NCBA Bank Tanzania Ltd vs Peter & Others (Civil Appeal No. 1308 of 2024) [2026] TZCA 533 (12 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA rrr>RAM: FIKIRINI. 3.A. RUMANYIKA, 3.A, And ISSA, 3.A.) CIVIL APPEAL NO. 1308 OF 2024 NCBA BANK TANZANIA LTD ................................................... APPELLANT VERSUS PETER . ............................................................................lst RESPONDENT NISEMBIA KULEWA ........................................................ 2"d RESPONDENT FRANCIS PONDO.............................................................3rd RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Arusha Registry) (Ndumbaro, dated the 8th day of May, 2024 in Consolidated Labour Revision Nos. 33 & 45 of 2023 JUDGMENT OF THE COURT 27th April & 12th May, 2026. FIKIRINI, J.A.: Under the law, parties are free to negotiate contractual clauses and correct any errors by mutual agreement. This is the genesis of the appeal before the Court, in which the appellant is faulting the High Court for misinterpreting the contractual documents, resulting in blessing awarding payment not mutually agreed upon, and disregarding statutory

requirements under the Employment and Labour Relations Act, Cap. 366 Revised Laws (the ELRA). The appellant, therefore challenges the decision of the High Court of Tanzania Labour Division, dated 8th May 2024, in Consolidated Labour Revision Nos. 33 and 45 of 2023. The dispute arose following the merger of NIC Bank Tanzania Ltd and CBA Bank Tanzania Ltd to form NCBA Bank Tanzania Ltd, after which the newly formed bank undertook a retrenchment exercise due to operational requirements. Following the retrenchment, each employee filed a dispute before the Commission for Mediation and Arbitration (the CMA), alleging breach of their retrenchment agreements on the ground that the ex-gratia payments made by the bank were lower than agreed. The employees contended that the agreements provided for ex gratia payments calculated at 23 days' salary for each completed year of service for their entire period of employment, while the bank maintained that such payments were limited to a maximum of ten years of service. At the CMA, the disputes were handled separately. The Arbitrator Mwebuge, found in favour of the employees and held that the bank had breached the agreements by limiting the ex-gratia payments to ten years. Consequently, the arbitrator awarded them TZS 12,042,040.12 2

and TZS 12,870,564, respectively. In contrast, the dispute by the 3r d respondent, registered as CMA/ARS/ARS/238/22/160/22 and heard by Arbitrator Anosisye, was dismissed on the basis that the parties had agreed to limit the ex-gratia payments to a period not exceeding ten years. Aggrieved by these decisions, the bank filed Revision No. 33 of 2023, challenging the award in favour of the 1s t and 2n d respondents, while the 3r d respondent filed Revision No. 45 of 2023, challenging the dismissal of his claim. Upon consolidation of the revisions, the High Court dismissed the bank's application for lack of merit and upheld the CMA award in favour of the 1s t and 2n d respondents. Conversely, the Court allowed 3r d respondent's application, set aside the CMA decision in his case, and ordered the bank to pay him TZS 51,329,688 as outstanding ex gratia for the period of service beyond ten years, thereby affirming that the retrenchment agreements entitled the employees to ex gratia payments for their entire period of service rather than being covered at ten years. Still dissatisfied, the bank preferred the present appeal with the memorandum of appeal with three (3) grounds, namely:-

1. The High Court Judge erred in law for faiiing to consider the legal position in determining the contractual position o f the parties

when there was inconsistency in the documents forming one transaction. 2. The High Court erred in law by finding that the Respondents are entitled to be paid an amount not mutually agreed upon by the parties contrary to the provision of the law governing payment of retrenchment package. 3. That the High court erred in law by disregarding the requirements o f section 38(1) (a) (b) and (c) of the Employment and Labour Relation Act Cap 366 R.E 2019 and Rule 23 (4) of the Employment and Labour Relation Act (Code of Good Practice) GN.42 o f2007. In arguing in support of the appeal, learned counsel for the appellant, John Ignace Laswai, besides adopting the written submissions filed on 13th Januray, 2025, referred the Court to pages 387 to 400 of the record of appeal, with the intention to amplify several key points. The main issue being that the learned High Court Judge erred in law by treating the retrenchment agreement as an ordinary commercial contract and insisting on the sanctity of the contract in isolation. Counsel contended that the agreement in question is not an ordinary contract but a retrenchment agreement concluded pursuant to a statutory

retrenchment process undertaken in full compliance with the provisions of Section 38 of the ELRA. Consequently, it was argued the retrenchment agreement ought to be construed and interpreted holistically by reading it together with all other documents forming part of the retrenchment process, including the retrenchment notice, minutes of the consultative meetings, and all ancillary documents. The counsel submitted that the retrenchment process was duly completed and the agreements were signed by the parties. However, there was an obvious omission in the final retrenchment agreements of the ten years cap on the payment of ex gratia. This cap had been specifically discussed and mutually agreed upon by the parties during the consultative meetings held prior to the signing of the agreements. It was counsel's contention that since the retrenchment process was initiated and concluded by the parties without any complaint from the affected employees, the inadvertent omission of the 10-year cap by the Human Resources department should not operate to the detriment of the appellant by entitling the respondents to payments beyond the agreed ten years. 5

Finally, counsel argued that Clause 12 of the retrenchment agreement did not amount to a waiver of the 10-year cap. He urged the Court to allow the appeal and quash the judgment of the High Court. In opposing the appeal, learned counsel for the respondents, Mr. Mnyiwala Mapembe, submitted that the main issue for determination in this appeal revolves around the proper interpretation of Clause 4.4 of the retrenchment agreements. Counsel argued that the said clause must be accorded its plain and ordinary meaning. He contended that while the appellant seeks to bring in other documents to aid interpretation, the parties had expressly agreed to exclude all other documents, with the retrenchment agreement itself being the sole repository of their contractual intentions. The counsel further, submitted that the fairness of the retrenchment procedure was never placed as an issue by the respondents. The dispute was limited strictly to the question of adherence to the terms of the signed retrenchment agreements, particularly the computation of the ex gratia payments. Counsel further pointed out that when the respondents complained to the appellant regarding the alleged underpayment of ex gratia, the 6

appellant never raised the defence of "typographical error" or omission. Similarly, this issue was not raised by the appellant even at the CMA or in its pleadings (Form 1). The late introduction of the alleged omission, significantly undermines the appellant's case, stressed the learned counsel. With regard to the second ground of appeal, counsel submitted that an ex gratia payment is not a statutory requirement under the law, as the respondents had already been paid their severance allowance. While acknowledging that the ELRA, does not specifically prescribe ex gratia payments, he stated that Section 3 of the ELRA permits parties to agree on terms more favourable than the statutory minimums. However, he emphasized that the argument that the High Court ought to have excluded ex gratia on the ground that it is not provided for by law was never canvassed before the CMA or the High Court. On the third ground of appeal, the counsel submitted that although the appellant complains that the High Court disregarded the provisions of Section 38(l)(a), (b), and (c) of the ELRA and Rule 23(4) of the Employment and Labour Relations (Code of Good Practice) Rules, GN. No. 42 of 2007, the appellant did not cite or rely on these provisions in its submissions before the High Court. 7

On the first ground, he argued that this ground is not on a pure point of law, as its determination would necessitate an evaluation of inconsistent documentary evidence and urged the Court to dismiss the appeal and uphold the decision of the High Court. Having examined the record of appeal and considered the submissions of both parties, the central issue for determination is whether the respondents were entitled to be paid less the amount mutually agreed upon as per the retrenchment agreement or otherwise. However, before embarking on the determination of the raised grounds, we agree with the counsel for the respondents that the first ground of appeal is based on fact. This is evident from the appellant's submissions on page 6, which effectively invited this Court to re evaluate the evidentiary record as considered by the CMA. It is well established principle that, pursuant to section 58 of the Labour Institutions Act, this Court's appellate jurisdiction is confined strictly to matters of law. The provision expressly stipulates as follows: "Any party to the proceedings in the Labour Court may appeal against the decision of the High Court to the Court of Appeal on points of law only.

From the above-cited provision of the law, we conclude that the ground is not fit for determination by the Court at this level, this being a second appellate court. We shall therefore ignore it. Regarding the second and third grounds of appeal, which we shall consider together. The appellant's assertion is that the High Court judge erred in law by holding that the respondents were entitled to payment of an amount that had not been mutually agreed upon by the parties, contrary to the governing laws on retrenchment payments. In its submissions, the appellant relied on the provisions of section 38(l)(a), (b), and (c) of the ELRA, read together with Rule 23(4) of the Employment and Labour Relations Act (Code of Good Practice). The appellant contended that, in cases of termination due to operational requirements, the employer is required to adhere strictly to these provisions of the law. Our close scrutiny of the proceedings does not reveal failure in strict compliance with the requirements. On the contrary, it shows that the appellant met all the conditions, as evidenced by the exhibits on record: the notice of intention to retrench (Exhibit Dl), the minutes of consultation meetings (Exhibit D2), and the notices of termination of employment (Exhibit D3). From these documents, in which both the

appellant and the respondents were actively engaged, Exhibits P2 (found at page 165 of the record of appeal, marked NCBA-2) and P5 (found at page 181 of the record of appeal) were duly established. If any amendments to these two documents were necessary, they would have required joint revision by the appellant and the respondents; however, no such revisions were undertaken or addendum made to the retrenchment agreement signed by parties. The authority cited, namely Haider Mwinyimvua & Others v. Deposit Insurance Board & Another [2022] TZCA 97, is distinguished from the present case. As admitted by the appellant, all three statutory conditions were indisputably met, meaning no step was skipped. Moreover, the factual matrix in the present appeal differs materially from that in the cited case. Here, the issue concerns payment of ex-gratia benefits, which, under the retrenchment agreements (Exhibits P2 and P5), is expressly provided for in Clause 4.4. This clause reflects the agreement duly signed by the parties. By contrast, the cited case concerned whether termination of bank employees under liquidation was subject to the procedure stipulated under section 38 of the ELRA. 10

Similarly, in Brian Celestine & Others v. The Salvation Army Tanzania Territory [2023] TZCA 1793, the appellants, as indicated in their Form No. 1, challenged the fairness of their termination both substantively and procedurally. However, before the CMA, their complaint was narrowed to the severance package. The Court held that the retrenchment was lawful and fairly executed, thereby rejecting the complaint and affirming the employer's business discretion. This position is distinguishable from the present appeal. Here, the appellant argues that Exhibits P2 and P5 should be read in conjunction with Exhibits Dl, D2, and D3. Yet, as already observed, Exhibits P2 and P5 were created after the processes documented in Exhibits Dl, D2, and D3 had been concluded. Accordingly, Exhibits P2 and P5 supersede the relevance of those earlier exhibits and remain the operative instruments governing the matter at hand. That said, in our considered view, the cited provisions and arguments put forward are not applicable at this stage. The issue before the High Court giving raise to the present appeal, concerned the legality of the amount paid to employees under the retrenchment agreement. This matter was properly addressed by the High Court, which rightly emphasized that parties are bound by the terms and conditions they ii

have freely negotiated, agreed upon, and reduced into writing. To reinforce this position, the High Court, correctly relied on the authority of Unilever Tanzania Ltd v Benedict Mkasa Trading as Bema Enterprises [2009] TZCA 24, where this Court stated that:- "Strictly speakingunder our laws, once parties have freely agreed on their contractual clauses which parties have agreed between themselves. It was up to the parties concerned to negotiate and to freely rectify clauses which parties found to be erroneous. It is not the role o f the courts to re draft clauses in agreements but to enforce those clauses where parties are in dispute... No party would therefore be permitted to go outside that agreement for remedy. For the purpose o f the instant appeal before us, it means that the rights of the appellant and respondent herein are strictly limited to what is provided for in the agreement (Exhibit P70 between these disputing parties and nothing more." The same applies in the matter at hand, the retrenchment agreements exhibits P2 and P5 had clause 4.4, which provides that:- "Ex gratia payments (23 days’ salary for each complete year of service..." 12

The appellant's subsequent claim that the clause was erroneous, and that they had intended to provide for 23 days' salary capped at 10 years of service, is plainly an afterthought. The appellant had ample opportunity to correct any alleged error before signing the agreement or making payment to the respondents, considering the said retrenchment agreement was signed on 13th April, 2022 while the payment started being effected on 1s t June, 2022. The appellant further argues that other documents, namely, the notice of intention to retrench (Exhibit Dl), minutes of consultation meetings (Exhibit D2), and notices of termination of employment (Exhibit D3), reflect an intention that ex gratia payments be calculated as 23 days' salary capped at 10 years of service. On one hand, this contention cannot override the binding effect of the agreements executed by the parties, namely Exhibits P2 and P5. On the other hand, and as previously emphasized, parties are bound by the terms of their freely negotiated agreements, and courts have no duty to interfere with such arrangements unless the parties themselves lawfully seek to vary or challenge them. In light of the foregoing, we find that the High Court properly held that the respondents were entitled to ex gratia payments as mutually 13

agreed as per exhibit P2 and P5. Accordingly, the appellant has no basis to escape its obligation to fulfill the agreement. The appeal lacks merit and is dismissed entirely. DATED at ARUSHA this 12th April, 2026. P. S. FIKIRINI JUSTICE OF APPEAL S. M. RUMANYIKA JUSTICE OF APPEAL A. A. ISSA JUSTICE OF APPEAL Judgment delivered this 12th day of May, 2026 via teleconferencing in the presence of Mr. John Ignace Laswai, learned counsel for the appellant, Mr. Mnyiwala Mapembe, learned counsel for the respondents and Mr. Nelson Novati, Court Clerk in person is hereby certified as a true copy of the original. J. J. KAMALA DEPUTY REGISTRAR COURT OF APPEAL 14