Moja Mapunda vs Tanzania Railways Corporation (TRC) (Civil Appeal No. 334 of 2023) [2026] TZCA 469 (4 May 2026)

IN THE COURT O i: APPEAL OF TANZANIA AT PAR £S SALAAM (CORAM : SEHEL. J.A.. KIHWELO, J.A. And AGATHO. 3.A.^ CIVIL APPEAL NO. 334 OF 2023 MOJA MAPUNDA ...................................................... ...................... APPELLANT VERSUS TANZANIA RAILWAYS CORPORATION (TRC) ......................... RESPONDENT (Appeal from the Judgment arid Decree'of the High Court of Tanzania, Labour Division, at Dar es Salaam) f Mlvambina. 3.) dated the 8th day of March, 2023 in Labour Revision No. 364 of 2022 JUDGMENT O F THE COURT 16th April, & 4th May, 2026 SEHEL, J.A.: The facts giving rise to this appeal may be briefly stated. The appellant was initially employed by the respondent's predecessor, Reli Assets Holding Company (RAHCO), as a Senior Internal Auditor under a three-year fixed-term renewable contract commencing on 9th March, 2009 and expired on 8th March, 2012. Upon expiry, the contract was renewed for a further three years, from 9th March, 2012 to 8th March, 2015, on the same terms and conditions. In 2015, the parties executed a one-year fixed-term contract, which introduced a variation regarding the payment of gratuity. It is pertinent to observe that, upon satisfactory completion of the first contract, the appellant was paid all his entitlements, including gratuity, in accordance with the agreed terms. However, a dispute arose under the second and third contracts after the respondent deducted gratuity payments amounting to TZS. 14,724,000.00 from the second contract and TZS. 4,932,000.00 from the third contract, making a total deduction of TZS. 19,656,000.00. Aggrieved, the appellant referred the matter to the Commission for Mediation and Arbitration (the CMA), which dismissed the complaint for lack of merit. Dissatisfied, the appellant pursued revision before the High Court of Tanzania, Labour Division, at Dar es Salaam (the High Court) but his application was unsuccessful. Hence, this present appeal. In his memorandum of appeal, the appellant advanced the following eleven grounds of appeal: 1. That, the Honourable Trial Judge erred in iaw and in fact by failure to explain how the Public Service Retirem ent Benefit A ct R.E. 2015, which established Public Service Pensions Fund (PSPF) covered or applied to the Appellant who was not a member o f the respective PSPF, but a member o f PPF Pension Fund (PPF) which was established by PPF Pensions, Fund A ct R.E. 2015. 2. That, the Honourable Trial Judge erred in law and in fact by failure to analyze and check the interpretation o f the word " m em ber" as translated and used by the Public Service Retirem ent Benefits A ct R.E. 2015, which does not involve or includes employees registered with other social security funds (not PSPF) and thus m isapplied the provision o f section 23 o f the Public Service Retirem ent Benefit A ct R.E. 2015. 3. That, the Honourable Trial Judge erred in law and in fact by failure to analyze and check the interpretation o f the term "benefit" as used in the Public Service Retirem ent Benefits A ct R.E. 2015 which are paid by PSPF, to PSPF members and which are not subject to income tax, which are different from the Gratuity paid by the em ployer to employees on fixed term contracts and thus wrongly used the provision o f section 23 o f Public Service Retirem ent Benefits Act R.E. 2015. 4. That, the Honourable Trial Judge erred in law and in fact by failure to consider the evidence given before the Commission 3 for Mediation and Arbitration (CMA) by the Respondent, which clearly showed that the Appellant was registered and required to contribute to the PPF Pensions Fund, not to the P5PF in that the law and regulation o f PSPF could not apply to him as a member o f PPF. 5. That, the Honourable Trial Judge erred in law and in fact by concluding that the Appellant was bound by the contract because he signed it despite the fact that the contract was void ab initio since the law which was used to change it was the Public Service Retirem ent Benefits A ct R.E. 2015, which does not apply to the Appellant since the same was the member o f PPF not the member o f PSPF. 6. That, the Honourable Trial Judge erred in law and in fact by failure to consider the Standing Orders for Public Service (2009), which was put to his attention, and which was directly relevant to the dispute between the parties. 7. That, the Honourable Trial Judge erred in law and in fact by failure to consider that the gratuity paid by the employer to the employee, is not one o f the retirem ent benefits that are paid by the social security funds to the members as the laws o f those funds say, including the Public Service Retirem ent Benefits A ct R.E. 2015. 8. That, the Honourable Trial Judge erred in law and in fact by failure to conclude that the act and conduct o f the Respondent to take a ll the Em ployer's contribution by deducting the same from the gratuity tantamount to failure to effect contribution to the fund as required by the law governing the contributions to the fund. 9. That, the Honourable Trial Judge erred in law and in fact by failure to consider that the com pulsory contribution o f the employee and the em ployer to the fund is not one o f the retirem ent benefits that are paid by the social security funds to the member when he retires, withdraw his membership, in sickness, becomes disabled, dies and or when he/she loses the employment. 10. That, the Honourable Trial Judge erred in law and in fact by failure to note that the Social Security Regulatory Authority A ct 2008 did not allow an employee to be a member o f the m andatory scheme to more than one Social Security Fund. 5 11. That, the Honourable Trial Judge erred in law and in fact by failure to note that the em ployer was not allowed by the PPF Pensions Fund A ct R.E. 2015 to refund him self for Employer's contributions to the fund, where there was no arithm etical error. At the hearing of the appeal, the appellant appeared in person, unrepresented, whereas, Mr. Stanley Mahenge and Ms. Agnes Makuba, both learned State Attorneys, appeared for the respondent. In compliance with the requirement of rule 106 (1) and (7) of the Tanzania Court of Appeal Rules (the Rules), both parties filed their respective written submission for and against the appeal. At the commencement of the hearing, Mr. Mahenge, learned counsel for the respondent, sought and was granted leave to argue two points of law. His first contention was that the appeal had been filed out of time. He submitted that the notice of appeal was lodged on 6th April, 2023 and, reckoning sixty days from that date, the appeal ought to have been filed by 5th June, 2023. However, the record of appeal was lodged on 6th June, 2023, thereby rendering it belated by one day. 6 Secondly, he argued that vital documents, namely the proceedings of the CMA, were missing from the record of appeal, contrary to rule 96 (1) and (2) of the Rules. While acknowledging that such omission is generally curable by filing a supplementary record of appeal under rule 96 (7) of the Rules, he maintained that, given the alleged lateness of the appeal, the defect could not be salvaged. He thus urged the Court to strike out the appeal. In reply, the appellant, appearing in person, sturdily resisted the objections. He contended that the record of appeal was in fact filed on 5th June, 2023, as evidenced in the record itself, and therefore within the prescribed time. On the second point of law, he submitted that he had sought and obtained leave from the Registrar to file a supplementary record of appeal, which he duly filed in compliance with the order. In rejoinder, Mr. Mahenge reiterated his earlier submission that the appeal was filed out of time. On our part, we have carefully revisited the record of appeal. We are satisfied that the record was filed on 5th June, 2023, well within the statutory period of sixty days. We further noted that, having been granted leave to file a supplementary record of appeal, 7 the appellant duly complied with the Registrar's order by filing the supplementary record of appeal. Accordingly, we find no merit in the two points of law raised by Mr. Mahenge, and they are hereby dismissed. Having disposed of the preliminary objections, we now proceed to determine the appeal on its merits, as counsel for the parties were invited to address the Court on both the points of law and the substantive appeal. When given a chance to argue the appeal, the appellant adopted the written submissions. In his submissions, the appellant abandoned the fourth and eleventh grounds of appeal. The remaining grounds were submitted in seriatim. Essentially, in the first, second, third, fifth, seventh, and nineth grounds of appeal, the appellant faulted the learned Judge for holding that the Public Service Retirement Benefits Act, 2015 (the PSRBA) was applicable to him. He submitted that section 2 of the PSRBA, which governs the general applicability of the Act, together with the definition of "member" under section 3, expressly excludes persons registered or insured under any other written law. The appellant contended that, during his employment with the respondent between 8 March 2009 and March 2015, he was a member of the Public Pensions Fund (PPF) and, at no point in time, was he a member of the PSPF nor did he contribute to it. Referring to sections 3, 8, 9, 10, 12, 13, 14, 15, and 22 of the PSRBA, he argued that the classes and types of benefits payable by PSPF to its members exclude taxes. Contrary to his case, where income tax and Pay As You Earn (PAYE) were deducted from the gratuity he received. He questioned how the learned Judge arrived at a conclusion that section 23 of the PSRBA was applicable to him whereas the law was explicit that it did not extend to persons registered under other written laws, such as himself, who was a member of the PPF established under the PPF Act. The appellant further distinguished gratuity payable under social security schemes, which he maintained is paid upon retirement as a retirement benefit to its members and is not liable to income tax. He referred to sections 2 and 7 of the PSRBA and sections 2 and 39(1) of the PPF Act. He argued that, his gratuity was contractual in nature, deriving its lawfulness from Standing Orders Nos. E.23, E.20, and D.2, which the learned Judge failed to consider, thereby arriving to an erroneous conclusion. 9 Emphasizing that compulsory contributions made by an employee and employer to a social security fund do not constitute retirement benefits, the appellant cited sections 2 and 3 (1) of the PPF Act. He argued that, since the Board of Trustees of the Social Security Fund pays pensions, gratuities, and other benefits strictly in accordance with the law, the contributions made by himself and the respondent could not be deemed retirement benefits, as the respondent had never paid him any pension. In the tenth ground of appeal, the appellant faulted the learned Judge for failing to take note of section 30 of the Social Security Regulatory Authority Act (SSRA), which prohibits any employee from being a member of more than one mandatory social security scheme. On the basis of these submissions, the appellant urged this Court to allow the appeal. In response, Mr. Mahenge adopted the written submissions in opposition to the appeal and addressed the first and second grounds together, as both concerned the applicability of the PSRBA. He began by supporting the findings of the High Court, contending that the appellant was a public officer who rendered services in a public office and was therefore directly covered by the provisions of the PSRBA. In 10 addition, he argued that the governing law of the appellant's employment contracts entered was the Laws of Tanzania. While acknowledging that the proceedings demonstrated the appellant's membership in the PPF, he was quick to argue that, given the wording of the long title of the PSRBA, the appellant was nonetheless covered by its provisions. Turning to the third and seventh grounds of appeal, which concerned the meaning of benefits, Mr. Mahenge submitted that retirement benefits, as defined under section 7 of the PSRBA, included gratuity allowances payable to an employee upon completion of a term contract. He maintained that such payments were equivalent to retirement benefits payable by the Social Security Fund. To support his submission, he referred to Standing Order No. 23, which the appellant himself had cited, noting that the Standing Order provides for the payment of gratuity to public servants, including the appellant. He emphasized that the Standing Order prescribes three conditions under which gratuity is payable, one of which is upon completion of the term of contract, which, in his view, literally amounted to a retirement benefit. 1 1 Responding to the fifth ground of appeal, Mr. Mahenge argued that, since the contracts were signed by the appellant of his own volition, they could not, in terms of section 10 of the Law of Contract Act, be void ab initio. Relying on the cardinal principle of sanctity of contract, he submitted that the appellant was bound by the agreements he freely entered into. To fortify his submission, he referred us to the cases of Abualy Alibhai Azizi v. Bhatia Brothers Ltd [2000] T.L.R. 288; Simon Kichele Chacha v. Aveline M. Kilawe [2021] TZCA 3558 and Lulu Victor Kayombo v. Oceanic Bay Limited & Another [2021] TZCA 228. Replying to the eighth ground of appeal, Mr. Mahenge supported the decision of the High Court, contending that the respondent lawfully deducted the appellant's gratuity in terms of clause 5.5 of the third agreement, which permitted an employer to deduct gratuity payments from an employee who was a member of any social security scheme. He argued that, since the appellant was a member of the PPF, the respondent acted in compliance with the terms and conditions of the contract freely entered into by the parties. In reply to the nineth and tenth grounds of appeal, Mr. Mahenge submitted that the grounds constituted new issues not raised before the two lower courts. On that basis, he urged this Court not to entertain them. To reinforce his position, he referred us to the case of Hassan Bundala @ Swaga v. Republic [2015] TZCA 261. With that submission, Mr. Mahenge urged the Court to dismiss the appeal. In rejoinder, the appellant stressed that Standing Orders Nos. D1 and D2 permit an employer and employee to modify their contract of employment to allow payment of gratuity, and that such payment was made in accordance with the terms of the contracts. He distinguished the facts in the cited case of the Abualy Alibhai Azizi v. Bhatia Brothers Ltd (supra) that the Court was dealing with the variation of the terms of the contract, whereas in the present appeal, the issue concerned deduction of gratuity payments. Having heard the parties' submissions and revisited the grounds of appeal, two issues arise for our determination. One, whether the PSRBA is applicable to the appellant and two, whether the respondent was justified in deducting the appellant's gratuity payable upon completion of the appellant's contract of employment. These two issues are intertwined therefore we shall conjunctly deal with them. However, before we do that, we wish to address the issue raised by Mr. Mahenge concerning the nineth and tenth grounds of appeal that they were not raised before the High Court. Having revisited the record of appeal, we observed at pages 240-241, that these grounds which raise factual matters were not part of the appellant's complaint before the High Court. In that respect, we concur with the learned State Attorney that this Court has no jurisdiction to entertain them, hence we refrain to deliberate on them - see the case of Hadija Ally v. George Masunga Msingi [2023] TZCA 17270. We now revert to the two issues. In order to adequately determine them, we find it apt to narrow down the uncontested factual matters. From the pleadings and the evidence on record, coupled with the rival submissions of the parties, it is not in dispute that the appellant concluded three employment contracts with RAHCO which was a public corporation. It is also not disputed that the appellant was a member of PPF; not PSPF. It was equally not in dispute that the first contract was successfully completed and the appellant was paid all his entitlements as per the terms and conditions of such contract. As indicated earlier on, the dispute was in respect of the second and third contracts regarding deduction on the payment of gratuity. 14 Starting with the second contract, clause 5.5 of the agreement deal with the payment of gratuity to the appellant. The wording of this clause was pari materia with the first contract which was successfully completed without any qualm from the appellant. Clause 5.5 reads: "Upon completion o f the contract period the employee w ill be entitled to a gratuity paym ent calculated as 25% o f the total; o f basic salaries paid to the employee during the contract." Despite of the clear wording of the above clause, the respondent deducted the appellant's gratuity with a justification that the deductions were made based on the provisions of the PSRBA which the appellant was required to adhered to. According to Mr. Mahenge's view, since the appellant was employed by a public corporation and the long title of the PSRBA provides that it was "//? respect o f the service o f officers in the Governm ent' , the appellant is covered by it. For ease of reference, we reproduce the long title of the PSRBA as hereunder: "An act to establish the Public Service Pension Scheme, to provide contributions to and paym ent o f pensions, gratuities and other benefits in respect o f the service o f officers in the Government and to provide for the related m atters . " With due respect to Mr. Mahenge's submission, the long title of the Act is only intended to provide a summarized description of the purpose or scope of the legislation. It does not override or limit a clear, unambiguous provision within the substantive sections of the Act. In the PSRBA, there is a substantive section dealing with its scope. That is, section 2 of the PSRBA which categorically excluded the appellant in the following terms: "This A ct shall apply to a person em ployed in the form al or inform al sector who has not been registered or insured under any other /aw. "[Emphasis added]. The above provision of the law expressly excludes persons registered under other pension schemes including the appellant who was, at all material times, a member of the PPF establishedunder the PPF Act.This means that the appellant was outside the ambit of the PSRBA. We are therefore, satisfied that, the deductions made under the second contract were unlawful, as the appellant remained entitled to gratuity according to his terms and conditions of contract which parties have freely entered. Consequently, we agree with the 16 appellant that the High Court erred in holding that the appellant's second contract was subject to section 23 of the PSRBA. However, we hold a different view with respect to the third contract since clause 5.5 of the contract explicitly provides that: "Upon completion o f the contract period the employee w ill be entitled to a gratuity paym ent calculated as 25% o f the total o f basic salaries paid to the employee during the contract period. I f the employee is a member o f any social security fund, then the em ployer's contributions to social security fund should be deducted on paym ent o f gratuity accordingly." [Emphasis added]. Our reading of the above clause is that, the employer is entitled to deduct 25% of the total basic salaries of the appellant, upon completion of his contract, and in the case of an employee who is a member of any social security, the employer's contribution is deducted from the employee's contribution. In other words, the appellant acceded for his gratuity to be deducted in order to pay for the employer's contribution in the social security scheme. Given that the appellant had freely consented to his gratuity being deducted, he is therefore bound by such term and condition of the contract. Our 17 position is fortified with a cardinal principle of the law of contract that parties are bound by the terms and conditions of the agreements they enter on their own free will -see: Uniliver Tanzania Ltd. v. Benedict Mkasa Trading as BEMA Enterprises, Civil Appeal No. 41 of 2009; Simon Kichele Chacha v. Aveline M. Kilawe, (supra) and Abualy Alibhai Azizi v. Bhatia Brothers Ltd (supra). In the latter case, the Court stated: "The principle o f sanctity o f contract is consistently reluctant to adm it excuses for non-performance where there is no incapacity, no fraud (actual or constructive) or m isrepresentation, and not principle o f public policy prohibiting enforcem ent" Accordingly, we find that the respondent acted within the contractual framework in deducting gratuity under the third contract. In the result, the appeal is allowed to the extent that the deductions made under the second contract were unlawful, thus, the appellant is entitled to be paid. Nonetheless, we find the deductions under the third contract was made consistent with the express agreement of the parties. We therefore order that, the appellant be paid his gratuity resulting from his successful completion of the 18 second contract. Further, we make no order as to cost as the dispute arose from a labour matter. DATED at DAR ES SALAAM this 4th 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 4th day of May, 2026 in the presence of the Appellant in person/unrepresented, Mr. Stanley Mahenge, learned State Attorney for the Respondent and Mr. Osca Msaki, Court Clerk; is hereby certified as a true copy of the original. 19