Richard Eusebio vs NCBA Bank Tanzania Ltd (Civil Appeal No. 622 of 2023) [2025] TZCA 1289 (16 December 2025)

THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM ( CORAM: MWANDAMBO. J.A.. MGONYA, 3.A. And FELESHl. 3.A.1 ) CIVIL APPEAL NO. 622 OF 2023 RICHARD EUSEBIO .......................................... ................... APPELLANT VERSUS NCBA BANK TANZANIA LTD.................................... ....... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Labour Division at Dar es Salaam) (Mganga, J.) dated the 18th day of August, 2023 in Labour Revision No. 141 of 2023 JUDGMENT OF THE COURT 11th November & 16th December, 2025 FELESHl. J.A.: In this appeal, Richard Eusebio (the appellant) is assailing the decision of the High Court of Tanzania (Labour Division) which revised, quashed and set aside the award entered in his favour by the Commission for Mediation and Arbitration (CMA) in Dispute No. CMA/DSM/ILA/370/2022/299/2022. The CMA found the NCBA Bank Tanzania Limited (the respondent) had both substantively and procedurally unfairly terminated the appellant, thus awarding him i TZS. 384,000,000.00 and TZS. 50,000,000.00, being sixty (60) months' salary compensation and general damages, respectively. Briefly, the antecedent facts giving rise to this appeal are that the appellant, who from 2.12.2013 to 8.7.2020 served as Legal and Security Officer with NIC Bank Tanzania Limited, was on 8.7.2020 contracted by the respondent to serve as Head of Loan Recovery. The respondent was created by the merger of NIC Bank Tanzania Limited and CBA Bank in 2020. In early 2022, following the merger, the respondent undertook an internal structural review which revealed duplication of roles and excessive operational costs. Consequently, the respondent's management decided to close four branches and reduce its workforce through a phased retrenchment programme. The retrenchment process commenced in April 2022 through a Town Hall meeting which was attended by all employees, including the appellant. In that meeting, the restructuring plans were discussed. Another meeting was convened on 3.6.2022 to introduce the second phase which involved formal retrenchment procedures. On 6.6.2022, the respondent issued a notice of intention to retrench the appellant (Exhibit N3) which was followed by a letter inviting him to attend a consultation meeting on 10.6.2022 (Exhibit N4) dated 7.6.2022. The 2 appellant attended the consultation meeting where he expressed his dissatisfaction, contending that the process was a mere formality since his position had already been declared redundant. He was later served with a retrenchment agreement dated 8.6.2022 (Exhibit N6) which he signed under protest on 30.6.2022. On 1.7.2022, the appellant was served with a termination letter (Exhibit N7). The termination took effect on 5.7.2022, the date his retrenchment package amounting to TZS 42,438,870.87 was deposited into his bank account No. 147136100033 (Exhibit N8). He thereafter referred a dispute to the CMA on 11.7.2022, claiming unfair termination. After hearing the parties, the CMA found that the respondent had terminated the appellant both substantively and procedurally unfairly, awarding him TZS. 384,000,000.00 as sixty (60) months' salary compensation, and TZS, 50,000,000.00 as general damages. It held that the respondent: one, did not justify her retrenchment selection criteria; two, failed to prove that she offered the appellant alternative employment, as she had done for his two colleagues; and three, upon reaching a disagreement with the appellant during the 3 consultation process, she ought to have referred the dispute to the CMA. Dissatisfied with the CMA award, the respondent preferred Labour Revision No. 141 of 2023 before the High Court whose judgment, as aforesaid, is the subject of this appeal. Inviting the High Court to revise it, the respondent complained that the arbitrator erred: first, in holding that it failed to prove the reason for the retrenchment; second, in failing to properly analyse and evaluate the evidence, thereby arriving at an incorrect finding that the reason for retrenchment was not valid; third, in holding that the appellant's termination was procedurally unfair despite clear evidence that all procedures were followed; fourth, in awarding aggravated compensation equivalent to 60 months' salary without justification, notwithstanding that the appellant had been paid substantial retrenchment benefits; and fifth, in awarding aggravated general damages for harassment without justification. Having heard the parties, the High Court resolved the two issues it had framed, namely; whether the termination was fair and what reliefs the parties were entitled to, in favour of the respondent. It accordingly allowed the respondent's revision application and quashed the CMA award. The High Court held that, in terms of section 38 (2) of the ELRA, both parties had equal opportunity to engage the CMA and that, having accepted the retrenchment package, the appellant was estopped from challenging the fairness of his retrenchment. Disgruntled by the High Court decision, appellant preferred this appeal on four grounds of appeal, but dropped the fourth at the hearing. The remaining three grounds are summarized as follows: 1. That the High Court erred in law to hold that the termination o f the appellant's employment was both substantively and procedurally fairly; 2. That the High Court erred in its interpretation o f section 38 (2) o f the Employment and Labour Relations Act, Chapter 366 (the ELRA) that the appellant could also refer the dispute to the CMA; and 3. That the High Court wrongiy invoked the doctrine o f estoppel against the appellant's retirement package o f TZS. TZS. 42,438,870.87 despite his signing the retrenchment agreement under protest At the hearing, Messrs. Jonathan Mbuga and Emmanuel Nkondo, learned advocates, appeared for the appellant, while Mr. Luka Elingaya, learned advocate, appeared for the respondent. Counsel for both parties had earlier on filed their respective written submissions 5 under rule 106 (1) of the Tanzania Court of Appeal Rules, 2009 (the Rules). In effect, the appellant's written submissions and the oral clarification by Mr. Mbuga was that, the termination of the appellant's employment was both substantively and proceduraliy unfair. On the substantive aspect, M r. Mbuga contended that there was no credible evidence whether documentary or oral establishing any loss suffered by the respondent or any anticipated loss, under the restructured business model, that would have necessitated the appellant's retrenchment. In his view, the failure to prove any loss rendered the purported restructuring a mere pretext to disguise an unfair termination. On the procedural aspect, learned counsel argued that the so- called consultation purportedly held by the parties on 10.6.2022 was a sham exercise conducted in a checklist fashion, contrary to section 38 (1) (c) of the Employment and Labour Relations Act, Chapter 366 (the ELRA). He added that, on that consultation day the appellant's position had already been declared redundant and a retrenchment agreement had been prepared since 8.6.2022, thus rendering the consultation process a mere formality. Mr. Mbuga cited Emmanuel Shio & Others v. Resolution Insurance Limited [2024] TZCA 151, Thomas Somme v. Tujijenge Tanzania Limited [2025] TZCA 383, Inviolata Rwelamira Itatito v. Times Radio FM Ltd [2025] TZCA 280 and Water Aid Tanzania v. Clare Haule [2025] TZCA 204, contending that meaningful consultation ought to have been conducted to predicate the decision to retrench. Regarding section 38 (2) of the ELRA, Mr. Mbuga contended that when disagreement arises during pre-retrenchment consultations, it is the employer, not the employee, who bears the duty to refer the dispute to the CMA. This is because it is ordinarily the employer who makes the decision to retrench an employee in order to either increase profit or reduce loss. He thus urged this Court to find that the provision places the duty to refer the consultation dispute to the CMA on the employer. On the third ground of appeal, learned counsel faulted the High Court for wrongly applying the doctrine of estoppel under section 123 of the Evidence Act, Chapter 6, contending that the doctrine could not arise in the absence of mutual consent. He argued that the proceedings of the consultation meeting (Exhibit N5) clearly shows that the appellant did not agree with the proposed retrenchment, and that he further expressed his reservations in his written comments when signing the retrenchment agreement (Exhibit N6), which indicated his disagreement with the process. Mr. Mbuga relied on the case of AMC Trade Finance Limited v. SAN LAM General Insurance (Tanzania) Limited [2023] TZCA 17613 to argue that estoppel cannot apply where the alleged representation was made under protest or without consensus, and that the learned High Court judge therefore erred in invoking that provision of law to bar the appellant from challenging the termination. He finally beseeched the Court to allow the appeal and restore the CMA award. In response, Mr. Elingaya, learned counsel for the respondent, supported the decision of the High Court. He submitted that the retrenchment was justified by operational requirements following the merger of NIC Bank Tanzania Limited and CBA Bank in 2020 and that the process took place between April and June 2022 through a series of staff meetings and consultations. He argued that the appellant was consulted and given adequate time to respond as evidenced by his participation in the first and subsequent meetings as per Exhibit N1 (Public Email) and Exhibits N3, 4, 5 on the consultation held on 8 10.06.2022 and his subsequent signing of the retrenchment agreement on 30.6.2022. Counsel for the respondent submitted further that the appellant's cited cases are distinguishable, arguing that they involved total non-compliance with the law, unlike in the present matter where consultation was undertaken in good faith. Regarding section 38 (2) of the ELRA, Mr. Elingaya submitted that the provision allows either party to refer a dispute to the CMA where there is no agreement concluded during pre-retrenchment consultation. On the invocation of estoppel, Mr. Elingaya argued that the High Court correctly reasoned that the appellant, having received and withdrawn his retrenchment package, was estopped from challenging the termination. In sum, he urged the Court to dismiss the appeal, concluding in the alternative that, in case the Court finds there was procedural unfairness, it should decline to restore the CMA award, which, in his view, was contrary to law. In rejoinder, the appellant's counsel maintained that the law does not prohibit restructuring per se, but the same must not be invoked arbitrarily or merely when loss is alleged without proof as it happened in this case. To that effect, he referred the Court to page 158 of the record of appeal and consequently reiterated his prayers. Having considered the record, submissions of the parties and applicable law, we propose to determine the first and second grounds conjointly, as they both relate to the fairness and legality of the appellant's retrenchment process. The legal framework on retrenchment (operational requirements) as a reason and procedure prerequisites in our jurisdiction is provided under section 38 (1) of the ELRA and rule 23 of the Employment and Labour Relations (Code of Good Practice) Rules, G.N. No. 42 of 2007 (the Code of Good Practice). Specifically, rule 23 (2) of the Code of Good Practice provides that: "(2) As a general rule the circumstances that might legitimately form the basis o f a termination are - (a) economic needs that relate to the financial management of the enterprise; (b) technological needs that refer to the introduction o f new technology which affects work relationships either by making existing 10 jobs redundant or by requiring employees to adapt to the new technology or a consequential restructuring o f the workplace; (c) structural needs that arise from restructuring o f the business as a resu/t o f a number o f business reiated causes such as the merger o f businesses, a change in the nature o f the business, more effective ways o f w o r k i n g a transfer o f the business or part o f the business" [Emphasis supplied]. It is evident from subrule (2) (c) of rule 23 above that, structural needs may arise from restructuring of the business as a result of a number of business-related causes such as the " merger o f businesses" a change in the nature of the business, more effective ways of working, a transfer of the business or part of the business. In this matter, the evidence on record, which was not disputed, clearly shows that NCBA Bank Tanzania Limited was formed following a merger between two entities that is, CBA Bank and NIC Bank, and that the merger resulted in the closure of some branches and restructuring of its operations. 11 The reason for the retrenchment directly and clearly communicated to the appellant during the notice-of-intention-to- retrench stage, the consultation meetings and in the retrenchment agreement (Exhibits N3, N4, N5 and N6, respectively), was the "Bank's intention to restructure its business modei in order to achieve a more competitive and sustainable business proposition and reduce operational costs In line with its financial and regulatory requirements" Therefore, with all due respect to Mr. Mbuga, we are contented that the respondent fairly discharged her mandatory obligation by communicating the above reason and engaged the appellant before terminating his employment. We find the circumstances of this case squarely falling within the ambit of rule 23 (2) (c) of the Code of Good Practice, thereby rendering the appellant's termination substantively fair, as correctly held by the High Court. Consequently, the appellant's complaint on the first limb is found unmaintainable. With regard to the retrenchment procedure, section 38 (1) of the ELRA speaks for itself, thus: n 38.-(i) In any termination for operational requirements (retrenchment), the employer 12 shall comply with the following principles, that is to say he shaii- (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 f proper consultation; (c) consult prior to retrenchment or redundancy on - (i) the reasons for the intended retrenchment; (ii) any measures to avoid or minimize the intended retrenchment; (Hi) the method o f selection o f the employees to be retrenched (iv)the timing o f the retrenchments; (v) and severance pay in respect o f the retrenchments,; (d) give the notice, make the disclosure and consult, in terms o f this subsection, with- (i) any trade union recognized in terms o f section 67; (ii) any registered trade union with members in the workplace not represented by a recognized trade union; 13 (iii) any employees not represented by a recognized or registered trade union." On the other hand, rule 23 (4) of the Code of Good Practice provides: "(4) The obligations placed on an employer are both procedural and substantive. The purpose o f the consultation required by Section 38 o f the 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 minimize 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 last-in-first-out (LIFO), subject to the need to retain key jobs, 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 14 (f) steps to avoid the adverse effects o f the terminations such as time o ff to seek work " From the above law, specifically, section 38 (1) of the ELRA, it is imperative that, before terminating employment on account of operational requirements, the employer must provide notice and engage in meaningful consultation with affected employees or their representatives. In the matter under our consideration, counsel for the parties' contentions are based on the consultation procedure. While the appellant's counsel argues that the consultation was merely meant for rubber-stamping the already one-sided retrenchment decision, the respondent's counsel maintains that it was meaningful and in good faith. Going by the record, the evidence demonstrates that the respondent embarked on the retrenchment process as early as April 2022 through several meetings involving all employees, including the appellant. The process was executed in phases, beginning with a voluntary exit program and culminating in a compulsory retrenchment phase. As aforesaid, after being served with notice of the intended retrenchment dated 6.6.2022, the appellant attended a consultation 15 meeting on 10.6.2022. The appellant complained that the retrenchment agreement was dated 8.6.2022, two days before the consultation meeting. We agree that, in principle, consultation should precede any agreement. Looking at page 4 of the retrenchment agreement (Exhibit N6) found at page 72 of the record of appeal, the endorsement by the appellant that 7 Richard Eusebio do hereby acknowledge and confirm that I was consulted on 10/06/2022 .... Date: 30.06.2022'' proves that the same was finalized after the consultation meeting. It further demonstrates that the appellant had remained in possession of the document until 30.6.2022 when he signed it, long after the consultation was held on 10.6.2022. This, in our respectful view, renders the slight inconsistency in dating Exhibit N6 inconsequential. Consequently, we hold that the appellant's retrenchment process in its entirety complied with section 38 (1) (c) of the ELRA. Nonetheless, in our considered view, the retrenchment process took a reasonable duration, approximately three months (April to June 2022), during which the appellant was made fully aware and actively engaged. We also consider it necessary to emphasize that the law does not require consultations to result in an agreement, rather, it 16 requires a genuine and meaningful engagement aimed at exploring alternatives and mitigating the adverse effects of retrenchment. After all, while the obligations to communicate the reasons for retrenchment and to engage the appellant through consultations were mandatory, the appellant's self-assessment that he qualified to be retained as the new Head of Recoveries was unfounded. That view could not preclude the respondent from appointing another person who, on a competitive basis, was considered the most suitable candidate. This takes us to the requirement of subsection (2) of Section 38, which provides that: "(2) Where in the consultations held in terms o f sub-section (1) no agreement is reached between the parties, the matter shall be referred to mediation under Part VIII o f this Act." In this, counsel for appellant forcefully argued that the provision imposes a duty on the employer, whereas the respondent's counsel was of the view that it is on either party. We think the provision as above quoted is clear and unambiguous. It does not impose the duty to refer the dispute exclusively to the employer. As the High Court 17 correctly observed, the language of section 38 (2) is permissive and allows either party to refer the dispute to the CMA. Had the legislature intended to limit this duty to one party, it would have done so explicitly. This interpretation accords with the principle of statutory construction stated in Republic v. Mwesige Godfrey & Another [2015] TZCA 264, where it was observed in part, that: "... the familiar canon o f statutory construction is that the starting point for interpreting a statute is the language o f the statute itself. Absenting a dearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive..." We therefore find no error in the High Court's interpretation of section 38 (2) of the ELRA. In the totality of the above discussion, we are therefore satisfied that the High Court properly re-evaluated the evidence and correctly found that both substantive and procedural requirements were met. The cases cited by the appellant are distinguishable. In Water Aid Tanzania v. Clare Haule (supra) and Inviolata Rwelamira Itatito v. Times Radio FM Ltd (supra), as correctly argued by the respondent's counsel, there was no meaningful consultation at all, 18 whereas in the present case, consultation did occur over an extended period. In the circumstances, the 1s t and 2n d grounds of appeal are devoid of merit. In the 3r d ground of appeal, the appellant faults the High Court for applying estoppel against him despite his signing the retrenchment agreement under protest. We have revisited the impugned High Court decision and the record which reveals that after signing the agreement on 30.06.2022, the appellant accepted and withdrew the retrenchment package credited to his account on 5.07.2022. He did not reject or return the funds before filing the dispute on 11.7.2022. While we are mindful that receipt of terminal benefits does not automatically bar an employee from challenging termination, the High Court merely observed that the appellant's conduct of receiving the package was inconsistent with his subsequent claim of protest. We therefore see no misdirection on the part of the High Court in referring to the principle of estoppel. All things considered, we are satisfied that the High Court properly re-evaluated the evidence and correctly held that the retrenchment of the appellant was substantively and procedurally fair. 19 Consequently, we find no merit in this appeal and we dismiss it. We issue no order as to costs. DATED at DODOMA this 16th day of December, 2025. L. J. S. MWANDAMBO JUSTICE OF APPEAL L. E. MGONYA JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL Judgment delivered this 16th day of December, 2025 in the presence of Mr. Hance Stephen Mlindoko, learned counsel for the Appellant, Ms. Sendua Salim Kabora learned counsel for the Respondent and M r. John Banene, Court Clerk; is hereby certified as a true copy of the original 20