Shelys Pharmaceuticals Limited vs Salome Malowe (Civil Appeal No. 75 of 2025) [2026] TZCA 512 (8 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT POPOMA fCORAM: KEREFU. J.A.. MWAMPASHI, J.A. And ISMAIL, J.AQ CIVIL APPEAL NO. 75 OF 2025 SHELYS PHARMACEUTICALS LIMITEP ....................................... APPELLANT VERSUS SALOME MAW OLE .......................... ..................................... RESPONOENT (Appeal from the judgment of the High Court of Tanzania, Labour Pivision at Par es Safaam) fMaahimbi, 3 ^ dated the 5th day of October, 2021 in Labour Revision No. 816 of 2019 JUDGMENT OF THE COURT 15thApril & 8th May 2026 ISMAIL. 3.A.: Shelys Pharmaceuticals Limited, the appellant herein, was a loser in revision proceedings which were instituted in the High Court, Labour Division. The said proceedings sought to challenge the decision of the Commission for Mediation and Arbitration (CMA) that sustained the respondent's complaints on the manner in which her services with the appellant were terminated. The High Court upheld CMA's holding that the respondent's termination was profoundly unfair. It is this decision that has precipitated the instant appeal. i

"me brief facts of this case as gathered from the record of appeal are pretty straight forward. They are to the effect that, the respondent, Salome Malowe, was employed by the appellant on 15th June, 2001, initially as a Representative promotion trainee. She steadily rose through the ranks. Her last position before things turned sour was that of Logistics and Distribution Manager. The game changer in the parties' employment relationship came on 7th September, 2016, when the appellant suspended the respondent on an allegation of involvement in the loss of sample medicine. An arrest and police detention followed shortly thereafter. In the midst of investigation into the alleged loss, the employer issued two letters, exhibit S6, dated 3r d October, 2026, and exhibit S4, dated 10th October, 2016. These letters called upon the respondent to resume her duties not later than 12th October, 2016, but she allegedly declined the invitation. When she finally reported to duty on 13th October, 2016, she was served with a letter of termination, exhibit S5. The ground cited for the termination was absenteeism. The respondent's contention was that resumption of her duties was dependent on formal withdrawal of criminal allegations and lifting of the suspension, and that, none of such steps was brought to her attention. This did not hold back the appellant as the termination went ahead as planned.

The termination rattled the respondent, and her immediate reaction was to institute proceedings in the Commission for Mediation and Arbitration (CMA), challenging the termination on the ground that the same was substantively and procedurally unfair. Form No. CMA 1 that commenced proceedings at the CMA raised a number of complaints. These included denial of the right to be heard on the allegations levelled against her; failure to invite her to a meeting of the disciplinary committee; failure to afford him an opportunity to be accompanied by a trade union leader; the employer's failure to prove the allegations levelled against the respondent; and failure to pay benefits that are due to the respondent. In the opening statement filed by the respondent in the CMA, two issues were framed for determination by the CMA. These are: one, whether the complainant (respondent) was fairly terminated, both substantively and procedurally; and two, to what reliefs were the parties entitled. On fairness of the termination, the CMA took the view that the reason for termination did not constitute a fair ground for termination as no convincing evidence was adduced to prove that the respondent refused to resume work subsequent to her suspension. Regarding the 3

procedural fairness, the CMA found that the procedure, as enshrined in rule 13 of the Employment and Labour Relations (Code of Good Practice) Rules, GN. No. 42 of 2007, was flouted as rights stipulated in the said rule were not accorded to the respondent. In the end, the CMA ordered reinstatement without loss of remuneration. Feeling hard done by the decision of the CMA, the appellant instituted an application for revision in the Labour Division of the High Court, taking an exception to the decision that reversed the termination. The High Court joined hands with the CMA in adjudging the termination unfair. With regard to procedural impropriety, the learned Judge reasoned as follows: "Rule 13 o f the same Code requires the employer to investigate the allegations, inform the employee o f the allegations, give her time to prepare [and] conduct a hearing and the list goes on. Ail these provisions were made so as to ensure that before an employee is terminated and his/her right to work is taken from her, she/he was afforded right to be heard. As for this case, none o f those procedures were followed. Any decision made without affording the adverse party a right to be heard is a nullity.

In conclusion , there is no dispute that the respondent was never called to any disciplinary hearing ; she was summarily dismissed without being afforded any right to be heard. The termination was hence procedurally unfair" The learned Judge took the view, in consequence, that reinstatement was not a feasible course of action, given the passage of six years from the date on which the respondent's services were dispensed with. Instead, the learned Judge ordered payment of compensation equivalent to 12 months' remuneration, in terms of section 40 (3) of the Employment and Labour Relations Act, Cap. 366 (the ELRA). This worked out to an aggregate sum of TZS. 187,936,786.00. Not unexpectedly, the concurrent findings in the respondent's favour elicited an outrage from the appellant whose swift action was to prefer an appeal to this Court. The appeal is predicated on 8 grounds of appeal which are paraphrased as follows: One, that the learned Judge erred in holding that the respondent could not report for duty while she had not been informed that the charges against her had been dropped. Two, the learned Judge erred in holding that the respondent was not contacted to report for duty before termination of employment while in fact there is evidence that she was contacted on two occasions but

refused to report. Three, the learned Judge erred in holding that absenteeism over short periods of time without leave or reason is a minor misconduct which is not serious enough to warrant a termination. Four, the learned Judge erred in holding that the termination was procedurally unfair. Five, the learned Judge erred in ordering payment of 12 month's compensation. Six, that the holding that the respondent's salary was TZS. 2,626,400.00 as opposed to TZS. 697,546.00 was erroneous. Seven, that the learned Judge's decision to order payment of 59 months' salaries was based on extraneous factors and, therefore, erroneous. Eight, the learned Judge erred when she awarded severance pay based on monthly salary of TZS. 2,626,200.00 instead of TZS. 697,546.00. Ahead of the hearing and consistent with rule 106 (1) of the Tanzania Court of Appeal Rules, 2009, the parties preferred written submissions both of which were adopted by respective counsel as part of their oral submissions. Featuring for the appellant was Dr. Onesmo Kyauke, learned counsel, who, at the outset, chose to abandon ground two of the appeal. The respondent enlisted the services of M r. Prosper Mrema, learned advocate. Their submissions will be considered in the course of discussion of each ground of appeal.

Our disposal journey begins with grounds three and four of the appeal which castigate the reasoning by the learned Judge of the High Court who held that absenteeism over short periods of time without leave or reason constitutes a minor misconduct and that the same would not be the basis for imposing a termination. The learned Judge also lashed out at the appellant's affront of the procedural aspects in effecting the termination. In his submissions, in respect of these grounds, D r. Kyauke contended that exhibit S5, found at page 137 of the record of appeal, quite correctly stated that, failure to report for duty without any justifiable reasons or prior permission amounted to absconding from duty, an offence which is punishable through termination. He contended that, this position is supported by the reasoning of the Court in Muhimbili National Hospital v. Constantine Victor John [2016] TZCA 208 in which it was held that, such absence warrants a termination. He urged us to fault the learned High Court Judge lest we let the Court set a bad precedent and encourage lazy and unscrupulous employees to absent themselves from work. M r. Mrema, was diametrically opposed to his counterpart's contention on this ground. He recounted that, the respondent was

contacted on 12th October, 2016 and reported to her employer on 13th October, 2016, just a day later. He contended that, this is why the learned High Court Judge reasoned, rightly so in his contention, that the violation was a minor offence which deserved a warning. It is a settled law that, a termination whose reason or procedure is not proven to be fair is, in terms of section 38 (1) of the ELRA, unfair and unlawful. This means that, termination of employment can only be fair if the reason for termination is as fair as the procedure through which such termination was carried out. The onus of proving that the termination was fair is, pursuant to section 39 of the ELRA, cast on the employer - see, for instance: Ally Farahani v. Geita Gold Mining Limited [2023] TZCA 225. As alluded to earlier on, the offence that led to termination was absenteeism which follows the respondent's failure to report for duty on 12th October, 2026, as she was mandated by a letter served on her on 10th October, 2016. It is on record that the respondent availed herself on 13th October, 2016, instead of 12th October, 2016. This means that the absenteeism complained about lasted for one day. This echoes the testimony of DW1 who, at page 159 of the record of appeal, confirmed: one, that the appellant found no reason to convene a disciplinary 8

hearing; and, two, that the incident was in relation to that one day i.e. 12th October, 2016, the date on which she was ordered to report. The question which arises in this connection is whether this is an offence whose penalty is termination. Dr. Kyauke thinks it is, but, with profound respect to him, we find this contention a little specious. We say so knowing that, the general principle in disciplinary cases is that, a first offence will only justify termination if such offence is serious and makes the employment relationship intolerable. This is stipulated in rule 12 (2) of the Code of Good Practice Rules which provides as hereunder: "12 (2) First offence o f an employee shali not justify termination unless it is proved that the misconduct is so serious that it makes a continued employment relationship intolerable." From this, the question that arises is, was absenteeism that the respondent was accused of constituted a serious misconduct in the realm of misconducts stated in rule 12 (2)? Our unflustered answer to this question is in the negative. The Guidelines clearly state that, absence without permission of up to five working days is a misconduct of a lesser degree and the corresponding penalty set out by law is a warning. These

Guidelines further guide that, termination would be imposed where absence from work is without permission or without acceptable reason, and is in excess of five working days. It would not, as was the case here, be preferred as a penalty, where the absence is below five-working days' threshold set out by law. This incisive legal position has been underscored by this Court through a multitude of its pronouncements. In Mbezi Beach Secondary School v. Elias Naligia [2025] TZCA 949, for instance, we held as follows: "Under rule 12 (2) o f the Code o f Good Practice Rules, the appropriate sanction for unauthorised absence from work is termination where such absence exceeds five working days. The appropriate sanction involving less than five working days is warning in accordance with item 1 to the Guidelines for Disciplinary, Incapacity and Incompatibility Policy and Procedures incorporated under the Code o f Practice Rules." [Emphasis added]. In the impugned judgment, the learned Judge predicated her decision to hold that the termination was not fair on the appellant's failure to prove that she contacted the respondent before termination was 10

preferred as a penalty. We take the view that, unfairness of the reason for termination resides not in the failure to prove that there was any contact with the respondent. Rather, it resides in the fact that the absence against which termination was imposed did not meet the threshold set out by the law. We are decidedly of the view that, contacting the respondent or otherwise, alone, would not take away the fact that termination is not a corresponding penalty for absenteeism which lasts up to five working days. Reverting to the procedural aspect of the termination, the question that yearns to be resolved is whether, the procedure followed (if any) was a fair procedure. To answer this question, it behoves us to revisit the testimony adduced by witnesses who testified in the matter. Of relevance here is the testimony of DW2, Abdallah Msesi who, at page 162 of the record of appeal, made a stunning admission to the effect that the procedure for termination of employment was given a wide-berth on the ground that the employer, the appellant, considered that the allegations bordered on criminal indulgences in respect of which a disciplinary hearing was not necessary. He also admitted that the respondent did not opt out of employment, adding that, it is the termination letter that brought the respondent's service to an end. This revelation is gathered 11

from his responses to cross-examination questions posed to him. To appreciate the extent of the revelation, it is apposite that we reproduce the relevant part of the testimony, as hereunder: "Umeeleza kuwa alikuwa anapelekewa nakala za barua, je ulipatiwa barua kufuta kesi ya jinai? Hapana. After [the] complainant [was served with a termination] letter, je complainant aliwahi kuacha kazi? Hapana. Je kuna siku umepata wito wa management kuonyesha complainant anaitwa katika hearing? Hapana. Why uamini kuwa complainant aiijiachisha kazi mwenyewe? Kwa maelezo ya respondent na complainant kuwa alipenda aone kesi ya po/isi imetoiewa. Sasa haki ya kusikilizwa ambayo respondent amenyimwa na respondent? Respondent alichukuiia kama kesi ya jinai na sio nidhamu thus hapakuwa na kikao cha nidhamu as jinai iiikuwa inaendeiea. Todate sijui kesi ya jinai inaendeieaje?" 12

From the foregoing, it is incontrovertible that, not a semblance of the procedure was invoked in terminating the respondent. It is aiso clear, in our view, that the employer's decision, that has been concurrently scathed by the CMA and the High Court, was not bred out of a fair procedure as enshrined in rule 13 of the Code of Practice Rules. What is quite telling, as well, is the fact that all requirements that are associated with a hearing process, such as issuance of charges; according the employee the right to be present at the disciplinary hearing; and such other requirements, as provided for in the Guidelines, were all eschewed by the appellant. The appellant chose expedience on the altar of mandatory procedural prescription set out by the law. We are, consequently, in agreement with the CMA and the High Court that termination of the respondent did not have any semblance of hallmarks of a fair termination. We find these grounds hollow and we dismiss them. In ground one, the complaint by the appellant is that the learned Judge's finding that the respondent could not report for duty in the pendency of the criminal investigation was wrong. The contention is that, since she was informed that charges had been dropped then her sitting out was unjustified. The appellant's contention is based on the contents

of exhibit S6 and the testimony of DW1. Dr. Kyauke has contended in his submissions that a bar to institution of disciplinary proceedings only exists where the matter is pending in court not where, as was in this case, the matter was under police investigation. Mr. Mrema held a divergent view, and his contention was that, exhibit S6 was never served on the respondent prior to her reporting for duty. He argued that the only communication to the respondent was done telephonically on 12th October, 2016, urging her to report on 13th October, 2016. We have weighed the rival submissions by the learned counsel. While we appreciate that there may be a disquiet on whether the letter was served and, if yes, when, we find this ground superfluous, given what we have pronounced ourselves on the complaint in ground 3. We are of the considered view that the timing of the service of the letter of resumption of duty would be of significance if the reason for termination and the procedure adopted were fair. We, therefore, choose to refrain from delving into this ground of appeal. Grounds five and seven take an exception to the learned Judge's award of compensation, equivalent to 12 months' remuneration and wages for unfair termination covering 59 months from the date the unfair 14

termination was carried out. Dr. Kyauke finds the award arbitrary, unfair and unjustifiable as payment of wages can only arise where an order for reinstatement of the terminated employee is issued. This, in his contention, did not arise in this case. Mr. Mrema finds nothing untoward in the decision of the High Court. His contention is that payment of compensation and other perks is consequential upon adjudging that the termination is unfair and it is consistent with the substance of section 40 (3) of the ELRA. The learned counsel argued that the order of reinstatement considered that the purported termination was unfair and it ought not to have been effected. As we have alluded to earlier on, the CMA adjudged the termination unfair and ordered that the respondent be reinstated without any loss of remuneration. This decision was substantially upheld by the High Court, save that the latter was of the view that a lot of water had passed under the bridge, rendering reinstatement unfeasible. It ordered payment of compensation in the sum equal to 12 months' wages. It also ordered that 59 months during which the respondent was tussling with the appellant in the matter that finally saw her emerge a victor should also be remunerated as the termination that kept her out of employment was, after all, discrepant. D r. Kyauke has considered the award utterly 15

outrageous and unjustified. We do not think so. We find it quite in order and in conformity with section 40 (3) of the ELRA which provides as hereunder: "(3) Where an order o f reinstatement or re engagement is made by an arbitrator or Court and the employer decides not to reinstate or re engage the employee , the employer shall pay compensation o f twelve months wages in addition to wages due and other benefits from the date o f unfair termination to the date o f final payment "[Emphasis added]. In our fortified view, 59 months' remuneration constituted wages due and other benefits for the period that covered the date of unfair termination to the date on which decision on revision was made. While the sum may be considered substantial, its payment cannot be said to be unjustified, arbitrary or outrageous. We find D r. Kyauke's contention unsupportable and lacking the necessary cutting edge. We, therefore, reject it out of hand and dismiss these two grounds of appeal. Next for our determination is ground six which raises a narrow question. It is on the quantum that should be picked as the respondent's salary. D r. Kyauke has drawn our attention to page 144 of the record of appeal at which exhibit SM8 is found. His contention is that the 16

respondent's actual salary was TZS. 697,456.00 as opposed to TZS. 2.626.400.00 which include other emoluments such as transport allowance payable to employees on duty. He implored us to be guided by the Court's reasoning in Security Group (T) Ltd v. Steven Gerson Kizinga [2024] TZCA 107 in which such benefits were excluded. Mr. Mrema has valiantly opposed the contention raised by his counterpart. He premised his argument on section 4 of the ELRA which defines remuneration to include all other emoluments that the terminated employee enjoyed when he was in employment. He contended that exhibit SM8 contains a remuneration due to the respondent, and that, the High Court was right to base its computation on the gross sum of TZS. 2,626,400.00. The learned counsel sought to distinguish the Court's decision in Security Group (T) Ltd (supra), arguing that facts in the said case were dissimilar to what obtains in the instant matter. It is worth of note that, the learned Judge preference of TZS. 2.626.400.00 to the sum of TZS. 697,456.00 that Dr. Kyauke has clung on is because payment envisioned in section 40 (3) of the ELRA factors in wages due and other benefits that the respondent enjoyed during her employment stint. They are, as Mr. Mrema correctly argued, a remuneration as defined in section 4 of the ELRA which states as follows: 17

""remuneration" means the total value o f all payments, in money or in kind, made or owing to an employee arising from the employment o f that employee." It would be foolhardy to confine the respondent's perks to the net payment. We find nothing flawed in the learned Judge's decision to gross up the payment. Her decision is, in ail respects, consistent with what the law provides. In our considered view, picking the basic salary as the basis for computation of the benefits would be egregious and an erosion of the spirit enshrined in section 40 (3) of the ELRA. We, accordingly, find this ground destitute of merit and we dismiss it. Ground eight bemoans the High Court's decision to compute severance pay based on the gross salary of TZS. 2, 626,400.00. The appellant's argument is that it is basic wage that should be used in the computation, not the employee's remuneration. The appellant's contention derives its potency from the decision of the High Court in Neema Batchu & Another v. Absa Group Ltd, Revision No. 408 of 2 0 2 1 . This position has drawn a convergence with that of the respondent who has taken the view that, that is what section 42 (1), (2) (a) of the ELRA provides. 18

We have, yet again, scrupulously leafed through the impugned decision of the High Court. At page 284 of the record of appeal, the learned Judge addressed the question of severance pay to the respondent, and she reasoned as follows: "The applicant shaft further pay the respondent severance pay under section 42 (2) o f the ELRA. The severance pay shall be 7 days' basic wage for each completed year o f continuous service...." [Emphasis added]. It is a correct postulation that severance pay is calculated based on the departing employee's basic wage. This is what section 42 (1) which defines a severance pay and guides on computation and payment thereof. For ease of reference, it is apt that we should reproduce the said provision. It states as follows: "42.-(1) For the purposes o f this section, "severance pay" means an amount at least equal to 7 days' basic wage for each completed year of continuous service with that employer up to a maximum often years. (2) An employer shall pay severance pay on termination o f employment i f - (a) the employee has completed 12 months continuous service with an employer...." 19

What we gather is that, the learned Judge of the High Court operated within the confines of the law as set out in the cited provision, and it comes as an amazement to us that the learned counsel have closed ranks and decried what is clearly an unblemished stance. We find the complaint by the appellant in this ground unmerited and we disallow it. In the upshot of all this, we find this appeal barren of fruit. Accordingly, we dismiss it in its entirety. No order as to costs. DATED at DODOMA this 7th day of May, 2026. R. J. KEREFU JUSTICE OF APPEAL A. M. MWAMPASHI JUSTICE OF APPEAL M. K. ISMAIL JUSTICE OF APPEAL Judgment delivered virtually this 8th day of May, 2026 in the presence of Messr. Dr. Onesmo Michael, Africa Mazoea, learned counsels for the appellant, Mr. Prosper Mrema, learned counsel for the respondent, and Mr. Shafii Kassim, Court Clerk, is hereby certified as a true copy of