A1 Outdoor (T) Limited vs Geofrey Shuma (Civil Appeal No. 549 of 2022) [2026] TZCA 460 (29 April 2026)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM fCORAM: NPIKA, J.A., MURUKE, J.A., And MGEYEKWA, J.A.) CIVIL APPEAL NO. 549 OF 2022 A1 OUTDOOR (T) LIMITED...............................................................APPELLANT VERSUS GEOFREY SHUMA.........................................................................RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Labour Division at Dar es Salaam) (Maghimbi. J.) dated the 25thday of March 2022 in Labour Revision No. 303 of 2021 JUDGMENT OF THE COURT 2CP &29hApril, 2026 NPIKA. J.A.: A1 Outdoor (T) Limited, the appellant, contests the judgment of the High Court, Labour Division at Dar es Salaam (Maghimbi, J.) dated 25th March 2022. The court overturned an award previously issued by the Commission for Mediation and Arbitration ("the CMA"). It affirmed assertion by the respondent, Geoffrey Shuma, that the termination of his employment was both substantively and procedurally unjust. Accordingly, the court granted the respondent TZS. 136,319,230.77 as compensation, representing the remuneration for the remaining term of his contract, which was twenty months and nine days, at a monthly rate of TZS. 6,700,000.00. Briefly, the appellant employed the respondent on 10th February 2019 on a three-year contract as Finance Manager. The appellant i terminated the employment on 31s t May 2020 purportedly for operational requirements. The respondent contested the termination in the CMA, but he was only awarded leave allowances with the rest of his claims dismissed. On revision, the High Court found that the appellant failed to establish valid operational requirements as the cause of the termination. That it failed to prove alleged financial crisis or demonstrate alleged restructuring. Furthermore, the court determined that the appellant failed to adhere to section 38 of the Employment and Labour Relations Act, Cap. 366 R.E. 2023 ("the ELRA"), together with the associated provisions concerning consultation, disclosure, and selection criteria for retrenchment purposes. As a result, the termination was deemed unjust and procedurally flawed. The CMA's award on those aspects was revised and annulled, and the respondent was directed to pay TZS. 136,319,230.77 as remuneration for the remaining contract term, as previously indicated. Exasperated by the revision of the CMA's award as mentioned, the appellant initially challenged the High Court's judgment on four grounds. Prior to the hearing, we engaged Messrs. Gilbert Mushi and January Kambamwene, learned advocates for the appellant and respondent respectively, on the essence of section 58 of the Labour Institutions Act, Cap. 300 R.E. 2023 stipulating that appeals to this Court are limited to 2 points of law. After a brief dialogue, it was concurred that the appeal presents two legal points: first, whether the dispute before the CMA was time-barred. Additionally, whether the retrenchment procedure was properly adhered to. Arguing on the first issue, Mr. Mushi referenced rule 10 (1) of the Labour Institutions (Mediation and Arbitration) Rules, 2007, Government Notice No. 64 of 2007, which stipulates that: "lO.-(l) Disputes about the fairness o f an employee's termination o f employment must be referred to the Commission within thirty days from the date o f termination or the date that the employer made a final decision to terminate or uphold the decision to terminate" Mr. Mushi and Mr. Kambamwene concurred that, according to the above rule, a referral of a labour dispute to the CMA must occur within thirty days from the termination date or the date the employer rendered a definitive decision about the termination. Mr. Mushi contended that the limitation period should be reckoned from 12th May 2020, the date the appellant issued the respondent a termination letter (exhibit P3). He posited that the said date was when the final decision to terminate was made. He relied on Tusiime Holding (T) Limited v. Maria Chorobi & Another [2022] TZHCLD 14. Conversely, citing Barclays Bank T. Ltd v. Jacob Muro [2020] TZCA 1875 Mr. Kambamwene asserted that the reckoning date should be 31s t May 2020, as specified as the employment termination date. Given that the referral was submitted on 18th June 2020, it would be time-barred according to Mr. Mushi's assertion, but not according to Mr. Kambamwene's proposition. We need not traverse a significant distance on this issue. It is acknowledged that exhibit P3 was issued and sent to the respondent on 12th May 2020, explicitly alerting him that "Your employment will end on 31st May2020. "In our view, the termination date is typically the final day of employment or the date on which the notice of termination expires. Consequently, for all practical reasons, 12th May 2020 marked the notification date of the impending termination, whereas 31s t May 2020 signified the termination date. The respondent accurately indicated 31s t May 2020 in the CMA referral form as the termination date. The referral, submitted on 18th June 2020, was undoubtedly filed in a timely manner. The appellant's initial grievance is unfounded. We dismiss it. We now proceed to the second complaint. It questions whether the retrenchment procedure was followed correctly. Primarily, termination of employment on operational grounds is regulated under section 39 of the ELRA read together with rule 23 of the Employment and Labour Relations (Code of Good Practice) Rules, 4 Government Notice No. 42 of 2007 ("the Code of Good Practice"). Section 39 is worded in terms of imperatives as follows: "39 .-(1) In any termination for operational requirements (retrenchment), the employer shall comply with the following operational principles, that is to say, he shall- (a) give notice o f any intention to retrench as soon as it is contemplated; (b) disclose all relevant information on the intended retrenchment for the purpose o fproper consultation; (c) consult prior to retrenchment or redundancy on- (i) the reasons for the intended retrenchment; (ii) any measures to avoid or minimise the intended retrenchment; (Hi) the method o f selection o f the employees to be retrenched; (iv) the timing o f the retrenchment; and (v)severance pay in respect o fthe retrenchments; and (d) give the notice, make the disclosure and consult, in terms o f this subsection, with- (i) any trade union recognised in terms o fsection 68 ; 5 (ii) any registered trade union which members in the workplace not represented by a recognised trade union; (Hi) any employees not represented by a recognised or registered trade union" The above provision lays down imperative standards to be observed by the employer for any retrenchment to be lawful. First, the employer is obliged to give notice of any intention to retrench as soon as it is considered. Secondly, the employer must disclose all necessary facts regarding the anticipated retrenchment to allow for effective consultation. Thirdly, the employer is enjoined to consult before retrenchment on the reasons for the intended retrenchment, the measures to avoid or minimise the intended retrenchment, the method of selection of the employees to be retrenched, the timing of the retrenchment; and severance pay for the employees to be retrenched. Fourthly, the employer also must serve the notice, make the disclosure and communicate with any recognised trade union or any employees not represented by a recognised or registered trade union. Rule 23(4), (5) and (6) of the Code of Good Practice is evocative of the letter and spirit of section 39 of the ELRA thus: "(4) The obligations placed on an employer are both procedural and substantive. The purpose o f the consultation required by section [39] o f the 6 Act is to permit the parties, in the form o f a joint problem-solving exercise, to reach agreement on- (a) the reasons for the intended retrenchment (i.e. the need to retrench); (b) any measures to avoid or minimise the intended retrenchment such as transfer to other jobs, early retirement, voluntary retrenchment packages, lay o ff etc; (c) criteria for selecting the employees for termination, such as iast-in-first-out (LIFO), subject to the need to retain keyjobs, experience or special skills, affirmative action and qualifications; (d) the timing o f the retrenchments; (e) severance pay and other conditions on which terminations take place; and (e) steps to avoid the adverse effects o f the terminations such as time o ff to seek work (5) The requirement which the employer is required to adhere to under subsection (1) o f section [39]. (6) In order for it to be effective, the consultation process shall commence as soon as the employer contemplates a reduction o f the workforce through retrenchments so that possible alternatives can be explored. The process shall allow the union to- (a) meet and report to employees; 7 (b) meet with the employer; and (c) request, receive and consider all the relevant information to enable the trade union to inform itself o f the relevant facts for the purpose o f reaching agreement with the employer on possible alternative solutions". Mr. Mushi, in support of the appeal, submitted that the appellant followed the proper procedure by consulting the respondent on the imminent retrenchment and got his consent to the intended termination of employment as demonstrated by the emails between the parties (exhibit P2). He said that after the agreement the respondent was retrenched and received all the terminal benefits. He cited the case of the Labour Division of the High Court in Apolinary Ringo v. Access Bank (T) Ltd [2023] TZHCLD 1498 to contend that an employee who accepts a layoff package would be estopped from disputing the validity and procedure of retrenchment. Mr. Kambamwene argued that the procedure commenced improperly as no notification of the proposed retrenchment was provided to the respondent. He maintained that none of the emails (evidence P2) constituted a legal notice. He asserted that the conversation between the appellant's Executive Chairman, Zadock Koola, and the respondent at the former's residence did not amount to any consultation and that no agreement was reached on the proposed retrenchment. He questioned why the downsizing just affected the respondent rather than all employees. It is not disputed that the respondent received an email from the appellant's Executive Chairman on Saturday 25th April 2020 (exhibit P2(a)) by which he was invited to a meeting on Monday 27th April 2020 at Laibon in Dar es Salaam. The email simply states as follows: "Good afternoon, Geoffrey. I would like to have a short meeting with you [at] 11:00 @ Laibon on Monday 27th . Please let's confirm on Monday morning 9 a.m. Regards. Zadock". Upon enquiring with Mr. Mushi whether the said email served as a notice of intention to retrench pursuant to section 39 (1) of the ELRA, he firmly asserted that it was, in fact, a legal notice. We believe he was attempting to search a needle in a haystack. The email was merely an invitation from the Executive Chairman to the respondent for a brief meeting, the agenda of which was not mentioned. The meeting was held in the Chairman's Laibon residence rather than the office. We question how the respondent would have perceived that the meeting pertained to his retrenchment. Following the respondent's meeting with the Chairman on the morning of Monday, April 27, 2020, as scheduled, the Chairman then sent an email at 16:16 hours that afternoon (also recognised as exhibit P2), ostensibly recording their discussion and agreement: 9 "Hi Geoffrey, as per our discussion today at Laibon this morning we aii agreed that A1 Tz is carrying costs above is ability and the only solution to keep the business afloat is to restructure some o f the financial obligations, cut costs to the bone. In this regard some positions will cease to exist, and some scope reallocated. As you can recall, the position o fFinance Manager which you are holding was vacant for almost two years before you joined to fill it. The reason we did not fill it on time was largely budgetary by that time. Given the current challenges which are worse than anytime in 10 years we are forced to 'scrap'o ff some positions [including] yours.... I have asked Matungwa, our GHRM to prepare a draft retrenchment letter for you and costs related to the retrenchment in line with your contract and labour law for second round o f discussion and dose. I would like to dose this before end o fApril hence you have one full month o f servicing (sic!) notice/handover. Regards. Zadock Koola". Mr. Mushi argued that the said email not only indicated that the appellant conferred with the respondent regarding the impending retrenchment but also that the respondent acquiesced to the suggested retrenchment. We respectfully disagree with him. Mr. Kambamwene is 10 correct that the email presents a unilateral depiction of the events that occurred during the meeting. Considering Mr. Mushi's admission that there is no evidence indicating the respondent replied to the email to affirm the Executive Chairman's assertion of an agreement, it would be imprudent to conclude that the parties reached a retrenchment agreement. We eventually find the appeal undeserving and proceed to dismiss it. Each party shall bear its own costs, as this is a labour matter ordinarily not subject to the award of costs. DATED at DAR ES SALAAM this 28th day of April 2026. G. A. M. NDIKA JUSTICE OF APPEAL Z. G. MURUKE JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL Judgment delivered this 29th day of April, 2026 in the presence of Mr. January Kambamwene, learned counsel for the respondent also holding brief for Mr. Gilbert Mushi, learned counsel for the appellant and Mr. Ladislaus Msuba, Court clerk; is hereby certified as a true copy of the original. J. E. FOVO DEPUTY REGISTRAR COURT OF APPEAL 11