Jacquiline Mushi vs Stanbic Bank Tanzania Limited (Civil Appeal No. 189 of 2023) [2025] TZCA 1005 (30 September 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM f COR AM: SEHEL. 3.A.. KHAMIS, J.A. And AGATHO, 3.A1 CIVIL APPEAL NO. 189 OF 2023 JACQUILINE M USHI ......... .................................................... APPELLANT VERSUS STANBIC BANK TANZANIA LIMITED ........................... ....... RESPONDENT (Appeal from the decision of the High Court of Tanzania, Labour Division at Dares Salaam) f Moanaa. J.> dated the 25th day of October, 2022 in Consolidated Labour Revision No. 233 & 263 of 2016 JUDGMENT OF THE COURT 21st March & 30th September, 2025 KHAMIS, 3,A.: The appellant, Jacquiline Mushi, was employed by Stanbic Bank Tanzania Limited, the respondent, on 16th July, 2008 as a Global Markets Sales Manager earning a monthly salary of TZS 8,500,000.00. She worked for fourteen (14) years and five (5) months until 9th November, 2012 when her employment was terminated for gross misconduct. She was aggrieved by the termination and instituted a dispute in the Commission for Mediation and Arbitration (the CMA) alleging that

there was no valid reason for the termination and the procedure was flawed. She prayed for an order of reinstatement and damages for unfair termination. The respondent denied liability and countered that, the appellant failed to give sufficient explanation on the allegations levelled against her, namely: one, between 15th November, 2011 and 9th September, 2012, she colluded with another bank staff, Maria Rajabu and an employee of the bank's customer, Williamson Diamond Limited (WDL) to defraud the bank the sum of TZS 1,095,845,000,00; two, misrepresentation of her academic credentials. It therefore prayed for dismissal of the dispute. Having heard the parties, the trial arbitrator (P.M. Chuwa) delivered the award on 6th day of June, 2018 ordering the appellant's reinstatement and payment of TZS 569,500,000.00 as salaries due for the period between termination and reinstatement. The respondent successfully preferred an application for revision in the High Court on four grounds. On 31s t day of December, 2019 Ngwembe, J (as he then was) applied section 86 (7) of the Employment and Labour Relations Act (the ELRA) to find that the CMA had no jurisdiction because the parties failed to refer the dispute to arbitration after an unsuccessful mediation. Accordingly,

the proceedings and award of the CMA were nullified and parties were left with liberty to act in accordance to law. On 26th February, 2020 the appellant lawfully referred the dispute to arbitration, as evidenced by the notice (CMA F.8) at page 54 of the appeal record. The dispute was heard afresh before a new arbitrator (G.M Wilbard) who rendered the impugned award on 10th June, 2022. The CMA found the termination was substantively fair but procedurally unfair. The appellant was awarded a compensation of 18 months' salaries while the respondent was ordered to clear her name with the Tanzania Bankers Association (the TBA) where she was allegedly blacklisted. Both parties were dissatisfied by the CMA award and preferred separate applications for revision in the High Court, Labour Division. Whereas the appellant lodged Labour Revision No. 233 of 2022, the respondent instituted Labour Revision No. 263 of 2022. The appellant faulted the trial arbitrator for awarding 18 months' compensation despite overwhelming evidence showing that: she was illegally charged, prosecuted and terminated; the disciplinary hearing was unfairly conducted; the respondent's report to the TBA led to her being blacklisted, resulting in a 10 year employment ban; and lastly, the termination was maliciously done.

On the other hand, the respondent faulted the award for being tainted with material irregularities allegedly because: an 18 months compensation was not justified as the termination was solely procedurally unfair; charging the appellant in a criminal case before termination did not render the termination unfair; and lastly, the order to clear the respondent's name with the TBA was unwarranted, as there was no evidence that the respondent made the report. Having consolidated the two applications, the High Court (Mganga, J.) dismissed Labour Revision No. 233 of 2022 for lack of merits and allowed Labour Revision No. 263 of 2022. In the process, the Judge found the termination was substantively fair but procedurally unfair and thus, reduced the compensation from 18 months to 4 months' remuneration. He found no evidence to support the alleged blacklisting with the TBA and further held that, the arbitrator lacked jurisdiction to decide the issue. Disgruntled by the High Court's findings, the appellant preferred this appeal geared to impugn the findings of the learned Judge on four grounds, to wit: one, reducing the compensation for unfair termination from 18 months to 4 months without assigning reasons; two, finding the termination was substantively fair; three, finding the appellant was not criminally charged at the time of her termination; and four, holding that

the arbitrator had no jurisdiction to order clearance of the appellant's name from the list of the TBA. At the outset, it is pertinent that we set out the essential facts that may illuminate the nature of the issues involved in this appeal. As earlier on stated, the appellant was employed as Global Sales Manager at the Head Office of the respondent bank. She was reporting to the Head of Global Markets. Subsequently, she was promoted to become the Head of Global Market Sales. Her duties, inter alia, was to agree on the trade exchange rates between the respondent and its customers. One of such customers was WDL who sought the respondent's services on the foreign exchange rates. As it transpired, the WDL complained that, TZS 1,095,845,000.00 equivalent to USD 522,000 was missing from its dealing with the respondent bank, Following internal investigations, the respondent established that, there was short crediting of the sum agreed between the appellant and the WDL officers. It was revealed that, there was a collusion orchestrated by the appellant, Maria Rajabu (an employee of the respondent based in Mwanza branch) and one Omary Mwinyidadi, an employee of the WDL. In a recorded phone call involving the appellant and Maria Rajabu without the latter's knowledge, Maria Rajabu opened up to implicate the

appellant for the fraudulent scheme which connected Omary Mwinyidadi. She went ahead to disclose unconventional means to ensure the scheme was not detected. She alleged that, TZS 100,000,000.00 was required to silence the director of the WDL who discovered the deal. She proceeded to detail the methods the trio used to keep the deal confidential. Following such discoveries, the appellant was suspended on 6th November, 2012 and subjected to a disciplinary hearing on 8th November, 2012. Two charges were thrown at her feet: colluding with Maria Rajabu and Omary Mwinyidadi (WDL accountant) to defraud the bank a sum of TZS 1,095,845,000.00 and misrepresentation of her academic credentials. In a written response to the charges, the appellant denied the accusations and sought an access to the record of WDL transactions to enable her mount a sound defence. Meanwhile, the second charge on misrepresentation of academic credentials was abandoned at the hearing stage. Upon hearing, the panel established the appellant's participation in a fraud which caused the respondent's financial and reputational loss. The panel arrived at a verdict that, the appellant was guilty of gross misconduct and recommended her termination with immediate effect.

She was accordingly terminated for gross misconduct on 9th November, 2012 . At the hearing of this appeal both parties were represented. Whereas Mr. Kobas Odhiambo, learned advocate, appeared for the appellant, the respondent enjoyed the services of Mr. Arbogast Mseke, also learned advocate. At the outset, Mr. Odhiambo abandoned the third ground of appeal and focused on the first, second and fourth grounds. However, we must also address the validity of the second ground of appeal at this stage, as it is based on an issue that was never raised by the parties in the High Court. We noted at page 1146 of the record that, the (earned Judge analyzed the evidence adduced at the CMA and found the respondent had a valid reason for termination. However, this finding had no roots to the parties' pleadings filed in the High Court. The record shows the parties' respective grounds of revision were centered on the procedural aspects and not substantive facet of the termination as perceived by the learned Judge at page 1140 of the record. The chamber summonses and the affidavits at pages 697, 702, 703, 877 and 882 of the record are very clear on this. ‘ V /

In Rungwe Freight & Another v. International Commercial Bank Ltd [2019] TZCA 635 we cited with approval the High Court decision in Agro Industries Ltd v. Attorney General [1990 - 1994] 1 EA 1 for the legal stance that, the court may base its decision on an unpleaded issue if it appears from the course of the trial that the issue was left to the court for determination so long as it allows the parties to address it accordingly. In this appeal, validity of the reason for termination was not raised by the parties through their respective applications for revision. Instead, the issue was picked by the learned Judge while composing the impugned decision. However, he did not invite the parties to address him on it. Given the circumstances, the High Court's decision was made in error and we therefore, strike out the second ground of appeal as improperly raised. Addressing the Court on the first ground of appeal, Mr. Odhiambo submitted that, the learned Judge erroneously reduced the compensation from 18 to 4 months. He cited section 40 (1) of the Employment and Labour Relations Act [the ELRA] and argued that, the High Court was required to order compensation of not less than twelve months' remuneration. 8

The learned counsel contended that, the High Court failed to judiciously exercise its discretion in awarding a fair compensation to the appellant. He referred us at pages 1121 to 1158 of the record which encompasses the impugned High Court decision and argued that, contrary to the CMA award reflected at pages 671 to 690, the High Court failed to assign reasons for reducing the compensation from 18 to 4 months remuneration. For emphasis, reliance was placed on Veneranda Maro & Another v. Arusha International Conference Centre [2022] TZCA 37 for the proposition that, where the arbitrator or the High Court fails to exercise his discretion on awarding the appropriate compensation, the higher courts can interfere. On the fourth ground of appeal, Mr. Odhiambo submitted that, the learned Judge misdirected himself in holding that the arbitrator had no jurisdiction to order removal of the appellant's name from the list of persons black listed with the TBA. He contended that, since the arbitrator had the powers to determine fairness of the termination, he could also determine the blacklisting allegation. Along that line, he referred us to the evidence of PW2 and exhibit J5 which were allegedly ignored by the High Court. 9

He further referred us at page 1156 of the record where the High Court concluded that, the CMA was not properly moved through Form No. 1 for an order to compel the respondent to remove the appellant's name from the list of blacklisted persons with the TBA. He added that, the Judge wrongly reversed the CMA decision on the point and urged us to restore the arbitrator's reasoning and the findings related to removal of the appellant's name from the list of blacklisted persons with the TBA. For the respondent, it was submitted by Mr. Mseke that, the High Court was justified in reducing the compensation from 18 to 4 months' remuneration on the ground that the unfairness of termination was only on the procedure. He argued that, the CMA found a valid reason but faulted the procedure employed to terminate the appellant. In his view, the sum awarded by the CMA was excessively high and invited us to hold so. Reliance was placed on the case of Felician Rutwaza v. World Vision Tanzania [2021] TZCA 2 where the Court agreed with the High Court Judge who reduced the compensation from 12 to 3 months' remuneration on the ground that the reasons for termination were valid and fair. 10

The learned counsel distinguished the case of Veneranda Maro (supra) as it dealt with both substantive and procedural unfairness of termination. He strongly opposed the assertion that, the Judge failed to assign reasons for reducing the amount of compensation. To that end, he referred us at pages 1147 to 1151 inclusive of the record of appeal where the extent of procedural unfairness and quantum of compensation were addressed. He maintained that, the reasons for the decision were given by the Judge at pages 1140 and 1141 of the record and urged us to find that, the same could not be faulted. On the fourth ground of appeal, Mr. Mseke submitted that, the learned Judge was correct to find the arbitrator had no jurisdiction to order removal of the appellant's name from the list of persons blacklisted with the TBA. He argued that, the banking industry requires a high degree of trust and has no room for unfaithful employees. He insisted that, the banking industry rules demands reporting of unfaithful employees to the Bank of Tanzania (BOT). On that ground, the counsel argued, there was no harm in reporting the appellant at the TBA since she was found guilty of gross misconduct although the TBA was not a creature of the respondent. u

In conclusion, the respondent's counsel submitted that, the impugned decision of the High Court was properly made. Accordingly, he urged this Court to dismiss the appeal and uphold the findings of the High Court. On rejoinder, Mr. Odhiambo reiterated his earlier submissions on the first and fourth grounds of appeal. He conceded that the issue regarding blacklisting of the appellant with the TBA was not pleaded in the CMA Form No. 1 but was quick to submit that, the same did not occasion a failure of justice. He argued that, the issue had a direct consequence on the acts of the respondent which the arbitrator had jurisdiction to determine. On the other hand, the appellant's counsel reasoned that the decisions of the Court in the cases of Felician Rutwaza (supra) and Kenya Kazi Security (T) Limited v. Rukia Abdallah Salum [2024] TZCA 90 were distinguishable from the instant matter which requires an award of compensation beyond the minimum 12 months' remuneration provided for under section 40 (1) (c) of the ELRA. This appeal arises from the decision of the High Court on a labour dispute that originated at the CMA. In terms of section 57 of the Labour Institutions Act (LIA), this Court is empowered to examine the findings of 12

the High Court and make determination on a point of law only. This legal stance was also observed by the Court in Impala Warehouse & Logistics (T) Ltd v. Samwel Kayombo & Others [2025] TZCA 948. In the instant appeal, it is not disputed that the appellant was employed by the respondent as its Head, Global Markets Sales for fourteen (14) years and five (5) months until on 9th November, 2012 when she was terminated. It is also uncontested that her termination was procedurally unfair but substantively fair. The issues that fall for our determination are thus, twofold: one, whether the High Court was justified in reducing the amount of compensation from 18 to 4 months' remuneration; and two, whether the High Court properly found the arbitrator had no jurisdiction to order removal of the appellant's name from the TBA blacklist. We propose to start with the second issue. It is on record that, the High Court dealt with this issue at pages 1154, 1155 and 1156 of the record of appeal. In so doing, the revisional Judge referred to the appellant's complaint that the respondent made a malicious report to the TBA hence the blacklisting. He observed that, the evidence adduced at the CMA did not disclose as to who had specifically made such a report to

the TBA on behalf of the respondent. To conclude the issue, he stated that: '7 find that the complaint by the employee is unjustifiable. More so, the arbitrator had no power to issue the order directing the employer to remove the name o f the employee from the list o f the persons blacklisted. I am o f that position because in the referral form (CMA FI), the employee did not indicate that she was also praying for an order to be issued to the employer requiring the latter to remove her name (the employee) from the list o f blacklisted persons..." The CMA award runs from page 671 to 690 of the record and addressed four recorded issues: one, whether the respondent had a valid reason to terminate the appellant; two, whether the termination was procedurally fair; three, whether the appellant suffered damages and to what extent; and, four, the reliefs that parties were entitled to. On the first issue, the arbitrator found the respondent had a valid reason for termination. On the second issue, the arbitrator concluded that, the procedure for termination was flawed. Regarding the third issue, the CMA found that, much as the termination was procedurally unfair, the appellant failed to prove the negative effects of termination. Addressing the reliefs that parties were entitled to, the arbitrator ordered 18 months' 14

remuneration as compensation for unfair termination and the respondent to clear the appellant's name with the TBA. It should be noted that, in Labour Revision No. 263 of 2022, the respondent advanced three grounds to fault the CMA award. One of the grounds was a complaint that, the arbitrator erred in law and facts for ordering it to clear the appellant's name with the TBA. In a counter affidavit deposed by the appellant in opposition to the respondent's allegations, she stated that: "14.01 do not agree on the contents o fparagraph 18 o f the affidavit. I wish to state the Mowing: (i) N/A (ii) N/A (Hi) That the applicant (the respondent) iiiegaiiy and maliciously reported me to the Tanzania Bankers Association and I was blacklisted for 10 years. During ail this period I was prevented to secure any employment with similar employer and or any other employer." This issue should not detain us for two main reasons. One, as rightly observed by the learned Judge, the appellant did not enlist the respondent's report to the TBA as one of the complaints in the CMA Form No. 1 which initiated the dispute at the CMA; two, the arbitrator made an 15

order which adversely affected the TBA which was not a party to the proceedings. It is an established law that a court cannot make an order that legally binds a person who is not a party to the case without first giving him the opportunity to be heard. It cannot simply issue an order against someone who is a stranger to the proceedings. This is aimed at ensuring fairness and due process, preventing adverse decisions against individuals who had no notice or chance to defend themselves. This legal stance was restated by the Court in Abdulatif Mohamed Hamis v. Meboob Yusuf Othman & Another [2018] TZCA 25. See aiso Afriscan Group (T) Limited v. David Joseph Mahende & Another [2014] TZHC 3155. Similarly, a court cannot decide an issue not pleaded by the parties as its decisions must be confined to the issues raised in the pleadings and the evidence. See our decision in Christian Makondoro v. Inspector General of Police & Another [2021] TZCA 30. Our review of the record revealed that the appellant did not raise the issue on the respondent's alleged report to the TBA through CMA F.l. Furthermore, we noted that the TBA was not a party to the CMA proceedings, rendering it unrelated to the dispute. Given that the TBA was not a party to the proceedings and was not afforded an opportunity to be heard, the High Court's findings

cannot be faulted. For this reason, the fourth ground of appeal is dismissed. The first issue relates to the first ground of appeal, whether the High Court was justified in reducing the amount of compensation from 18 to 4 months' remuneration. In the impugned judgment, the learned Judge cited Felician Rutwaza (supra) and Veneranda Maro (supra) for the proposition that, when termination is unfair procedurally only, the employee may be compensated for less than twelve months' remuneration. In his view, there was no justification in compensating the appellant with 18 months' remuneration. At page 1154 of the record of appeal, the Judge concluded that, the compensation of four months' remuneration was sufficient for the appellant. It is indisputable that the appellant's employment was unlawfully terminated and therefore, entitled to compensation in terms of section 40 (1) (c) of the ELRA. The relevant provision before the revision edition 2023 came into force reads: "40 (1) Where an arbitrator or Labour Court finds a termination is unfair, the arbitrator or Court may order the employer: (a) N/A (b) N/A

(c) To pay compensation to the employee o fnot less than twelve months'remuneration. (d) Where an order o f reinstatement or re engagement is made by an arbitrator or Court and the employer decides not to reinstate or re-engage the employee, the employer shall pay compensation o f twelve months'wages in addition to wages due and other benefits from the date o f unfair termination to the date o f final paym ent" The provision reproduced above has been interpreted by the Court in several cases. In Felician Rutwaza (supra) the Court subscribed to the High Court decision in Sodetra (SPRL) Ltd v. Mezza & Another, Labour Revision No. 207 of 2008 (unreported) that, the provisions of the ELRA gives a distinct impression that, the law abhors substantive unfairness more than procedural unfairness and the remedy for the former is heavier than the latter. Accordingly, it upheld the High Court decision which reduced the compensation from 12 months' remuneration to 3 months' remuneration. In Veneranda Maro (supra), the Court referred to Felician Rutwaza (supra), Sodetra (SPRL) (supra) and Pangea Minerals Limited v. Gwandu Majali, Civil Appeal No. 504 of 2020 (unreported) in observing that, substantive unfairness attracts heavier penalty than 18

procedural unfairness. It further observed that, the ELRA established a floor of 12 months' remuneration for compensation but imposed no ceiling. The Court emphasized that, the arbitrator and the Labour Court must exercise their discretion judiciously when assessing compensation, considering all relevant factors and circumstances of the case. If discretion is not exercised judiciously, the appellate court has the authority to intervene. In Emmanuel Shio & Others v. Resolution Insurance Limited [2024] TZCA 151 the Court held that: "We make a finding, as the CMA did, that a compensation o f 12 months' remuneration is reasonable in the circumstances. As we recently observed in Tanzania Cigarette Company Limited v. Lucy Mandara, Civil Appeal No. 187 o f 2021 (unreported), this is the minimum compensation awardable in the event o f unfair termination under section 40 (1) (c) o f the ELRA..." In the instant matter, the question is whether the learned High Court Judge acted judiciously in reducing the compensation from 18 to 4 months' remuneration. To appreciate it better, we find it apposite to begin with the CMA findings on the issue. 19

The arbitrator awarded 18 months' remuneration as compensation, citing the severity of the allegations against the appellant and the resulting loss of trust as justification. For the emphasis, he cited Charles Mwita Siaga v. National Microfinance Bank PLC, Civil Appeal No. 112 of 2002 for the proposition that, when trust is lost between an employer and employee, reinstatement is often not feasible. He pointed out that the awarded sum was reasonable considering the procedural lapse was quite extensive. Further, the arbitrator appraised that, the appellant was cleared of the charges in the criminal case which were similar to the offences preferred against her in the disciplinary proceedings. On the other hand, when the High Court reduced the amount of compensation it stated at page 1154 of the record, thus. "I have read the CMA award and find as explained hereinabove that, there was no justification offered by the arbitrator in awarding the employee to be compensated 18 months' salaries. It is my view that based on the circumstances o f the application at hand, the employee is entitled to payment o f four (4) months' salaries as compensation for unfair termination. According evidence o f the employee, her last salary was TZS 8.500.000. She is therefore entitled to be paid TZS 34.000.000.00." 20

From the reasons given by the arbitrator and the excerpt from the impugned decision of the High Court as reproduced above, the following points are apparent: one, the learned Judge found the arbitrator offered no justification for awarding the 18 months' compensation. In our view, this finding did not match squarely with the facts on record. Had the High Court thoroughly scrutinized the CMA award particularly at page 689 of the record, it would have arrived at a different conclusion; two, apart from a blanket statement regarding "the circumstances o f the application..." the learned Judge did not assign reasons for departing from the findings of the CMA on the sum awarded; and, three, the Judge did not analyze each of the reasons given by the arbitrator to arrive at a finding that they were not justified. In the circumstances, we are satisfied that the High Court failed to take into account matters which it should have considered and therefore, arrived at a wrong conclusion. In view of that, it is evident that the learned High Court Judge did not properly exercise his discretion in reducing the amount of compensation awarded by the CMA. We therefore allow the first ground of appeal and as a result, quash the impugned judgment of the High Court. 21

In light of the arbitrator's reasoning at page 689 of the record, we find that, an award of 12 months' remuneration as compensation is reasonable under the circumstances. The appeal is granted to the extent specified. As this is a labour matter, each party will bear own costs. It is so ordered. DATED at DODOMA this 22n d day of September, 2025. B. M. A. SEHEL JUSTICE OF APPEAL A. S. KHAMIS JUSTICE OF APPEAL U. J. AGATHO JUSTICE OF APPEAL The Judgment delivered this 30th day of September, 2025 in the presence of Mr. Odhiambo Kobas, learned counsel for the Appellant, Mr. Arbogast Mseke, learned counsel of the Respondent via virtual Court and Christina, Court Clerk; is hereby certified as a true copy of the original. R. W. CHAUNGU DEPUTY REGISTRAR COURT OF APPEAL 22