Annah Lupemba vs NCBA Bank Tanzania Limited (Civil Appeal No. 459 of 2023) [2025] TZCA 1209 (25 November 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM fCORAM: SEHEL. J.A.. RUMANYIKA. J.A. And ISMAIL, J.A,^ CIVIL APPEAL NO. 459 OF 2023 ANNAH LUPEMBA......................... ......................................... APPELLANT VERSUS NCBA BANK TANZANIA LIMITED .................................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, Labour Division, at Dar-es-Salaam) (Mlvambina, J.T dated the 17th March, 2023 in Labour Revision No. 438 of 2022 JUDGMENT OF THE COURT 7th & 25th November, 2025 SEHEL. J.A.: In this appeal, the appellant, Annah Lupemba, is challenging the decision of the High Court of Tanzania, Labour Division at Dar es Salaam (the High Court) in Labour Revision No. 438 of 2022. In that revision, the High Court partly allowed the respondent's application for revision by holding that the termination of the appellant was substantially fair but procedurally unfair. Consequently, it reduced the awarded compensation of twelve months to three months and i removed the subsistence allowance on account that the appellant failed to comply with exit procedures. Aggrieved by the decision of the High Court, the appellant lodged the present appeal. In order to appreciate the context in which the labour dispute arose and later culminated to the present appeal, we find it apposite to briefly, provide the material facts of the matter as obtained from the record of appeal. The appellant was employed by the defunct NIC Bank Tanzania Limited as a Brach Manager at Kahama Branch on 12th November, 2012. She worked with that bank at various work stations and her last working station was Samora Branch at Dar es Salaam. It happened that in 2020, the defunct NIC Bank Tanzania Limited and the defunct CBA Bank Tanzania Limited merged together and formed NCBA Bank Tanzania Limited, the respondent herein. After the merger, the appellant attained the position of a Head of Branch Business which she served until termination on 18th June, 2021 on grounds of gross misconduct for being gross dishonest and gross negligent for acting contrary to her employment contract, job description and the respondents' policies. Aggrieved by termination, she instituted a dispute in the Commission for Mediation and Arbitration (the CMA) at Dar es Salaam alleging that there was no valid reason for her termination and the procedure was flawed. She prayed to be paid her terminal benefits and entitlements as per the labour laws including subsistence allowance and compensation for unfair termination. The respondent denied liability and countered that, the appellant facilitated suspicious transactions by conspiring with the Branch Manager of Zanzibar, one Majid Mohamed, and assisted business persons to use other customer's domicile accounts at the Zanzibar Branch to transfer money abroad for importation of goods with an agreement to split the commission generated from the transfer, an act which facilitated money-laundering activities as the said accounts were opened without a business licence. Having heard the parties, the CMA found that the appellant was unfairly terminated, both substantially and procedurally. Accordingly, the appellant was awarded 12 month's salaries as compensation for unfair termination, one month salary in lieu of notice, one month salary as leave payment, repatriation allowances amounting to TZS. 1,716,000.00 and subsistence allowance of 18 months quantified upon daily basic wage equalled to TZS. 101,198,233.98. 3 As stated herein, the respondent's application for revision before the High Court was partly allowed hence, the present appeal. In the memorandum of appeal, the appellant advanced the following five grounds: " (1) That the High Court o f Tanzania , Labour Division at Dar es Saiaam (hereinafter called the High Court" or x the Labour Court') erred in iaw and misdirected itself in law in analysing the evidence by holding that the Appellant's termination was substantively fair in the absence o f any proof o f loss suffered and without any proof o f the alleged suspicious transactions, or any violation o f law or policy by the Appellant to constitute negligence, which the Respondent grounded as the reason for termination. 2) That the High Court having found that Mr. Majid Mohamed who approved the opening o f the alleged bank accounts with the alleged suspicious transactions and Mr. Rajabu Ramadhan Ismail whose bank account was alleged to be involved in large business transactions not related to him were neither summoned at the disciplinary hearing nor before the Commission for Mediation and Arbitration (CMA) to prove the allegations against the Appellant, and that the Respondent tendered no proof o f the alleged deposit slips o f the alleged suspicious transactions and in absence o f any proof that the alleged accounts were personaI account notbusinessaccount, grossly erred in law in holding that the offences levelled against the Appellant were proved as required by the law. 3) That the Labour Court grossly erred in law, having found that the Appellant's termination was proceduraiiy unfair, to reduce the Commission for Mediation and Arbitration (CMA) award to three months contrary to the dictates o f the law. 4) That the Labour Court grossly erred in law for interfering with the award o f the subsistence allowance in absence o f any evidence showing that the Appellant was repatriated and or paid her subsistence allowance as required by the law. 5) That the High Court erred in law for failure to apply its discretion judiciously under the law and partly arrived into an erroneous decision." When the appeal was placedbefore us for hearing, the appellant was represented by Messrs. Pascal Mshanga andGeorge Masoud, learned advocates, whereas, the respondent had the legal services of Mr. Luca Elingaya, learned advocate. It is noteworthy that, in compliance with rule 106 (1) and (7) of the Tanzania Court of Appeal Rules (the Rules), both parties filed their written arguments for and against the appeal. Before proceeding with the parties' submissions, we had to deal with a point of law raised by Mr. Eiingaya through a notice of preliminary objection which was filed a day before hearing of the appeal. That, the grounds of appeal contravened the mandatory provision of section 58 of the Labour Institutions Act (the LIA), thus, rendering the appeal incompetent. Having reflected on the grounds of appeal, Mr. Mshanga conceded that the first and second grounds of appeal contravened section 58 of the LIA. He therefore opted to drop them. He further abandoned the fifth ground of appeal and remained with the third and fourth grounds of appeal which he informed the Court that he will focus his submission on points of law only. Following the concession and the course taken by the learned counsel for the appellant, Mr. Elingaya decided to withdraw the notice of the preliminary objection which was not objected to by Mr. Mshanga. Accordingly, we marked it withdrawn. Arguing the third ground of appeal that the High Court erred in law in reducing the twelve months' compensation to three months, Mr. Mshanga submitted that, having found the appellant's termination was procedurally unfair, the High Court ought to have awarded the appellant the statutory compensation of not less than 12 months postulated under section 41 (1) (c) of the ELRA before it was amended by the Labour Laws (Amendments) Act No. 4 of 2025 and not otherwise. He pointed out that the High Court relied on the case of Felician Rutwaza v. World Vision Tanzania [2021] TZCA 2 of which he alleged it was decided per in curium. Elaborating, he asserted that the then section 41 (1) (c) of the ELRA used the word 'may' which meant for the arbitrator or Labour Court to use its discretionary power to choose among the three awards prescribed under section 41 (1) of the ELRA, namely; reinstatement, re engagement or compensation of not less than twelve months, depending on the circumstances of each case. That, the law did not give discretion to the tribunal or Labour Court to reduce the statutory minimum amount of compensation. That, if the legislature had the intention to differentiate between procedural unfairness and substantiate unfairness, it would have legislated so. To reinforce his submission, he cited to us the decisions of this Court in the cases of BP Tanzania v. The Commissioner General, Tanzania Revenue Authority [2016] TZCA 749 and Republic v. Mwesige Geofrey & Another [2015] TZCA 264 where the Court stressed that, where the language of the statute is clear, there is no need for further interpolations. It was his submission that the High Court failed to judiciously exercise its discretion as it did not give reasons for interfering with the award of the CMA. For emphasis, he relied on the case of Jacquiline Mushi v. Stanbic Bank Tanzania Limited [2025] TZCA 1005 where the Court stressed that the arbitrator and the Labour Court must exercise their discretion judiciously when assessing compensation, considering ail relevant factors and circumstances of the case and that, where such discretion is not exercised judiciously, the Court has authority to intervene. Mr. Mshanga impressed upon us to find that rule 32 (5) (a) of the Labour Institutions (Mediation and Arbitration Guidelines) Rules, G.N. No. 67 of 2007 (G.N. No. 67 of 2007) is inconsistent with the 8 provisions of section 41(1) (c) of the ELRA. He submitted that, while section 41 (1) (c) of the ELRA provided for a minimum statutory pay of 12 months' renumeration for unfair termination, the rule allows an arbitrator to make an award of appropriate compensation based on the circumstances of each case, considering any prescribed minimum or maximum compensation. In his view, such discretionary power contemplated in the rules contravenes the principal legislation. He therefore cited section 36 (1) of the Interpretation of Laws Act urging us to declare part of rule 32 (5) (a) of the G.N. No. 67 of 2007 void. On our prompting regarding the import and intent of rule 32 (5) of the G.N. 67 of 2007, Mr. Mshanga admitted that the rule is in conformity with the principal legislation as it only provides for procedure and modality of issuing an award. He therefore withdrew this part of his submission. But in all, he urged us to depart from our previous position in the case of Felician Rutwaza v. World Vision Tanzania (supra) and allow the appellant's appeal. Regarding repatriation costs and subsistence allowances, Mr. Mshanga faulted the High Court for declaring that the respondent was not entitled to payment of subsistence allowance allegedly she was the cause for delay due to her failure to comply with exist procedures. 9 Mr. Mshanga's argument was that the legal basis for awarding subsistence allowance stems from section 44 (1) (c) of the ELRA which makes no condition for its payment. He added that the requirement for the employee to do anything prior to his/her repatriation is not a requirement of the law. To cement his argument, he referred us to the case of Mantra Tanzania Limited v. Joaquim P. Bonaventure [2024] TZCA 1153 where the Court considered the import of section 44 (1) (c) of the ELRA and held that repatriation of the terminated employee to his /her place of recruitment by the employer has no strings attached. Therefore, relying on the authority in the case of Pangea Minerals Limited v. Gwandu Majali [2021] TZCA 414, it was the appellant's counsel argument that since the High Court observed that the appellant was not repatriated, it ought not to interfere with the subsistence allowance awarded by the CMA. With the above submissions, Mr. Mshanga urged the Court to allow the appellant's appeal. On the other hand, Mr. Elingaya opposed the appeal. He supported the award of three months' compensation, contending that after the High Court had found the termination of the appellant was substantively fair but procedurally unfair, it properly reduced the 10 award which was based on unfairness of the termination of both substantive and procedure. He asserted that, it is settled law, where termination is found to be substantively fair, it attracts a heavier penalty as opposed to procedural unfairness which attracts lesser penalty. In his view, the case of Felician Rutwaza v. World Vision Tanzania (supra) was based on proper analysis of the law and the High Court's decision was based on the evidence on record. He differed with Mr. Mshanga's submission, arguing, he failed to show substantive reasons for the Court to depart from its previous decision or how the Court's decision was per in curium. Relying on the case of Veneranda Maro & Another v. Arusha International Conference Centre [2022] TZCA 37, he impressed upon us to uphold the decision of the High Court. Replying to the complaint that the High Court wrongly denied payment of the subsistence allowance, Mr. Elingaya acknowledged the import of section 44 (1) of the ELRA that the employer has an obligation to repatriate an employee and that, where the employee is not repatriated such employee is entitled to payment of subsistence allowance. Nonetheless, he maintained that payment of repatriation expenses was to be done after completion of exit procedures. He ii referred us to the evidence of DW2 who testified that after the appellant was informed to comply with the clearance and return the properties of the respondent, she refused. He added that the appellant was duty bound to comply with the terms and conditions of her employment contract, specifically clause 12.6 which requires her to surrender all the property including data/information belonging to the respondent. To reinforce, his argument that the appellant has to comply with the terms and conditions of her employment contract, he referred us to the case of Hotel Sultan Palace Zanzibar v. Daniel Laiza & Another, Civil Appeal No. 104 of 2004 (unreported) where it was emphasized that the terms and conditions of the contract must be adhered to. In that respect, he implored us to be persuaded by the holding of the High Court in the case of Serengeti Breweries Limited v. Samwel Nyaki [2022] TZHCLD 89 where it held that the employee was not entitled to subsistence allowance because he delayed the process of repatriation which was to be done after exit procedures. In his view, to bless a disobedience and disregard of employers' rules would be highly unfair and unjust to the employers. In rejoinder, Mr. Mshanga reiterated that the High Court failed to judiciously exercise its discretion and beseeched us to interfere with 12 the High Court's decision as it was done in the case of Jacquiline Mushi v. Stanbic Bank Tanzania Limited (supra). Regarding subsistence allowance, Mr. Mshanga submitted that the counsel for the respondent acknowledged the appellant was not repatriated. In that respect, he urged us to allow the appellant's appeal. Starting with the issue of compensation for unfair termination, the prevailing law was section 41 (1) of the ELRA which prescribed remedies for unfair termination and G.N. No. 67 of 2007 details the factors, criteria and the modality of awarding the remedies stipulated in the principal legislation. For ease of reference, we reproduce section 41 (1) of the ELRA as hereunder: "S. 41 (1) Where 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 loss o f remuneration during the period that the employee was absent from work due to the unfair termination; or b) To re- engage the employee on any term s that the arbitrator or Court may decide; or c) To pay compensation to the employee o f not less than twelve months remuneration." Our plain reading of the above provision of the law is that, where the arbitrator or the Labour Court makes a finding that termination of an employee was unfair, the employer should be ordered to either reinstate, or re-engage or pay compensation to the employee of not less than twelve months. Nonetheless, in the case of Felician Rutwaza v. World Vision Tanzania (supra) we cited with approval the High Court's decision in the case of Sodetra (SPRL) Ltd v. Njelu Mezza & Another, Labour Revision No. 207 of 2008 (unreported) that, it is not mandatory that, in all cases of unfair termination, the arbitrator should order compensation of not less than twelve months' remuneration because the law abhors substantive unfairness more than procedural unfairness. In that appeal, we were of the firm view that the reasoning of the High Court was founded on logic and common sense and reflects a correct interpretation of the law. Consequently, we held that, where the unfairness of the dismissal is on procedural ground only, it was correct in law for the 14 arbitrator or the Labour Court to exercise discretion and order compensation of less than twelve months' remuneration. At this juncture, we wish to reiterate that rule 32 of G.N. No. 67 of 2007 details the factors and criteria to be considered when exercising a discretion of either reinstatement, re-engagement or payment of compensation. It provides: "32(1) Where an arbitrator finds a termination to be unfair, the Arbitrator may order the employer to reinstate, re-engage the employee or to pay compensation to the employee. (2) The Arbitrator shall not order re instatement or re-engagement where- (a) the employee does not wish to be re instated or re-engaged; (b) the circumstances surrounding the termination are such that a continued employment relationship would be intolerable. (c) it is not reasonably practical for the employer to re-instate or re-engage the employee. 15 (d) the termination was unfair because the employer did not follow a fair practice. (3) Re-engagement shall be subject to any terms o f employment that the arbitration may decide. (4) For the purpose o f these rules, re instatement means that an employee shall be put back in the job unconditionally. (5) Subject to sub-rule (2), an arbitrator may make an award o f appropriate compensation based on the circumstances o f each case considering the following factors- (a) Any prescribed minimum or maximum compensation; (b) the extent to which the termination was unfair; (c) the consequences o f the unfair termination for the parties including the extent to which the employee was able to secure alternative work or employment; (d) the amount o f the employees' remuneration; (e) the amount o f compensation granted in previous similar cases; (f) the parties conduct during the proceedings; and any other relevant factors." From the above, it is patently clear that, in terms of rule 35 (5) of the G.N. No. 67 of 2007, an arbitrator is required to make appropriate compensation basing on the circumstances of each case by considering, among other factors, any prescribed minimum and maximum compensation, whether the unfairness of the dismissal was on substantive or procedural grounds or both substantive and procedural grounds and the amount of compensation granted in previous similar cases. It should be kept in mind that where discretion is not judiciously exercised, the higher courts would be entitled to interfere with it - see the case of Veneranda Maro & Another v. Arusha International Conference Centre (supra); Pangea Minerals Limited v. Gwandu Majali (supra) and Jacquiline Mushi v. Stanbic Bank Tanzania Limited (supra). In the appeal before us, we have stated that the CMA awarded the appellant twelve months' compensation after being satisfied that 17 the termination was both substantially and procedurally unfair. However, on appeal, the High Court found that the appellant's termination was substantially fair but procedurally unfair. Subsequent to such a finding, it reduced the award of twelve months' compensation to three months. The ensuing question is whether the High Court judiciously exercised its discretion in reducing the awarded twelve months' compensation to three months. In order to understand as to how the High Court reached to its decision, we revert back to its judgment and found the following reason: "As to the award o f compensation, since it is found that [the appellant] was unfairly terminated only procedurally, it is my view that she is not entitled to the 12 months' salaries awarded by the arbitrator. The same is hereby reduced to 3 months salaries which I find to be reasonable and justifiable to the circumstances at hand. This award is in light with the Court o f Appeal decision in the case o f Feiician Rutwaza v. World Vision Tanzania Civil Appeal No. 213 o f 2019 (unreported)..." 18 Since the appellant's termination was found to be procedurally unfair but substantially fair and such finding is not disputed by the appellant, we find nothing to fault the High Court's decision which was premised on proper logic that the law abhors substantive unfairness more than procedural unfairness. Thus, it would be an absurdity for this Court to uphold the CMA's award which was reached on a finding that the termination was both substantially and procedurally unfair. That said, we dismiss this ground of appeal. We now turn to the complaint that the High Court erred in interfering with the CMA's award of subsistence allowance. It is settled under section 44 (1) (c) of the ELRA that an employee whose employment has been terminated is entitled to inter alia, repatriation costs and subsistence allowance during the period between termination of his employment and the date of payment of costs of his transportation to the place of recruitment. For ease of reference, we reproduce the said section as hereunder: "44 (1) Where an employee's contract o f employment is terminated at a place other than where the employee was recruited, the employer shall either; 19 a) transport the employee and his persona! effects to the place o f recruitment, or b) pay for the transportation o f the employee tv the piace o f recruitment, or c) pay the employee an allowance for transportation to the place o f recruitment in accordance with subsection (2) and daily subsistence expenses during the period, if any between the date o f termination o f the contract and the date o f transporting the employee and his family to the place o f recruitment..." The above provision of the law imposes an obligation on the part of the employer to either "transport the employee and his persona! effects to the place o f recruitment" or "pay for the transportation o f the employee to the place o f recruitment' and where repatriation is delayed, the employee is entitled to be paid daily subsistence allowance from the date of termination to the date of his repatriation. More than often, the provisions of section 44 (1) of the ELRA had been the subject of discussion by the Court as to whether 20 payment of repatriation of costs is conditional. For instance, in the case of Bahari Oilfields Service FPZ Ltd v. Peter Wilson [2021] TZCA 250, the Court was called upon to address the issue as to whether payment of repatriation costs under section 44 (1) (c) of the ELRA is conditional upon the employer confirming the date of his departure. Having revisited prevailing law on the payment of repatriation costs and subsistence allowance, the Court categorically held that: "... there is nothing in section 43 o f the Act that suggests that payment o f repatriation costs is conditional upon the employee indicating the date o f departure." Yet again, in the case of Mantra Tanzania Limited v. Joaquim P. Bonaventure (supra), when the Court was dealing with the issue as to whether an employee was required to request or apply to the employer to be repatriated, it stated: "...repatriating a terminated employee to the place o f his recruitment has no strings attached. It is paid to the employee regardless o f whether one decides to go back to his recruitment place or n o t" [Emphasis added]. 21 See also: Gaspar Peter v. Mtwara Urban Water Supply Authority (MTUWASA) [2019] TZCA 28; Kiboberry Limited v. John van der Voort [2022] TZCA 620 and Kenya Kazi Security v. Kirobotoni & 71 Others [2024] TZCA 821. We have stated herein that the High Court interfered with the CMA's award of subsistence allowance for the following reasons; one, the appellant was under obligation to prove that she complied with the instructions given in her termination letter (Exhibit A16) but failed to do so. Two, the respondent could not transport the appellant because the appellant had in possession the respondent's belongings which were required to be returned before being repatriated. Three, it was an absurdity to punish an employer for the employees' breach of the terms of the employment contract which required her to hand over all the respondents' properties including data. Four, subsistence allowance is awarded upon failure by an employer to timely repatriate an employee and fifthly, repatriation costs are paid upon completion of exist procedures. All in all, and with greatest respect we find the reasons given by the High Court are not in line with the dictates of section 44 (1) (c) of the ELRA which imposes a statutory obligation on the part of the 22 employer to pay an employee transport allowance upon termination of his employment and subsistence allowance while awaiting for repatriation. Since it is not disputed that the appellant was not repatriated in time, she is therefore entitled to be paid subsistence allowance for the entire period she was kept waiting to be paid transportation allowance. Pursuant to regulation 16 (1) of the Employment and Labour Relations (General) Regulations G.N. No. 47 of 2017, subsistence allowance shall be computed basing on the appellant's daily basic wage. We therefore find merit to this ground of appeal. For avoidance of doubt, the decision of the High Court is partly varied in that the order refusing payment of the subsistence allowance is quashed and set aside and replaced with an order that, the appellant should be paid three months' remuneration as compensation for unfair termination; one month salary in lieu of notice, one month salary as leave payment, repatriation allowances amounting to TZS. 1,716,000.00 and subsistence allowance from the date of termination to the date of repatriation basing on her daily wage. 23 In the end, the appeal is partly allowed to the extent explained above. Since the dispute arose from a labour matter, we make no order as to costs. DATED at DODOMA this 25th day of November, 2025. B. M. A. SEHEL M. K. ISMAIL JUSTICE OF APPEAL Judgment delivered this 25th day of November, 2025 in the presence of Mr. Paschal Mshanga, learned counsel for the Appellant, Mr. Luka Elingaya, learned counsel for the Respondent via virtual Court and Mr. Issa Bakari, Court Clerk; is hereby certified as a true copy of the original. JUSTICE OF APPEAL S. M. RUMANYIKA JUSTICE OF APPEAL DEPUTY REGISTRAR COURT OF APPEAL