Chingwalu and Others v Peoples Trading Centre Limited (Civil Cause No. 1408 of 1997) [2008] MWCommC 8 (14 January 2008);

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REPUBLIC OF MALAWI

 

IN THE HIGH COURT OF MALAWI

 

PRINCIPAL REGISTRY

 

CIVIL CAUSE NO. 1408 OF 1997

 

BETWEEN:

 

WESLEY W. CHINGWALU AND OTHERS……………………………………………PLAINTIFF

 

-and-

 

PEOPLES TRADING CENTRE LIMITED………………………………………………DEFENDANT

 

CORAM: HON. MR JUSTICE F.E. KAPANDA

Mhango of Counsel, for the Plaintiff

Katundu of Counsel for the Defendant

Messrs Kaundama and Fatchi , Court Clerks

 

Place and Dates of hearing :Blantyre, 25th July 2001, 26th July 2001, 5th February 2004, 6th May 2004, 7th May 2004 and 26th March 2007

Place and Date of Judgment : Blantyre, 14th January 2008

 

 

 

 

 

 

 

____________________________________________________________

JUDGMENT

____________________________________________________________

Kapanda, J:

 

INTRODUCTION

The handing down of the judgment in this matter has taken long because of intransigence of Counsel. They took unusually long to furnish the court with their submissions.

The Plaintiffs are former employees of Peoples’ Trading Centre Limited (the Defendant). As I understand it, the Plaintiffs’ employment were terminated in May 1997 on grounds that the latter had participated in an alleged illegal work stoppage and that the Plaintiffs failed to comply with the Defendant’s appeals for them to resume work. The Plaintiffs allege that the reasons given by the Defendant for termination of the Plaintiffs’ employment is unsustainable as they were ready; willing and resolved to return to work by 7.30 a.m. on Saturday, 3rd May 1997 and/or on Monday, 5th May 1997 in compliance with the Defendant’s official notification No. 4 of the 22nd May 1997.

 

The Plaintiffs pray unfair labour practice on the part of the Defendant in that the Plaintiffs were not given a right to be heard in respect of their re-application for employment and that the Defendant allegedly prevented the Plaintiffs from returning to work effectively locking the Plaintiffs out.

 

The Defendant, on the other hand plead that the Plaintiffs, during the subsistence of their contracts of employment, grossly misconducted themselves, resulting in their justified dismissal from employment. The particulars of the said misconduct are given as follows:

1.3.1 On 30th April 1997 the Plaintiffs and various other employees threatened and later embarked upon a strike demanding salary increments.

 

1.3.2 The Defendant advised the striking employees, inter alia, that their action was illegal and a breach of their individual contracts of employment and the said employees were further advised to stop the strike and return to work.

1.3.3 The striking employees through their representatives were afforded an opportunity to reflect on their actions and to reconsider their positions in that connection.

1.3.4 Notwithstanding the foregoing and despite the ultimatum given to the employees to return to work or face the consequences of dismissal, the employees failed to heed the ultimatum.

1.3.5 During the period of the strike the striking employees used abusive language and intimidated some employees who were still working and not willing to join the strike.

1.3.6 In view of the foregoing on 5th May, 1997 the Defendant dismissed all the striking employees.

The Defendant further alleges in the alternative that the Plaintiffs’ conduct in refusing to return to work amounted to a repudiation of their employment contract and the Defendant was entitled to accept the repudiations and cancel the contracts of employment, which it did.

 

 

 

 

FACTUAL BACKGROUND

 

As far as this court was able to gather from the evidence, and the pleadings, the facts of this case may be summarized as follows:

It is in evidence that the Plaintiffs were at all material times employees of the Defendant. They went on strike on 30th April, 1997 demanding a better pay package.

There is no dispute that the Defendant issued a notification on 2nd May, 1997 that the Plaintiffs should return to work. It is common cause that the Plaintiffs duly reported for work on 3rd and 4th May, 1997. However, the Defendant never allowed them in their premises, essentially locking them out.

Further, there is testimony to the effect that the Defendant then terminated the Plaintiff’s employment on 5th May, 1997. As it were, the termination was on the ground that the Plaintiffs failed to report for work after having notified to return to work.

It is on record that later on, through the intervention of the labour office, the Plaintiffs were told to re-apply for their jobs. Apparently, the Plaintiffs accepted this proposal on the understanding that the re-application was a mere formality. However, the Plaintiffs received letters that their applications were unsuccessful. The action is therefore premised on the above facts.

 

ISSUES FOR DETERMINATION

 

The questions that have been isolated herein below arise from my reading of the pleadings that have been exchanged between the parties. It will suffice to put it here that, as I see it, the following are the said issues:-

 

(a) Was the plaintiffs’ strike illegal as to compel the Defendant to terminate the plaintiffs’ individual employment contracts?

 

(b) Even if the answer in (a) above is in the affirmative, did the Defendant’s notification to the employees act as a waiver to their (defendant’s) strict legal rights to dismiss the employees?

 

(c) Whether at law the Defendant locked out the employees and whether such lock out was legal.

 

(d) Whether in view of (a) (b) (c) above the plaintiffs’ termination of employment were wrongful and unconstitutional.

 

 

There are other secondary questions that will also be alluded to later in this judgment i.e. what remedies are the Plaintiffs entitled to?

 

I wish to express my sincere gratitude to Counsel for their written submissions on the issues that arise for consideration in this matter. Any lucidity in this judgment is really due to the said submissions. It has not, however, been possible to refer to each and every detail of their points of view.

I now proceed to consider the pertinent issues for consideration in this action.

 

LAW AND DISCUSSION

 

 

Legality of the strike

 

As I see it, the starting point in answering this question is to look at the statutory definition of a strike. The Trade Disputes (Arbitration and Settlement) Act, cap 54:02, has defined a strike as meaning the cessation of work by a body of workmen acting in combination, or concerted refusal or a refusal under a common understanding of any number of workmen to continue to work for an employer, done as a means of compelling their employer or any workman or body of workmen, or to aid other workmen in compelling their employer or workman or body of workmen, or not to accept terms or conditions of or affecting employment.1 It is also well point out that the right to strike is recognized in the Constitution of the Republic of Malawi.2 However, the Courts have by and large understood that a strike as a total Cessation of work will always constitute a breach of contract of employment, regardless of the circumstances which provoked it3. It is for this reason that the court’s understanding is that the aim of a strike is not to break the contract by withholding labour but keeping the contract alive for as long as the employer would tolerate the breach without exercising their right of rescission. Indeed, employees on strike do not, in reality, wish to leave their employment but rather to remain on terms other than those on offer by the employer.

Furthermore, it is common cause that industrial action suspends, rather than breaches, the contract of employment. In Morgan vs. Fry4 Lord Denning had this to say which is instructive and I adopt it:

If a strike takes place, the contract of employment is not terminated. It is suspended during the strike and revives again when the strike is over.”

 

It is not un-common that employers have attempted to require employees to sign undertakings that they will not participate, or take any further part in existing labour disputes as a condition of being allowed to return to work. The courts have nevertheless held that a refusal to give such an undertaking does not, in itself, constitute a breach of the act of employment5.

 

As I understand the law examined above, the strike herein was not illegal. There were meetings between management and the Workers Representatives. The Defendants were first verbally notified of the impending strike. Most of the avenues of negotiations were exhausted before the Plaintiffs went on strike. Pursuant to The Trade Disputes (Arbitration and Settlement) Act, there was no limitation on the right to strike except in the case of essential services. In point of fact, the matter herein did not even concern essential service6. Even though under the Act, a dispute was to be reported to the Minister of Labour, such requirement was not mandatory under the Act. It was at the discretion of a party7.

By reason of the foregoing I conclude that the strike staged by the Plaintiff was legal. I so find.

 

Did the Defendant’s notification to the employees to return to work act as a waiver?

 

My understanding is that the doctrine of waiver bars a person from insisting on his strict legal rights where he made a promise and leads another party to think that he would not pursue a certain course of action. At law the person making the undertaking would be barred from resiling from his assurance. The following dictum of Lord Denning, in the case of Charles Rickards Ltd vs Oppenheim8, is instructive in this respect:-

Whether it is waiver or forbearance on his part, or an agreed variation or substituted performance, does not matter. It is a kind of estoppel. By his conduct he evinced an intention to affect their legal relations. He made in effect a promise not to insist on his strict legal rights. That promise was intended to be acted on and was in fact acted on. He cannot afterwards go back on it.’

Further, Mc Cardie J. in the case of Hartley vs.Hymans had this to say which is again revealing:-

...... a man may be debarred by the doctrine of waiver from asserting that an original condition precedent is still operative and binding.’9

Turning to the instant case, it was in evidence that the Defendant issued a notification to the employees to return to work. In my judgment the said notification acted as a waiver by the Defendant to any right of dismissal that they had on the Plaintiffs. Accordingly, I find and conclude that the said notification to return to work should be treated as if no strike had taken place.

Additionally, having waived their right to dismiss at common law, the Defendant’s action in locking out the Plaintiffs was unlawful. It is so found. In concluding thus I am alive to the fact that it was stated in the evidence of Messrs Chingwalu and Edson Kaunda that they had returned to their work place on 3rd & 4th May, 1997 and were ready and willing to resume work but the Defendant locked them out.

 

 

 

Was the lock out lawful?

 

In answering this question we should again seek guidance from our statutory law. The said assistance can be obtained from a definition of a lock out. In section 2 of the Trade Disputes (Arbitration and settlement) Act, (Cap 54:02) a lockout is defined in the following terms:-

lock-out” means the closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him, done in Consequence of a trade dispute, not with the intention of finally determining employment but with a view to compelling those persons employed by him, to accept terms or conditions of or affecting employment’

As I understand it, the intention of a lockout is not to finally determine the employment of workers but to compel them to accept terms or conditions of or affecting their employment.

It is on record that the Plaintiffs arrived at the workplace by 6:30 am. The placard on the gate stated that those who did not report by 7:30 am would be automatically dismissed. But the Plaintiffs were locked out and Management refused to meet them. Evidently, the lockout was in bad faith and illegal as it was not intended to allow the plaintiffs a chance to accept the terms of the employer. It was however a cover up to dismiss the Plaintiffs on the excuse that the employees had not returned to work at the agreed time. Indeed, there is evidence to demonstrate that the gates were manned by a commissionaire and policemen to ensure that the employees should not get access to their various workplaces.

 

Were the Dismissals fair and /or lawful?

 

It is trite that the Defendant dismissed the Plaintiffs for not reporting for work. In point of fact, there is undisputed evidence that some employees i.e. Mrs. Chinomba & Mr Clobius Phiri got their dismissal letters whilst they had resumed work and had worked for a week.

 

This, in my judgment, undoubtedly shows that the Plaintiffs’ dismissals were predetermined. Indeed, as I see it, the notification was just a cover up to create an impression that the Defendant had exhausted all means to recall the employees back to work but that the employees were unwilling to do so.

 

The Plaintiffs were unfairly treated. Now, Section 43 of the Republic of Malawi Constitution provides that:

43. Every person shall have the right to –

Lawful and procedurally fair administrative action, which is justifiable in relation to reasons given where his or her rights, freedoms legitimate expectations or interests are affected or threatened, and be furnished with reasons in waiting for administrative action where his or her rights, freedoms, legitimate expectations or interests are known.’

I agree with the Plaintiffs when they argue that the purpose of Section 43 is unmistakably to guarantee transparency in decision-making where the decision is likely to infringe on the rights, freedoms, interest or legitimate expectation of others. Further, it is well to note that in Dr Chawani VS The Attorney General10 the Malawi Supreme Court of Appeal instructively observed that:

(T)he section was also intended to enable persons affected by administrative actions to have adequate opportunity to defend themselves effectively. A person would only be able to present a good and effective defence to an administrative action when he knows the reasons supporting the action.”

This court is of the opinion that the Plaintiffs were denied the opportunity to defend themselves. Actually, the Defendant has not demonstrated before me that such an opportunity to defend themselves effectively was availed to the Plaintiffs. In coming to this conclusion I am aware that in Earl –vs- Slater & Wheeler Ltd.11 it was held that the burden of proving the reason for dismissal is on a defendant and if the latter cannot prove the reason for dismissal there is a conclusive presumption that the dismissal was unfair.

As we have already seen, Section 43 incorporates the principle of procedurally fair administrative action, which includes the right to be heard before a decision is made12. Accordingly, the common law principle that an employer can lawfully, without giving reasons, terminate a contract if done according to the agreement including where the employer will override an employee’s natural justice rights cannot be countenanced today. The role of the courts is to respect natural justice principles and the rights which citizens have under the 1994 Constitution13. It is also important that we note that Section 31 (2) of the Constitution provides that all persons shall have the right to form and join trade unions or not to form or join trade Unions while Section 31 (4) of the Constitution states that the state shall take measures to ensure the right to withdraw labour.

In the instant case, I have found and concluded that the Plaintiffs were on a legal strike. They had, clearly, exhausted most avenues of negotiation. The Defendants were not happy with the strike and had issued several notifications for the Plaintiffs to go back to work. In essence, the effect of the notification was that whoever did not abide by the notifications would lose his or her job. Further, the evidence shows that the Plaintiffs did indeed return to work in compliance with the 4th Notification but the Defendants would not let them in. Instead, they were prevented from entering the Defendant’s premises.

By reason of the foregoing there was no fair administrative action. Perhaps sight should not be lost of the fact that the strikers were on strike because of a grievance. They were allegedly being paid lowly. It is settled law that the right to strike is recognized universally. Our Constitution in section 31(4) has also recognized this right.

In short, the dismissals were not only unfair but also unlawful. I so find.

 

Did the invitation for re – application of the jobs change the nature of the said dismissals?

 

I have found that the Defendant wrongfully and unfairly dismissed the Plaintiffs. Accordingly, the Defendant having wrongfully and unfairly dismissed the plaintiffs, the re –application would not have any legal bearing vis-à-vis the said dismissals as the contract of employment had already ended.

Further, I would like to agree with the Plaintiffs that the selection for re-employment was not transparent. It was tainted with discrimination as some workers got reinstated whilst others were not. The Defendant never told the workers what criterion they would use to accept the re – applications from the employees. It is not surprising that the Defendant ended up rejecting the Plaintiffs’ re-applications without hearing their side of the story and without assigning any reason for the rejection, despite the Plaintiffs being assured that the re-application would be a mere formality.

It is found by this court that the Plaintiffs’ dismissal from employment was wrongful unfair and discriminatory. The Plaintiffs should therefore be awarded damages for wrongful/unlawful termination of employment as pleaded. The said damages shall be assessed by the Registrar. It is so adjudged.

 

Any estoppel ?

 

The question that still remains to be answered is whether the fact that the Plaintiffs were made to sign letters indicating that they would have no claim against the Defendant acted as an estoppel.

As a general rule, a person who signs a document is bound by the terms of the document whether he read the said terms or not14. Nevertheless, there is an exception to this rule. My understanding of the law is that where a person has signed a document through duress, fraud, misrepresentation or false pretence, the doctrine of estoppel does not apply15.

In the instant case, the said document signifying that the Plaintiffs would have no claim against the Defendant would not act as estoppel for several reasons. Firstly, there was no consideration for the same and, even if there was such consideration, the same had failed. Secondly, it would appear that the letters were signed under a misrepresentation and/or fraud as there is uncontroverted evidence to show that the Plaintiffs were told that the same would not have any effect since it was intended to be a mere formality. Lastly, the terms were drafted by the Defendant itself thereby giving no room for discussion for concerns or alterations respecting the said contents.

It is for this reason that the Defendant cannot be held to say that the Plaintiffs are estopped from suing the Defendant.

 

CONCLUSION AND DISPOSITION

The long and short of it is that the Plaintiffs have made out their case.

Therefore, it is ordered as follows:-

 

  1. A declaration shall issue declaring that the Defendants’ termination of the Plaintiffs’ employment was wrongful and or in violation of the Constitution.

  2. The Plaintiffs are awarded general damages for wrongful/unlawful termination of employment. The said general damages shall be assessed by the Registrar.

 

Costs

The position at law is that costs of and incidental to all proceedings in the High Court shall be in the discretion of the High Court16.

Additionally, it is trite law that costs normally follow the event. An instructive authority is Order 62 of the Rules of Supreme Court and also the case of Chihana v Speaker of the National Assembly and Malawi Electoral Commission17 Indeed, this is echoed in the case of the State v OPC et al ex parte Chilumpha, where Justice Chipeta put it this way:-

The general rule guiding Courts on the question of costs is that costs follow the event.

The court has upheld the Plaintiff’s action. Accordingly, the Plaintiff should be awarded costs of, and occasioned by, this action. It is so adjudged that the Defendant pays the costs of, and occasioned by, this action.

 

Pronounced in open Court this 14th day of January, 2008 at the High Court of Malawi, Blantyre.

 

 

F.E. Kapanda

JUDGE

 

 

1 Section 2 of the Act.

2 Section 31(4) of the Constitution of Malawi

3 Deakin & Morris Labour Law

4 [1968] 2 QB 710

5 Tice Hurst & Thompson VS British Telecommunications PLC[1992] IRLR 219 at 228.

6 Section 2 of the Trade Disputes (Arbitration and settlement) Act.

7 Sections 3 and 4 of the Trade Disputes (Arbitration and settlement) Act

8 [1950] 1 KB 616 at P. 623.

9 [1920] 3 KB 475 at 495

10 MSCA Civil Appeal No. 18 of 2000. Blantyre Netting Company Ltd –vs- C. V. Chidzulo & Others (MSCA Civil Appeal No. 17 of 1995).

 

11 (1973) 1 WLR 51 at 55

12 Mkandawire vs Council of the University of Malawi Constitutional Case Number 19 of 2004 (unrep).

13 Nkhwazi vs Commercial Bank of Malawi Civil Cause No. 233 of 1999 (Unrep) H.C.

14 L’estrange vs. Graucob [1934] 2 K.B. 394

15 Chitty on Contracts Chapters 6 and 7.

16 See S.30 Courts Act.

17 Misc Civ Cas. No. 2933 of 2005 (H.C) (Unrep.).