Venance Edson vs Comviva Technologies Limited (Civil Appeal No. 564 of 2022) [2026] TZCA 495 (7 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT P A R ES SALAAM ( CORAM: gFHFI r 3.A.. KIHWELO, 3.A. And AGATHO, J .A J CIVIL APPEAt. NO. 564 OF 2022 VENANCE EDSON..............................................................................APPELLANT VERSUS COMVIVA TECHNOLOGIES LIM ITED ........................................ RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Labour Division, at Dar es Salaam) (Mqanqa, JO dated the 29th day of September, 2022 in Labour Revision No. 354 of 2016 JUDGMENT OF THE COURT 13th April, & 7th May, 2026 SEHEL. J.A.: In this appeal, the appellant, Venance Edson, is challenging the decision of the High Court of Tanzania, Labour Division at Dar es Salaam (the High Court) in Labour Revision No. 354 of 2016. In that revision, the High Court allowed the respondent's application for revision by holding that, by virtue of the consultancy agreement, the appellant was not an employee of the respondent rather a consultant thus, the Commission for Mediation and Arbitration (the CMA) had no jurisdiction to determine a dispute. Consequently, it quashed and set aside the CMA's Award which was in favour of the appellant. 1 Aggrieved by the decision of the High Court, the appellant lodged the present appeal. In order to appreciate the context in which the labour dispute arose and later culminated to the present appeal, we find it apposite to briefly, provide the material facts of the matter as obtained from the record of appeal. On 25th July, 2011, the appellant and the respondent concluded a one-year consultancy agreement to end on 24th July, 2012. However, on 25th July, 2012 the parties signed an addendum extending the duration of the agreement to 31st May, 2014. The fees for consultancy agreement were; fixed consultation fee of TZS. 22,113,312.00 per annum but payable on monthly basis, performance-based consultancy fee of TZS. 5,528,328.00 payable on quarterly basis, skill allowance of TZS. 18,096,000.00 payable annually and variable consultancy fee of TZS. 345,520.00 payable on monthly basis. As a support Engineer on Airtel Money electronic system, he was required to provide daily reports of his work to the Senior Officials of the respondent but with limited access to the Airtel Money System. He was further restricted to render his services whatsoever to any other company, directly or indirectly. Before the expiration of the term, the respondent wrote a letter dated 19th September, 2012 to the appellant terminating the consultancy agreement. Aggrieved by termination, he instituted a dispute in the CMA alleging that reasons for his termination was not disclosed in the termination letter and he was not given a chance to defend himself, in other words, he claimed that the respondent did not adhere to any disciplinary mechanisms. He therefore, prayed to be paid compensation equal to the remaining contract period of 23 months and his terminal benefits as per the labour laws. The respondent denied liability and raised a preliminary point of law that the CMA had no jurisdiction to entertain a contractual agreement whereby parties agreed to resolve their dispute amicably within fourteen days. If the same could not be resolved then the dispute shall be referred to arbitration in accordance with the Indian Arbitration and Conciliation Act, 1996 and Rules made thereunder. In the alternative, the respondent averred that it exercised its right of contractual right of termination as provided for under clause 3 of the consultancy agreement by paying two months' consultancy fees in lieu of notice. 3 Having heard the parties, the CMA found that the appellant was unfairly terminated, both substantially and procedurally. Accordingly, the appellant was awarded the remaining period of the contract which was found to be 20 months and 12 days and two months' notice. In that respect, the respondent was ordered to pay the appellant a total sum of USD 49,976. As stated herein, the respondent's application for revision before the High Court was allowed hence, the present appeal. In the memorandum of appeal, the appellant advanced the following seven grounds: "(1) That the High Court Judge m isdirected him self and erred in law in deciding that the contract between the parties was for consultancy and it did not create an Em pbyer- Em pbyee Relationship between the parties. 2) That the High Court Judge m isdirected him self and erred in law in deciding that the parties were bound by the terms o f the contract between them. 3) That the High Court Judge m isdirected him self and erred in law by his failure to observe that from the conduct o f the parties there were factors which in law led to an Employer-Employee relationship between the 4 parties irrespective o f the name o f the contract. 4) That as the result o f the failure in ground (3) herein above, the High Court Judge erred in law in deciding that the Commission for Mediation and Arbitration had no jurisdiction to determ ine the dispute between the parties. 5) That as a result o f the failure in ground (3) hereinabove, the High Court Judge erred in law in deciding that the laws applicable to determ ine the dispute were not Tanzanian Laws. 6) That the High Court Judge erred in law by the failure to find out that the appellant's fixed term contract was unlawfully terminated. 7) That the High Court Judge erred in law by the failure to find out that the appellant is entitled to the reliefs awarded by the Commission for Mediation and Arbitration". When the appeal was placed before us for hearing, the appellant was represented by Ms. Stella Simkoko, learned advocate, whereas, the respondent had the legal services of Mr. Norbert Mlwale, also learned advocate. It is noteworthy that, in compliance with rule 106 (7) of the Tanzania Court of Appeal Rules (the Rules), the counsel for the respondent filed the written arguments opposing the appeal. Arguing the appeal, Ms. Simkoko consolidated the first five grounds, all of which turned on whether an employer-employee relationship existed and whether the CMA possessed jurisdiction to entertain the complaint. The sixth and seventh grounds were argued separately. Submitting on whether there was an employer-employee relationship, Ms. Simkoko referred us to section 62 of the Labour Institutions Act (the LIA) which sets out factors for presumption of the employer-employee relationship and to the High Court's decision in the case of Mwita Wambura v. Zuri Haji [2014] TZHC 2636 that made reference to the principles contained in the International Labour Organization Employment Relationship Recommendation No. 198 of 2006, in particular paragraphs 9 and 13. She argued that the High Court Judge summarized few clauses on the contract between the parties while disregarding others that directly established the statutory factors under section 62 of the LIA and the ILO Recommendation. In particular, she cited clause 1.4, read together with appendix 1, which detailed the appellant's assignments and deliverables, thereby demonstrating the respondent's control over the manner, timing, and place of work. Clause 1.5, fixing the contract's duration from 25th July, 2011 to 31st May, 2014 but prematurely terminated on 19th September, 2012, showed exclusivity of service. Clauses 1.6 and 1.7 reinforced that exclusivity by prohibiting outside engagements and requiring proof of termination from prior employment. Clause 2, read with appendix 2, established monthly and quarterly payments, allowances, and consultancy fees, evidencing economic dependence. Clause 6 bound the appellant to the respondent's Code of Conduct. Further, Ms. Simkoko referred us to page 333 of the record of appeal where the appellant stated that he worked daily from 07:45 to 17:00 hours, a schedule consistent with section 62(a) and (b) of the LIA. These factors, she argued, were duly considered by the CMA and summarized by the High Court, but the latter failed to appreciate their import. It was therefore, Ms. Simkoko's proposition that there was enough evidence to support an employer - employee relationship contrary to the case of James Gaty Magabe v. GUD Holdings (PTY) Limited [2024] TZCA 930, where the Court dismissed the appellant's appeal because there was no enough evidence to prove there was an employer employee relationship. 7 On that basis, Ms. Simkoko faulted the High Court's conclusion that the appellant was bound by the contract terms, that the CMA lacked jurisdiction, and that Tanzanian laws were inapplicable. On the sixth ground of appeal, Ms. Simkoko submitted that section 37(1) of the Employment and Labour Relations Act (the ELRA) permits termination of a contract of employment by notice. She further cited section 41(3) of the ELRA, which obliges an employer to issue written notice of termination, expressly stating the reasons. In her view, the letter of termination served upon the appellant did not state the reason for termination of the contract of employment. Since no reason was stated, she submitted, under section 41 (7) (a) of the ELRA, the appellant was entitled to dispute the lawfulness of termination which he did by filing a dispute before the CMA. On the seventh ground, she argued that the reliefs awarded by the CMA were premised on breach of the employment contract, not on unfair termination. That is why the CMA granted the appellant compensation equivalent to the remaining period of the contract. To reinforce her submission, she relied on the High Court's decision in the case of Good Samaritan v. Joseph Robert Savar Munthu, Labour Revision No. 165 of 2011 (2013) LCCD 9. In opposing the appeal, Mr. Mlwale adopted the reply submission to form part of his oral submission. He submitted that the conditions to establish employer and employee relations as stipulated under section 62 of the LIA were non-existence in the present appeal since the contract of employment was self-explanatory. He referred us to page 138 of the record of appeal where the title of the contract was expressed as a " Contract for Consultancy Agreem ent. He added that, even looking at the terms, for instance, clause 1.2 at pg. 138 of the record of appeal, clearly stipulated that the consultant was to work as independent agent not an employee of Comviva (the respondent). Similarly, clauses 2.1, 2.2, 3.1 found at pg. 139 of the record of appeal which stipulated the mode of renumeration and the said payments were designated as consultant's fee and not salary. Further, clause 2.2 required the appellant to pay his own taxes as consultant. He added that the cited case of James Gaty Magabe v. GUD Holdings (PTY) Limited (supra) supported the respondent's position that the appellant was a consultant and not an employee of the respondent. Responding on hours of work, he referred us to page 317 of the record where DW1 stated that the appellant was an independent service provider who managed his own working hours. 9 Regarding renumeration, Mr. Mlwale referred us to page 319 where DW1 explained the mode of payment of the appellant's consultancy fees. He therefore asserted that, according to the evidence, the mode of renumeration was not salary of a regular employee as he was not a full-time employee of the respondent. Even if, he was provided working tools as computers that alone cannot make him fit under section 62 of LIA. In the end, he supported the High Court's decision that it was correctly made basing on the available evidence before the CMA. He therefore submitted that the appellant's appeal was baseless as the parties were bound by the terms of their consultancy agreement. In the end, he prayed for the appeal to be dismissed for want of merit and urged us to uphold the High Court's decision. In rejoinder, Ms. Simkoko reiterated that the statutory conditions under section 62 of the LIA were satisfied notwithstanding the contract's title. She argued that the non-deductibility of personal taxes was immaterial, stressing that the decisive factor under section 62(e) of the LIA was economic dependency on the person who engaged the appellant, as set out under section 61 (e) of the LIA. 10 We have duly considered the parties' submission and noted that the central issue for our determination is whether the appellant was an employee of the respondent notwithstanding the designation of the agreement. For a start, we wish to iron out undisputed facts that; the appellant concluded a consultancy agreement with the respondent on 25th July, 2011 which was renewed through an addendum but terminated prior to its anticipated expiry date of 31st May, 2014. The termination aggrieved the appellant, who maintained that, despite the nomenclature of the agreement, he was in substance an employee of the respondent. It is settled law that, the burden of proving the existence of an employer-employee relationship rests upon the party asserting that status. In seeking to discharge that burden, Ms. Simkoko took us through seven criteria stipulated under section 62 of the LIA which provides that: "For the purposes o f a labour law, a person who works for, or renders services to, any other person is presumed, until the contrary is proved, to be an employee, regardless o f the form o f the contract, if any one or more o f the follow ing factors is present- a) the manner in which the person works is subject to the control or direction o f another person; (b) the person's hours o f work are subject to the control or direction o f another person; c) in the case o f a person who works for an organisation , the person is a part o f that organization; (d) the person has worked for that other person for an average o f a t least forty-five hours per month over the last three months; (e) the person is econom ically dependent on the other person for whom that person works or renders services; (f) the person is provided with tools o f trade or work equipm ent by the other person; or (g) the person only works for or renders services to one person." [Em phasis added]. It follows that, in determining whether a person who renders services is an employee, the mere designation of the agreement is not decisive. Courts must instead examine the seven statutory indicators in light of the facts and circumstances of each case, so as to discern the true nature of the relationship between the parties. We emphasize that the listed indicators under section 62 of the LIA are not exhaustive. Other relevant considerations may also be 12 taken into account, including whether deductions are made for pension contributions or for Pay As You Earn (PAYE) taxes. In the case of Workmen of Nilgiri Cooperative Marketing Societies Ltd v. State of Tamil Nadu & Others [2204] 2 S.C.R. 159, which we find highly persuasive, the Supreme Court of India, citing the book of I.T. Smith and J.C. Wood in "Industrial La w " third edition, at pages 8-10, observed that the factors distinguishing an employee from an independent contractor have evolved considerably over time. The Court noted: "In spite o f the obvious importance o f the distinction between an employee and an independent contractor, the tests to be applied are vague and may, in a borderline case, be difficult to apply. H is to ric a lly , th e so lu tio n la y in a p p ly in g th e 'c o n tro l te st', i.e ., c o u ld th e e m p lo y e r c o n tro l n o t ju s t w h a t th e p e rso n w as to do, b u t a lso th e m a n n e r o f th is d o in g it - i f so, th a t p e rso n w as h is em ployee. In the context in which it m ainly arose in the nineteenth century, o f domestic, agricultural and m anual workers, this test had much to commend it, b u t w ith th e in c re a se so p h istic a tio n o f in d u s tria l p ro c e ss a n d th e g re a te r n u m b e rs o f 13 p ro fe s s io n a l a n d s k ille d p e o p le b e in g in s a la rie d em ploym ent, it soon became obvious that the test was insufficient for example in the case o f a doctor, architect ; skilled engineer, pilot, etc.) and so, despite certain attem pts to modernize it, it is n o w a cce p te d th a t in it s e lf c o n tro l is n o lo n g e r th e so le te st, though it does remain a factor and perhaps, in some cases, a decisive one. In th e se a rch fo r a s u b s titu te test, id e a s h ave b een p u t fo rw a rd o f an In te g ra tio n te s t', i.e ., w h e th e r th e p e rso n w as fu lly in te g ra te d in to th e e m p lo y e r's con cern, o r re m a in e d a p a rt fro m a n d in d e p e n d e n t o f it. Once a g a in , th is is n o t n o w vie w e d a s a s u ffic ie n t te s t its e lf, but rather as a potential factor (which m ay be useful in allowing a court to take a wider and more realistic view). The m od ern a p p ro a ch h a s been to aband on th e se a rch fo r a sin g le te st, a n d in s te a d to ta k e a m u ltip le o r \p rag m atic' ap proach , w e ig h in g upon a ll th e fa c to rs fo r a n d a g a in s t a c o n tra c t o f e m p lo ym e n t a n d d e te rm in in g on w h ich sid e th e sc a le s e v e n tu a lly se ttle . Factors which are usually o f importance are as follows - the power to select and dismiss, the direct paym ent o f some 14 form o f renumeration deduction o f PAY and national insurance contributions, the organization o f the workplace , the supply o f tools and m aterials (though there can s till be a labour only sub-contract) and the econom ic realities (in particular who bears the risk o f loss and has the chance o f profit and whether the employee could be said to be 'in business on his own account). A fu rth e r d e ve lo p m e n t in th e re c e n t case la w (p a rtic u la rly co n ce rn in g a ty p ic a l e m p lo ym e n t) h a s b een th e id e a o f 'm u tu a lity o f o b lig a tio n s ' as a possible factor, i.e., whether the course o f dealings between the parties dem onstrates sufficient such m utuality for there to be an overall employment relationship. "[Emphasis added] From the foregoing, it is evident that courts now adopt a pragmatic approach, rather than relying solely on the control test or the integration test. In cases where services are rendered without a formal contract, the inquiry must extend to the intentions of the parties specifically, whether there existed mutuality of obligations sufficient to establish an employer-employee relationship. Applying the pragmatic approach, and weighing the statutory indicators under section 62 of the LIA against the facts of the present 15 appeal, we are persuaded that the learned Judge of the High Court correctly held that the agreement between the parties was purely a consultancy arrangement and did not create an employment relationship. The record demonstrates that the respondent, engaged in telecommunications services, contracted the appellant as a consultant responsible for system administration in Airtel Money Solutions for a specific period of time from 25th July, 2011 with expectation to end on 31st May, 2014 but terminated on 19th September, 2012. The appellant's duties included monitoring servers and storage devices, with reporting obligations to senior officials and restrictions against engaging in other services. While these requirements suggest some measure of control, we find that such control was directed at safeguarding system security and ensuring operational integrity, rather than establishing an employment relationship. The appellant retained autonomy in devising his methodology of reporting and delivering contractual tasks. Further, the appellant was not entitled to benefits typically associated with employment, such as annual leave, promotion, or pension contributions. His remuneration, monthly and quarterly 16 payments, tied to deliverables, was made without statutory deductions for PAYE or pension, underscoring his independence. The economic reality is that the appellant bore the risk of his own engagement and was not integrated into the respondent's organizational structure. We also note that exclusivity clauses and reporting obligations, while restrictive, do not in themselves transform a consultancy into employment. Such provisions are common in consultancy agreements where sensitive systems and data are involved, and they serve to protect the integrity of the respondent's operations rather than to establish subordination characteristic of employment. Additionally, the appellant's evidence that he worked fixed hours does not, in our view, alter the nature of the relationship. The requirement to be available during certain hours was dictated by the operational needs of Airtel Money Solutions, not by an overarching employment framework. In the circumstances, we are satisfied that the High Court correctly applied section 62 of the LIA in holding that no employer- employee relationship existed. Furthermore, we agree with the High Court that the CMA had no jurisdiction because the parties ousted it 17 by agreeing that the disputes arising out of the consultancy agreement would be resolved by an arbitration process. Consequently, we find that the sixth and seventh grounds of appeal are without merit and we dismiss them. Accordingly, we find the appeal devoid of merit and dismiss it. Given that the dispute arose from a labour matter, we make no order as to costs. DATED at DAR ES SALAAM this 5th day of May, 2026. B. M. A. SEHEL JUSTICE OF APPEAL P. F. KIHWELO JUSTICE OF APPEAL U. J. AGATHO JUSTICE OF APPEAL Judgment delivered this 7th day of May, 2026 in the presence of Ms. Stella Simkoko, learned counsel for the Appellant, Mr. Deus Tarimo holding brief for Mr. Norbert Mlwale, learned counsel for the Respondent and Mr. Osca Msaki, Court Clerk; is hereby certified as a true copy of the original. ^ D. R. LYIMO DEPUTY REGISTRAR COURT OF APPEAL