Ally A. Nassoro vs Msph Tanzania Llc (Civil Appeal No. 47 of 2023) [2026] TZCA 465 (30 April 2026)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM: SEHEL. J.A.. KIHWELO. J.A. And AGATHO, J.A.^ CIVIL APPEAL NO. 47 OF 2023 ALLY A. NASSORO ........................................................................... APPELLANT VERSUS MSPH TANZANIA LLC..................................................................RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Labour Division, at Dar es Salaam) (Mteule. J.1 dated the 21st day of November, 2022 in Labour Revision No. 114 of 2022 JUDGMENT OF THE COURT 23rd & 30th April, 2026 AGATHO, J.A.: This matter originated from the Commission for Mediation and Arbitration (CMA) in Labour Dispute No. CMA/DSM/ILA/837/19/392, where the appellant lodged a complaint against the respondent alleging unfair termination following the non-renewal of his fixed-term employment contract. The dispute was later taken on revision before the High Court of Tanzania, in Labour Revision No. 114/2022 and is now before this Court on appeal. As background, the appellant was employed by the respondent under successive fixed term contracts from 1st October 2013 to 30th September 2019 as evidenced by contracts and renewal letters tendered and admitted in evidence as Exhibit D -l collectively. Prior to expiry of the contract of employment, the respondent notified the appellant of its non-renewal through a meeting invitation (Exhibit D-2), the minutes (Exhibit D-3), and a formal letter dated 23rd July 2019 (Exhibit D-4). The appellant contested this through his letter dated 16th August 2019 (Exhibit D-5). Upon expiry of the contract, the appellant was paid all terminal dues and issued a certificate of service and relocation allowance from Dar es Salaam to Kagera, as evidenced by Exhibits D-6, D-7, D-8 and D-9 collectively, indicating that the employment relationship ended by effluxion of time. Notwithstanding the above, in its award dated 18th March 2022, page 202 of the record of appeal, the CMA found in favour of the appellant and granted him twelve (12) months' salary as compensation for unfair termination. Aggrieved, the respondent successfully filed a revision application before the High Court, which quashed the CMA award for lack of evidence regarding legitimate expectation of renewal. The appellant, being dissatisfied with that decision, has preferred this appeal on single ground that the High Court erred in law in holding that there was no reasonable expectation of renewal of the appellant's employment contract. In prosecuting the appeal, the appellant was represented by Mr. Godfrey Tesha, learned advocate, whereas, the respondent had the services of Ms. Oliva Mkanzabi Malekia, learned advocate. Beginning, Mr. Tesha argued that the High Cort Judge erred in interpreting clause 12.3 of the contract. Regarding whether there was legitimate expectation of renewal of the contract between the appellant and respondent, the learned advocate took issue with the High Court holding (on page 397 of the record of appeal) that the clause in the contract was clear without a room for compromise. While referring to the contract clause 12.3 found on page 110 of the record of appeal, he argued that this clause should be read together with clause 3 found on page 106 of the record stipulating conditions for non-renewal being satisfactory performance and availability of donor funds. It was his argument that clause 12.3 (ii) is subject to conditions contained in other clauses, especially clause 1, seen on page 106 of the record of appeal. He contended that parties renewed the contract twice, which confirms that clause 12.3 of the contract is not restrictive. They renewed the contract from 1st October 2017 to 30th September 2018 as visibly seen on page 113 of the record of appeal. Further renewal was from 1st October 2018 to 20th September 2018 as shown on page 114 of the record of appeal. He therefore concluded that the interpretation of the High Court Judge was erroneous. In another twist, Mr. Tesha argued that, before renewing the second contract the respondent called a meeting with the appellant to inform him as to why the contract will not be renewed. He referred us to the minutes of that meeting found on page 49 of the record of appeal, which stated the reason for non-renewal to be lack of funds. Despite that, Mr. Tesha contended that if clause 12.3 of the contract was binding there was no need to set up a meeting to inform the appellant about the non-renewal of the said contract. Supporting presence of legitimate expectation of contract renewal, the appellant counsel argued that the respondent gave the appellant notice of non-renewal found at page 46 of the record of appeal citing the reason for non-renewal to be change of scope of work contrary to the reasons advanced in the meeting. He assailed the High Court decision for failure to note a contradiction on the reasons for non renewal of the contract; that is, in the meeting it was lack of funds while in the notice of non-renewal the reason was said to be change of scope of work. Mr. Tesha claimed that the above contradictory reasons confirmed that clause 12.3 of the contract was not restrictive. He was also firm that the conduct of the respondent indicated that the contract will be renewed. Mr. Tesha continued to submit that looking at the High Court judgment at page 399 of the record of appeal, the Judge held that the notice of non-renewal was issued early before the contract expiration date meaning the contract was automatically terminated. The learned advocate insisted that this fact does not preclude legitimate expectation of contract renewal developed when the employee enters the contract and cemented by the conduct of the employer. He clarified that the legitimate expectation develops during existence of the contract. Adding to that, Mr. Tesha argued that the record shows that the contract was renewed seven times. He contended further that the notice of non-renewal cannot eliminate the legitimate expectation of the renewal. The learned counsel took a stance that since reasons for non-renewal differ then they were not fair. Another controversy was on a word "may" found clause 12.3 of the contract appearing at page 397 of the record of appeal where the High Court Judge held that it was not mandatory. Although the appellant's counsel did not have issue with the use of the word "may" he blamed the High Court Judge for failing to consider the conduct of the employer including the fact that the contract was renewed seven times. Mr. Tesha restated the conditions for renewal as satisfactory performance and availability of donor funds. He contended that no such issues were raised in the meeting to discuss non-renewal. It was his contention that the High Court erred in interpreting clause 12.3 of the contract. Mr. Tesha argued that the employer knew that the contract would not terminate automatically, that is why she called a meeting to discuss non-renewal. Probed by the Court whether renewals could create legitimate expectations, Mr. Tesha responded affirmatively and referred us to the case of Marwa Chacha Kisyeri v. Mwanza Baptist Secondary School [2022] TZCA 774 where contract of employment renewal was three times. However, we hasten to hold with respect that, the learned advocate did not consider the entire decision. Nevertheless, and in the end, the learned advocate beseeched the Court to allow the appeal and uphold the CMA decision as to him the non-renewal amounted to unfair termination. 6 Resisting the appeal, Ms. Malekia sided with the High Court, submitting that it was right to hold that there was no legitimate expectation of renewal of the contract. She backed her submission with rule 4(2) of the Employment and Labour Relations (Code of Good Practice) Rules, G.N. No. 42 of 2007 which provides that where the contract is a fixed term contract, the contract sh a ll term inate autom atically when the agreed period expires, unless the contract provided otherwise. She also referred us to the contract of employment, part of the record of appeal at page 93, which clearly shows that the contract was for a fixed term and there was no legitimate expectation of renewal. As regards contract clause 12.3, evident on page 110 of the record of appeal, Ms. Malekia pointed out that the clause is clear that the contract shall terminate automatically. It states further that, neither party shall have a legitimate expectation of renewal upon termination. In respect of the meeting held about non-renewal of contract as the record of appeal shows at pages 49 and 117, it was the learned advocate's response that as a courtesy to an employee who had been working with them for the past six years, the employer decided to inform the appellant about non-renewal of his employment, which she said, it is good practice. She urged the Court not to punish the employer for doing such a courtesy. The learned advocate submitted that the employer is an NGO which is dependent upon donor funds and when its scope of work project changes then it implies that there will be no funds or budget to continue with the work. In her view, the reason for change of scope of work is the same as non-availability of funds. The counsel for the respondent argued that the renewal of contract does not change the contract to become permanent. Nor should the employer's good practice of calling the meeting and issuing a notice of non-renewal to the appellant be misconstrued to imply there was legitimate expectation of the contract renewal. In closing her submission, she urged the Court to dismiss the appeal for lacking merit. In rejoinder, Mr. Tesha attacked Ms. Malekia's reference to rule 4(2) of G.N. No. 42 of 2007 on the basis that the contract itself provides for renewal or non-renewal, which was dependent upon the satisfactory performance and availability of donor funds. Cementing his argument, he referred us to page 73 of the record of appeal containing a notice of renewal of employment contract. He was content that was not a new contract because the terms remained the same. 8 The learned advocate also rejected the submission that the employer being an NGO, the change of scope of work caused reduction of funds/budget. In his view, this point was not raised at the CMA, and it is not borne from the record of appeal. He thus suggested that, this is something new and should be ignored. In the end, he beseeched the Court to allow the appeal. Having sketched the submissions by the learned Advocates, scrutinized the record of appeal and the relevant law, we think the central issue for determination is whether there was legitimate expectation for renewal of the contract of employment. Put it differently, whether in the case at hand there was legitimate expectation of renewal of a fixed term employment contract? Regarding the above issue, we have carefully considered the contractual provisions, particularly clauses 1 and 12.3(ii) of Exhibit D1 found on page 38 of the record of appeal along with the applicable law and authorities. It is undisputed fact that the appellant was employed under a fixed-term contract which was renewed on several occasions from 1st October 2013 and ultimately expired on 30th September 2019 as exhibited by exhibit D l. The contract expressly provided two positions: first, under clause 1, renew al was discretionary, dependent 9 upon satisfactory perform ance and availability o f donor's fund, and second, under Clause 12.3 (ii), the contract w ould autom atically term inate upon expiry and neither party would have legitim ate expectation o f renew al or continuation. Based on the above clauses, we ask whether, despite the cited express clause, the appellant could s till claim legitim ate expectation o f contract renew al? There are no qualms that in our jurisdiction the law governing this issue is well settled. Understandably, under section 36 (a) (iii) of the Employment and Labour Relations Act [Cap 366] read together with Rule 4 (4) of G.N. No. 42 of 2007, failure to renew a fixed- term contract may amount to unfair termination only where there exists a reasonable or legitimate expectation of renewal. This position has been affirmed by the Court in its several decisions including the cases of Asanterabi Mkonyi v. TANESCO [2022] TZCA 96 at page 10; Hamidu Abdallah Mbekae & 11 Others v. Be Forward Tanzania Co. Ltd [2023] TZCA 62 at page 11 while citing with approval the High Court decision in Mtambua Shamte & 64 Others v. Care Sanitation and Suppliers, Revision No. 154 of 2010 (unreported) where it was held that the doctrine of unfair termination does not ordinarily apply to specific tasks or fixed term contracts unless such expectation is established. In Asanterabi Mkonyi (supra) the Court held that it is striking that the ELRA has not defined the phrase reasonable expectation of renewal. Thus, an employee's expectation of renewal would be open to interpretation by courts depending on the circumstances of the case upon an objective basis. The Court went further referring to the decision in South African case of Dierks v. University of South Africa (1999) 20 IU 1227 which listed criteria for determining objective test to establish expectation of renewal including: an approach involving the evaluation of all the surrounding circumstances; the significance or otherwise of the contractual stipulation; agreements; undertaking by the employer; or practice or custom in regard to renewal or re employment; the availability of the post; the purpose of or reason for concluding fixed terms contract; inconsistent conduct; failure to give reasonable notice; and nature of the employer's business. We think the above tests become relevant where the renewal expectation is not expressly excluded. Notably, where parties have expressly excluded expectations for renewal in their fixed term contract of employment, the Court must give effect to that intention. In the case of Registered Trustees of Tanzania Postal Bank v. Deusdedit Mahinyila, Civil Appeal No. 10 of 2016 (CAT) (unreported), the Court emphasized that courts are bound by the terms of the contract and ii cannot import rights or expectations that are clearly excluded by the parties themselves. Further the Court emphasized that renewal of a fixed term contract is not automatic and past renewals do not by themselves create a legal right or expectation of further renewal. Applying the above principles to the present case: Clause 1 of the contract merely created a possibility of renewal, depending on satisfactory performance and availability of donor funds. However, clause 12.3(ii) provided for an automatic termination upon expiry and expressly excluded any legitimate expectation of renewal. The wording used is mandatory and leaves no room for ambiguity or discretion. Besides, in our settled view there is no evidence of conduct by the employer capable of overriding the express terms of the contract; in previous renewals. We thus agree with Ms. Malekia that the respondent issued exhibit D4 - a notice of intention not to renew the contract on 23rd July 2019, early before termination as courtesy and good practice. In that perspective, the appellant's assertion that there was a reason to expect renewal lacks merit. In the absence of clear contract provision or conduct of the parties which suggest renewal, nothing can override an express contractual exclusion. See the case of Marwa Chacha Kisyeri (supra). 12 From the above analysis, the arbitrator's findings at page 221 of the record of appeal that there existed a reasonable expectation of renewal was, with respect, unfounded and a misdirection in law as it failed to give effect to a clear contractual provision. For that reason, we agree with the High Court Judge's finding that there was no reasonable expectation of renewal where the contract clearly stipulates that it shall be terminated upon its expiry and neither party shall have expectation of renewal. Before penning of, we find it apt to say a word or two regarding the issue whether the respondent as the NGO her scope of work and finances are related. Although Mr. Tesha sought to impress us that this was not an issue at the CMA, we agree with Ms. Malekia that as a matter of logic that the NGO which is donor funded whenever her scope of works changes her finances are affected. Therefore, we hold that the two are not different reasons as correctly pointed out by the respondent's counsel. The reason for non-renewal of the contract of employment stated in the notice for non-renewal and the meeting is the same but with different wordings. In light of the foregoing, it is evident that, first, the appellant did not have a legitimate expectation of renewal within the meaning of 13 section 36(a)(iii) of the ELRA and rule 4(2) of the G.N. No. 42 of 2007; second, the employment relationship lawfully came to an end by effluxion of time upon expiry of the fixed-term contract and third the High Court was correct in law to set aside the CMA award. In the end, we find the appeal lacking merit. It is thus dismissed. This being a labour matter, we make no order as to costs. DATED at DAR ES SALAAM this 30th day of April 2026. B. M.A. SEHEL JUSTICE OF APPEAL P. F. KIHWELO JUSTICE OF APPEAL U. J. AGATHO JUSTICE OF APPEAL Judgment delivered this 30th day of April, 2026 in the presence of Ms. Oliva Mkanzabi Malekia, learned counsel for the Respondent also holding brief for Mr. Godfrey Tesha, learned counsel for the Appellant through virtual Court and Mr. Osca Msaki, Court Clerk; is hereby 14