Equity Bank Tanzania Limited vs Erick Mgosi Shao (Civil Appeal No. 49 of 2024) [2025] TZCA 1294 (17 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM ffORAM: MWANPAMBO. J.A.. MGONYA, J.A. And FELEgHI, J.A.) CIVIL APPEAL NO. 49 OF 2024 EQUITY BANK TANZANIA LIMITEP ..................................... APPELLANT VERSUS ERICK MGOSI SHAO ................................ ......... ........ RESPONDENT (Appeal from the decision of the High Court of Tanzania, (Labour Division), at Dar es Salaam) ( Mlvambina, J.) Dated the 20thday of September, 2023 in l a hour Revision No. 147 of 2023 HiDGMENT OF THE COURT 11th November, 2025 &160 1 December, 2025. MGONYA, 3.A.: The appellant, Equity Bank Tanzania Limited, is before the Court challenging the decision of the High Court (Labour Division) at Dar es Salaam, which upheld the Commission for Mediation and Arbitration's (CMA) award. The brief facts of the instant appeal as they appear from the record may be summarized as follows: On 14th December 2018, the appellant issued to the respondent a letter of appointment to the position of General Manager - Corporate Banking to take effect from 7th January 2019. The said contract of employment incorporated a probationary period of six months which was renewable for a further period of six months. Notwithstanding the foregoing, the appointment to the aforesaid position was subject to prior vetting and approval by the Bank of Tanzania (BOT) pursuant to Regulations 13 and 19 (1) of the Banking and Financial Institutions (Licensing) Regulations, 2014, which require that a bank or financial institution shall obtain approval from the Bank of Tanzania before appointing any person to, or assigning duties of, a senior managerial position. It is evident from the record that the appellant proceeded to appoint the respondent and permit him to assume duties without having first obtained the requisite approval because the application for vetting was submitted only on 5th February 2019. The respondent commenced performance of his duties on 7thJanuary 2019 in the bona fide belief that the necessary regulatory approval had been secured. On 8th October 2019, the respondent attended an interview convened by the BOT. Following the interview, the BOT declined to grant approval for his appointment. Consequently, the respondent who had by then rendered service for a period exceeding twelve months, had his employment terminated by the appellant, who proceeded to terminate his employment and paid his terminal benefits accordingly. Being dissatisfied therewith, the respondent instituted labour proceedings before the CMA in June 2020, by way of Labour Dispute No. CMA/DSM/ILA/508/2020, claiming unfair labour practices and unfair termination of employment. After hearing the parties, the CMA delivered an award in favour of the respondent. Aggrieved by the said award, the appellant preferred Revision Application No. 250 of 2021 before the High Court of Tanzania. On 22 May 2022, Hon. Maghimbi, J., directed the respondent to lodge a fresh complaint confined exclusively to the issue of unfair labour practice, within a period of thirty days from the date of the order. In compliance with the aforesaid High Court order, the respondent filed a new labour dispute bearing No.CMA/DSM/ILA/436/2022/257/2022. Upon adjudication of the matter, the CMA Arbitrator found in favour of the respondent, holding that unfair labour practice had been established, and accordingly awarded compensation equivalent to twelve months' salary in the sum ofTZS 240,000,000.00. 3 Discontented, the appellant sought revision at the High Court (Labour Division) in Revision No. 147/2023. Having heard the parties submissions, the High Court (Hon. Mlyambina, 3.) upheld the CMA award, confirming unfair labor practice. Dissatisfied with the High Court decision, the appellant appealed to the Court seeking to quash the High Court judgment which upheld the CMA award. The memorandum of appeal filed by the appellant comprises six grounds of appeal, namely: 1. The Honourable Judge erred in law in holding that the respondent’ s case was not time-barred on the ground that leave was granted by the court to refile the application; 2. The Honourable Judge erred in iaw by holding that the respondent's right of being heard was violated in total disregard of the evidence by the appellant on steps taken before ending the respondent's employment and the circumstances of the case generally; 3. The Honourable Judge erred in law in arriving at the decision that the Respondent was terminated without following fair procedures; 4. The Honorable Judge erred in iaw in confirming and granting an award of unfair termination on the matter, to which the cause of action was unfair labor practice; 5. The Honourable Judge erred in law by introducing the issue of a probationary employee, which was a new aspect and altogether notan issue between the parties, hence resuiting in an erroneous decision; and 6. The Honourable Judge erred in iaw by not treating the above serious illegality with the importance that it ought to have been given. When the appeal was called on for hearing, the appellant and the respondent were represented by Ms. Mercy Grace Kisinza and Mr. Brave Saronga, both learned Advocates, respectively. When invited to amplify the grounds of appeal, Ms. Kisinza commenced by seeking leave of the Court to add another ground of appeal pursuant to rule 106 (3) (b) (ii) of the Tanzania Court of Appeal Rules, 2009 (the Rules) to the effect that; the Judge failed to analyse evidence hence ended up holding that the act of terminating the respondent was substantively unfair. She further prayed the Court to consider the written submission in support of the appeal, which was filed earlier with some clarification on those grounds. Submitting the 1st ground of appeal on time limit, Ms. Kisinza stated that the respondent initiated the present dispute by filing CMA Form No. 1, designating the matter as one involving unfair labour practices. By referring us to page 121 of the record of appeal, she submitted that, in his testimony before the CMA, the respondent asserted that, the unfair labour practices commenced from the date of his employment and persisted until his termination. That, according to the respondent, his employment by the appellant for a period of one year and four months without undergoing vetting amounted to an unfair labour practice. Ms. Kisinza went further and submitted that, it was testified by the respondent that he was never confirmed in his position and that he asked for confirmation in vain. According to the learned counsel, the cause of action for the alleged unfair labour practice crystallized when the respondent sought confirmation in July 2019, which was denied. In her view, at that juncture, the respondent was obligated to file the dispute promptly, as that marked the beginning of the purported unfair labour practices. 6 The learned counsel argued further that the dispute regarding unfair labor practices was filed with the CMA in June 2020, which represents a delay of one year and four months from the start of employment or four months after the end of the 12-months probationary period. It was her stance that, the matter was filed outside the 60-days' time limit set by Rule 10 (2) of the Labour Institutions (Mediation and Arbitration) Rules, GN 64/2007. She stressed that the 30-days extension granted by the Labour Court does not cure the failure to comply with the legal deadline to file proceedings before the CMA using Form No. 1. Arguing on the 2n d ground of appeal, Ms. Kisinza referred us to page 76 of the record of appeal and submitted that the respondent attended the interview with the BOT. That summoning for an interview established that he was not taken by surprise, as he was aware of what was going on. By referring to rule 10 (3) of the Employment and Labour Relations (Code of Good Practice) Rules, G.N. 42/2007 (the Code) and the case of Stella Temu v. Tanzania Revenue Authority (Civil Appeal No. 72 of 2002) [2004] TZCA 55, she argued that, the respondent was on probation and non-confirmation was due to the BOT's refusal of approval. That the respondent was aware of the vetting process, as he was interviewed in October 2019; hence, it was not a surprise. According to Ms. Kisinza, the purpose of probation as per Rule 10 (3) of the Code is to assess suitability which includes BOT's approval as a condition of the contract. She argued that, non-confirmation is like failing an interview, with no right to a hearing. Premising on that argument, Ms. Kisinza was of the view that the respondent was given a right to be heard. On the 3rd ground of appeal on violation of the procedures, the learned counsel submitted that the High Court was misdirected by quoting rule 10 (7) of the Code since the rule itself relates to performance-related termination. It was Ms. Kisinza's view that, if the learned Judge could have confined himself to rule 10 (8) of the Code, he could not have come to the conclusion that there was a violation of the procedures. Submitting on the 4th ground, the appellant's counsel argued that, the High Court erred in confirming the CMA award for unfair termination, while the refiled suit was solely for unfair labour practice. Ms. Kisinza submitted that the learned Judge misdirected himself by assigning the conditions and components of unfair termination to unfair labour practice. She contended that, there was a mix-up of two distinct causes of action, and a wrong one was used to adjudicate the matter. Admitting that the term "unfair labour practice" is not defined under Tanzania Laws, Ms. Kisinza borrowed the meaning covered under the South African Labour Relation Act, Section 186 (2) (a) and (b) to mean: "Unfair labour practice means any unfair act or omission that arises between an employer and employee involving; - a. Unfair conduct by the employer relating to the promotion ; demotion , probation (excluding disputes about dismissal for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee; b. Unfair suspension of an employee or any other unfair disciplinary action short of dismissal in respect of an employee." She then defined "unfair labour practice" as a dispute between the employer and employee/ and excludes disputes with the nature of dismissal for reasons relating to probation. She argued that the respondent did not prove any elements of unfair labour practice. 9 Ms. Kisinza went further to fault the lower court's decision to award compensation. She contended that the term compensation itself stems from section 40 (1) (c) of ELRA, which is for unfair termination matters and not for unfair labour practice claims. Premising on what she submitted, the learned advocate argued that the High Court erred in awarding the reliefs based on an erroneous CMA Award. For reasons better known to the appellant's counsel, there were no submissions in respect of the 5th and 6th grounds. Neither did she express her intention to abandon them. On the additional ground, Ms. Kisinza submitted that the respondent's evidence, together with his open statement, reveals that the position he was employed required approval from the BOT and in that respect, the respondent was involved in the vetting process. According to Ms. Kisinza, if the respondent was not satisfied with the vetting that was done after his employment, he would have complained immediately after the vetting on 08th October, 2019. It was the learned counsel's contention that the High Court Judge erred in upholding the CMA findings that the employee's termination was substantively unfair. 10 In reply to the first ground of appeal on time limitation, the respondent's counsel argued that the appellant's claim is misguided, as the unfair labor practice arose from the termination on 23rd May, 2020, and not from January 2019. That the original CMA dispute No. CMA/DSM/ILA/508/2020 was filed in June 2020, which was within time (30 days) for termination claims. He further argued that, in Revision No. 250/2021, the court granted 30 days to refile solely for unfair labor practice, which was complied with. Thus, in his view the matter was not time-barred. Responding to the 2n d and 3rd grounds of appeal, which he addressed separately but related, the learned counsel argued on the 2n d ground to the effect that the respondent was denied a hearing. By referring us to pages 170-172 of the record of appeal, he contended that the respondent was informed of BOT refusal without seeing the letter or discussing alternatives. He further argued that the termination letter (exhibit P4) cited a non-existent section 4.6.6 of the HR Manual. He stated that, no consultation on benefits or options was made. By citing Abbas Sherally v. Abdul Sultan Haji Mohamed, Civil Application 133 of 2002 (unreported), he stressed that there was a violation of the right to be heard which contravenes principles of natural justice. Mr. Saronga distinguished the case of Stella Temu (supra), arguing that the same is no longer a good law and has been superserded by Good Practice 2007; hence, it is inapplicable as probation was not conditioned on BOT approval in the contract/HR Manual. Arguing further, Mr. Saronga stated that the appellant solicited the respondent from his prior job, creating legitimate expectations of permanent employment, but the pending approval culminated in unilateral termination. Responding to the 3rd ground of appeal on fair procedures, the learned counsel stated that the appellant wrongly claimed rule 10 (8) applies in this matter. He argued that, even if it mentions performance or behavior correction, the same is inapplicable in this matter. The learned counsel stated that rule 10 (7) requires notice to the employee of unsuitability and allowing a response or alternatives. No evidence, such as minutes of compliance was adduced to that effect. He contended that, Regulation 19 (1) places the duty on the employer to obtain BOT's prior approval before appointment or assignment which the appellant breached by appointing the respondent first. On the same line of argument, he contended that the BOT letter (exhibit D4) did not mandate termination. It was the learned counsel's stance that, the appellant contravened banking laws initially and employment laws in termination, ignoring that termination is a last resort affecting employees' livelihood. Responding to the 4th ground of appeal on confirmation of the CMA award, the respondent's counsel argued that, at no point did the High Court erroneously apply or conflate unfair termination and unfair labour practice. He argued that, in addressing the appellant's practices in its treatment of the respondent, the High Court Judge referred to international and national standards in measuring the relationship between the parties. The Judge invoked rule 10 (7) of the Code, which addresses the appropriate practices an employer should follow when dealing with matters similar to this one. According to Mr. Saronga, the appellant failed to show where the learned Judge sustained the CMA Award based on unfair termination instead of unfair labour practice. On the additional ground of appeal on failure to analyze evidence on substantive unfairness, the learned counsel argued that the BOT denial did not ipso facto terminate the contract. He argued that the appellant had duties under labor laws to adhere to fair procedures, explore alternatives, and not terminate hastily. Mr. Saronga emphasized that the appellant's initial breach (post-appointment vetting) and failure to challenge the BOT decision amount to unfair practice. He thus prayed the Court to reject the entire appeal. Having heard the rival submissions made by the counsel for the parties and going through the record of this appeal and the cited decisions in support and against the appeal, we find there are two main issues for our determination, namely: i) whether the matter was time barred; and ii) What are the consequences for non-compliance with Regulation 19 (1) of the Banking and Financial Institutions (Licensing) Regulations 2014. To start with the first issue, as we demonstrated earlier, the appellant's counsel argued that the dispute between the parties arose on 7th January, 2019, immediately after the respondent's employment, whilst the respondent's counsel insisted that the dispute arose on 23 May, 2020, when the respondent's employment was terminated. On our part, we agree with the respondent's counsel's submission that the dispute arose on 23rd May, 2020 when the employment contract was terminated. It is clear from the record of this appeal that the respondent's claims resulted from a continuous unfair labour practices. 14 The breach commenced when the respondent was employed and continued during his termination. That, the appellant was aware that the respondent's position requires approval from the BOT, but she employed the respondent and assigned duties before obtaining approval from the BOT. Further, the respondent's claim is based on the appellant's action after the BOT disapproval, resulting into termination. Therefore, the High Court correctly held that the matter was not time-barred, as the respondent's cause of action on the claim based on unfair labor practice accrued when the practice ended, which was on 23rd May 2020. The appellant's view that the dispute arose in July 2019 when the respondent unsuccessfully asked to be confirmed, ignores the ongoing nature of the practice until termination. Rule 10 (2) of the Labour Institutions (Mediation and Arbitration) Rules, GN 64/2007 provides that, other disputes that do not involve the fairness of the employee's termination should be referred to the Commission within 60 days. It is on record that the original application was filed in June 2020 which was well within 60 days. Nonetheless, the High Court Judge, when ordering refilling, granted 30 days for the respondent to refile a fresh dispute, an order which was adhered to by the respondent. That being the case, we find that there is no evidential material to support the complaint that the matter was time-barred. Consequently, the first issue is answered negatively. On the second issue, basically the BOT Regulations require assessing whether the proposed Senior Management and members of the Board of Directors are fit and proper in accordance with the criteria listed in the first schedule to the Regulations. The listed criteria include the assessment of core qualities like character and moral suitability specifically whether the intended person has previously been declared bankruptcy or convicted of fraud or dishonesty. See for instance, STANBIC Bank T. Limited v. Iddi Halfani (Civil Appeal No. 139 of 2021) [2023] TZCA 17496. Regulation 19 of the BOT Regulations directs a bank or financial institution not to appoint any person as a senior manager or board member and assign him or her responsibilities unless it obtains prior approval of the Bank of Tanzania. For clarity, we find it apposite to reproduce the relevant regulation as hereunder: "19 (1) A bank or financial institution shall not appoint any person as senior manager or board member and assign that person responsibilities 16 unless it has obtained prior approval o f the Bank." [emphasis added]. It should be noted that the above subregulation uses the word "shall not" which, according to section 53 (2) of the Interpretation of Laws Act, Cap. 1, means the appointment made without prior approval is illegal. The phrase "shall not" creates a statutory prohibition. Essentially, the law directs the appellant to seek approval of the BOT a function that must be performed, as failure to do that is fatal. See, for instance, Abasi Salim Kichenje v. Sehe Mohamed Zayumba and Another (Civil Appeal No. 49 of 2005) [2007] TZCA 222; Omari Bobi v. Tanzania Railways Corporation (Civil Reference No. 1 of 2004) [2007] TZCA 376 and Africarriers Limited v. Shirika la Usafiri Dar es Salaam Ltd & Another (Civil Appeal No. 350 of 2020) [2023] TZCA 17899. In the latter, the Court held that: "The word shall encapsulate the mandator/ nature of the requirement in consonance with the provision of section 53 (2) of the Interpretation of the Laws A ct" In the appeal at hand, it is undisputed from the record of this appeal that the appellant employed the respondent without prior seeking approval from the BOT, contrary to the regulatory requirement. Admittedly, the BOT denial of approval can serve as a good or substantive reason for termination. However, this position works when the employer acts in accordance with the regulation by seeking approval before appointment as it was in Stanbic Bank v. Iddi Halfan (supra). As rightly concluded by the High Court, it was an unfair labor practice for the appellant to employ the appellant without prior seeking approval, as once the BOT denied the approval, everything became a nullity. No right to appeal or review, which implies that the right to be heard has no chance. Then what is the impact? As rightly argued by the respondent's counsel, the appellant's act created an unfair labor practice of which she cannot benefit. Right to work is among the fundamental rights enshrined under Article 22 of the Constitution of the United Republic of Tanzania (1977). It is on record from this appeal that, before entering into an employment agreement with the appellant, the respondent was employed with FNB Tanzania Limited. It is reflected in the record of the appeal at page 26 that, he terminated his prior employment contract on 18th December, 2018, when he had already concluded a new contract with the appellant. Consequently, we find no reason to criticize is the lower court's conclusions that the respondent was terminated as a result of the BOTs disapproval, even though the record is silent on whether the parties had any mitigation. Consequently, we dismiss the appeal and uphold the High Court's decision. We make no order as to costs. DATED at DAR ES SALAAM this 16th day of December, 2025. L. J. S. MWANDAMBO JUSTICE OF APPEAL L. E. MGONYA 1IJSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL Judgment delivered this 17th day of December, 2025 in the presence of Ms. Mercy Grace Kisinza, learned counsel for the Appellant, Mr. Brave Saronga holding brief of Mr. Rahim Mbwambo, both learned counsels for the Respondent via Virtual Court and Mr. John Gervas, Court Clerk; is hereby certified as a true copy of the original.