Amos Logani Masuruali vs Sunshine Industrial Company Limited (Civil Appeal No. 439 of 2022) [2024] TZCA 1290 (16 December 2024)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA fCORAM: LILA. 3.A., MURUKE. J.A. And MDEMU, J.AJ CIVIL APPEAL NO. 439 OF 2022 AMOS LOGANI MASURUALI .............................. .....................APPELLANT VERSUS SUNSHINE INDUSTRIAL COMPANY LIMITED ............................... RESPONDENT (Appeal from the decision of the High Court of Tanzania, at Dodoma) fKalombola, J.) dated the 13th day of December, 2018 in Labour Revision No. 19 of 2017 JUDGMENT OF THE COURT 10th & 16th December, 2024 MDEMU. 3.A.: The appellant is before this Court challenging the decision of the High Court of Tanzania at Dodoma, which refused to award him compensation after it had found that he was unfairly terminated from employment by the respondent. On 23rd May, 2017 the appellant, who was employed as a driver by the respondent, was terminated from employment on proven disciplinary charges by the disciplinary committee. The charges were on negligence and misconducts leading to mechanical vehicle destruction and also cheating to the employer. The appellant was thus terminated and paid his terminal

benefits in terms of section 44 (1) of the Employment and Labour Relations Act, Cap. 266. The appellant thought to have been unfairly terminated by the respondent company. He henceforth referred the matter to the Commission for Mediation and Arbitration (the CMA). The mediation at the CMA went unsuccessful, thus the arbitral proceedings had to commence forthwith. On 9th October, 2017 the CMA dismissed the appellant's complaint on account that, his termination by the respondent was on fair reasons and followed proper procedures. Dissatisfied with the CMA's award, the appellant rushed to the High Court on revision, mainly fronting unfair termination basing on the disciplinary charges. His complaint was that, the three punitive warnings and reprimand arrived at by the respondent for the alleged disciplinary offences, were substantively and procedurally unfair. The High Court thus heard him and also heard the respondent and, in the end, it made the following findings on 13th December, 2018: "Section 40 (1) (c) o f the Em ploym ent and Labour Relations Act, No. 6/2014 provides fo r com pensation o f not less than (12) twelve m onths rem uneration where it is found, like in this case, that the em ployer failed to inform the em ployee the rig h t to appeal against the decision o f the disciplinary committee. I thus decide, since that the respondent was to com pensate the applicant (12) twelve m onths salary and a ll 2

other term inal benefits as p e r the iaw, but in the present case and the circum stances found as w ell the evidence in the record o f the CMA, the applicant was p aid as it is stated in KIELELZO D4 a t the la st paragraph that: Hivyo, kuanzia leo tarehe 23/05/2017, O fisi ya Sunshine inakuachisha kazi na kukuiipa m afao yako yote siku hiyo ya tarehe 23/05/2017. Mafao hayo n i kama ifuatavyo: utapata m shahara wako ambao n i ia k i tatu (300,000/=) na kiinua mgongo ambao n i m shahara wa siku saba ambao n i sh ilin g i eifu sabini (70,000/=) na mshahara wako uiiofanya kazi ambao n i sh ilin g i ia k i m b iii na elfu them anini (280,000/=) na kama katika huu m wezi umefanya ka zi ya ziada nayo utaiipw a jum ia ya fedha n i sh ilin g i ia k i sita na elfu Ham sini (650,000/= )" These findings of the High Court on revision devastated the appellant's stance, thus approached us on appeal by lodging a memorandum of appeal complaining as follows: That, the honourable Judge o f the High Court erred in law and fact by holding that the appellant, having been p aid som e o f the com pensation as p e r exhibit D4 he was not entitled to be p aid other com pensation o f twelve (12) m onth's salary fo r unfair term ination. Reading the memorandum of appeal, the appellant invited us to interpret one legal point, that is whether, terminal benefits payable under section 44 (1) of the ELRA is a compensation awardable on unfair 3

termination in terms of section 40 (1) (c) of the ELRA as was interpreted by the High Court in the appellant's revision. We thus heard the parties on 10th December, 2024 in which the appellant was represented by Mr. Erick Christopher, learned advocate and Mr. Godwin Beatus Ngongi, also learned advocate, appeared for the respondent. Submitting in support of the appeal before us, Mr. Christopher first stood by the contents of the written submissions he had filed to the Court on 16th September, 2022. He thereafter made reference to pages 67 and 68 of the record of appeal amplifying that, as the High Court made a finding that the appellant was unfairly terminated, it ought to have awarded him compensation in terms of section 40 (1) (c) of the ELRA. He thus faulted the learned High Court Judge in her interpretation of the law that, since the appellant was paid terminal benefits under section 44 (1) of the ELRA, awarding him compensation under section 40 (1) (c) of the same Act constitutes double payment. To him therefore, the two sections are distinct because, whereas what is paid under section 44 (1) of the ELRA is terminal benefits, section 40 (1) (c) of the Act, on the other hand, is on compensation as a result of unfair termination. He eventually argued that the appeal is meritorious, thus urged us to hold so. Mr. Ngongi did not file written submissions. He however opposed the appeal because, the appellant did not contest his substantive termination at 4

the hearing of the disciplinary charges in the disciplinary committee. When he was probed by the Court on the nature of the complaint as levelled in the ground of appeal which is on pure point of law, Mr. Ngongi remarkedly conceded that, the raised ground of appeal is on the interpretation of the law regarding terminal benefits and compensations awardable under sections 44 (1) and 40 (1) (c) of the ELRA respectively. He therefore referred us to page 35 of the record of appeal conceding that, the learned High Court Judge slipped into error to hold that, since the appellant was paid terminal benefits under section 44 (1) of the ELRA, then awarding compensation on unfair termination under section 40 (1) (c) of the ELRA would be double payment. He thus invited us to intervene and provide a proper interpretation of the law. In rejoinder submission, Mr. Christopher restated what he submitted in chief. He finally urged us to allow the appeal. In dealing with this appeal, we have given a thorough consideration of the record of appeal before us, written submissions filed by the appellant and also taken into account the oral submission by the counsel. In the record of appeal, the learned High Court Judge, unreservedly, came to conclusion in her findings that, the appellant was unfairly terminated. She made such findings upon realization that, the appellant was not informed by the respondent the right to appeal against the decision of the disciplinary 5

committee. At page 67 of the record of appeal, which we find it appropriate to reproduce for ease of reference, the learned Judge's stance on this position reads as hereunder: "In regard to the ground that the applicant was n ot given rig h t to appeal against the decision o f the disciplinary com m ittee, the law is dear and provides fo r a duty o f the em ployer to inform the employee the righ t to appeal against the decision o f the disciplinary committee. See the case o f Tanzania Revenue Authority v. Godfrey Kajetani Dimoso, Labour D ivision o f 2016 (unreported), where the court held that, denial o f the rig h t to appeal against the decision o f the disciplinary hearing to the higher authority against h is em ploym ent term ination pollutes and d rills the whole process o f term ination." As to remedies, we agree with her that, remedies for unfair termination are provided for under section 40 (1) of the ELRA. The section reads as hereunder: "40. -(1) Where an arbitrator o r Labour Court finds a term ination is unfair, the arbitrator or Court m ay order the em ployer - (a) to reinstate the employee from the date the em ployee was term inated w ithout loss o f rem uneration during the period that the em ployee was absent from work due to the unfair term ination; or

(b) to re-engage the employee on any term s that the arbitrator or Court m ay decide; or (c) to pay com pensation to We employee o f not less than twelve m onths rem uneration." In the section we have just quoted above, where the court or the arbitrator makes a finding that the employee was unfairly terminated, it may order reinstatement, reengagement or payment of compensation of not less than twelve months remuneration. Guided by this provision, the learned High Court Judge's choice for compensating the appellant under section 40 (1) (c) of the ELRA, was appropriate in the circumstances. We have no any query with the exercise of that discretion because, the material before her led to the chosen remedy. We add that, it is not contentious. The question now which quickly comes to our attention is whether the order made by the High Court that the appellant cannot be paid compensation in terms of section 40 (1) (c) of the ELRA because he was paid terminal benefits payable under section 44 (1) of the ELRA, which would result into double payment, was justified. Essentially, this is the crux in the appellants complaint in that respect. Basically, we do not intend to open a discussion of what terminal benefits are and the circumstances upon which they are payable, but for us, it suffices to explore if the intention of the Parliament in legislating the two

sections, that is, sections 40 (1) (c) and 44 (1) both of the ELRA entailed provision of the same reliefs and therefore may be invoked interchangeably. Before hand, we reproduced section 40 (1) (c) of the ELRA. To make our discussion more lucid, we find it appropriate also to reproduce sections 40 (2) and 44 (1) of the ELRA as follows, beginning with section 40 (2): "40 (2) An order fo r com pensation made under this section sh a ii be in addition to, and not a substitute for, any other am ount to which the employee m ay be entitled in term s o f any law or agreem ent As to section 44 (1) of the ELRA, the Parliament legislated: "44 (1) On term ination o f employment, an em ployer sh all pay an em ployee - (a) any rem uneration fo r work done before the term ination; (b) any annual leave pay due to an em ployee under section 31 fo r leave that the em ployee has not taken; (c) any annual leave pay accrued during any incom plete leave cycle determ ined in accordance with section 31(1); (d) any notice p ay due under section 41(5); (e) any severance pay due under section 42; (f) any transport allow ance that m ay be due under section 43.

What we note in the above reproduced provisions of the law, in the circumstances of this case where the appellant was paid other terminal benefits in terms of section 44 (1) of the ELRA is that, section 40 (1) (c) should not be read in isolation to subsection (2) of section 40 to the ELRA. It is clear in section 40 (2) of the ELRA that compensation for unfair termination under section 40 (1) (c) of the ELRA has two tenets. One, that such compensation is payable as an addition to any other payment which the employee is entitled and two, such compensation is not a substitute of any statutory or contractual arrangement that would entitle the employee to other payments. Section 44 (1) of the ELRA, on the other hand, and as also stipulated in the marginal notes to the section, relates to payment of terminal benefits and certificate of employment. In Tanzania Cigarette Company Limited v. Lucy Mandara (Civil Appeal No. 187 of 2021 [2024] TZCA 128 (26 February 2024; TanzLII) the Court, at page 20 through 21 of the judgment, made the following decision regarding payment of compensation on unfair termination in circumstances, as this one, where terminal benefits were already paid: "On that note ; th is appeal is p artly allow ed as discussed above. We thus quash and set aside the judgem ent and decree o f the High Court forthwith. In the circum stances, we aw ard 12 m onths' salary com pensation being the minimum provided fo r under section 40(1) (c) o f the ELRA. 9

In term s o f section 40 (2) o f the ELRA, this com pensation is in addition to the term inal benefits awarded to the respondent in the term ination ietter found a t page 99 through 100 o f the record ofap p eai." In the instant appeal, we have demonstrated, the learned High Court Judge ruled out that the appellant was unfairly terminated and that the terminal benefited he was paid under section 44 (1) of the ELRA was, the appropriate remedy, and doing otherwise would entitle to double payment on the appellant. She erred, in our opinion, as per the principle of law we have just stated. In our considered view, having found that the appellant's termination was unfair, and having sought the remedy of that unfair termination was the payment of compensation within the meaning of section 40 (1) (c) of the ELRA, then the exercise of her discretion regarding the amount of compensation is clothed within the section, which prescribes the minimum compensation of not less than twelve months remuneration. We do not think that the Parliament intended the court awarding compensation should rely on other provisions within the section which, as was in this case, provides reliefs or remedies for other matters regulating labour relations. We find this to be the rationale behind the phraseology in subsection (2) of section 40 to ELRA pegging compensation under section 40 (1) (c) to be in addition to,

and not a substitute for any other payment which the employee is legally entitled, either by the letters of the law or through an agreement. We note in the instant labour dispute at page 35 of the record of appeal that, the appellant was paid terminal benefits in terms of section 44 (1) of the ELRA. That payment, in our view, is not compensation for unfair termination in terms of section 40 (1) (c) of the ELRA as clearly legislated in section 40 (2) of the ELRA. Instead, compensation for unfair termination payable to the appellant should be in addition to that payment exhibited in the termination letter, neither was it to be a substitute thereof. See also Tanzania Cigarette Company Limited v. Lucy Mandara (supra). On that account, we interpret words any other am ount to which the employee m ay be entitled in term s o f any law or agreem ent used in subsection (2) to section 40 of ELRA, in the instant appeal to include terminal benefits paid to the appellant within the meaning of section 44 (1) of the ELRA. We therefore agree with both counsel that the learned High Court Judge improperly interpreted the law that payment of terminal benefits which the appellant was paid under section 44 (1) of the ELRA was payment of compensation for unfair termination under section 40 (1) (c) of the ELRA. We now turn to the reliefs under section 40 (1) (c) of the ELRA. We reproduced that section above, and reading it, and as also interpreted by n

many decisions of the Court, where the court or arbitrator finds that the employee was unfairly terminated, a compensation of not less than twelve months remuneration should follow. In the labour dispute before us, the CMA recorded that the appellant was fairly terminated. In setting aside, the award before the High Court during revision, the learned High Court Judge found that termination of the appellant was unfair because he was not informed by the respondent regarding appeal procedures. She then proceeded to award a compensation of not less than twelve months remunerations as hereunder: "Section 40 (1) (c) o f the Em ploym ent and Labour Relations Act, No. 6/2014 provides fo r com pensation o f not iess than (12) tw elve m onths rem uneration where it is found, like in this case, that the em ployer failed to inform the em ployee the rig h t to appeal against the decision o f the disciplinary com m ittee." The above order, in our view, is the correct interpretation of the law by the learned High Court Judge, and would have therefore proceeded to order payment of compensation. We have discussed at length above that there was no justification to consider the terminal benefits payable under section 44 (1) of the ELRA as compensation for unfair termination under section 40 (1) (c) of the ELRA. We therefore make an order that, the appellant is entitled to a compensation of twelve months remuneration for 12

being unfairly terminated by the respondent. The compensation we have just ordered is in addition to the terminal benefits already paid to the appellant under section 44 (1) of the ELRA. The appeal is accordingly allowed to that extent. This being a labour matter, we refrain from awarding costs. DATED at DODOMA this 14th day of December, 2024. S. A. LILA JUSTICE OF APPEAL Z.G. MURUKE JUSTICE OF APPEAL G. J. MDEMU JUSTICE OF APPEAL The Judgment delivered this 16th day of December, 2024 in the presence of the appellant in person and Mr. Godwin Ngongi, learned counsel W. A. HAMZA DEPUTY REGISTRAR COURT OF APPEAL