James Gaty Magabe vs Gud Holdings (Pty) Limited (Civil Appeal No. 350 of 2021) [2024] TZCA 930 (25 September 2024)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM fCORAM: SEHEL. J.A. MASOUD. 3.A AND MDEMU, J.A^ CIVIL APPEAL NO. 350 OF 2021 JAMES GATY M A G A B E............................................................. ...... APPELLANT VERSUS GUD HOLDINGS (PTY) LIM ITED ........................... ..................... RESPONDENT (Appeal from the decision of the High Court of Tanzania, Labour Division at D ares Salaam) rMwiPQPO, 3.1 dated the 9th day of July, 2021 in Revision No. 188 of 2020 1IIDGMENT OF THE COURT 13* August & . 25th September, 2024 MASOUD, 3.A.: In this appeal, the appellant is faulting the concurrent findings of facts by the High Court and the Commission for Mediation and Arbitration (the CMA) that the relationship that existed between the respondent and him was not an employer-employee relationship. The said relationship was hinged on a six-month contract (exhibit Dl). When the term of the relationship expired, the appellant refused to renew it. As the appellant was aggrieved, he referred a dispute to the CMA. His complaint was that he was unfairly terminated. At the hearing the central issue for determination before venturing into fairness of the

alleged termination was whether the appellant was an employee of the respondent. The appellant's stance was that he was an employee because he was being paid a monthly salary, he was under the control and supervision of the respondent, he used to seek and obtain leave, and that he received training from the respondent and was introduced as such to facilitate his travel to South Africa for the training related to his employment. He supported his position by several exhibits that he tendered in evidence at the CMA. On the other hand, the respondent's position was that, the contract entered was explicit that there was no employer-employee relationship and for such reason, he was receiving a retainer fee and not a salary as he was a marketing and research analyst engaged as an independent contractor for a six months term. He was being paid through invoicing and the amount paid was not subjected to statutory salary deductions. Additionally, it was maintained that the appellant was not under the respondent's control in the daily performance of his duties. The respondent relied on exhibit D l. After hearing the parties, the CMA determined the issue whether or not there was employer - employee relationship against the appellant. It was satisfied that the presumption of employment under the provision of section 61 of the Labour Institutions Act (LIA) was not 2

in the circumstances established by the appellant. The CMA further held that since the relationship was just for six-month period, it expired after the lapse of such period. The complaint was thus dismissed by the CMA. The appellant's revision at the High Court was equally unsuccessful as the CMA award was upheld. In its deliberations, the High Court considered exhibit Dl. It found that the exhibit was quite explicit that the appellant was engaged under independent service agreement as a consultant working for the respondent as an independent contractor without any intention whatsoever of creating an employer-employee relationship. Thus, in the absence of sufficient evidence from the appellant, the claim that there was employer-employee relationship could not hold. The revision was thus dismissed. As the appellant was once again unsatisfied with the decision of the High Court, he preferred the instant appeal on the following grounds:

1. That, the learned judge erred in law In holding that there is no sufficient evidence to support the appellant's assertion that there was employer-employee relationship between the parties.
2. That, the learned judge erred in law and in fact by holding that the element o f economic dependency was 3

not proved as the appellant m onthly paym ent was not subjected to statutory deduction. 3. That, the learned judge erred in law by failing to properly interpret section 61 o f the Labour Institution Act, A ct No. 7 o f2004. 4. That, the learned judge failed to exercise its vested power as first appeal court to re-evaluate and re-appraise the whole evidence o f the tria l court hence reaching to a wrong conclusion. 5. That, the High Court grossly erred in law and fact by dism issing the appellant's application for revision. At the hearing, Mr. Ndanu Emmanuel, learned advocate represented the appellant and Ms. Leila Hawkins, also learned advocate, appeared for the respondent. They both adopted their respective written submissions which had already been lodged to the Court. They did not have anything to clarify or expound on. It is common ground that the 1st, 2n d and 3rd grounds were argued together by both counsel. The arguments for and against these grounds were hinged on section 61 of the LIA. The argument by the appellant's counsel revolved on the phrase "...regardless o f the form o f contract, if any one or more o f the following factors is present" In respect of such phrase, we were told that despite the title of the contract being "independent service agreement," the proof by the 4

appellant of the presence of the statutory factors in the relationship meant that the disputed relationship created none other than employer- employee relationship. He faulted the finding of the High Court judge that the first factor on control or direction of the manner of working was not shown to exist in the relationship. In his view, the reasoning for the above finding was not based on the evidence on the record. He argued that, there was evidence that the appellant was being controlled by the respondent from South Africa where the respondent is based. The model of supervision, in his submission, was through submission of weekly reports which were in turn to be assessed by the respondent. The other form of control, according to the counsel, was in clause 4.1.1 through 4.1.6 which required the appellant to conform to the rules of work provided by the respondent which included discharging his duties within the prescribed business hours. He also referred us to leave that had to be sought from the respondent and the training that he underwent in the course of his employment. On the second factor that relates to hours of work, the High Court was attacked for failure to address it in relation to clause 5.1 of the contract. The substance of that clause, he argued, tells loud and clear 5

that the appellant was not in control of the hours he was supposed to work every day, for the same were under the control of the respondent. In so far as the third factor on economic dependency is concerned, the High Court was faulted in its finding that the remuneration the appellant was getting did not qualify as a salary as it was not subjected to the relevant statutory deductions. In as much as there is no law to that effect, the reasoning for the finding is, it was submitted, unfounded and baseless. There was, it was further submitted, ample evidence as was also agreed by the High Court, that the appellant economically depended on the respondent. According to the appellant, such evidence by itself suffices to establish that there was indeed an employer- employee relationship between parties. As to the factor that relates to provision of tools of trade, reference was made by the learned counsel to the training that the appellant attended and the knowledge and skills that he earned. In his argument, the knowledge and skill earned amounted to essential tools of trade within the meaning of the provision of section 61 (f) of the LIA. On the last factor concerning rendering service to only one person, it was argued with reference to clause 5.2 of the contract that there was no limitation of the working hours on the part of the appellant in 6

discharging his duties. This means that the appellant, it was argued, could not work elsewhere other than with the respondent. On the fourth ground, the appellant faulted the High Court for its failure to re-evaluate the evidence afresh and arrive at its own decision. It thus failed to discharge its duties. Its decision that there was no sufficient evidence to prove ernployer-employee relationship between the parties was not based on the evidence on the record. He relied on Standard Chartered Bank Ltd v. National Oil Tanzania Ltd and Another (Civil Appeal No. 98 of 2008) [2013] TZCA 228 (13 February 2013; TANZLII) and Joseph Ndyamukama v. N.I.C Bank Tanzania Ltd & Others (Civil Appeal No. 239 of 2017) [2020] TZCA 1889 (11 December 2.020; TANZLII). In relation to this argument, he referred us to email printouts, the contract, the letter introducing the appellant to immigration, and the conduct of the parties which, in his view, were not re-appraised in the light of section 61 of the LIA. On the last ground, it was argued that the High Court erred in dismissing the appellant's application for revision. In view of the afore mentioned evidence, the counsel for the appellant beseeched us to hold that the application for revision before the High Court was meritorious notwithstanding the title of the contract. 7

In reply, the respondent refuted the grounds of appeal. On the 1st, 2n d and 3rd grounds, it was argued that the weekly report which were sent to the respondent by email was the only means of communication the appellant had with the respondent. It was the only means through which the respondent could have a clue of what was done and what was not done as per the contract. It was also the means to ascertain whether the respondent was still in need of the appellant's service under the contract. With regard to the arguments relating to hours of work, it was submitted that the same has to be looked at in the context of consultancy work as opposed to the employer-employee relationship as it is the former that governed the contractual relationship that the parties had and not the latter. Thus, the traditional business hours which apply in the employer-employee relationship do not apply in the contractual relationship that the parties were in. On the arguments made in relation to clause 5.1 of the contract, it was the respondent's submission that the hours of work were defined by the respondent's demand. The latter is unlike in the employer-employee relationship where the hours of work and days of working are clearly stated and the employee has no option but to comply as failure to do so would ordinarily result in misconduct. In so far as the appellant's hours

of work were concerned, they were flexible as is typical of the consultancy work envisaged in the contract. As to the arguments made in relation to clause 5.2 which relates to the absence of limitation of the working hours, the respondent's counsel argument was that the clause has to be read with the entire contract. In that respect, it was the respondent's counsel argument that the totality of the clauses of the contract proves that the respondent was entitled to work independently with no control of the respondent. The expectations were reasonable as the appellant was being paid remunerations and had to deliver as per the respondent's standards. It was further argued that the appellant was a consultant in the capacity and form of marketing and research analyst, receiving a monthly retainer fee of USD 1,500.00, which was not subject to any statutory deductions applicable to salaries in the country, and was not entitled to any employment benefits such as leave. If the appellant was dependent on the respondent, it was argued, it was his own choice as the contract did not restrict him from working elsewhere as long as he meets the contractual deliverables. Further that, the training provided was only meant to impart knowledge and skills to the appellant on the respondent's products and not as a means of 9

controlling him as alleged. Such endeavour was done for the welfare of the respondent's business. On the fourth and fifth grounds, arguments were advanced refuting submissions made in their respect. The visa letter was only meant to facilitate the appellant smooth entry to South Africa and not otherwise. The CMA and the High Court properly evaluated the evidence on the record. The contract was within the purview of section 10 of the Law of Contract Act and not within the purview of section 4 of the Employment and Labour Relations Act (the ELRA)1. In support, we were referred to the case of Stevenson, Jordan Harrison Ltd v MacDonald & Evans [1952] 1 TLR 101. We have closely considered the rival submissions on the grounds of appeal in relation to CMA FORM No.l which was filed by the appellant before the CMA. Whilst the appellant claimed that he was unfairly terminated, the respondent's maintained that the appellant was not his employee as his was an agreement for an independent contractor which engaged him as a consultant serving as market and research analyst. Thus, the arguments that arose on the 1st, 2nd, 3rd and 4th grounds concerned the issue whether there was employer-employee relationship between the parties in terms of section 61 of the LIA. 10

Based on the cause of action that the appellant pleaded, the respondent was, in terms of the provision of section 39 of the ELRA, duty bound to prove that the termination was fair. Since applicability of the said provision presupposes the existence of the employment relationship between the parties which is denied by the respondent by virtue of exhibit D l, it is only when such relationship is established that the burden of proof is placed on the respondent to prove that the termination was fair. On this position, see for instance, Hamidu Abdallah Mbekae and Others v. Be Forward Co. Tanzania Ltd (Civil Appeal No. 380 of 2019) [2023] TZCA 62 (24 February. 2023; TANZLII). In proving that there was employer-employee relationship contrary to what is suggested in exhibit D l, the burden of proof in the circumstances of this appeal therefore, as was in Hamidu Abdallah Mbekae and Others (supra), was on the appellant. The proof of existence of such relationship is pursuant to provision of section 61 of the ELRA which reads thus: "For the purposes o f a labour taw, a person who works for, or renders services to, any other person is presumed, until the contrary is proved, to be an employee, regardless o f the form o f the

contract, if any one or more o f the following factors is present- (a) the manner in which the person works is subject to the control or direction o f another person; (b) the person's hours o f work are subject to the control or direction o f another person; (c) in the case o f a person who works for an organisation, the person is a part o f that organization; (d) the person has worked for that other person for an average o f at least forty-five hours per month over the fast three months; (e) the person is econom ically dependent on the other person for whom that person works or renders services; (f) the person is provided with toois o f trade or work equipment by the other person; or (g) the person only works for or renders services to one person". On whether or not there was employer-employee relationship between the parties, the appellant's counsel in a nutshell maintains, with reference to the 1st, 2n d and 3rd grounds, that there is sufficient evidence on the record adduced by the appellant establishing the existence of the factors itemized under section 61 of the LIA which, as a result, meant

that the appellant was employed by the respondent. The appellant's counsel maintains also, with reference to the 4th ground that the evidence as a whole, and in particular, the email printouts, the contract, the letters, and the parties' conduct, was not re-evaluated and re appraised by the High Court. Had it done so, it would have found that there was empioyer-employee relationship in terms of section 61 of the LIA. On the contrary, the respondent's counsel refuted the claim. She argued that there was no sufficient evidence adduced by the appellant proving the existence of the employment relationship as alleged, regard being had to the exhibit D1 whose clauses clearly show that the intent of the parties was to create a contract for service. The respondent's counsel was of the view that the findings by the High Court were reached after it had re-evaluated and re-appraised the entire evidence on the record. We have subjected the record of appeal before us to a close scrutiny. It is not in dispute that the relationship between the parties was founded on exhibit Dl. The appellant referred to clause 4.1.1 through 4.1.6 of the contract, and clause 5.1 of the contract whilst arguing that they proved that the appellant's manner of discharging his duties and hours of work were being controlled by the respondent from

South Africa in terms of section 61 (a) and (b) of the LIA. It was also argued that the appellant used to submit weekly report which was used by the respondent to assess and control his work from South Africa. Further that, the training he received translated into tools of trade by virtue of the knowledge and skills that he received in terms of section 61(f) of the LIA. Despite reliance on the above clauses of exhibit D l, there was no any other evidence over and above the invoked clauses that was shown to have been tendered by the appellant at the CMA to support his claim. We could not in that respect find such evidence on the record. There is, for example, no evidence shown to have been adduced by the appellant on how the cited clauses were applied in practice and in a manner that supports the appellant's point of view to warrant us to construe the clauses in favour of the existence of employer-employee relationship. The evidence of certificates issued by the respondent after the training the appellant had attended, email printouts and the letters issued with a view to facilitating the appellant's entry to South Africa could not, in our view, amount to sufficient evidence that proves the existence of employer-employee relationship. We say so because they were clearly issued for particular purposes that were in the furtherance of the relationship created under the contract (exhibit D l) in which the 14

appellant was engaged as independent consultant. We find that further evidence was needed from the appellant to prove his claim, but none was adduced on the record. We cannot in the circumstances, therefore, interfere with the concurrent findings by the High Court and the CMA in that respect. We are aware that the very contract (exhibit Dl), which is relied on by the appellant as a proof of the existence of the employment relationship on account of the presence of the factors prescribed by section 61 of the LIA, portrays a different position altogether. The same is to the effect that exhibit D l was not meant to create employment relationship between the parties as was evident in the testimony of the respondent's witness on the record of appeal before us. In particular, the most relevant clauses which were equally relied upon by the respondent's counsel in her submission in reply reads this: 2. Nature o f service 2.1 The Company shall contract with the consultant and the consultant shall provide services to the Company in the capacity o f a marketing and research analyst. 2.2 No expectation o f employment is created by this contract or by the consultant's services with the Company. The, consultant agrees and certifies that the consultant is not entitled in fact and in law, nor does 15

the consultant have any expectation of, employment with the company, and is an independent consultant with, and independent contractor to the Company. 2.3 The consultant is not entitled to any o f the employment benefits and conditions applicable to the employees o f the Company. 2.4 No employer/employee relationship o f any nature whatsoever is created by the terms o f this agreement, or by the consultant's services to the Company in terms o f this agreement. In the absence of any other evidence on the record to support the appellant's arguments in respect of the 1st, 2n d , and 3rd grounds, we are afraid that the import of the clause 2.1 through 2.4 reproduced herein above would prevail. They must all, in the circumstances, be taken into account in construing the provisions of the clauses that were invoked by the appellant to support his argument that the appellant's manner of doing work and hours of work were subject to the control and directive of the respondent and in the same way for the other factors within the purview of section 61 of the LIA. We agree with the respondent's line of reasoning that the provisions of the clauses relied on by the appellant must be looked at in the context of the framework of the consultancy agreement and not otherwise. 16

On the remuneration that the appellant was getting based on the terms of the contract, there was nothing advanced by the appellant's counsel to warrant us buy his line of argument. He complained that the High Court's finding that the remuneration was not a salary as it was not subject to statutory deductions was not supported by any law. He also complained that despite the finding by the High Court that the appellant was depending on the respondent which is within the purview of section 61 (e) of the LIA, it did not erroneously find that there was an employer-employee relationship. . ■ It was, however, not disputed by the appellant that the said remuneration was not subjected to the statutory deductions ordinarily applicable to a salary as clearly shown by the High Court and the CMA. The respondent's argument was to the effect that there was, in the circumstances, nothing on the basis of which the finding of the High Court can be faulted regard being had to the contract that engaged the appellant as an independent consultant and which is essentially not disputed by the appellant. We must also underline that there is no clause in the said contact that forbade the appellant from working elsewhere. At this juncture, we find that nothing was brought up by the appellant to warrant us interfering with the concurrent finding by the

High Court and the CMA that the remuneration did not amount to a salary for it was not shown that it was subjected to the statutory deductions that apply to a salary payable to an employee. Clause 3.4 of the contract is, in our view, evident that the remuneration was not a salary for the appellant was not an employee regard being had to the manner in which he was being remunerated. It was only upon completing a time sheet for service rendered which had also to be accompanied by an invoice to the company that the appellant would be paid the retainer fee. In the totality of our findings in respect of the 1st, 2nd, 3rd and 4th grounds, we are settled that there is nothing sufficiently raised and argued by the appellant that would entitle us to interfere with the concurrent findings of facts by the CMA and the High Court that there was no sufficient evidence on the record proving that the appellant was employed by the, respondent as an employee. Needless to say, it is evident on the record that the High Court arrived at its decision having sufficiently re-evaluated and re-appraised the evidence. Indeed, the particular pieces of evidence that were relied upon in this regard were amongst other pieces of evidence that were re-evaluated and re appraised by the High Court. On the other hand, however, there is sufficient evidence showing that the appellant engagement or 18

relationship with the respondent was based on independent service agreement which admittedly regulated the relationship and the conducts of the parties. That said, we find in relation to the 5th ground that the High Court was justified in dismissing the application for revision. Consequently, all grounds of appeal raised are without merit. We dismiss them. In the end, we find no merit in the appeal and we dismiss it. In the circumstances, we make no order as to costs. It is so ordered. DATED at DAR ES SALAAM this 25th day of September, 2024. B. M. A. SEHEL JUSTICE OF APPEAL B. S. MASOUD JUSTICE OF APPEAL G. J. MDEMU JUSTICE OF APPEAL The Judgment delivered this 25th day of September, 2024 in the presence of Ms. Leila Hawkins, learned counsel for the respondent also holding brief for Mr. Emmanuel Ndanu, learned counsel for the applicant, is hereby certified as a true copy of the original.