National Bank of Commerce Limited vs Mongateko Makongoro Mongateko & Another (Civil Appeal No. 1193 of 2025) [2026] TZCA 557 (13 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT MBEYA fCORAM: MKUYE, J.A., FELESHI, 3.A. And NANGELA, J.A.^ CIVIL APPEAL NO. 1193 OF 2025 NATIONAL BANK OF COMMERCE LIMITED ................................ APPELLANT VERSUS MONGATEKO MAKONGORO MONGATEKO ......................... 1 st RESPONDENT LUCY GEORGE M U SH I........................................................2 nd RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania (Labour^ Division) at Dar es Salaam) (Mlvambina, 3.) dated the 25th day of March, 2025 in Consolidated Labour Revision Nos. 295 and 304 of 2022 JUDGMENT OF THE COURT 29thApril & 13th May, 2026 FELESHI, J,A,: The High Court of Tanzania, Labour Division, at Dar es Salaam, in its judgment dated 25th March, 2025, partly allowed and partly dismissed the parties7 consolidated Labour Revision Nos. 295 and 304 of 2022. In the end, it ordered the appellant to pay the respondents compensation equivalent to twenty-four months' remuneration, calculated to include the items listed in the termination letters (Exhibits DIO and D ll), namely salary, notice, house allowance, leave due and subsistence allowance. Aggrieved by that part of the judgment, • particularly the inclusion of subsistence allowance and the award of twenty-four months' remuneration, the appellant preferred this appeal. Briefly stated, the dispute arose from the termination of the respondents' employment. The 1s t respondent had been employed by the appellant as Head of Sales, while the 2n d respondent served as Manager, Customer Experience and Sales. Their employment was terminated in April, 2021 on allegations of gross negligence in relation to loan processing involving Peertech Company Limited. Following the termination, the respondents lodged a complaint before the Commission for Mediation and Arbitration (CMA), which found the termination both procedurally and substantively unfair and awarded compensation equivalent to twenty-four months' salary together with general damages. Both parties were dissatisfied and consequently filed revision applications before the High Court, being Labour Revision Nos. 295 and 304 of 2022. The revisions were consolidated. The matter eventually reached this Court, which remitted it back to the High Court for fresh determination before another judge, particularly on the issue of discrimination after hearing the parties thereon. Upon reconsideration, the High Court upheld the CMA's finding on unfair termination, quashed the award of general damages for discrimination, but held that ' compensation under section 40 (1) (c) of the Employment and Labour Relations Act, Chapter 366 (ELRA) ought to be based on "remuneration" and not merely "salary." Dissatisfied with that decision, the appellant lodged the present appeal on the following two grounds: 1. That the High Court erred in iaw by stepping outside the threshold set by the Court o f Appeal by ordering payment o f subsistence allowance, while (1) it was not prayed for and was not an issue for determination before the High Court 2. That the High Court erred in law by ordering payment of 24 months remuneration something which is contrary to section 40 (1) (c) o f the ELRA as amended by Section 12 o f the Labour Laws (Amendments) Act No. 4 o f2025. At the hearing of the appeal, Ms. Josephine Sifael, learned advocate, appeared for the appellant, while the respondents were represented by Mr. Rahim Mbwambo, learned advocate. Both parties had filed their respective written submissions. The appellant's written submissions were drawn and filed by Mr. Joseph Sylivester Ndazi, learned advocate. Arguing the first ground of appeal, Ms. Sifael adopted the written submissions and contended that the High Court exceeded the scope of the remittal order issued by this Court. According to counsel, the issue of subsistence allowance had neither been pleaded nor canvassed before the CMA and was not among the matters remitted for determination by the High Court. Counsel further submitted that subsistence allowance is not a monthly payment capable of being incorporated into compensation equivalent to twenty-four months' remuneration. It was argued that the determination of such allowance would require evidence relating to rates, duration and entitlements, matters which could not properly be resolved in revision proceedings. In response, Mr. Mbwambo submitted that the High Court merely interpreted the meaning of "remuneration" under section 4 of the ELRA, which includes all payments and benefits accruing from employment. He argued that the termination letters themselves expressly listed subsistence allowance among the respondents' entitlements. However, learned counsel clarified that the High Court did not intend subsistence allowance to be multiplied over twenty-four months, but only recognized it as one of the respondents' terminal dues. We have carefully considered the rival submissions, the record of appeal and the impugned judgment. In our considered view, the first ground of appeal will not detain us, and we think it succeeds to the extent complained of by the appellant. We shall demonstrate. The impugned portion of the High Court judgment reads: "The award o f 24 months salaries is replaced with 24 months remuneration as in accordance with section 40 (1) (c) o f the ELRA. Therefore, compensation should be calculated to include what is stated in their termination letters exhibits DIO and D ll , that is: (i) 24 months salary (ii) Notice (Hi) House allowance (iv) Leave due (v) Subsistence allowance." With respect, it is our considered view that once the learned judge reached the conclusion that compensation under section 40 (1) (c), now 41 (1) (c), of the ELRA ought to be based onremuneration ratherthan salary, the matter should have ended there. The actual composition and quantification of the respondents' remuneration package was a matter capable of ascertainment during execution proceedings upon production of the relevant employment records and contractual documents. Moreover, the terminal benefits enumerated in exhibits DIO and D ll were not themselves the subject of contest before the CMA or the High Court. In particular, subsistence allowance was neither pleaded nor specifically adjudicated upon. We are therefore satisfied that the learned judge went beyond what was necessary for determination of the'revisions by directing the manner in which remuneration was to be computed, including the inclusion of subsistence allowance. Accordingly, we quash that part of the High Court order directing that remuneration be calculated to include salary, notice, house allowance, leave due and subsistence allowance. In its place, we substitute an order that the respondents are entitled to compensation equivalent to twenty-four months' remuneration in accordance with the law. Regarding the second ground of appeal, the appellant argued that by virtue of the amendment introduced by the Labour Laws (Amendment) Act No. 4 of 2025, compensation for unfair termination is now covered at twenty months except in cases involving discrimination or harassment. According to the counsel, since the High Court had dismissed the claim of discrimination, the award of twenty-four months' remuneration was unlawful. The respondents opposed that contention, arguing that the amendment cannot operate retrospectively. They maintained that the respondents' rights accrued in 2021 when their employment was terminated and when the dispute was lodged before the CMA. They relied on the decisions of Joseph Khenani v. Nkasi District Council [2022] TZCA 82 and Commissioner General (TRA) v. CRJE Estate Limited [2022] TZCA 3051, for the proposition that statutory amendments do not apply retrospectively unless expressly stated. As for the first ground of appeal, this too should not detain us much. We find merit in the respondents' submission. It is not disputed that the respondents' employment was terminated in 2021 and that the CMA delivered its award on 3rd August, 2022. At that time, the amendment introduced by Act No. 4 of 2025 was not in force. The amendment came into operation much later, on 14th March 2025, and there is nothing in the amending legislation indicating an intention by Parliament to give it retrospective effect. The settled principle of law is that statutes affecting substantive rights operate prospectively unless a contrary intention is expressly provided. This Court reiterated that principle in Joseph Khenani v. Nkasi District Council (supra). The same approach was adopted in COCA-COLA Kwanza Limited v. Erastus Vicent Mtui [2024] TZCA 634. We therefore agree with the respondents that the applicable law is the one that existed at the time the cause of action arose and when the proceedings commenced. In the event, the second ground of appeal is devoid of merit and is accordingly dismissed. Consequently, this appeal succeeds only to the extent indicated above. The order of the High Court directing the computation of remuneration to include the specific items listed in exhibits DIO and D ll is hereby quashed and substituted with an order that the respondents are entitled to compensation equivalent to twenty-four months' remuneration. In all other respects, the judgment of the High Court is affirmed. Given the nature of the dispute, there shall be no order as to costs. DATED at MBEYA this 13th day of May, 2026. R. K. MKUYE JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL D. J. NANGELA JUSTICE OF APPEAL Judgment delivered virtually this 13th day of May, 2026 in the presence of Ms. Josephine Safiel, learned counsel for the Appellant, Mr. Rahim Mbwambo, learned counsel for the respondent and Ms. Anna Utou, Court clerk, is hereby certified as a true copy of the original. D. P. KINYWAFU DEPUTY REGISTRAR COURT OF APPEAL / /