEPUTY REGISTRAR COURT OF APPEAL 21