1 Citation Parties Legal Principles Discussed CIVIL APPEAL NO. 127 OF 2005- COURT OF APPEAL OF TANZANIA AT TANGA- MAKAME, J.A., MUNUO, J. A., AND KAJI, J. A. THE MANAGING DIRECTOR, TANGA CEMENT COMPANY LIMITED Vs. 1. JUMANNE D. MASANGWA, 2. AMOS A. MWALWANDA (Appeal from a judgment of the High Court of Tanzania at Tanga- Civil Appeal No. 4 of 2001 -M. H. C. S. Longway J.) Exercise of employer s legal option not to reinstate employment services- Whether the respondents are entitled to be paid arrears of wages and fringe benefits for the period they were out of work, that is, from when their employment was purportedly terminated by the appellant until when the Board ordered their reinstatement- A correct answer can be found in sections 40 A (4) (a), Section 40 A (5) (a) (b) and 36 of the Employment Act. Where the Board or Minister orders re instatement of an employee and the employer complies, then on re instatement the employee will be entitled to the payment of wages, severance allowance and other retiring benefits from the date of the termination of the employee s employment or dismissal, as the case may be. But the employer may deduct the said wages in respect of the period which the employee was out of work. IN THE COURT OF APPEAL OF TANZANIA AT TANGA (CORAM: MAKAME, J.A., MUNUO, J. A., AND KAJI, J. A.) CIVIL APPEAL NO. 127 OF 2005 THE MANAGING DIRECTOR, TANGA CEMENT COMPANY LIMITED.. APPELLANT VERSUS 1. JUMANNE D. MASANGWA 2. AMOS A. MWALWANDA. RESPONDENTS (Appeal from a judgment of the High Court of Tanzania at Tanga)
2 (M. H. C. S. Longway J.) Dated the 5 th day of September, 2001. in Civil Appeal No. 4 of 2001 JUDGMENT OF THE COURT 5 July, 2006 & 21 st September,2007 KAJI, J. A.: In this appeal, the appellant, the Managing Director, Tanga Cement Company Limited, is appealing against the decision of the High Court at Tanga (Longway J.) dated 5 th September, 2001 in Civil Appeal No. 4 of 2001, whereby the appellant was ordered to reinstate and pay the respondents Jumanne D. Masangwa and Amos A. Mwalwanda shs. 7, 087, 482= being arrears of wages and fringe benefits for the period they were out of work. The respondents were employed by the appellant. On 10/10/1999 their services were terminated by the appellant. They were aggrieved. They successfully appealed to the Tanga Labour Conciliatory Board (The Board) on 26/05/2000. The Board ordered reinstatement with effect from 11/10/1999. The appellant refused to reinstate them and opted to pay them 12 months salaries, statutory
3 compensation equivalent to severance allowance, house allowance for the notice period, repatriation costs/ allowance, 7 days salary in lieu of leave for the period 1/7/1999 to 11/10/1999, one month salary in lieu of notice plus 11 days salary for the month of October 1999 (ANN AFI). The respondents were not satisfied. Apart from the above payments they wanted to be re instated in their jobs as ordered by the Board and to be paid arrears of wages and fringe benefits for the period they were under termination. The appellant was not ready to do so. The respondents filed an application in the District Court of Tanga under Sections 27 (1) and 25 (1) (a) of the Security of Employment Act, Cap 574 and prayed for the following reliefs:- 1. An order to compel the appellant to pay the respondents shs 7,087,482=, or to issue an execution order by attachment and sale of a motor vehicle Registration No. TZM 4714 the property of the appellant for the amount claimed. 2. Costs of the application. 3. Any other order(s) the court could deem fit, fair and equitable to make.
4 The appellant resisted the application on the ground that he exercised his legal option not to reinstate the respondents and instead duly paid them statutory compensation and a sum equal to 12 months wages in addition to other terminal benefits stated above. The trial court agreed with the appellant and dismissed the application with costs. The respondents were dissatisfied with the decision. They successfully appealed to the High Court at Tanga. The High Court, Longway J, held the view that, since the Board had ordered reinstatement, the appellant had to reinstate the respondents and pay them all arrears of wages/ salary from 11/10/1999 up to actual reinstatement. Each party was ordered to bear their own costs of the appeal and of the court below. The appellant was aggrieved; hence this second appeal. Before us the appellant was represented by Mr. A. J. Akaro, learned counsel who had preferred the following grounds of appeal. 1. That the learned High Court judge erred in law by ordering reinstatement of the respondents whereas the respondents did not apply for such relief in the District Court
5 nor did they seek to enforce such order in the said court. 2. That the learned High Court judge erred in law in ordering reinstatement of the respondents whereas the facts of the case clearly indicate that the appellant was unwilling to continue engaging the services of the respondents. 3. That the learned High Court Judge erred in law by declining to hold that the respondents having been paid statutory compensation and a sum equal to 12 months wages in accordance with the provisions of section 40 A (5) (a) of the Security of Employment Act the appellant had an option not to pay the respondents wages for the number of days that they did not work for the appellant while awaiting the decision of the Conciliatory Board.
6 The learned counsel elaborated on these grounds at length in his oral submission. The respondents who were not represented by an advocate, fended for themselves. They pointed out that, the option whether to be reinstated or to be paid 12 months wages and statutory compensation was upon them and not on the appellants. They further contended that, on their part, after the Board had ordered their reinstatement, they were ready and willing to be reinstated, even up to now. They pointed out that, the Board s order meant that they had been in service all the time from 11/10/1999 and that they deserved to be paid salaries and fringe benefits for all that period, the very amount they claimed in their chamber summons in the trial court. They complained bitterly that, by refusing to reinstate them, the appellant had denied them, their constitutional right to work. The respondents observed that, since the Board s decision has not been reversed by any competent authority, it is still in force and they are deemed to be in continuous employment to date. In a brief rejoinder Mr. Akaro insisted that, after paying the respondent 12 months wages and statutory compensation and other
7 payments as stated above, the appellant discharged his burden under Section 40 A (5) (a) (b) of the Employment Act and, there is no justification for paying the respondents wages and other fringe benefits for the period they were out of work. On our part, we think, the crucial issue in this case is whether the respondents are entitled to be paid arrears of wages and fringe benefits for the period they were out of work, that is, from 11/10/1999 when their employment was purportedly terminated by the appellant until on 26/5/2000 when the Board ordered their reinstatement. We think, a correct answer can be found in sections 40 A (4) (a), Section 40 A (5) (a) (b) and 36 of the Act. Section 40 A (4) (a) provides: 40 A (4): Where in the exercise of its powers under this section a Board or the Minister orders:- (a) re instatement of an employee, the employer shall re instate the employee in his former employment, and such re instatement shall have effect for the purpose of the payment of wages, entitlement to severance
8 allowance and other retiring benefits, and otherwise in relation to any benefits of the employment, from the date of the termination or his summary dismissal, as the case may be, but the employer may deduct from any wages due on or after re instatement, the wages in respect of the number of days during which the employee remained absent from work during (and including) the day on which the termination or the dismissal took effect and the day on which the re instatement is ordered by the Board or, inthe case of a further reference to the Minister, the day on which re in statement in confirmed or ordered by the Minister (emphasis provided). Our understanding of this provision is that, where the Board or Minister orders re instatement of an employee and the employer complies, then on re instatement the employee will be entitled to the payment of wages, severance allowance and other retiring benefits
9 from the date of the termination of the employee s employment or dismissal, as the case may be. But the employer may deduct the said wages in respect of the period which the employee was out of work. As demonstrated above, this applies only where the employer has complied with the re instatement order. In the instant case the appellant failed or refused to comply with the re instatement order. In such case what is the position? This brings us to Section 40 A (5) which provides:- 40 A (5): Where a re instatement or re engagement has been ordered under this section and the employer refuses or fails to comply with the order (a) in the case of an order made by a Board against which no reference has been made to the Minister, within twenty eight days of the order being made; or (b) in case of the order made by the Minister on a further reference to him, within fourteen days of the order being made by the Minister, the employer shall be liable to pay the
10 employee compensation of an amount equal to the aggregate of (i) the statutory compensation computed in accordance with section 36; and (ii) a sum equal to twelve months wages at the rate of wages to which the employee was entitled immediately before the termination of his employment, or as the case may be, his dismissal, and such compensation shall be recoverable in the same manner as statutory compensation, the payment of which has been ordered under section 40. Section 36 provides in part as follows:- 36: The statutory compensation shall be (a) Such some of money as shall be equal to the severance allowance due and payable to the employee on the termination of his employment; or (b) The sum of five hundred shillings, whichever is greater.
11 Computation of severance allowance due and payable is provided by Section 5 of the Severance Allowance Act, 1962. However for the purpose of the case at hand we do not think we need to go into the details therein, suffice it to say that severance allowance does not include arrears of wages for the period an employee is absent from work. See the case of Pius Sangali & Others V Tanzania Portland Cement Company Limited, Civil Appeal No. 100 of 2001 (Unreported). With all these in clear light, we are of the firm view that, the learned judge on first appeal erred when she ordered the payment of arrears of wages and fringe benefits for the period the respondents were not at work, that is, from 11/10/1999 to 26/5/2000. The respondents are only entitled to what is provided under section 40 A (5). With regard to the respondents complaint that by refusing to re instate them the appellant has denied them their constitutional right to work, we can only say that, this right, by its very nature, cannot be absolute. It is subject to many factors which include availability of work suitable to the person involved. It does not mean that one can simply walk into an office, factory or worksite and force
12 to be given work under the pretext of Article 22 of the Constitution as was remarked by the Court in the Case of Timoth Kaare V Mara Co operative Union (1984) Limited, Civil Appeal No. 42 of 1992 (Unreported). In the end result, and for the reasons stated above, we allow the appeal, quash the order of the court on first appeal which ordered the appellant to re instate and pay the respondents arrears of wages and fringe benefits for the period they were out of work.; and hold that the respondents are only entitled to what is provided under Section 40 A (5). Due to the circumstances of the case where the respondents have been out of work for almost ten years, we direct that each party is to bear his own costs. DATED at DAR ES SALAAM this 21 st day of September, 2007. L. M. MAKAME JUSTICE OF APPEAL E. N. MUNUO
13 JUSTICE OF APPEAL S. N. KAJI JUSTICE OF APPEAL I certify that this is a true copy of the original. S. M. RUMANYIKA DEPUTY REGISRTRAR Delivered in Court /Chambers under my hand and Court seal this... day of......