Compassion International Tanzania vs Nickson Alex (Civil Appeal No. 101 of 2022) [2025] TZCA 814 (6 August 2025)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA (CORAM: MKUYE. J.A., MDEMU. J.A.. And ISSA, J.A.^ CIVIL APPEAL NO. 101 OF 2022 COMPASSION INTERNATIONAL TANZANIA.................................APPELLANT VERSUS NICKSON A L E X ........................................................................... RESPONDENT (Appeal from the decision of the High Court of Tanzania (Labour Division) at Arusha) C Gwae, J.) dated the 30th day of August, 2021 in Revision Application No. 66 of 2020 JUDGMENT OF THE COURT 29th July & 6th August, 2025 ISSA, J.A.: In this appeal, the appellant is challenging the judgment and decree of the High Court of Tanzania (Labour Division) at Arusha which partially confirmed the award given by the Commission for Mediation and Arbitration (the CMA). The following brief background facts will serve the purpose of appreciating the essence of the present appeal. The respondent was employed by the appellant on 12th February, 2013 as Complimentary Intervention Administrator and on 15th March, 2018 he received summons to appear before the Disciplinary Hearing Committee (the Disciplinary Committee) facing the following charges: amending the

already funded proposal without approval on the country level and African level, cloning the expired proposal in violation of the procedures, adding beneficiaries in the house project without informing the facilitator or the implementing church partner and violation of the manual (Employee handbook). The respondent was found guilty and upon conviction, the Disciplinary Committee passed a sanction of a final written warning. Aggrieved with the decision, the respondent appealed to the National Director who is the appellant's Appellate Committee (Appellate Committee) which at the end, substituted the sanction of final warning to that of termination of employment contract. The decision was based on the fact that, the offences which the respondent committed were serious and intolerable for the best interest of the ministry. Dissatisfied with the decision, the respondent filed a labour dispute at the CMA alleging that, his termination from employment by the Appellate Committee was unfair as he was not afforded a right to be heard. He, therefore, sought for a reinstatement. The appellant, on the other hand, contended that the Appellate Committee being the top management organ had the power to overrule the decision of the Disciplinary Committee and replace it with its own decision.

Upon hearing the parties, the CMA delivered its award in favour of the respondent. Under section 40(l)(a) of the Employment Labour Relations Act, Cap. 366 (the ELRA), it ordered the appellant to reinstate the respondent from 1st September, 2020 and to pay him his arrears from 2n d July, 2018 to 1st September, 2020. Aggrieved, the appellant lodged a labour revision at the High Court of Tanzania (Labour Division) at Arusha vide Revision Application No. 66 of 2020. The High Court delivered its decision on 30th August, 2021 in favour of the respondent. It upheld the order of the CMA to reinstate the respondent, but the appellant was given an option that in case it does not want to reinstate the respondent, it should pay him his monthly remuneration from the date of termination to the date of his option not to reinstate him plus 12 months' salary compensation as per section 40(3) of the ELRA. Undaunted, the appellant lodged the instant appeal predicated on seven grounds of appeal which go thus:

1. That, having found that the em ployer did not follow fa ir procedure in term inating the employment o f the respondent, the High Court erred in law and in fact in ordering reinstatem ent o f the respondent
2. That, the High Court erred in law and in fact in holding that the respondent should be reinstated and paid remuneration from

date o f term ination to the date o f reinstatem ent and or payment o f remuneration from date o f termination to the date o f reinstatem ent plus twelve (12) m onths' salary compensation if the appellant does not wish to reinstate the respondent. 3. That, having acknowledged that the respondent's employment was term inated on substantive and valid reasons, the High Court grossly erred in law and in fact to order reinstatem ent o f the respondent 4. That, the High Court grossly erred in law and in fact in holding that the respondent was not afforded right to be heard by Disciplinary Hearing Committee and appellant's Appellate Committee. 5. That, the High Court grossly erred in law and fact in ordering paym ent o f remuneration to the respondent during the entire period he was not at work. 6. That, the High Court failed to properly anayise evidence on record and thereby erroneously confirm ed that the respondent was entitled to reliefs granted by the tria l CMA. 7. That, the documentary exhibits, which were the basis o f the decision in the tria l Commission for Mediation and Arbitration (the CMA) and considered by the High Court on revision, were irregularly admitted. At the hearing of the appeal, the appellant was represented by Mr. Boniface Joseph and Mr. Matuba Nyerembe, learned counsel whereas the respondent had the services of Mr. Philemon Raulencio and Mr. Thomas Kitundu, also learned counsel.

Taking the floor, Mr. Joseph adopted his written submissions filed earlier on and withdrew the 7th ground of appeal. Expounding on the 1st to 6th grounds of appeal, he submitted that in this appeal the appellant faults the CMA and the High Court for ordering reinstatement of the respondent and payment of his entitlements when the CMA on page 564 of the record of appeal confirmed that the respondent violated the company rules and procedures. Further, on page 565 of the record of appeal the CMA confirmed that the Disciplinary Committee had discretion to enter the penalty of final written warning to the respondent. Furthermore, he submitted that this position was not vacated by the High Court. He concluded that the CMA and the High Court erred to order reinstatement when there was substantive fairness and procedural unfairness. On the issue of procedure, Mr. Joseph referred to the termination letter appearing on page 35 of the record of appeal (exhibit D2) which varied the decision of the Disciplinary Committee and sanctioned the termination of employment of the respondent. He argued that, if the CMA and High Court had considered exhibit D2, it would have found that the appellant was heard according to the procedure. Hence, the CMA and High Court would not have ordered a reinstatement. He reinforced his argument by citing the Court's decision in Platinum Credit Ltd v.

Martin Joaqim [2023] TZCA 17740, TANZLII where it held that when an employee was dishonest reinstatement was not a proper remedy. He also referred us to various decisions of the Court in The Guardian Ltd v. Edmund Msangi [2024] TZCA 1117, TANZLII, Robert Shemhilu v. Tanzania Electric Supply Company [2024] TZCA 379, TANZLII, National Microfinance Bank v. Elizabeth Alfared Khairo [2023] TZCA 17490, TANZLII and Kenya Kazi Security (T) Ltd v. Rukia Abdalla Salum [2024] TZCA 90, TANZLII. Lastly, Mr. Joseph submitted that reinstatement was not an option in the instant case and the CMA and High Court should have taken the third option in section 40(l)(c) of the ELRA. He added that the orders of reinstatement and compensation granted were also in contravention of the law as they condemned the employer for the time he was in court's corridor. Mr. Raulencio, on the other hand, submitted that after the respondent was terminated from his employment he preferred a claim to the CMA which found the termination was unfair substantively and procedurally. Further, the revision sought at the High Court was also not successful as the High Court concurred with the CMA that, the termination was unfair substantively and procedurally. He prayed for this appeal to be dismissed.

In the determination of this appeal, the Court will start with the 1st and 3rd grounds of appeal together which deal with the issue of reinstatement. With regard to these grounds, the appellant faulted the CMA and High Court for ordering reinstatement of the respondent. Mr. Joseph argued that the appellant had a valid and fair reason for termination of the respondent's employment contract as correctly held by the CMA at pages 552 to 568 of the record of appeal. The Disciplinary Committee found the respondent guilty of gross violation of the appellant's procedures as the respondent cloned proposal without authorization, amended proposal by adding illegal beneficiaries and violated the company's policy by overriding his supervisor. Hence, it recommended final written warning be issued to the respondent. On appeal, the Appellate Committee found the respondent guilty of gross misconduct and therefore terminated the respondent's employment contract. Mr. Joseph added that it is trite law that when there is procedural unfairness but there is valid and fair reason for termination, the CMA cannot order reinstatement. Instead, it can order compensation. He bolstered his argument by citing the decision of the High Court in Vedastus S. Ntulanyenka and 6 Others v. Mohamed Trans Ltd [2014] TZHC 2354, TANZLII.

Further, he argued that rule 32(2)(d) of the Labour Institutions (Mediation and Arbitration Guidelines) Rules of 2007 (GN No. 67 of 2007) was also contravened. This rule provides that an arbitrator cannot order reinstatement where there is fair and valid reason for termination of employment contract. Finally, he prayed to this Court to allow the appeal and quash the entire judgment and decree of the High Court and award of the CMA. Responding to the 1st and 3rd grounds of appeal, Mr. Raulencio submitted that, the termination was unfair both substantially and procedurally. Further, he submitted that during hearing of the appeal there were several irregularities observed. The respondent was not called to defend himself against new charges. In fact, he submitted that the respondent was terminated not because of what was found by the Disciplinary Committee rather on the new charge and new investigation which was conducted afterwards. When the Court probed Mr. Raulencio to point out those new charges, he admitted that the charges were not there in the record of appeal. He concluded that the appeal has no merit and should be dismissed. On our part, upon examination of these grounds of appeal we found that the issue in contention is one of reinstatement and the crux of the matter is whether the CMA and the High Court were right in ordering

reinstatement in the existing circumstances. Starting with the facts of the case, there is no dispute that the respondent was summoned before the Disciplinary Committee for gross violation of the appellant's procedures. He was accused of cloning proposal without authorization, amending proposal by adding illegal beneficiaries and violating the company's policy by overriding his supervisor. The Disciplinary Committee found him guilty of gross misconducts and sanctioned him with the finalwrittenwarning. The respondent was not amused; hence, he lodged his appeal to the Appellate Committee which overturned the decision of the Disciplinary Committee and ordered termination of his contract of employment. Now, coming to the position of law our starting point is section 37 of the ELRA which provides: " 37 (1) It sh all be unlawful for an em ployer to terminate the employment o f an employee unfairly. (2) A term ination o f employment by an em ployer is unfair if the em ployer fails to prove - (a) that the reason for termination is valid (b) that the reason is a fa ir reason - (i) related to the employee's conduct, capacity or com patibility, or (ii) based on the operational requirem ents o f the employer, and

(c) that the employment was term inated in accordance with a fa ir procedure. (3) N/A (4) N/A (5) N/A". This provision entails that for the termination to be fair, it must be fair both substantively as well as procedurally. On the substantive part, it must be proved that the employer had a valid reason for termination or that the reason is a fair reason based on the employee's conduct, capacity or compatibility, or that it is based on the operational requirement of the employer. Glancing on the record of appeal, the CMA on page 553 of the record enumerated the charges leveled against the respondent before the Disciplinary Committee. These charges were: "The applicant was term inated after being accused for three allegations. The charge sheet was adm itted as exh. PI. Allegations were amending the already funded proposal without PW1 's approval on the country level, and African level approval; cloning the expired proposal in violations o f the procedures, and adding beneficiaries in the house project without inform ing the facilitator or the implementing church partner, and violation o f the manual (Employee handbook)". 10

The record further shows that the CMA framed three issues for determination: one, whether there was valid reason for termination, two, whether the appellate chairperson of the disciplinary hearing was procedurally fair, and three, what remedy each party was entitled. In answering the first issue on whether there was a valid reason for termination, the CMA's finding is seen on page 563 and 564 of the record of appeal where the CMA stated: "On the substantive fairness, this Commission has noted three questions to be discussed and these are; was it proven that the applicant violated work procedures, was the fin al warning an appropriate penalty, and was the term ination decision by the Appellate Chairman fair... Therefore, the Commission finds the respondent to have proved on the balance o fprobability that the applicant was in violation o f the company procedures." From this finding, it is clear that the first question posed was answered in the affirmative. There was a valid reason for termination of the respondent contract of employment. With regard to the second question, it was also answered in the affirmative as the CMA observed on page 565 of the record of appeal that: "Since the applicant was fa irly found guilty o f gross violation o fprocedures, the disciplinary hearing Committee was right to enter the penalty for final written warning. In ii

this situation the Committee h ad d iscre tio n to recom m end fin a l w ritte n w arning o r d ism issa l b u t it chose th e p rio r. "^Emphasis supplied ). Unfortunately, that was the end of the matter with respect to the Disciplinary Committee. The CMA did not discuss the procedure used by the Disciplinary Committee whether it was fair or not. Taking into account that no party complained of the procedure before the Disciplinary Committee, it is our take that the procedure was also fair. On the third posed question, the CMA found that the decision of the Appellate Committee was unfair. It stated: "It has been gathered in evidence that after the applicant appealed, the Appellate Chairman suspended him pending investigation. No any interrogation was made with the applicant in such investigation. However, the appellate chairman adm its that she conducted investigation, heard witnesses and gathered new evidence without hearing the applicant. From there she was in the position to conclude that the applicant was entitled to be terminated. Out rightly, this was a blatant violation o f the fa ir procedures and violation o f the right to be heard." Based on these violations, the CMA came to the conclusion that the appellant's termination was unfair in both limbs; substantive and procedurally. The High Court also confirmed this finding. 12

It is our considered view that the CMA's decision was not based on the evidence on record. There were no new charges which featured on the record, there was no investigation report, there was no list of witnesses who testified before the Appellate Committee, there was no proceedings of the Appellate Committee. In fact, there is nothing in the record of appeal to prove that the respondent was re-charged or re investigated by the Appellate Committee. What we have on record is the letter of termination of the Appellate Committee which is worth to reproduce here. It reads: "2ndJu ly 2018 Dear Nickson, RE: OUTCOME OF YOUR APPEAL: TERMINATION OF EMPLOYMENT CONTRACT Am w riting in reference to your appeal against the decision o f a disciplinary committee after a disciplinary hearing held on l9 h March 2018 to which you pleaded guilty o f the allegation as m entioned in the outcome o f the hearing. The decision o f the committee was Final Written Warning. You were aggrieved by the decision o f the disciplinary committee hence you presented your appeal before me. A fter hearing your appeal, I have re vie w e d th e h e arin g p ro ce e d in g s a n d evid ence docum ents you 13

p re se n te d fo r yo u r defense a g a in st th e evidence p ro d u ced b y th e p ro se cu tio n sid e . A fter a thorough analysis I found out that offences com m itted are serious in nature and may not be tolerated for the best interest o f the m inistry. Also, while your appeal is being determined. I found out serious evidence o f your incom patibility with the m inistry. In the totality o f the foregone I hereby depart from the decision o f disciplinary hearing held on I9 h March 2018 which recommended a final written warning and replace it with term ination o f your employment contract with Compassion International Tanzania with immediate effect..." The above letter clearly demonstrated that the Appellate Committee reviewed the proceedings before the Disciplinary Committee as well as all documents presented by the respondent and appellant and finally came to its own conclusion to terminate the respondent. Therefore, this is to say the basis for the decision of the Appellate Committee was in the same charge in which the respondent was found guilty by the Disciplinary Committee. We agree with the learned counsel for appellant that, if the CMA and the High Court had considered this document it would not have reached to that decision. All in all, we agree that there was a valid reason for termination and hence the termination was substantively fair. 14

With regard to the procedural fairness, the record is very clear that the respondent was not called before the appellate authority, hence, was not accorded his right to be heard. We, therefore, agree with the CMA and the High Court that the procedure for termination was unfair. Having found that the termination was substantively fair and procedurally unfair, what is the way forward. The remedies for unfair termination are found in section 40 (1) of the ELRA which states: " Where an arbitrator or Labour Court finds a term ination is unfair, the arbitrator or Court may order the em ployer - (a) to reinstate the employee from the date the employee was term inated without loss o f remuneration during the period that the employee was absent from work due to the unfair term ination; or (b) to re-engage the employee on any terms that the arbitrator or court may decide; or (c) to pay compensation to the employee o f not less that twelve months rem uneration." Under this provision, the arbitrator or the Labour Court has discretion to grant one of the remedies laid down in the provision. The import of section 40 is well settled. In National Microfinance Bank v. Leila Mringo and 2 Others [2020] TZCA 240, TANZLII the Court stated: "We are settled in our m ind that reinstatem ent or re engagement or compensation in subsection (1) (a), (b) and 15

(c) o f section 40 o f the ELRA [respectively] m ust be read disjunctively. The 'o r' in the subsection is not conjunctive, it is disjunctive... We thus agree with Mr. KamaIa that by ordering reinstatem ent and compensation o f twelve m onths' salaries conjunctively, the High Court fe ll into error. It should have ordered disjunctively as the CMA did." (See also National Microfinance Bank Pic v. Elizabeth Alfred Khairo [2023] TZCA 17490, TANZLII. In addition to the above settled position, there are some guidelines from Regulations and case law to guide the courts in exercising their discretion. One of such rule is rule 32(2) of the GN. No. 67 of 2007 which provide for the circumstances under which those reliefs may be awarded including reinstatement. Rule 32 (2) provides: "32 (2) The arbitrator shall not order reinstatem ent or re engagement where - (a) the employee does not wish to be reinstated 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 em ployer to re instate or re-engage the employee, or (d) the term ination is unfair because the em ployer did not follow a fa ir procedure. 16

Paragraph (b) and (d) of the rule 32 (2) of GN. No. 67 of 2007 apply to the situation in hand because: one, the circumstances surrounding the termination involved violations of rules and procedures, failure to consult the supervisors in important matters and indiscipline in working environment which makes continued working relations intolerable. Two, as observed earlier, there was valid reason for termination of the respondent contract of employment, the flaw was on the procedure. Hence, it was improper for the CMA and the High Court to order the reinstatement in such circumstances. Leaping to the case law, the Court in Felician Rutwaza v. World Vision Tanzania [2021] TZCA 2, TANZLII endorsed the decision of the High Court in Sodetra (SPRL) Ltd v. Njellu Mezza and another, Revision No. 207 of 2008 (unreported) about the deserving reliefs where a termination is only procedurally unfair. In Sodetra the High Court observed: "... The arbitrator is mandated not to order reinstatem ent where term ination is unfair because the em ployer did not follow a fa ir procedure... the dear intention o f the above is to make consequences o f substantive unfairness direr than those o f procedural unfairness... The arbitrator who has found unfair termination, has the discretion to award an appropriate amount o f compensation found fa ir and just to both parties. Section 40 (l)(c) does not mandate the 17

arbitrator to order compensation o f twelve (12) pay in a ll cases o f unfair term ination." Mr. Joseph has cited to us another persuasive decision of the High Court in Vedastus S. Ntulanyenka and 6 Others (supra) where the court discussed what to be done in a case of substantive fairness and procedural unfairness. It stated: " ... Nevertheless ,, the respondent's failure to follow fa ir procedure or procedural fairness does not thwart the naked fact that there was substantive fairness in term inating the applicant's employees as discussed in this judgm ent. C 'e st a dire [that is to say] the respondent had a fa ir and valid reason to terminate the applicant's employees. Now since the respondent did not follow a fa ir procedure, the commission was right to order compensation to the applicant according to the circum stances o f the case and not reinstatem ent o f the applicants to their employments...". We agree with the above authority which stipulated a correct position of law. In the event and for the stated reasons, we set aside the relief of reinstatement or payment of monthly remuneration from the date of termination to the date of opting not to reinstate him plus 12 month's salary compensation. Instead, given the circumstances of this case we order compensation of twelve months remuneration following unfair termination of the respondent. 18

All said and done, the determination of the remaining grounds of appeal is unnecessary as we allow the appeal on the 1st and 3rd grounds of appeal. Since this appeal is a labour matter, there is no order as to costs. DATED at ARUSHA this 5th day of August, 2025. R. K. MKUYE JUSTICE OF APPEAL G. J. MDEMU JUSTICE OF APPEAL A. A. ISSA JUSTICE OF APPEAL The Judgment delivered this 6th day of August, 2025 in the presence of Mr. Erasto John, learned Counsel for the Appellant and Mr. Matuba Nyirembe, learned Counsel holding brief for Mr. Thomas Kitundu, learned Counsel for the Respondent, is hereby certified as a true copy of the original. R. W. CHAUNGU DEPUTY REGISTRAR COURT OF APPEAL