Philipo Kipingu vs Mbeya Cement Company Ltd (Civil Appeal No. 652 of 2023) [2026] TZCA 551 (13 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT MBEYA fCORAM: MKUYE. J.A.. FELESHI. J.A. And NANGELA. J J U CIVIL APPEAL NO. 652 OF 2023 PHILIPO KIPINGU ..................................................................... APPELLANT VERSUS MBEYA CEMENT COMPANY LTD.......................................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania at Mbeya) fEbrahim, J.^ dated the 20th day of May, 2022 in Labour Revision No. 25 of 2021 JUDGMENT OF THE COURT 28th April & 13th May, 2026 FELESHI. J.A.: The appeal before us arises from the judgment of the High Court of Tanzania, Labour Division, at Mbeya dated 20th May, 2022 in Labour Revision No. 25 of 2021, which overturned the decision of the Commission for Mediation and Arbitration (CMA) in Labour Dispute No. CMA/MBY/115/2019/AR.67. The CMA had earlier found that the appellant's termination of employment by the respondent was unfair both substantively and procedurally. Briefly stated, the background to the dispute is that, the appellant was employed by the respondent on 13th October, 2008 in the Health, Safety and Environmental Department. In the course of his employment, he rose through different positions and eventually became a Logistic Coordinator, which was the position he held at the time of termination. On 6th September, 2019, the respondent terminated the appellant's employment on allegations of misconduct, specifically negligence resulting in damage, theft or loss to company property, namely cement consignments destined for Kasanga and Mwanjelwa depots, contrary to clause 7.3.1 of the respondent's Disciplinary Code. Aggrieved by the termination, the appellant instituted proceedings before the CMA at Mbeya in the aforementioned Labour Dispute claiming that the termination was both substantively and procedurally unfair. He prayed for reinstatement or, in the alternative, compensation equivalent to twenty-five months' remuneration amounting to TZS. 98,569,200.00, severance pay of TZS. 7,317,067.69, reimbursement of TZS. 2,160,000.00 allegedly paid by him to compensate the respondent, and general damages of TZS. 100,000,000.00. The appellant's contention before the CMA was that he was not responsible for the consignments once they passed the weighbridge; that the duties previously performed by the Distribution Controller and Logistic Manager had never formally been handed over to him; and that no actual loss to the respondent had been proved. The respondent resisted the claim and maintained that the termination was fair both substantively and procedurally. It was contended that the appellant had the responsibility of ensuring that cement consignments reached their intended destinations and that he negligently failed to discharge that responsibility, resulting in diversion of consignments by a transporter, one Reina Lukarah. Upon hearing the parties, the CMA found in favour of the appellant, holding that the termination was unfair, and ordered reinstatement without loss of remuneration together with reimbursement of the amount paid by the appellant in respect of the alleged loss. Dissatisfied with that award, the respondent successfully moved the High Court for revision. The High Court held that the appellant was indeed responsible for ensuring that consignments reached their destinations and that his failure to account for 251 tons of cement constituted negligence warranting termination. The High Court further held that the disciplinary process complied with the Employment and Labour Relations Act, Chapter 366 (the ELRA) and the Employment and Labour Relations (Code of Good Practice) Rules, 2007, G.N. No. 42 of 2007 (Code of Good Practice). Consequently, the High Court set aside the CMA award and held that the appellant was only entitled to terminal benefits available to a fairly terminated employee. The appellant, being dissatisfied with that decision, lodged the present appeal on four grounds, namely: 1. That the High Court erred in iaw and fact in holding that the appellant assumed ati duties o f ensuring that consignments reached their destinations and that he violated such duty. 2. That the High Court erred in iaw and fact in holding that the appellant acted negligently causing loss to the respondent and therefore that the reason for termination was valid and fair. 3. That the High Court erred both in iaw and fact in faulting the reasoning o f the learned Arbitrator and consequently holding that the termination was proceduraiiy fair. 4. That the High Court erred in iaw and fact in revising and setting aside the award o f the CMA without justification and contrary to the evidence on record. At the hearing of the appeal, Mr. Benedict E. Sahwi, learned counsel for the appellant, and Mr. Ndanu Emmanuel, also learned counsel for the respondent, represented their respective parties. Both counsel had filed written submissions pursuant to rule 106 (1) and (7) of the Tanzania Court of Appeal Rules, 2009. At the outset, Mr. Sahwi abandoned grounds one and four of the appeal. We accordingly strike them out as abandoned. Grounds two and three were argued together under one broad issue, namely whether the High Court was justified in holding that the appellant's termination from employment was fair both substantively and procedurally. Submitting in support of the appeal, Mr. Sahwi argued that sections 38 (1), (2) and 40 of the ELRA place the burden upon the employer to prove that termination was based on valid reasons and fair procedure. He submitted that under section 38 (2) (a) and (b), termination becomes unfair where the employer fails to prove that the reason for termination related to the employee's conduct, capacity or compatibility. He further referred to section 38 (2) (c), which requires that termination must be preceded by fair procedure. Learned counsel submitted that the respondent failed to prove the charge against the appellant. He referred to the termination letter and disciplinary proceedings showing that the appellant had been charged under paragraph 7.3.1 of the respondent's Disciplinary Code relating to negligence occasioning loss to the respondent. Counsel drew the Court's attention to the evidence of DW2 at page 46 of the record of appeal where the witness admitted during cross- examination that no actual loss had been proved against the appellant. According to counsel, the complainant before the Disciplinary Committee even requested amendment of the charge from paragraph 7.3.1 to paragraph 7.3.2 of the Disciplinary Code, which related merely to negligence endangering property. Counsel pointed out that DW2 admitted that the appellant may have contravened paragraph 7.3.2 rather than paragraph 7.3.1 but the charge was never amended. Mr. Sahwi further submitted that negligence could not be established in the absence of proof of duty of care, breach of that duty and foreseeable damage. In support of that proposition, he relied on Winfred Mkumbwa v. SBC Tanzania [2019] TZCA 685, where the Court stated that all the essential elements of negligence must be proved before liability can arise. Counsel argued that the respondent failed to prove that the appellant was responsible for ensuring that the consignments reached Kasanga depot or that he was responsible for receiving payment. According to counsel, the appellant's duty ended at the weighbridge after which the Distribution Controller assumed responsibility. It was also submitted that the transporter, Reina Lukarah, admitted responsibility and paid for the consignment, thereby disproving the allegation that the respondent suffered actual loss. Regarding procedural fairness, Mr. Sahwi submitted that the disciplinary proceedings were fundamentally flawed. He argued that the chairman of the disciplinary committee descended into the arena of conflict by refusing amendment of the charge and thereby effectively siding with the complainant. Counsel contended that such conduct violated Guideline 4 (2) of the Guidelines for Disciplinary, Incapacity and Incompatibility Policy and Procedures annexed to the Code of Good Practice, which requires a chairperson to remain impartial and avoid prior involvement in the matter. Counsel further submitted that the chairman had prior access to the respondent's documents before commencement of the hearing while the appellant's documents were only introduced during the hearing itself, thereby creating procedural inequality and apparent bias. It was also submitted that two employees, namely the appellant and one George Kilembe, were implicated in the same offence but treated differently. Counsel referred to the evidence of DW2 at page 47 of the record of appeal showing that George Kilembe was merely warned whereas the appellant was terminated. On investigation, Mr. Sahwi relied on rule 13 (1) of the Code of Good Practice which requires an employer to conduct investigation before instituting disciplinary proceedings. Counsel argued that no investigation was conducted in the present matter. He contended that exhibit R2 relied upon by the respondent was merely a Depot Analysis Report and Monthly Sales Report rather than an investigation report. Counsel referred to exhibit P5 comprising the suspension letter, complaint form, lifting of suspension and the appellant's statement, all dated 29th July, 2019, and argued that it was impossible for a proper investigation to have been conducted and completed on the same day. He submitted that failure to conduct and tender an investigation report cast serious doubt on the fairness of the disciplinary proceedings. Counsel further submitted that the High Court improperly interfered with the CMA award contrary to section 92 (2) (a)-(c) of the ELRA and rule 28 (1) of the Labour Court Rules, G.N. No. 106 of 2007. He, therefore, prayed that the appeal be allowed, the judgment of the High Court be set aside and the CMA award be restored. 3 In response, Mr. Ndanu Emmanuel, learned counsel for the respondent, supported the decision of the High Court. He submitted that the appellant himself admitted during the CMA proceedings that one of his duties was to ensure that consignments reached customers and depots. Counsel referred to the testimony of Gerald Masalu, the respondent's Internal Controller and Tax Manager, who testified that the appellant was responsible for ensuring that cement consignments reached Kasanga depot. Counsel further submitted that even if there was no formai handover of the duties previously performed by the Distribution Controller and Logistic Manager, the appellant had nonetheless assumed those duties by continuing to perform them after departure of the previous office holders. According to counsel, the elements of negligence identified in the case of Winfred Mkwambwa v. SBC Tanzania Limited (supra) had therefore been satisfied. On procedural fairness, Mr. Ndanu submitted that the appellant's complaints were misconceived. He argued that the audit reports and depot analysis reports tendered as exhibit R2 substantially fulfilled the purpose of an investigation report under rule 13 (1) of the Code of Good Practice because they were prepared to ascertain discrepancies between goods dispatched and stock received at the depots. Counsel maintained that the disciplinary hearing complied with the law and that the appellant was accorded an opportunity to defend himself. He referred the Court to pages 207-208 and 329 of the record of appeal as well as pages 180-189 concerning cross-examination of the Chairman of the disciplinary committee. Counsel therefore urged the Court to dismiss the appeal and uphold the judgment of the High Court. In a brief rejoinder, Mr. Sahwi reiterated that the appellant never accepted formal responsibility for the duties of Distribution Controller and Logistic Manager. Counsel referred to the appellant's testimony at page 54 of the record explaining that proper handing over procedures were never conducted and that even auditors noted delays in handing over responsibilities after restructuring of departments. He accordingly urged the Court to allow the appeal. We have carefully considered the submissions by learned counsel for both parties, the grounds of appeal, the record of appeal and the applicable law. As already observed, the remaining grounds of appeal may conveniently be determined together under one issue, namely 10 whether the High Court erred in holding that the appellant's termination was fair both substantively and procedurally. It is settled law that in disputes relating to unfair termination of employment, the burden rests upon the employer to prove that the termination was based on a valid reason and that fair procedure was followed. This is clearly provided for under sections 38 (1), 38 (2) and 40 of the ELRA as well as rules 9 and 13 of the Code of Good Practice. Section 40 of the ELRA provides: "In any proceedings concerning unfair termination o f an employee by an employer, the employer shaiiprove that the termination is fair/' The respondent's case against the appellant was founded on allegations of negligence occasioning loss to the respondent contrary to paragraph 7.3.1 of its Disciplinary Code. However, upon our own evaluation of the record/ we are unable to agree with the conclusion reached by the High Court that such allegation was sufficiently proved. The evidence on record shows that throughout the proceedings, the appellant consistently maintained that he had never officially been handed over the duties previously performed by the Distribution Controller and Logistic Manager following the restructuring of i i departments. He explained that although responsibilities appeared to have been merged, there was no formal handover, no revised job description and no proper assumption of those duties by him. This aspect was not adequately addressed by the High Court. Indeed, the record reveals that the appellant repeatedly complained of being not officially handled with the duties which were merged. In the circumstances, we interpret, as was suggested by Mr. Sahwi that the alleged variations in consignments might have originated during the tenure of former employees before any alleged transfer of responsibilities to the appellant. In our considered view, such complaint was material and required proper investigation before any finding of negligence could be reached. Furthermore, the respondent's own witness, DW2, admitted during cross-examination that the transporter, Reina Luka rah, was the person who diverted the consignment and that payment for the consignment was eventually made. The same witness further admitted that no actual loss had been occasioned by the appellant. Significantly, DW2 acknowledged that the appellant ought perhaps to have been charged under paragraph 7.3.2 relating to negligence endangering property rather than paragraph 7.3.1 relating to negligence causing actual loss. 12 This leads us to undoubtedly conclude that the respondent did not prove valid reason for terminating the appellant's employment. We now turn to look at the procedures. As we have noted herein above, section 38 (1) and (2) of the ELRA, termination of an employee is fair if it is based on fair reason and done in accordance with a fair procedure. Relevant to this appeal we find it irrelevant to enumerate all the required procedures as provided under the Code of Good Practice. The appellant's complaint was based on the investigation report and conduct of the Chairman of the disciplinary committee. We will also confine ourselves on these aspects. The appellant faults the High Court Judge for associating Exhibit R2, namely Depot Analysis Reports and Monthly Sales Reports, with the investigation report required under rule 13 (1) of the Code of Good Practice. This also was the submission by Mr. Emmanuel. According to rule 13 (1), investigation must be conducted to ascertain whether there are sufficient grounds to hold disciplinary hearing. The rule states as follows: "13 - (1) The employer shall conduct an investigation to ascertain whether there are grounds for a hearing to be held . " 13 In Enza Zaden Africa Limited v. Edwin Kasena [2023] TZCA 17733, when the Court was emphasizing on the provision of the above rule, it stated that: "From the wording o f the above reproduced rule, investigation must precede the disciplinary hearing. That serves two main purposes; to ascertain existence o f the grounds for commencing disciplinary hearing against an employee and to enable the employee to make defence on the basis o f the investigation report" The minor issue now is whether there was investigation conducted before the appellant was charged and committed for hearing in the disciplinary committee. In its reasoning at pages 572 to 574 of the record of appeal, the High Court found exhibit R2 as an investigation report and it stated as follows: "Additionally before the CMA there was a complaint that there was no any investigation report. Counsel for the respondent in this application has submitted that the so-called investigation report i.e exhibit R-2 is a mere sales report. He firmly argued that to constitute the investigation report it was supposed to be titled so. The applicant maintained that exhibit R-2 is the investigation report since it was the one 14 which revealed the loss and was the bases o f the charge. I concur with the respondent's counsel that G.N No. 42 mandatoriiy requires the employer to conduct an investigation. Rule 13 (1) o f the G.N No. 42 provides that:... Nevertheless, the same does not provide for the format o f the report. In my opinion, the necessity o f the investigation is for the employer to establish that there is a violation made by the transgressor worth for him/her to be forwarded to the disciplinary committee for hearing. In the matter at hand, the depot analysis report (exhibit R-2) was the foundation o f the charge served to the respondent. The respondent was clearly notified that, he should prepare his statement o f defence on why there were discrepancies in the Kasanga and Mwanjelwa Depots. In his defence before the disciplinary committee, the respondent showed that he was aware o f the discrepancies but denied to be responsible for the same. That being the case, I am o f the concerted view that the respondent was availed with enough opportunity to be heard. And the hearing was fair." 15 As it is in the above quoted part of the impugned judgment, Mr. Emmanuel as he did in the High Court he stili insists in this Court that exhibit R2, namely Depot Analysis Reports and Monthly Sales Reports, constituted an investigation report. With due respect, we are unable to agree. Those documents were merely audit and reconciliation reports showing monthly depot analysis. They were not investigation reports addressing the specific allegations against the appellant, the circumstances of the alleged negligence, the persons responsible, or conclusions reached after inquiry. More importantly, the chronology of events demonstrates absence of any meaningful investigation. The appellant was suspended on 29th July, 2019 pending investigation. Surprisingly, on the very same date, the suspension was lifted, the investigation purportedly completed, and the appellant required to resume duty. In our considered opinion, it is inconceivable that a proper investigation into allegations of diversion of consignments involving substantial quantities of cement could validly commence and concluded within the same day under such circumstances. Additionally, looking at the same Exhibit R2 they indicate they were signed and dated 2n d and 5th August, 2019, the dates post to 16 charge and summons to the appellant's to appear for disciplinary hearing, This is contrary to the requirement of law that investigation should be conducted to ascertain if there is reason of hearing of the suspect of misconduct. We are alive to the holding in Tanzania Cigarette Public Limited Company v. Msafiri Kibanga [2024] TZCA 800, that the law does not invariably require an employer to furnish an investigation report to an employee. However, the circumstances of the present matter were peculiar. Here, the alleged investigation formed the foundation of the charges against the appellant. Denial of access to such report, coupled with failure even to tender it before the disciplinary committee or the CMA, gravely undermined procedural fairness. We also find guidance in Severo Mutegeki & Another v. Mamlaka Ya Maji Safi Na Usafi Wa Mazingira Mjini Dodoma [2020] TZCA 310, on the importance of availing relevant reports to an employee facing disciplinary proceedings where justice so demands. In that regard, the total absence of an investigation report seriously prejudiced the appellant's right to prepare his defence. Had investigation been conducted, it might have clarified the appellant's contention that the Kasanga depot was already full and that the alleged 17 discrepancies may have related to duties not formally handed over to him. On the same procedural aspect, the appellant complains that the Chairman of the Disciplinary Committee was biased. He relied on three reasons: that he was seized with the respondent's documents prior to the hearing; he denied prayer to amend/change the offence; and that, he was cross-examining the appellant. Having gone through the record of appeal, we are inclined to agree with the appellant's counsel that during the disciplinary proceedings the complainant sought to amend the charge from paragraph 7.3.1 to paragraph 7.3.2, but the Chairman refused such request on the ground that it would necessitate a fresh hearing. In our view, that conduct raises serious doubt regarding the impartiality of the Chairman. The refusal to permit amendment of the charge, despite admission by the complainant himself that the original charge did not correspond with the facts, strongly suggests that the disciplinary process was predetermined towards securing the appellant's dismissal. That said and done, we are also persuaded by the appellant's complaint that the Chairman of the disciplinary committee had access to the respondent's documents before commencement of the hearing while 18 the appellant's documents were only introduced during the hearing itself. Although the Chairman attempted to justify this arrangement by claiming he needed to appreciate the nature of the dispute, the arrangement nonetheless created a legitimate perception of bias and procedural inequality. The Chairman conduct, in our view, contravened Guideline 4 (2) of the Guidelines for Disciplinary, Incapacity and Incompatibility Policy and Procedures annexed to the Code of Good Practice, which requires a Chairperson of disciplinary proceedings to be impartial and, where possible, not previously involved in the matter giving rise to the hearing. The conduct exhibited by the chairman in the instant matter fell short of that standard. Instead of acting as an impartial arbiter, he descended into the arena and effectively assumed the role of prosecutor and judge simultaneously. We also find merit in the appellant's complaint regarding unequal treatment. Rule 12 (5) of the Code of Good Practice requires the employer to apply the sanction of termination consistently with the way in which it has been applied to the same and other employees in the past, and consistently as between two or more employees who commit same misconduct. In this matter the evidence; Exhibit R2 and testimony of DW2, shows that one George Kilembe was equally implicated in the 19 alleged irregularities. However, whereas the appellant was terminated, the said George Kilembe received only a warning. No satisfactory explanation was offered by the respondent for such differential treatment despite both employees being accused of involvement in the same incident. Upon the totality of the evidence, we are satisfied that the respondent failed to prove, on a balance of probabilities, that there existed a valid reason for terminating the appellant's employment. The alleged negligence causing loss was not established. Likewise, the disciplinary process was tainted by procedural unfairness, lack of impartiality, unequal treatment, and absence of proper investigation. Accordingly, we find that the High Court erred in interfering with the well-reasoned award of the CMA. In the event, the appeal succeeds. We hereby allow the appeal, quash and set aside the judgment of the High Court dated 20th May, 2022 in Labour Revision No. 25 of 2021, and restore the award of the CMA with modification on remedies. Considering the circumstances of the matter and the relationship between the parties, reinstatement is no longer practicable. Instead, pursuant to section 41 (1) (c) of the ELRA, we award the appellant 20 compensation equivalent to twenty-four months' remuneration as prayed in CMA Form No.l. The appellant shall also be entitled to reimbursement of the amount paid in respect of the alleged loss together with all lawful terminal dues. We make no order as to the costs. DATED at MBEYA this 12th this 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 Mr. Benedict Elioth Sahwi, learned counsel for the Appellant, Mr. Ndanu Emmanuel, learned counsel for the respondent and Ms. Anna Utou, Court clerk, is hereby certified as a true copy of the original. 21