Poster Mahaba vs Tanzania Commercial Bank (Civil Appeal No. 519 of 2022) [2025] TZCA 1321 (18 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM ( CORAM: LILA J.A.. KENTE, J.A., And MWAMPASHI. J.A.) CIVIL APPEAL NO. 519 OF 2022 POSTER MAHABA....................................................................APPELANT VERSUS TANZANIA COMMERCIAL BANK (Formally known as TPB BANK PLC) .............. . ............... . RESPONDENT [Appeal from the Decision of the High Court of Tanzania (Labour Division) at Dar es Salaam] (Rwizile. J.1 dated the 04th day of August, 2022 in Consolidated Labour Revisions Nos. 324 and 326 of 2021 JUDGMENT OF THE COURT 12th November & 18th December, 2025 MWAMPASHI. J.A.: POSTER MAHABA, the appellant herein, had been employed by TPB BANK PLC now known as TANZANIA COMMERCIAL BANK, the respondent herein, until on 03.07.2015 when he was terminated after being found guilty of gross misconduct by the Disciplinary Committee. Aggrieved by the termination, the respondent referred the dispute to the Commission for Mediation and Arbitration for Dar es Salaam (the CMA) vide Dispute No. CMA/DSM/ILALA/R.403/15/796 in which it was decided by the CMA that, though the appellant's termination was substantively fair as there i were valid reasons for termination, procedurally, the termination was, however, unfair. According to CMA FI, the reliefs the appellant had sought were; one, reinstatement to his post as Head of Finance without loss of remuneration and two, payment of compensation for unfair termination. However, having found that the termination was unfair only procedurally and not substantively, the CMA ordered the respondent to pay the appellant 12 months' salaries compensation amounting to TZS. 47,491,572.00 in terms of section 40 (1) (c) of the Employment and Labour Relations Act, Cap. 366 (the ELRA). Both the appellant and respondent were dissatisfied with the CMA award. Each preferred a separate revision application of the award to the Labour Division of the High Court of Tanzania (the High Court) which consolidated the two applications and determined them together in the Consolidated Revision Nos. 324 and 326 of 2021. Common issues raised from the two applications before the High Court were two; one, whether the termination was substantively and procedurally unfair and two, the legality and justification of the amount of compensation awarded to the appellant. Antithetical to what was found by the CMA, in its judgment, the High Court found that, the termination was procedurally fair but substantively unfair. Regarding the remedy/ having found that the termination was substantively unfair, the High Court ordered reinstatement of the appellant or in the alternative, payment of 15 months' salaries as compensation. For ease of reference as the appellant's grievance and the ground of appeal in the instant appeal germinate from the order made by the High Court regarding the reliefs granted, we find it instructive to reproduce the said order in extensors hereunder: "On the third issue o f reliefs, as it has been determined that there was no valid reason for termination. The order for reinstatement as provided for under section 40 (3) ofELRA is given or compensation o f 15 months as provided under section 40 (1) (c) ofELRA. CMA award is revised to that extent. As this is labour matter , ; I order no costs". As we have just alluded to above, the appellant was discontented with the above order regarding the reliefs awarded to him hence the instant appeal predicated on the following single ground of complaint: 1, That the learned High Court Judge erred in law by ordering payment o f 15 months remuneration as an alternative for an order for reinstatement instead o fjust ordering for reinstatement Before us, when the appeal was called on for hearing, in presence were Messrs. Gregory Lugaila and Charles Lugaila, learned advocates for the appellant and Messrs. Innocent Mhina and Ayoub Sanga, learned State Attorneys, who represented the respondent. At the outset, before the commencement of the hearing of the appeal, Mr. Sanga, who addressed us on behalf of the respondents, raised two preliminary issues. The first issue raised which was simple and readily conceded by the appellant's counsel, was in regard to the appellant's name. It was pointed out by Mr. Sanga and agreed by Mr. Gregory Lugaila, learned counsel for the appellant that, the name of the appellant has changed from TPB BANK PLC to TANZANIA COMMERCIAL BANK. In that regard, the counsel for the parties urged the Court to take note of the said changes of the name and regularize the record to that effect. On our part having been so informed, we, for purposes of regularizing the record, took note of the changes and instantly directed that, the name of the appellant in the record of appeal should read TANZANIA COMMERCIAL BANK instead of TPB BANK PLC. The second issue raised by Mr. Sanga was on jurisdiction. It was argued by him that, the arbitrator who determined the dispute between the parties after the failure of mediation had no jurisdiction. Mr. Sanga expounded the point by referring the Court to section 86 (7) (b) (i) of the ELRA under which it is provided that, where the mediator fails to resolve a dispute and if the dispute is a complaint, any party to the dispute may refer the complaint to arbitration. It was further argued by Mr. Sanga that, although, at page 150A of Vol. Ill of the record of appeal, there is a mediator's certificate of non-settlement of the dispute (Form No. 5), there is nothing in the record showing or indicating that the complaint was referred to arbitration in accordance with section 86 (7) (b) (i) of the ELRA. The Court was also referred to page 320 of Vol. II of the record of appeal where the proceedings commenced with no indication or record by the arbitrator on how and who had referred the complaint to the arbitration. It was emphasized by Mr. Sanga that, although before 2017 Form No. 8 which is used to refer complaints from mediation to arbitration, was not in force and further, while by then, there was no prescribed form on how to refer a complaint to the arbitrator after failure of mediation, still the appellant ought to have exhibited that he referred the complaint to the arbitrator. Mr. Sanga was of a firm position that, the complaint was not referred to the arbitrator and the arbitrator was thus not seized with jurisdiction to entertain the complaint. He, for that reason, prayed for the proceedings before the arbitrator and the High Court to be nullified and for the resultants judgments to be quashed. Mr. Gregory Lugaila, learned counsel for the appellant did not agree with Mr. Sanga that, the arbitrator lacked jurisdiction to conduct the arbitration in question. He submitted that, the appellant properly referred the dispute to the Commission using CMA FI as required by section 86 (1) of the ELRA and after the mediation had failed as exhibited by the mediator's certificate of non-settlement of the dispute (Form No. 5), the dispute was orally referred to the arbitrator by the appellant. Mr. Lugaila joined hands with Mr. Sanga that before the introduction of CMA Form No. 8 in 2017, there was no prescribed form of referring complaints from mediation to arbitration. He insisted that complaints to arbitration could be referred by parties approaching the Commission physically for the appointment of an arbitrator who would determine the dispute. See- section 88 (2) (a) of the ELRA. It was further argued by Mr. Lugaila that, the dispute was properly referred to the arbitrator in accordance with the then procedure because if that was not the case, the respondent could not have failed to raise an objection at the commencement of the proceedings. He also contended that, even if there was an alleged failure to refer the dispute to the arbitrator as argued by Mr. Sanga, which is not the case, the alleged failure did not prejudice the respondent. Mr. Lugaila thus, urged us to find that, the dispute was properly referred to arbitration and further that the arbitrator was seized with jurisdiction to conduct the arbitration. In his brief rejoinder Mr. Sanga insisted that section 86 (7) (b) (i) of the ELRA was not complied with and that the arbitrator determined the dispute without jurisdiction which was prejudicial to the respondent The issue of the mediator allegedly lacking jurisdiction as raised and argued by Mr. Sanga should not detain us. It is our considered view that, since it is common ground that the mediation in question was conducted in 2015 when there was no prescribed form of referring disputes from mediation to arbitration until in 2017 when CMA Form No. 8 was introduced for that purpose, then it cannot be complained that the dispute was not referred to arbitration. It cannot be so complained particularly where it is argued for the appellant that, the dispute was orally referred to arbitration by the appellant who, after the mediation has failed, physically showed up at the Commission to follow up summonses for arbitration stage. We also note that at the commencement of arbitration proceedings neither of the parties, the respondent in particular, raised such an objection that the dispute had not been referred to arbitration. The fact that the issue was not even raised before the High Court renders the same nothing else but an afterthought as argued by Mr. Lugaila. As we have alluded to above, before 2017, there was no codified procedure on how to refer a dispute from mediation to arbitration. By then, reference to arbitration could be made orally. In the case of FINCA T. Ltd v. Wildman Masika & Others [2019] T2CA 3, wherein the dispute was referred to CMA in 2013 and was determined by arbitrator on 21.08.2015, one of the grounds of appeal when the matter reached the Court, was that the CMA had no jurisdiction to determine the matter because no party to the dispute had referred it to arbitration. In its decision, the Court stated that: "As to the second ground o f appeal, we wish to state briefly that there is no codified procedure for referring a matter from mediation to arbitration , As the record reflects, when mediation was marked to have failed, the mediator recorded what the parties agreed, referring the matter to arbitration and the parties signed, something suggesting that the parties agreed for the dispute to be referred to the CMA. On that basis, we cannotsay thatparties did not refer the dispute to arbitration . As such therefore, the ground is without merit". [Emphasis added] Guided by the above position, it is our considered view that, since by then, there was no codified procedure of referring disputes from mediation to arbitration and as it is argued by the appellant in the instant appeal that, he orally and physically referred the dispute to the arbitration through the Commission and further since the record is clear that, at the 8 commencement of arbitration neither of the parties complained of the dispute having not been referred to the arbitration, it can thus, not be said that, the dispute was not referred to the arbitration. For the above reasons, we find that the issue raised by Mr. Sanga that, the dispute was not properly referred to arbitration and therefore that the arbitrator lacked jurisdiction to determine the dispute, unmerited and the same is thus, accordingly overruled. The dispute was properly referred to arbitration and the arbitrator was seized with jurisdiction to determine the dispute. With regard to the merit of the appeal, it was submitted by Mr. Lugaila in the written submissions and in his brief oral submissions that, the only grievance by the appellant is on the relief awarded by the High Court. It was argued that, the High Court having found that the termination was substantively unfair, it ought to have ordered reinstatement in terms of section 40 (1) (a) of the ELRA without more. It was insisted that, an order for reinstatement was, sufficient and further that, giving an alternative of payment of 15 months' salaries as compensation under section 40 (1) (c) of the ELRA was, under the circumstances of the matter where the termination was substantively unfair, uncalled for, unfair and not in accordance with the law. Placing reliance on the decisions of the Court in Benjamini Mazigo & Another v. Tanzania Investment Bank [2024] TZCA 1137 and Joseph Fissoo & 58 Others v, Ithna Asheri Charitable Hospital [2020] TZCA 1952, Mr. Lugaila argued that, the High Court was bound by the reliefs which the appellant sought and that it was an error for the High Court to have ordered compensation in the alternative of reinstatement. He thus, prayed for the appeal to be allowed by ordering the appellant's reinstatement in terms of section 40 (1) (a) of the ELRA. In response to the appellant's submissions, it was submitted by the respondent in her written submissions that, the High Court wrongly ordered reinstatement under section 40 (3) of the ELRA which does not give the High Court powers to order reinstatement rather it gives an option to an employer where it is opted not to reinstate an employee. It was further submitted that, the reinstatement granted under a wrong provision of the law is tantamount to the High Court having ordered no reinstatement. To the respondent's view, the High Court did not order reinstatement and for that reason it cannot be argued that, the alternative order for payment of compensation was erroneously made. It was further argued by Mr. Sanga that, once termination is unfair, the decision to award the employee either of the reliefs provided for under section 40 (1) (a), (b) and (c) of the ELRA, is in the discretion of the CMA and the High Court, based on the circumstances of each particular case. That being the case, it was argued that, the High Court properly and in 10 accordance with the law, refrained from ordering reinstatement and instead ordered payment of compensation in terms of section 40 (1) (c) of the ELRA. To buttress the point, Mr. Sanga referred the Court to its earlier decisions in Elia Kasalile & Others v. Institute of Social Works [2019] TZCA 73, where the Court concluded that, the grant of an award of reinstatement was improper and also to the case of Magreth Method Mapunda v. National Muslims of Tanzania [2022] TZCA 698, where it was stated that, reinstatement would serve no useful purpose considering that the appellant had been out of office for the past seven years. In conclusion, it was submitted by Mr. Sanga that, in terms of Pangea Minerals Limited v. Joseph Mgalisha Bulabuza [2023] TZCA 17471, reinstatement is ordered only where it is proved that the termination was unfair both substantively and procedurally. He also submitted that, the cases of Benjamin! Mazigo & Another and Joseph Fissoo & 58 Others (supra) cited by the appellant are distinguishable because unlike in the instant case, in the cases cited, the termination was both substantively and procedu rally unfair. He thus urged the Court to dismiss the appeal. Briefly, it was rejoined by Mr. Lugaila that, reinstatement is dependent on the nature of the unfairness of the termination and the ii circumstances of each particular case and not on the termination being unfair both substantively and procedurally. As alluded to earlier, the instant appeal is against the reliefs awarded by the High Court. The appeal faults the manner the reliefs were awarded. That being the case, it is our considered view that the starting point should be to ascertain what reliefs were really awarded. This takes us to the relevant part of the High Court's judgment in which the reliefs awarded are contained and which, we find it apt, though at the costs of being repetitive, to reproduce, thus: "On the third issue o f reliefs, as it has been determined that there was no vaiid reason for termination. The order for reinstatement as provided for under section 40 (3) o f ELRA is given or compensation o f 15 months as provided under section 40 (1) (c) o f ELRA. CMA award is revised to that extent As this is labour matter, I order no costs". On the face of it, as it can be clearly observed, the order or relevant part of the judgment as reproduced above, is, to some extent, not explicit. Apart from the first sentence which is clear to the effect that, the High Court had found the termination substantively unfair, the rest part of the order is not that much clear. That notwithstanding, we note that, the first part of the second sentence reading " The order for reinstatement as 12 provided under section 40 (3) o f the ELRA is giveri' erroneously makes reference to section 40 (3) of the ELRA which does not provide for reliefs for unfair termination. Section 40 (1) (a) of the ELRA which is the correct provision under which reinstatement for unfair termination is granted ought to have been cited instead of section 40 (3). To us, however, that is an obvious error which, we think, resulted from a slip of the pen. Because the High Court had already found that the termination was unfair and as reinstatement had been granted, then, it is certain that the reinstatement was granted in terms of section 40 (1) (a) of the ELRA and not under section 40 (3) of the ELRA as indicated in the order. In that regard therefore, the relevant part of the order reading "The order for reinstatement as provided for under section 40 (3) o f ELRA is given, "is thus incorrected. It was supposed to read " The order for reinstatement as provided under section 40 (1) (a) o f ELRA is given". In the same vein, the argument by Mr. Sanga that for making reference to the wrong provision of the law, the High Court did not order reinstatement, fails. From the above clarification, it is thus clear that, having found that the termination was substantively unfair, the High Court ought to have granted reinstatement in terms of section 40 (1) (a) of the ELRA. As it is being complained in this appeal, the High Court did not end with granting reinstatement but it went on granting, though in the alternative, 13 compensation of 15 months' salaries as provided for under section 40 (1) (c) of the ELRA. Worthy of note is also the fact that, the High Court's finding that, the termination was unfair as well as its award reinstating the appellant, have not been appealed against. What has been appealed against by the appellant is the manner the reliefs, particularly the alternative relief regarding compensation under section 40 (1) (c) of the ELRA, were granted. It is the appellant's complaint, according to the ground of appeal, that, having ordered reinstatement, the High Court erred in proceeding to order, in the alternative, compensation of 15 months salaries. The appellant's position is that, the order for reinstatement sufficed without more. In view of the appellant's standpoint and having heard the submissions for and against the appeal from the counsel for the parties, the issue for our determination becomes narrow and simple, that is, whether having ordered reinstatement in terms of section 40 (1) (a) of the ELRA, was it legally proper for the High Court to have gone further ordering, in the alternative, payment of compensation of 15 months' salaries in terms of section 40 (1) (c) of the ELRA? In tackling the above issue and in consideration of the fact that, the ground of complaint in the instant appeal faults the manner reliefs for unfair termination were granted by the High Court, we find it apposite to 14 begin by revisiting section 40 (1) of the ELRA which is the governing provision of the law on reliefs for unfair termination. It is provided under section 40 (1) of the ELRA that: 1 '40, -(1) When 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 ioss o fremuneration 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". In terms of section 40 (1) of the ELRA as reproduced above, once it is established that the termination is unfair, the arbitrator or the Labour Court, is enjoined and has discretion, depending on the circumstances of the case and the nature of the unfairness, to order either of the three reliefs provided under subsections 1(a), (b) and (c), that is, reinstatement, re-engagement or payment of compensation. At this juncture, it should also be pointed out that, unlike what Mr. Sanga tried hard to impress on us, the law under section 40 (1) of the ELRA, does not provide that an 15 order for reinstatement should be made only when the termination is unfair both substantively and procedurally. Having gone through the decision of the Court in Pangea Minerals Limited (supra), cited by Mr. Sanga, we have observed that, the position stated in that case was in reference to the import of rule 32 (1) and (2) of the Labour Institutions (Mediation and Arbitration Guidelines) Rules, GN. No. 67 of 2007 and not to section 40 (1) of the ELRA. The position of the law is also settled that, the three reliefs for unfair termination as provided under section 40 (1) of the ELRA cannot be granted conjunctively but disjunctively. In the case of National Microfinance Bank v. Leila Mringo & Others [2020] TZCA 240, where the High Court had both ordered reinstatement and compensation under subsections (1) (a) and (b) of section 40 of the ELRA respectively, the Court stated that: "We are settled in our mind that reinstatement or re-engagement or compensation in subsection (l)(a), (b) and (c) o f section 40 o f the ELRA (respectively) must be read disjunctively. The "or" in the subsection is not conjunctive, it is disjunctive... We thus agree with Mr. Kamala that, by ordering reinstatement and compensation o f twelve months' salaries conjunctively, the High Court fell into an error. It should have ordered disjunctively as the CMA did". Along with the above position of the law, it is instructive to state that, while reinstatement and re-engagement under section 40 (1) (a) and (b) of the ELRA are self-sufficing reliefs for unfair termination, the relief of compensation under section 40 (1) (c) of the ELRA, is not. The compensation payable under section 40 (1) (c) of the ELRA has to be supplemented by other payments an employee who is unfairly terminated is entitled under section 40 (2) of the ELRA under which it is provided that: "An order for compensation made under this section shall be in addition to, and not a substitute for, any other amount to which the employee may be entitled in terms o f any law or agreement It is crystal clear from section 40 (2) of the ELRA that, where the arbitrator or Labour Court finds a termination of an employee is unfair and where, under the circumstances of the case, the relief to be awarded is an order for payment of compensation under section 40 (1) (c) of the ELRA, the fact that, the employee is also entitled to other payments as may be provided for under any law or agreement, should be taken into consideration. Sections 40 (1) (c) and 40 (2) of the ELRA should thus, be read together and applied conjunctively. 17 Back to the instant case, it is our firm view that, though compensation was awarded as an alternative to reinstatement, still such an order, particularly in view of how it was going to be executed, had the effect of conjunctively awarding reinstatement and compensation. It is our considered view that, based on the circumstances of the case at hand, having awarded reinstatement in terms of section 40 (1) (a) of the ELRA, the High Court erred in again awarding, though in the alternative, payment of compensation in terms of section 40 (1) (c) of the ELRA. In awarding compensation as an alternative to reinstatement, the respondent who had been ordered to reinstate the appellant, was given an advantage of not being bound by the provisions of section 40 (3) of the ELRA in case she would have opted not to reinstate the appellant, which would be to the detriment of the appellant. In the case of Benjamini Mazigo & Another (supra), the Court emphasized that, when reinstatement is ordered and if that is what the employee had sought, it is desirable for the employer to be left to decide whether to receive the employee back to work as ordered by the arbitrator or Court or not. The Court stated that: "The option available to the employer (respondent) under section 40 (3) o f the ELRA is either to receive the employee back to work or not... It then remains to be the duty o f the 18 respondent, at the time o f the execution o f the award, to invoke the provisions o f section 40 (3) o f the ELRA and exercise the options available either receive them back to work or not". As we have amply alluded to above, we agree with the appellant that, since reinstatement was one of the reliefs the appellant had sought in CMA FI and as the High Court had awarded reinstatement in terms of section 40 (1) (a) of the ELRA, the High Court ought to have ended there. Awarding compensation under section 40 (1) (c) of the ELRA in the alternative to reinstatement without even giving reasons why it should be so, was an error. Where termination is unfair calling for reinstatement under section 40 (1) (a) of the ELRA but the arbitrator or Court finds it not practicable and awards compensation under section 40 (1) (c) of the ELRA, reasons for not ordering reinstatement have to be given. In the event, for the above given reasons, we find merit in the ground of appeal. Under the circumstances of this case, having ordered for reinstatement of the appellant in terms of section 40 (1) (a) of the ELRA, the High Court ought to have ended there. Going further by ordering payment of compensation under section 40 (1) (c) of the ELRA in alterative to reinstatement, was an error and for that reason the said order is thus, accordingly set aside. For avoidance of doubts, remaining, 19 is an award of reinstatement of the appellant in terms of section 40 (1) (a) of the ELRA. Appeal allowed. DATED at DODOMA this 18th day of December, 2025. S. A. LILA JUSTICE OF APPEAL P. M. KENTE JUSTICE OF APPEAL A. M. MWAMPASHI JUSTICE OF APPEAL Judgment delivered this 18th day of December, 2025 in the presence of Mr. Charles Lugaila, learned counsel for the appellant and Ms. Kause Kilonzo, learned State Attorney for the respondent through Virtual and Ms. Christina Mwanandenje, Court Clerk; is hereby certified as a true copy of the original. DEPUTY REGISTRAR S I COURT OF APPEAL fev --------------------------- R. W. CHAUNGU 20