Elerai Construction Company Limite & Another vs Adelmarce Mallya (Civil Appeal No. 1478 of 2024) [2026] TZCA 472 (4 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA fCORAM: FIKIRINI. J.A., RUMANYIKA, J.A.. And ISSA. J.A.^ CIVIL APPEAL NO. 1478 OF 2024 NORTHERN ENGINEERING WORKS LIMITED ELERAI CONSTRUCTION COMPANY LIMITED 1 st APPELANT 2 nd APPELLANT VERSUS ADELMARCE MALLYA RESPONDENT (Appeal from the decision of the High Court of Tanzania at Arusha) In this appeal, the appellants are challenging the judgment and decree of the High Court of Tanzania at Arusha which set aside the decision of the Commission for Mediation and Arbitration (the CMA). The following brief background facts will serve the purpose of appreciating the essence of the present appeal. On 1s t October, 2021 the appellant was employed as a Legal Counsel and Human Resource Officer by the 1s t respondent under a fixed term employment contract of one year which (Masara, J.) dated the 19th day of July, 2024 in Labour Application No. 78 of 2023 JUDGMENT OF THE COURT

was supposed to end on 30th September, 2022. On 15th November, 2021 without her consent, she was transferred to the 2n d appellant, which is a sister company of the 1s t appellant, to work as a legal counsel. While at a new work station there was a misunderstanding with her employer allegedly that, the employer was creating intolerable working environment for her. On 19thJuly, 2022, the respondent wrote to the Managing Director of the 2n d respondent and aired her grievances on the intolerable working conditions. The Managing Director did not respond, hence, on 3r dAugust, 2022 the respondent gave a notice of constructive resignation to the 2n d appellant and demanded among others: leave accrued and not paid, overtime worked, severance pay, repatriation allowance and compensation for mental, physical and psychological damages inflicted and loss of employment. The response came on the next day, 4th August, 2022, in which the 2n d respondent did not allow the resignation. She characterized that it was on unfounded, unrealistic and fabricated basis. Nevertheless, she urged the respondent to make a proper handover of the company belongings. Aggrieved by the turn of events, the respondent instituted Dispute No. CMA/ARS/ARS/279/22/133/22 before the CMA challenging a constructive termination from employment. According to the complaint

form filed before the CMA (CMA F.l), the respondent pleaded that the employer conducted unfair labour practices and thus caused breach of contract. The respondent's opening statement and evidence revealed that, she was forced to resign from her employment contract following unfair labour practices inflicted on her by the respondents causing intolerable working environment. The appellants, on the other hand, alleged that the respondent resigned on her own volition and there were no unfair labour practices. The CMA framed three issues for determination: one, whether or not the second respondent (2n d appellant) constructively terminated the complainant (the respondent), two, whether there were unfair labour practices by both respondents and three, relief each party is entitled. Upon assessing the evidence, the CMA was satisfied that there was no constructive termination by the appellants. Hence, it dismissed the dispute for lack of merit, but allowed the appellants out of their free will to pay the respondent two months salaries which remained out of her contract of employment. Still aggrieved, the respondent lodged an application for revision at the High Court of Tanzania at Arusha (the court) challenging the decision of the CMA that, it failed to find that there were unfair labour practices

and hence the respondent was constructively terminated. The court evaluated the evidence on record and came to the conclusion that, the respondent was constructively terminated. It ordered the appellants to compensate the respondent TZS. 46,438,400.00. The appellants were not amused; they filed the instant appeal armed with four grounds of appeal, but before the hearing could commence in earnest the appellants who had the services of Messrs. Jeremiah Mjema and Ombeni Kimaro, learned counsel abandoned the 2n d to 4th grounds of appeal. The remaining ground reads thus: "The Honourable High Court Judge erred in law and in fact by holding that\ the respondent proved that she was constructively terminated while in actual fact there was no proof o f the alleged constructive termination." The respondent, on the other hand, was represented by Mr. Allen Godian, also learned advocate. Mr. Kimaro on behalf of the appellants adopted the written submission filed on 11th December, 2024 and with respect to the sole ground of appeal submitted that, the issue of constructive termination was not even pleaded by the respondent. The claim before the CMA was unfair labour practice causing breach of contract, the respondent was not

complaining about constructive termination. He concluded that, the issue of unfair labour practices was not proved and constructive termination was a new issue which was raised at the High Court during revision. Mr. Kimaro added that the parties were bound by their pleadings and what is evident from the pleadings is a claim for unfair labour practice. The respondent did not specify that the complaint included constructive termination. To bolster his argument, he cited the Court's decision in Masaka Mussa v. Rogers Andrew Rumenyela and Others [2023] TZCA 17339. Responding to this ground of appeal, Mr. Godian submitted that, at page 4 of the record of appeal in the CMA F.l the respondent specified that the dispute is about unfair labour practice which caused breach of contract. He added that, section 37(a)(ii) of the Employment and Labour Relations Act, Cap. 366 (the ELRA) clearly specifies that termination includes making employment intolerable. In addition, he argued that, rule 7(2)(b) of the Employment and Labour Relations (Code of Good Practices) (G.N. No. 42 of 2007) specifies what is constructive termination. Therefore, the respondent was correct in her pleading and the CMA properly framed the first issue as: whether or not the respondent constructively terminated the complainant from her employment contract.

Further, he argued that, the appellants knew about this claim from the beginning. Firstly, the letter of resignation (exhibit P5) was titled Notice of Constructive Resignation. Secondly, the letter of the respondent to the 2n d appellant of 19thJuly, 2022 (exhibit P4) provided the gist of the complaint of the respondent: one, she was employed by the 1s t appellant, but was transferred to the 2n d appellant which is another legal entity without her consent and it was not a term in her employment contract. Two, while working for the 2n d respondent she was forced to work for both companies as seen on exhibit P2 appearing on page 26 and exhibit P3 on page 35 of the record of appeal. Three, she was removed from her private office and made to work in the boardroom after collecting a broken chair from the store. Four, the respondent wrote a letter dated 19thJuly, 2022 complaining about the miserable work conditions, but the appellants did not bother to reply. He concluded that the case of Kobil Tanzania Limited v. Fabrice Ezaovi [2021] TZCA 477 is very relevant to the instant case on constructive termination. The respondent terminated the contract due to the conditions which were intolerable and it was the employer who made it intolerable. He prayed for the appeal to be dismissed.

In the rejoinder, Mr. Kimaro discussed the principles in Kobil Tanzania Limited case (supra) and submitted that the respondent wrote a letter of complaint on 19th July, 2022 and few days later she wrote a letter of resignation. He argued that this is an act done in a rush and does not qualify as a constructive termination. He added that, the respondent consented to the transfer as she went to another office and worked there for eight months. When he was probed by the Court about the testimony of DW2, he conceded that DW2 testified that the respondent was transferred to another office because she could not work as Human Resource Officer. The ball is now on our court; we have been called upon to determine two issues: whether constructive termination was pleaded at the CMA and whether the High Court was correct in its finding that there was constructive termination. Starting with the first issue, we glanced at page 3 of the CMA F.l found at page 4 of the record of appeal, the nature of dispute brought by the respondent before the CMA was unfair labour practice and there is no mention of constructive termination. We agree with Mr. Kimaro on that aspect, but the term "unfair labour practice" is a general term which has not been defined in the ELRA. On the other hand, the Black's Law

Dictionary, 9th edition on page 1667 has defined the term unfair labour practice as follows: "Any conductprohibited by state or federal law governing the relations among employers, employees, and labour organisations. Examples of unfair labour practices by an employer include (1) interfering with protected employee rights, such as the right to self organisation , (2) discriminating against employee for union related activities, (3) retaliating against employees who have invoked their right, and (4) refusing to engage in collective bargaining." (Emphasis Supplied). From the above definition, any conduct in the relations between employer and employee which is prohibited by the labour laws may fall under the term "unfair labour practice". Hence, the conduct of an employer to make working conditions intolerable such as to force the employee to resign from employment commonly known as constructive termination falls under the term unfair labour practice. Therefore, we do not agree with the suggestion made by Kimaro that constructive termination was not pleaded at the CMA. That explains why the arbitrator after reading the opening statements of appellants and respondent

framed the first issue as: whether or not the respondent constructively terminated the complainant from the employment contract. Secondly, we also partly agree with Mr. Kimaro that the parties are bound by their pleadings, but as we stated in James Funke Ngwalilo v. Attorney General (2004) T.L.R. 165 that, even though the parties are bound by their pleadings where unpleaded matter has been argued and left for the Court's determination, the Court is bound to make a decision thereon. The Court cited the case of Nkulabo v. Kibirige [1973] E.A. 102 where the defunct Court of Appeal for East Africa stated: While the general rule is that a relief not founded on pleading will not be given, a Court may allow evidence to be called, and may base its decision on an unpieaded issue if it appears from the course followed at the trial that the unpleaded issue has in fact been left to the Court for decision." This issue needs not detain us for the following reasons: one, constructive termination was generally pleaded under the term unfair labour practice. Two, the trial court framed it as an issue and the parties marshalled their evidence in support and opposing the existence of constructive termination. Three, the CMA made a finding to the effect that there was no constructive termination and similarly the High Court

reversed the decision based on its finding that the respondent proved that she was constructively terminated. Therefore, the first issue on the sole ground of appeal is found meritless and we dismiss it. The second issue concerns whether the High Court was correct in its finding that there was constructive termination. Our starting point is the law governing constructive termination which is section 37 (a)(ii) of the ELRA and Rule 7(1) of the Employment and Labour Relations (Code of Good Practice) (G.N. No. 42 of 2007). Section 37(a)(ii) of the ELRA provides: "(s) "termination o f employment"includes 0) N/A (ii) a termination by an employee because the employer made continued employment intolerable for the employee..." While Rule 7(1) of the G.N. No. 42 of 2007 provides: "(1) Where the employer makes an employment intolerable which may result to resignation of the employee, that resignation amounts to a forced resignation or constructive termination. (2) Subject to sub-rule (1), the following circumstances may be considered as sufficient 10

reasons to justify a forced resignation or contructive termination - (a) sexual harassment or the failure to protect an employee from sexual harassment; and (b) if an employee has been unfairly dealt with, provided that the employee has utilised the available mechanisms to deal with grievances unless there are good reasons for not doing so. (3) Where it is established that the employer made employment intolerable as a result o f resignation of employee, it shall be legally regarded as termination o f employment by the employer." In addition, the Court in Kobil Tanzania Limited (supra) while citing the South African case of Solid Doors (Pty) Ltd v. Commissioner Theron and Others, (2004) 25 ID 2337 (LAC) laid down three requirements for constructive termination to be established: "The first is that the employee must have terminated the contract o f employment. The second is that the reason for termination o f the contract must be that continued employment has become intolerable for the employee. The third is that it must have been the employee's employer who had made continued employment intolerable. ii

AH these three requirements must be present for it to be said that a constructive dismissal has been established. I f one of them is absent, constructive dismissal is not established...." There is no doubt in our mind that, the first requirement has been complied. It was the respondent who wrote a letter on 3r d August, 2022 titled Notice of Constructive Resignation to the 2n d respondent. Therefore, it was the employee who terminated the contract. The controversies are on the second and third requirement that, the reason for termination of the contract must be that continued employment has become intolerable for the employee and that, it must have been the employer who had made continued employment intolerable. To resolve these two requirements, we must answer the five questions evolved in Katavi Resort v. Munirah J. Rashid [2013] LCCD 161 and Girango Security Group v. Rajabu Masudi Nzige, Labour Revision No. 164 of 2013 and endorsed by the Court in Kobil Tanzania Limited (supra) and Fabrice Ezaori v. Kobil Tanzania Limited [2023] TZCA 176. The five questions are: a) Did the employee intend to bring the employment to an end? 12

b) Had the working relationship become so unbearable objectively speaking that the employee could not fulfil his obligation to work? c) Did the employer create an intolerable situation? d) Was the intolerable situation likely to continue for a period that justified termination of the relationship by the employee? e) Was the termination of the employment contract the only reasonable option to the employee? We shall now answer the above five questions. The first question is not hard to answer. It was the respondent who intended to bring the contract of employment to an end after being fed up with the existing conditions at the work place. She wrote a letter of resignation to the 2n d appellant. As to the second question, there are divergent views from the learned counsel on whether the working relationship had become so intolerable that the respondent could not fulfil her obligation. The appellants argued that the conditions were normal at the work place, but it was out of her own volition the respondent wanted to resign. Glancing at the evidence on record, it is clear that the respondent was employed 13

by the 1s t appellant as legal counsel and human resource officer and was occupying her own office at the building of the 1s t respondent. On 8th November, 2021 everything suddenly changed when the respondent received a letter transferring her to the 2n d respondent where she was assigned the duties of legal officer. The transfer was unilaterally made without consultation and also it was in breach of the terms of the contract. The result is that: one, there was a constructive demotion; the unilateral reduction of responsibilities was neither contractually justified nor consented to. Two, the transfer to the 2n d appellant was affected without prior notice, justification or consent. The contract of employment was with the 1s t appellant, yet she was deployed to a separate legal entity disregarding the principle of sanctity of contract. The existing contract of employment had no provision allowing a transfer to a sister company. The closest provision is clause 1.3. which provides: "The present place and area of work is ARUSHA. However, due to exigency of services/ the employee may be transferred or asked to perform duties and functions in another place and area within or outside Tanzania , subject to the needs of the ELERAI CONSTRUCTION COMPANY LTD." The above clause contemplates the transfer within the company, that is the 1s t appellant and not working in another company.

Three, the respondent was compelled to serve two distinct companies simultaneously in absence of any contractual provision permitting such arrangement and was working under the same remuneration. There is evidence on record that, she was assigned to work for the 1s t appellant while she was with the 2n d appellant. Further, the transfer letter (exhibit P2) had no clause stipulating that she will work for the two companies. This arrangement altered her employment terms. Four, the respondent was relocated from her private office to a boardroom with unsatisfactory working conditions and restricted access which undermined her ability to perform her duties with dignity and efficiency. Therefore, we are satisfied that the conditions of work were unbearable considering that she did not consent for that kind of employment. Hence, the second question is answered in the affirmative. The third question is did the employer create an intolerable situation? The answer is in the affirmative. The transfer was made by the employer without her consent, and there was a breach of the terms of the transfer as envisioned in the respondent's letter of employment instead, the respondent was made to work for two employers under the same remuneration, as alluded to before. 15

The fourth question was the intolerable situation likely to continue for a period that justified termination of the relationship by the employee? The answer to this question is not hard to find. The respondent was employed by the 1s t appellant for a term of one year commencing from 1s t October, 2021 to 30th September, 2022. On 15th November, 2021, she was transferred to the 2n d respondent which means she worked for the 1s t respondent only for 45 days. Under the 2n d appellant she worked till 19th July, 2022 when she aired her grievances regarding the working conditions at the 2n d appellant's office. The 2n d appellant did not respond to the letter; hence, she was forced to resign on 3r d August, 2022 two months before her contract of employment was due to expire. Therefore, the intolerable condition was supposed to continue for the whole period of employment. In those circumstances, the action taken by the respondent was understandable. Mr. Kimaro argued that, the decision to resign was rushed as the letter of complaint was written on 19thJuly, 2022 and the resignation was tendered on 3r d August, 2022 just after 14 days. Considering that the employer and employee were working on the same building and the fact that the employer was able to respond to the letter of resignation on 4th August, 2022 asking her to make a proper handover undermines the 16

appellants' denial on the alleged constructive termination. It is clear that it was not a rushed decision as the 2n d appellant ignored the letter of 19th July, 2022. The last question was the termination of the employment contract the only reasonable option to the employee? The Court in Kobil Tanzania Limited (supra) laid down the test to determine this question, it stated: "For constructive dismissal to stand, an employee must show that the course o f action taken by him was a last resort. Constructive dismissal cannot stand where an employee had an alternative avenue to resolve the problem." In the instant case, the respondent had only two months remaining in her contract of employment and taking into account that, in accordance with that contract she was accountable to the Managing Director. More so, there was no provision in the contract stipulating other avenues to resolve the dispute. It was, therefore, the right decision for her to write to the Managing Director explaining her grievances, but when he failed to respond within reasonable time the termination of the employment contract was the only reasonable option. Therefore, we are of the firm view that the ground of appeal has no merit and we dismissed it. 17

In fine, we are satisfied that the appeal has no merit and we similarly dismiss it. We make no order as to costs as this is a labour matter. DATED at ARUSHA this 30th day of April, 2026. P. S. FIKIRINI JUSTICE OF APPEAL S. M. RUMANYIKA JUSTICE OF APPEAL A. A. ISSA JUSTICE OF APPEAL Judgment delivered this 4th day of May, 2026 via teleconferencing in the presence of Mr. Jeremiah Mjema, learned counsel for the appellant and Mr. Allen Godian, learned counsel for the respondent while Mr. Nelson Novati, Court Clerk appeared in person is hereby certified as a true copy of the original. J. J. KAMALA DEPUTY REGISTRAR COURT OF APPEAL 18