Innocent William Mlay vs Coca Cola Kwanza Limited (Civil Appeal No. 311 of 2024) [2026] TZCA 475 (5 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM; NDIKA, J.A., MURUKE. J.A. And MGEYEKWA. J.A.> CIVIL APPEAL NO. 311 OF 2024 INNOCENT WILLIAM MLAY..............................................................APPELLANT VERSUS COCA COLA KWANZA LIMITED .................................................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Labour Division at Dar es Salaam) (Mlvambina. J.^ dated the 12thDecember, 2023 in Revision No. 250 of 2023 JUDGMENT OF THE COURT 2CP April & 5* May, 2026 MGEYEKWA. J.A.: This is an appeal against the judgment of the High Court, Labour Division, delivered on 12th December, 2023. The appellant is before this Court seeking to overturn the decision of the High Court of Tanzania, Labour Division in Revision No. 250 of 2023 (Mlyambina, J.), whereby the learned Judge reduced the award of compensation from 84 months' salary, as granted by the Commission for Mediation and Arbitration (CMA), to 3 months' salary. In order to place the matter in its proper perspective, and before we delve into the merits of the appeal, it is necessary to set out, albeit briefly, the sequence of events giving rise to the present appeal as borne out by the record. The appellant, Innocent William Mlay, was employed i by the respondent, Coca-Cola Kwanza Limited, as a Regional Sales Manager from 10th September 2018 until 3r dSeptember, 2020, when his services were terminated on allegations of gross dishonesty and conduct said to have tarnished the respondent's image. It was further alleged that the appellant solicited unauthorized payments from customers over and above the official company charges. Aggrieved by the termination, the appellant lodged a labour dispute before the Commission for Mediation and Arbitration (CMA), challenging the fairness of his dismissal. He claimed, inter alia, compensation equivalent to 96 months' salary in the sum of TZS 671,630,880.00, notice pay of TZS 6,996,155.00, and additional compensation for alleged injury to his career and reputation, quantified at TZS 160,000,000.00. Upon hearing the parties, the CMA found that the termination was both substantively and proceduraliy unfair. It accordingly awarded the appellant a total sum of TZS 848,171,252.00, comprising compensation equivalent to 84 months' salary, notice pay, severance benefits for two years, and a further sum of TZS 250,000,000.00 as nominal damages. Being dissatisfied with that decision, the respondent preferred a revision to the High Court. In its decision, the High Court set aside part of the CMA award, upheld the awards of notice pay and severance allowances, but reduced the compensation for unfair termination from 84 2 months' salary to 3 months' salary, and quashed the award of nominal damages. Undeterred, the appellant preferred an appeal to this Court on nine grounds. However, upon being prompted on the competence of the said grounds under section 58 of the Labour Institutions Act, Cap.300 [R.E. 2023], learned counsel for the appellant abandoned all the grounds save for the ninth ground, which challenges the learned Judge's decision to interfere with and reduce the quantum of compensation awarded by the CMA. On the sole ground of appeal, Mr. Amos Paul, learned counsel for the appellant, assailed the decision of the High Court on the footing that the learned Judge misdirected himself in relying on the case of Felicia Rutwaza v. World Vision Tanzania, Civil Appeal No. 213 of 2019 [2021] TZCA 2, to reduce the award from 84 months' salaries to 3 months' salaries, a course which, in his submission, was inconsistent with the requirements of the law. He contended further that the said authority was inapposite to the circumstances of the present case, in that it concerned an employee engaged on a fixed-term contract, whereas the appellant herein was on permanent and pensionable terms, thereby giving rise to a legitimate expectation of continued employment. On that basis, he urged 3 this Court to allow the appeal and restore the award of 84 months' salaries as granted by the CMA. Replying to the appellant's sole ground of appeal, Mr. Godfrey Tesha, learned counsel for the respondent opposed the appeal. He supported the decision of the High Court that it had the power to award compensation less than 12 months. He clarified that, upon a proper evaluation of the evidence, the learned Judge correctly found that although the termination was procedurally unfair owing to the respondent's failure to furnish the appellant with an investigation report, the substantive reason for termination was valid. In the circumstances, he argued, the award of three months' salaries was appropriate and consistent with the principles enunciated in Felicia Rutwaza (supra). He further maintained that the nature of the contract of employment is a relevant consideration in determining the quantum of compensation, and that the High Court properly exercised its discretion in reducing the award. He accordingly urged the Court to dismiss the appeal. We have given due consideration to the rival submissions and the record before us. The controversy in this appeal lies within a narrow compass, namely, whether the High Court properly exercised its discretion in reducing the compensation from 84 months' salaries, as awarded by the CMA, to 3 months' salaries. On this question, the parties take opposing 4 positions. Mr. Paul contended that the award of three months' salaries was manifestly inadequate. While Mr. Tesha supported the learned Judge's exercise of discretion in reducing the 84 months salaries to 3 months. We deem it appropriate, at the outset, to consider the law governing compensation payable to an employee upon termination of employment, as stipulated under section 40(1) of the Employment and Labour Relations Act, Cap. 366, [R.E. 2019] (now section 41(1) of the R.E. 2023). For ease of reference, we reproduce the same hereunder. It provides as follows: "40.- (1) Where an arbitrator or Labour Court finds a termination is unfair, the arbitrator or Court may order the employer (a) to reinstate the employee from the date the employee was terminated without loss o f remuneration during the period that the employee was absent from work due to the unfair termination; or (b) to re-engage the employee on any terms that the arbitrator or Court may decide; or (c) to pay compensation to the employee o f not less than twelve months' remuneration '. [Emphasis added] 5 The foregoing provision vests the CMA or the Labour Court with discretion to grant an appropriate remedy, such as reinstatement, re engagement, or compensation, depending on the circumstances of each case. Where compensation is awarded, the law prescribes that it shall not be less than 12 months' salary. This position of law has been elaborated in numerous decisions of the Court, including the case of Balton Tanzania Limited v. Victoria Galinoma & Another, Civil Appeal No. 224 of 2019 [2022] TZCA 212, whereby we held that the Labour Court or an arbitrator can award any of the reliefs under section 40 (1) of the ELRA. The record reveals that the lower courts noted that the appellant's termination was procedurally unfair. In our view, we think procedural fairness is fundamental and its breach cannot be taken lightly; even a single lapse vitiates the process. In the circumstances, we are unable to agree with the learned Judge's reliance on Felicia Rutwaza (supra) to justify the reduction of compensation to three months' salaries. We are therefore satisfied that the learned Judge misdirected himself in the exercise of his discretion on quantum. The drastic reduction of the award from eighty-four months to three months' salaries was, in our view, unduly low and does not reflect a proper and judicious exercise of discretion. Moreover, the learned Judge did not sufficiently address the applicable statutory framework, namely section 40 (now section 41) of the Employment and Labour Relations Act, Cap. 366, and Regulation 32(5) of 6 Government Notice No. 67 of 2007. We are thus persuaded that this is an appropriate case for this Court to interfere with and revise the award of the High Court. Having taken into account the procedural unfairness and the need to strike a fair balance, we are satisfied that an award equivalent to twelve months' salaries would be just and reasonable. For the foregoing reasons, we quash the Judgment of the High Court and set aside the award of three months' salaries and substitute it with an award of twelve months' salaries. The appeal is accordingly allowed. This being a labour-related matter, we make no order as to costs. It is so ordered. DATED at DAR ES SALAAM this 4th day of May, 2026. G. A. M. NDIKA JUSTICE OF APPEAL Z. G. MURUKE JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL Judgment delivered this 5th day of May, 2026 in the presence of the appellant in person-unrepresented and Mr. Godfrey Tesha, learned counsel for the respondent and Mr. Ladislaus Msuba, Court clerk; is hereby certified