National Bank of Commerce Limited vs Joyce Ndaiga (Civil Appeal No. 236 of 2023) [2025] TZCA 1087 (13 October 2025)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA (CORAM: NDIKA. J.A.. KIHWELO. J.A.. And NGWEMBE, J.A1 CIVIL APPEAL NO. 236 OF 2023 NATIONAL BANK OF COMMERCE LIMITED................................APPELLANT VERSUS JOYCE NDAIGA .................................. ....................................RESPONDENT (Appeal from the Decision of the High Court of Tanzania at Dodoma) (Mdemu, J1 dated 17th February, 2023 in Labour Revision No. 09 of 2018 JUDGMENT OF THE COURT gth & 13th O c to b e r, 2 0 2 5 NGWEMBE. J.A.: The appellant, National Bank of Commerce (NBC), was dissatisfied with the decision of the High Court in Labour Revision No. 09 of 2018 which declared the termination of the respondent unfair and ordered her reinstatement or payment of 12 months remuneration as compensation. The instant appeal seeks to overturn that judgment. The brief background to the dispute is summarized as follows: that, the respondent was employed by the appellant on 02/01/1992 as a Bank Clerk. She worked for a period of 25 years and was elevated up to

the position of a Senior Teller or Supervisor Teller at the appellant's branch in Singida. The dispute that would eventually terminate her employment arose on 15th July, 2017 and on 27th September, 2017, the appellant terminated her employment. The following, is how the respondent was terminated from employment. It is on record that on 15th July, 2017 the branch accountant discovered a loss of TZS. 725,000.00 in respect of the transactions made by one Happiness Lyimo, a teller. Some preliminary inquiries were made between the Bank Security Officer and Ms. Lyimo. No further discovery was disclosed to the respondent. Through an internal letter dated 5th September, 2017 (exhibit D3), the respondent was served with a notice to attend a disciplinary hearing to be held on 8th September, 2017. The disciplinary charge was styled as follows: "Gross negligence in faiiure to verify cash balance before cash is moved into cash vault the act which resulted to financial loss amounting to TZS. 725,000.00 contrary to NBC Branch Operation Manual version 1.0 o f August 2016 and rule 12 (3) d o f the offences which constitute serious misconduct and if proved m ight lead to termination o f an employee under the Employment and Labour Relations (Code o f

Good Practice) Rules 2007 GN 42 read together with NBC Disciplinary, Capability and Grievance Policy," The particulars of the offence were that the respondent committed an offence of gross negligence on 8th July, 2017. That being a Senior Teller she was accountable and responsible for verification of individual teller's cash balance before the money was moved to the cash vault. Ms. Happiness Lyimo was assigned telling duties and noticed cash shortage of TZS. 725,000.00 but she did not report as required by section 8.7 of the Bank Operation Manual (the Manual) which requires any cash shortage to be reported on the same day. That the shortage was reported on 15th July, 2017, the fact which according to the appellant, proved that the respondent did not verify Happiness Lyitno's end of a day cash balance. Such a negligent act caused financial loss of TZS. 725,000.00. The letter informed her on the date, time and place for the hearing. According to the record, the disciplinary hearing was conducted on 11th September, 2017. However, it is recorded that the respondent denied the allegations and the initiator who acted as the complainant, gave his statement whose gist is as earlier on alluded to. The respondent was invited to state her case. The gist of her defence was 3

that on the fateful date when she was verifying the balance and treasury slip, she found everything was correct, then handed them to Ms. Lyimo to pack them in the envelope. Even during cross examination, the respondent maintained her stance and that she knew her duties and followed all proper bank procedures. On the summing up of each one's case, the initiator insisted that there was gross negligence on the side of the respondent. Eventually, the disciplinary committee found her guilty and the initiator proposed termination as the appropriate sanction, while she suggested a written warning instead of termination. We wish to quote part of her mitigation hereunder: "Kwa sababu ndiyo mara yangu ya kwanza kutokea jam bo hifo, na haikuwa dhamira yangu bali Uitokea kwa bahati mbaya fabda kwa sababu ya mazingira yaliyokuwepo . Naomba nisipewe adhabu kaii zaidi kwa sababu famffia inanitegemea na sitoweza kurudia tena. Nimeshajifunza." The above may be translated to mean, since it was her first time such loss has occurred, which was not intentional, she should be pardoned or leniently punished. She has a family depending on her and she has learnt a lesson and therefore, she will not repeat. Despite her

mitigation, the disciplinary committee found her guilty of gross negligence capable of terminating her employment. Consequently, on 12th September, 2017 the decision to terminate her employment was communicated and she had 7 days to appeal within the appellant's hierarch. On 15th September, 2017 she filed an appeal which was dismissed, thus on 27th September, 2017 she received a final termination letter. Being dissatisfied with the termination, she lodged her complaint to the Commission for Mediation and Arbitration (CMA) challenging that termination and sought reinstatement without loss of her salaries on the ground that the termination was both substantively and procedurally unfair. Evidence was adduced by both parties but the investigation report was not among the tendered documents at CMA. At the final trial, the CMA dismissed the application holding that the termination was substantively and procedurally fair. The respondent successfully applied for revision before the High Court which overturned the decision of the CMA because the termination was found to be unfair substantively and procedurally. The High Court among other factors, found that the appellant failed to conduct investigation on the alleged misconduct before holding a disciplinary hearing. Also, the disciplinary committee was found not impartial as it was constituted only by the appellant's employees. Thus, it ordered for reinstatement of the

respondent, otherwise she be paid compensation of 12 months' salary, severance pay and leave allowance. The appellant was dissatisfied, hence the instant appeal before the Court with four grounds as follows:

1. That the High Court erred in iaw for adjudicating that there was no good or fair reason for terminating the empioyment o f the respondent.
2. That the High Court erred in iaw for hoiding that the reason for termination was supposed to be estabiished by investigation on an offence which needed no investigation and was adm itted by the respondent.
3. That the High Court erred in iaw by holding that the disciplinary committee was not independent for being composed with the personnel from the same office contrary to the iaw.
4. That the High Court erred in law for failure to consider the respondent's admission o f misconduct. At the hearing of this appeal, Ms. Josephine Safiel, learned advocate appeared for the appellant and Mr. Majura Magafu assisted by Mr. Mathew Kabunga, learned advocates represented the respondent. In support of the appeal, Ms. Safiel adopted her written submission filed in Court on 26/6/2023 and added that the respondent was negligent which occasioned loss of TZS. 725,000.00 the property of the appellant. She argued jointly grounds one and four as they both 6

relate to the reason for termination. She argued that the negligence of the respondent was contrary to NBC Branch Operation Manual version 1.0 of August 2016 and NBC Disciplinary, Capability and Grievance Standard. Such negligence was a good cause for termination in conformity with rule 12 (3) (d) of the Employment and Labour Relations (Code of Good Practice) Rules GN. 42 of 2007 (Code of Good Practice). Moreover, she submitted that the respondent admitted to be negligent before the disciplinary committee. Thus, she pointed out that, the first appellate court misconstrued the facts when it considered that there was no investigation while the respondent admitted to have been negligent in her performance as shown at pages 14 to 16 of the supplementary record. She maintained that the investigation was conducted by one Mjua Mungu, although its report was not tendered at CMA. She pointed out that the purpose of investigation is to determine whether there are sufficient grounds to charge the respondent. Since the respondent was able to understand the charge against her and she admitted wrong doing, the investigation was irrelevant and the High Court erred in this aspect. She insisted that the appellant had good and fair reason for terminating the respondent.

In respect to the third ground, related to composition and impartiality of the disciplinary committee, the learned advocate referred the Court to rule 13 (4) of the Code of Good Practice that it was complied with. The disciplinary committee was chaired by an independent person, a Branch Manager from Morogoro Branch who was senior to the respondent and other attendees were not from the same office. In the alternative, she argued that even if there was procedural unfairness, yet the first appellate court still erred when it held that even the reason for termination was not fair. She thus, urged the Court to allow the appeal, quash and set aside the first appellate court's decision. In response, Mr. Magafu strongly opposed the appeal. To him, the first appellate court's decision was proper. He insisted that, there was no investigation report which could lead into constitution of the disciplinary committee. He buttressed his argument by referring the Court to rule 13 of the Code of Good Practice and to the appellant's internal policy which require investigation to be conducted prior to the formation of the disciplinary committee. Doing otherwise, constituted unfair procedure which amounted to unfair termination. Submitting on the reason for termination, the learned counsel pointed out that section 40 of the Employment and Labour Relations 8

Act, Cap 366 R.E. 2019 (ELRA), impose the duty to the employer to prove that termination was fair. Submitting on independence of the disciplinary committee, Mr. Magafu, referred the Court to page 35 of the records that the initiator turned to be the prosecutor and decision maker. He was the one who proposed termination of the respondent which proposal was followed by the committee. In that aspect, rules of natural justice were not complied with, thus, constituted unfair hearing and the High Court's decision was right. In regard to the alleged admission to the offence charged, the learned counsel was firm to argue that the respondent was making a mitigation after the proposed termination. Mitigation did not amount to admission to the offence of negligence. There was nowhere shown in the record that the respondent admitted to the offence charged. He added that, the one who caused loss was Happiness Lyimo who was ordered to refund that money and was also terminated. The respondent was innocent and for the working period of 25 years, she never caused any loss to the employer. In the circumstances, Mr. Magafu implored the Court to dismiss the appeal and uphold the decision of the first appellate court.

On whether the High Court was correct to invalidate the reason for termination only because of flouted procedure, Mr. Magafu was the view that even when the termination is substantively fair, when procedurally is unfair, the conclusion is the same, that it amounts to unfair termination. He thus urged the Court to dismiss the appeal. In rejoinder, the learned advocate for the appellant submitted that the initiator did not participate in passing the verdict of the disciplinary committee, what the initiator did was to propose the relief sought, the opportunity which was equally availed to the respondent. Each one of them proposed sanctions, but the final decision was made by the chairman. Having scrutinized the grounds of appeal, the record before us and the rival arguments of the learned counsel, the contentious matter and major issue for our determination is whether the termination of the respondent was fair in terms of substantive and procedural fairness. We lay the foundation by restating the general rule provided for under section 39 of the ELRA, we deliberately reproduce as follows: "In any proceedings concerning unfair termination o f an empioyee by an employer, the employer shall prove that the termination is fair/' 10

Proving fairness of termination under the provision, the employer has a duty to prove on the balance of probability that there was a valid reason for termination and that the procedures for termination were complied with. The employee's duty is just to allege that the termination was unfair. See, National Microfinance Bank v. Leila Mringo & Others (Civil Appeal No. 30 of 2018) [2020] TZCA 240 (20 May 2020) (TANZLII) where the Court observed as follows: "We agree with the respondents' counsel that section 39 reproduced above, has the effect o f shifting the burden o f proof o f fair termination to the employer in any proceedings concerning unfair termination. In such cases, the employee's duty is sim ply to allege termination and that it was unfair." In this appeal, the record shows that the evidence was given to establish the following undisputed facts: first, the respondent was a senior teller/supervisor teller; second, she had a duty to supervise tellers, including Ms. Happiness Lyimo who was also a teller; third, that Ms. Happiness Lyimo noticed loss in the cash but failed to report; fourth, that the respondent in her capacity as a supervisor, did not notice that loss and report accordingly.

In our view, there is no dispute that the incident occurred which could be a fair reason for termination. However, as the High Court Judge found in the judgment, for such loss to be a fair reason for termination, particularly for the respondent, a thorough investigation was required. Further, in this case, the one who noticed loss and failed to report was a different person (Happiness Lyimo). According to the respondent's evidence, Ms. Lyimo had double roles to play, that is, as a teller and second custodian while the respondent was a first custodian. There is no way to escape the need for investigation to establish on whether gross negligence existed in relation to the respondent and or Happiness Lyimo. In the circumstances, to conclude whether reason for termination existed in relation to the respondent, we find grounds two and four must first be resolved. The two grounds raise the question of whether the investigation was conducted and whether the respondent admitted negligence to the appellant. We have understood, the appellant's counsel admitting that investigation report was not produced and tendered at the CMA. But she defended that the respondent admitted to the offence and hence there was no need for investigation. The basis of her argument on admission is related to the respondent's statement during mitigation at the 12

disciplinary committee where the respondent among other prayers, prayed for lenient punishment. We purposely reproduced her statement earlier on. Statements made during mitigation, do not constitute confession or admission rather serve a purpose of reducing severity of punishment or sentence. Undeniably, there is nowhere in the record where the respondent admitted her charge. Therefore, investigation being a statutory requirement under rule 13 (1) of the Code of Good Practice was inevitable. For ease of reference the provision is reproduced as follows: 13 (1) "the employer shall conduct an investigation to ascertain whether there are grounds for a hearing to be held ? (2) "where a hearing is to be held, the employer shall notify the employee o f the allegations using a form and language that the employee can reasonably understandZ The above excerpt has received thorough interpretation in numerous decisions of the Court including: Enza Zaden Africa Limited v. Edwin Kasena (Civil Appeal No. 427 of 2021) [2023] TZCA 18037 (5 October 2023) (TANZLII); and Severo Mutegeki & Another v. Mamlaka ya Maji Safi na Usafi wa Mazingira Mjini Dodoma (Civil Appeal No. 343 of 2019) [2020] TZCA 310 (19 June 2020) (TANZLII). The decisions

of the Court converged into one conclusion that failure of the employer to conduct investigation vitiated the procedure of termination. We have considered exhibit D2, the appellant's policy on Disciplinary, Capability and Grievance Policy, which reflects the above cited provision. The employer's policy in section 3.1.1 provides as follows: "An investigation w ill be carried out prom ptly and thoroughly into any m atter that is reasonably suspected or believed to contravene any o f the NBC's policies or rules or which may otherwise be a disciplinary matter; Investigation may be carried out by the manager or another appropriate staff member as required by the business, who has had no direct involvem ent with the situation; Except in cases where it is inappropriate for any reason the employee w ill be inform ed that the investigation is taking place and when it has been concluded. Depending on the nature o f the allegations the employee may or may not be involved in the investigation." According to the policy, investigation must be conducted before resolving to convene a disciplinary charge and hearing. It is the 14

investigation report which lays the foundation on whether or not a disciplinary action should be taken. Even if no need of disciplinary action is found, the policy requires the manager to inform the employee in writing as soon as possible. The policy provides further that a disciplinary hearing should be conducted not less than 24 hours after the end of investigation and within 10 working days, not more than 10 working days. As earlier on alluded to, in this appeal the shortage was reported on 15th July, 2017. No investigation was conducted. Ms. Safiel tried to argue that the disciplinary hearing was conducted on 11 September, 2017 which was about two months from the occurrence of the shortage. It was for the appellant to show when the investigation was completed, if any, and whether the disciplinary hearing was conducted within the prescribed time. Since there was no investigation, several questions remained unanswered. Apart from that, during the disciplinary hearing, as shown at page 23 of the proceedings, item 4 on plea, the respondent upon being informed on the charges, denied all the allegations. In the subsequent proceedings, the respondent entered a clear defence of denial to the charges. Ms. Safiel argued that the respondent admitted the charge of 15

gross negligence which Mr. Magafu contended that she never admitted to it, rather she made a mitigation after being convicted and the punishment was proposed by the initiator. We have reviewed the proceedings of the disciplinary committee and the proceedings of CMA, there is nowhere the respondent admitted to the charge of gross negligence. We therefore, find no ground for assuming that the respondent admitted to the charges. In the circumstances, investigation was compulsory, and the High Court was correct in its finding on this aspect. This takes down ground two and four together as unmerited. On the reason for termination which covers ground 1, the appellant relied on the said loss of TZS. 725,000.00 which would stand to be a fair reason for termination. However, Mr. Magafu contradicted the assertion that the ground would be a good reason as against Happiness Lyimo and not the respondent, but still investigation had no exception. It was also testified by the respondent that Happiness Lyimo played double roles, as a cashier and custodian, performing equivalent duties as those of the respondent. The centre of the dispute was that Happiness noticed loss and failed to report within time. We have read exhibit Dl, Branch Operation Manual it provides under section 8.7 that when there is any difference between physical and system balance, the 16

same must be cleared on the same day. It is further provided that if it cannot be resolved, it should be reported to the branch manager. Without thorough investigation as alluded to earlier, how could the reason for termination be established as against the respondent. The argument raised by Ms. Safiel that the High Court erred to invalidate reason for termination, must fall because the law is very particular when the employer intends to terminate an employee. Rule 12 (4) of the Code of Good practice Rules, provide guidance to employers. For ease of reference, we take the liberty to reproduce the rule: 12 (4) 7/7 determining whether or not the termination is the appropriate sanction , the employer should consider - (a) The seriousness o f the m isconduct in the light o f the nature o f the jo b and the circumstances in which it occurred, health and safety and the likelihood o f repetition, or (b) The circumstances o f the employee such as the employee's employment record, length o f service , previous disciplinary record and personal circum stanced It is evident in this appeal that the respondent worked with the appellant for the period of 25 years without any complaint or warning or 17

charge of any kind. What happened as termed gross negligence was the first instance which was caused by Happiness Lyimo who played double role as a teller and custodian. In the circumstances, investigation was inevitable to gather both reason for the appropriate charge and follow the laid down procedures. The High Court Judge critically considered, both substantive fairness and procedural fairness and concluded that both were faulted. Failure of the employer to conduct investigation resulted into erroneous charges which ended up into unfair termination of the respondent. Considering in totality the circumstances of this case, we find no reason to fault the decision of the High Court. We would as well arrive to a similar conclusion that the termination of the respondent was both procedurally and substantively unfair. This being the position, we do not think it is useful to consider whether the disciplinary committee was properly constituted and whether it was not impartial. This is because, the disciplinary hearing would not be convened before investigation. So, whether it was not impartial or otherwise, is immaterial since the convening itself was unprocedural. 18

Having so held, we find no merit on this appeal. We dismiss it entirely. Considering that the appeal is from a labour dispute, we make no order as to costs. DATED at DODOMA this 13th day of October, 2025. G. A. M. NDIKA JUSTICE OF APPEAL P. F. KIHWELO JUSTICE OF APPEAL P. J. NGWEMBE JUSTICE OF APPEAL The Judgment delivered this 13th day of October, 2025 in the presence of Ms. Josephine Safiel learned Counsel for the appellant, Mr. Mathew Kabunga, learned Counsel for the Respondent, via virtual Court and Ms. Christina, Court Clerk; is hereby certified as a true copy of the original. R. W. CHAUNGU DEPUTY REGISTRAR COURT OF APPEAL 19