Moscane Mbulo v Quattro Company Limited (IRD/ ND/39/ 2016) (9 August 2017) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA IRD/ ND/39/ 2016 AT THE NDOLA DISTRICT REGISRY HOLDEN AT NDOLA BETWEEN: MOSCANE MBULO AND QUATTRO COMPANY LIMITED RESPONDENT Before: Hon. Judge D. Mulenga this 9th day of August. 2017. For the Complainant Mr. T. Chabu of Messrs Terrence Chabu & Co. For the Respondent Ms. K.N. Kaunda of Mmems K.N. Kaunda Advocates. JUDGMENT Cases referred to: 1. Chillingworth v Esche (1924) 1 Ch. 97 2. Lord Wensleydale in Ridgway v Wharton (1857) 6 H.L.C. 238, 304-7 3. Financing Ltd v Stimson (1962) 3 All E.R. 386 4. Surrey Council & Another v Bredero Homes Limited (1993) 3 ALL ER 5. Attorney General v D.G. Mpundu (1984) Z R 6 Jl (iv) Compensation for loss of earnings of KS,000.00 per month, leave • days housing allowance of $215.25 and talk time allowance of KS00.00 per month for the remaining contract period of 9 months (v) Interest and (vi) Costs. The Complainant's Notice of Co1nplaint is supported by an affidavit filed into Court on 2 711i April, 2 O1 6. The Complainant's case through his depositions in the affidavit in support • of complaint and oral testimony is that he was employed by the Respondent in Decen1ber, 2015 but reported for work in January, 2016, as Manager Security and was stationed at Solwezi Quattro Yard. According to the Complainant he was retained on a 12 Months' contract of employment as per exhibit MMl, the same is a letter of offer of employment. However, the Complainant told the Court that he was surprised when just after three months of being in employment, he received a letter from one Muyembe a Branch Manager, to the effect that his probation period of employment with tl}.e Respondent Company was unsuccessful. The letter of unsuccessful probation is dated 31st March, exhibit "MM3". It is the contention of the Complainant that his employment could not be terminated for the reason of unsuccessful probation period because he was not en1ployed on the probation period. According to Complainant, the only terms and conditions of en1ploy1nent that applied to him are those that are J3 (iv) Con1pensation for loss of earnings of KB,000.00 per month, leave · days housing allowance of $215.25 and talk time allowance of KS00.00 per month for the remaining contract period of 9 months (v) Interest and (vi) Costs. The Complainant's Notice of Co1nplaint is supported by an affidavit filed into Court on 2Th April, 2016. The Complainant's case through his depositions in the affidavit in support • of con1plaint and oral testimony is that he was employed by the Respondent in Decen1ber, 2015 but reported for work in January, 2016, as Manager Security and ,vas stationed at Solwezi Quattro Yard. According to the Complainant he was retained on a 12 Months' contract of e1nployment as per exhibit MM1 , the same is a letter of offer of employment. However, the Complainant told the Court that he was surprised when just after three months of being in employment, he received a letter from one Muyen1be a Branch Manager, to the effect that • his probation period of employment with tl}e Respondent Company was unsuccessful. The letter of unsuccessful probation is dated 31st March, exhibit "MM3". It is the contention of the Complainant that his en1ployment could not be terminated for the reason of unsuccessful probation period because he was not e1nployed on the probation period. According to Complainant, the only terms and conditions of employment that applied to him are those that are J3 in the letter of offer of en1ployn1ent, the said letter did not state any conditi011 as regards ' employment on probationary period'. The C01nplainant told the Court that the letter of unsuccessful probationary period can1e to him with great shock because he had just put in 111easures to stop the biggest problem the Respondent Company was facing of thefts and generally that of indiscipline. Prior to the letter of unsuccessful probationary period, the Complainant • was alleged to have used abusive language to his subordinates . The C01nplainant admitted, having had an argument with one of his subordinates one Kawewe who he called an idiot. The incident was followed up with a 1neeting attended by Kawewe, the Complainant and the Branch Manager. According to the Con1plainant the said meeting was reconciliatory in order to work in harmony. However, according to the Complainant after a month the Branch Manager, called him and asked him to sign what purported to be a charge sheet, which he refused to sign because according to him the said charge was being raised after it had been ·• discussed and settled and that it was being prefe rred under a section that belonged to General Worker's Conditions. In cross-examination by Learned Counsel for the Respondent, the Complainant told the Court that the effective date of his en1ployment with the Respondent was 4th January, 2016. J4 The C01nplainant admitted that there were two disciplinary charges against-hin1, the first one was raised on 4th February, 2016 relating to use of abusive language against the Safety Officer, one Mumba Mambwe, which charge the Con.1plainant said he denied. The Co1nplainant was again charged with use of abusive Language against a fellow employee one Kawewe, on 17th February, 2016, and he admitted the same. The Complainant in cross-examination described the payment to hiln of gratuity by the Respondent on termination of his services, which was not • provided for in his conditions of service as an act of desperation and n1alice upon realisation that the termination of his employment was wrongful. In reference to the contract of employment form (exhibit LS 1) in the Respondent's affidavit in support of the Answer, Complainant told the Court that the said document did not affect him neither is the three months probationary clause therein. . The Complaint is opposed and to that effect the Respondent filed an Answer and an affidavit in support, on 30th May, 2016 . -- Clearly, the Respondent's case in its defence through the affidavit in support of the Answer and the oral testimony of one Leonard Sin1asiku a Human Resources Manager (RWl) is that the C01nplainant was offered a e1nployment by the Respondent, effective January, 2016, on condition that he was to be issued with a twelve (12) months contract. JS The Con1plainant signed the letter of offe r of employment and was sent to take up his position as Manager - Security at Solwezi, without signing the twelve (12) months contract. According to Respondent, the Complainant's offer of employment was subject to issuance of a short tern1 contract of twelve (12) months whose terms included a probation period of three months as per Respondent's internal manage1nent policy and by law. The Respondent refe rred to this Court to exhibit marked "LSI" which is a blank contract of employment fonn. According to Respondent, whereas the Complainant was charged in February, 2016, with two offences of using abusive language to two fellow employees, the reason for termination of the Complainant's employment was "unsuccessful" probation. The Respondent contends that termination of the Complainant's employment on the grounds of unsuccessful probation was its legal right and within the contractual terms and conditions of employment. • At the close of hearing of oral testimony b.oth Learned Counsel for the Complainant and the Respondent field written submissions and I am greatly indebted to them. Learned Counsel for the Complainant has sub1nitted at length in respect of wrongful and unlawful termination of Complainant's employment on the grounds of the two charges of abusive language. However, it is the position of this Court that the issue of wrongful and or unlawful termination of contract of employment as regards the two charges on the J6 - - - - - - - - - - - -·-------- - - - - -- grounds of abusive language does not arise. The issue in dispute relates as alluded to herein above to the alleged unsuccessful probation. On the other hand Learned Counsel for the Respondent subn1itted that the offer letter of en1ploy1nent was expressed subject to the contract, therefore, the offe r letter was not binding until the f orn1al contract was drawn. According to Learned Counsel for the Respondent, the contract refe rred to in the letter of offe r of employn1ent was meant to include other tern1s of the contract of employment. • The question which this Court is called on to answer in the case in casu is whether or not the condition in the letter of offer of employment dated 18th December, 2015 (Exhibit mml) stating that: Should you agree to the conditions above you will be issued a 12 months contract. Is an agreement subject to contract and if the answer is in the affirmative whether or not there was a binding contract. • The Learned authors Sutton and Shannon Qn contracts Seven Edition at page 62 states: Parties when entering into a contract by offer and acceptance may intend that the agreement shall ultimately be put into the form of a written agreement and that it shall not be binding until that has been done. If this is their intention, there is no contract until the agreement has been put into writing. This is as it was described in the case of Chillingworlh v Esche~ J7 Or they may intend that they shall be bound as soon as they are agreed as to the terms, and that those terms are a~erwards to be put into writing for the sake of preserving a memorial. In this case they are bound as soon as all the terms which are to be put into writing are agreed upon, as per Lord Wensleydale in the case of Ridgway v Wharton2. Silnply, therefore, the position of the rule is that where an agreement is 1nade subject to a condition precedent, the contract does not bind the parties until the condition has been satisfied. • In the case of Financing Ltd v Stimson3 it was held that where a defendant agreed to purchase the Plaintiff's invention if inspected and approved by the defendant's engineer, no contract could exist until the engineer had inspected and approved the invention. In the case in casu, the Respondent offered the Complainant employment vide a letter dated l81 Decen1ber 2015 (exhibit "mml "). The said letter 1i reads in part; • Re: Letter of offer of Employment We are pleased to offer you the position of Security Manager at our Solwezi Branch effective 4111 January, 2016. ....... Conditions of Service Your remuneration will be as follows: J. Monthly basic pay of KB, 000.00 (Eight Thousand Kwacha only) and 30% housing allowance. 2. You will be issued with a brand new working laptop for all your operations. J8 - -------- 3. Company vehicle 4. You will also receive a brand new mobile phone. 5. MTN Airtime of KS00.00 a month. Should you agree to the conditions above you will be issued a 12 months contract. Your signature below indicates that you agree to the above conditions. Please do not hesitate to contact me should you have any queries. • Signed Mrs. Selena Kalero Kayi Signed Mr. Mscane Mbulo A critical analysis of the evidence and authorities alluded to herein above clearly shows that the letter of offer of employment to the Complainant from the Respondent was very categorical as it relates to the conditions of employment and expressly stat~d that the signature of the Complainant was to indicate that he agreed to the condit~ons which were stipulated in • the said letter. The conditions in the letter of offer did not include a probation period. Contrary to the submissions of Learned Counsel for the Respondent, I find and hold that the condition prec~dent which was required to be fulfilled by the Complainant was the acceptance signified by his signature of the conditions of employment offered by the Respondent. J9 The Respondent did not issue a 12 months contract to the Complainant. Since the issuance of a 12 months contract to the Complainant was based on his having to accept the conditions in the letter of offer which he did, the Respondent was bound to issue the said 12 months contract of employment. This Court has no difficult to find that the parties herein intended that they shall be bound as soon as they agreed to the terms and conditions in the letter of offer of e1nployment. • It is inconceivable that the Respondent wants to rely on the clause (relating to probation period) which appears in the draft contract of employment and the same was not presented to the Complainant prior and after the signing of the acceptance of the letter of offer of employment. On the totality of the evidence before me and the authorities referred to, I find and hold that the termination of the Complainant's employment by the Respondent on the grounds of unsuccessful probation, which was not a condition of en1ployment was done in breach of contract of employment. The Complainant has therefore, proved his case on the balance of • probabilities that the Respondent breached the contract of employment when it terminated the same on the grounds of unsuccessful probation which was not a condition of e1nployment. Having found that the Complainant has proved his complaint for damages for breach of contract of employment, I shall now detern1ine the damages sought. JlO Learned Counsel for the Con1plainant submitted that the Complainant is entitled to payment of salary, leave days, housing allowance and talk-tilne allowance for the remaining contract period, the same being nine (9) n1onths as da1nages for breach of contract. The Complainant's advocate relied on the case of Surrey Council & Another v Bredero Homes Limited4 where it was held that an award of compensation for breach of contract serves to protect three separate interests, the starting principle being that the aggrieved party ought to be • compensated for loss of his positive or expectation interest. Learned Counsel for the C01nplainant also referred this Court to the holding in the case of Attorney-General v D.G. Mpundu6, where an emphasis was made as regards the requirement that special damages are pleaded and proved specifically. On the other hand Learned Counsel for the Respondent submitted and referred this Court to the case of Kitwe City Council v William Nguni where the Supreme Court held that:- • It is unlawful to award a salary or pension benefit for a period not worked for because such an award has not been earned and might be properly termed as unjust enrichment. Learned Counsel for the Respondent argues that the case of The Attorney General v D.G. Mpundu and Surrey County Council and Other v Bredero Homes Limited, cannot be relied on in the case in casu, because J11 they do not relate to e1nployment, but to breach of contract on commercial contracM and special damages which are not issues in the case herein. Learned Counsel for the Respondent further sub1nitted that the Co111plainant is currently in e1nploy1nent and the said status goes to show mitigation of damages or loss within the meaning of Supreme Court held in the case of Barclays Bank Zambia Limited v Mando Chola and Another 1. • The above authorities notwithstanding, I find the facts in the case of Agholor v Cheesebrough Ponds (Zambia) Limiteds, similar to the case herein. In that case the dictum of Cullinan, J. that:- The Plaintiff has claimed in respect of benefits arising out of the loss of free housing and free car supplied by the defendant also the difference between his present salary and that paid by the defendant over the period of three years. The three claims total Kl 0, 966. The claims are based on the proposition that if the employer terminates before the end of the term of service, he is liable for all benefits accruing thereafter and despite the fact that the employee ceases I to render any consideration therefore, i.e. to work, None of the claims are I sustainable in law. In every pure Master and servant contract there is the l I implied right to terminate on notice. If an employer gives due notice then the I employee is required to worl< out the period of notice during that period. I I ' After expiration of such period notice o,- afi:er payment of salary in lieu of notice, apart from other benefits already accrued, it is no concern to the employer that the employee encounters less attractive conditions in new employment ... to my mind the Plaintiff claims under all three heads are little short of preposterous and they are dismissed. J12 I an1 mindful of the lilnitation of the holding in the case of Agholor, in the light of Section 5 of the Elnployment (Amendn1ent) Act, 2015. There are decisions of the Labour Court in South Africa which obviously have no binding effect on this Court, but are persuasive. One of such cases is Kwena Darius Mangope v South African Football Association 9, where the Labour Court of South Africa, took the view that; The amount of damages to be awarded to an employee as a result of an unlawful termination of a fixed term contract by the employer is the • amount he or she would have received in salary but for the repudiation of the contract of the employer. In other words the damages in an unlawful termination of an employment contract is calculated on the basis of what would have been due to the employee for the unexpired period of the. contract less whatever amount he or she may have received after the termination of the contract, constituting mitigal'ion of his or her damages. In view of the authorities cited above and considering the fact that the Complainant upon termination of his contract of e1nployn1ent by the Respondent, mitigated his damages by findit:g en1ployn1ent as Manager at e Chowa Farms in Kitwe. Further, I take into account the gratuity paid to the Complainant which he was not entitled to following the conditions of I service expressly provided vide the letter of offer of employment. I I I I I I I I I I I J13 I award the Co1nplainant four (4) n1onths pay with all taxable allowances with interest at the Bank of Zainbia ruling rate fr01n the date of notice of c01nplaint until date of pay1nent. Costs shall follow the event to be taxed in default of agreement. Informed of Right of Appeal within thirty (30) days of the date hereof. Dated at Ndola this 9th day of August, 2017. .. '·• . . . . . . . . . . . . . . . . . . . . t .................. . Hon. Justic D. Mulenga JUDGE J14