The plaintiff's claim is for damages for unfair dismissal and K516,730.78 representing total sum of alleged unpaid terminal benefits
and interest on the sums due. The plaintiff also claims collection charges calculated at 15% of liquidated claim.
By a letter dated 5th September 2000, the plaintiff applied for a job as a Human Resources Manager. In the letter aforesaid the plaintiff
stated that since Brown and Clapperton Ltd went into liquidation he was a part time Lecturer at the Polytechnic.
By a letter dated 10th October 2000 the defendant informed the plaintiff that they had offered the plaintiff a job as a Human Resources
Manager. The conditions of the employment were contained in a letter of offer and the plaintiff duly signed the said letter.
The plaintiff completed his probationary period and was duly confirmed as the Human Resources Manager. In March 2001, the plaintiff
had his salary raised.
In May 2001, the defendant started a restructuring of the organisation and the plaintiff was consulted. By his memo dated the 21st
May 2001 the plaintiff acknowledged being consulted. The defendant had a discussion with the plaintiff where several possibilities
were considered which included possibilities of the plaintiffs suitability in any other post within the organization.
Further, during a meeting on 30th May 2001 the plaintiff was offered a position of Zone Manager of Karonga Branch at higher and an
incentive package. He was given up to 4th June 2001 to accept the post so as to finalise the transfer.
By his letter dated the 4th June 2001 the plaintiff chose being employed in a capacity as a Zone Manager. On 20th June 2001 the defendants
received a letter from the Ombudsman asking them why they had demoted the plaintiff. On the 19th June 2001, the plaintiff further
declined the plaintiff's offer of redeployment to Karonga Branch.
The defendant by their letter dated the 28th June 2001 terminated the plaintiff's employment on grounds of redundancy and his terminal
benefits were duly given to him. The plaintiff had been in employment for a period of 8 months.
The plaintiff in his statement of claim alleges that the termination of his employment was unfair, unjustified and unlawful because
of the following reasons amongst others:-
The post of Human Resources Manager was the only one declared redundant amongst 150 posts in FINCA Malawi;
In or about July 2001, the defendant advertised a vacancy for the of Office Manager whose duties and functions encompassed those to
carried out by the plaintiff;
FINCA Malawi continues to employ more staff in its operations hence the necessity of a human resources expert.
The plaintiff also avers that he was not paid his terminal benefits in full and therefore claims for the following remedies:-
Damages for unfair dismissal;
The sum of K516,730.78 being the total sum of unpaid terminal benefits;
Interest at the bank lending rate on the amount of claim from the date it was last due for payment;
K77,509.62 being legal practitioners collection charges;
Costs of the action.
In its defence, the defendant denies that the said termination of the plaintiff's employment was unfair, unjustified or unlawful and
contends that the plaintiff was notified of the defendant's decision to terminate his employment.
ISSUES FOR DETERMINATION
Was that dismissal in the present case under the present rules unfair dismissal?
Was the plaintiff given all the payments that were due to him upon termination of his contract
of employment by the employer? Is the plaintiff entitled to damages?
The plaintiff was the only witness to testify. He adopted his witness statement as follows –
By a letter of offer of employment dated 10th October 2000, he was employed by FINCA Malawi in the capacity of Human Resources Manager.
The Managing Director of FINCA Malawi at the material time was Mr Larry Hastings who was the Chairman of the interviewing panel at
the time that the plaintiff went for his interviews.
During the interviews, he made it clear to Mr Hastings that the salary he was being
offered was not very much different from the salary he was getting in his previous job. The main attraction for him was the offer
of use of a company vehicle for business and reasonable personal use. Although this was not specified in the letter of offer of employment,
it was specifically agreed upon during the interview and it was implemented not too long after he began working for FINCA Malawi.
After working for FINCA Malawi for a period of about three months, he was confirmed
in his appointment by a letter dated 29th December 2000 signed by Mr Larry Hastings.
In or about February 2001, Mr Hastings got a job in Mozambique and was replaced
by Mr Ishtiaq Mohiuddin who joined FINCA Malawi in the capacity of Acting Managing Director.
Upon taking up his post, one of the first things Mr Mohiuddin did was to attempt
to downgrade the plaintiff's position by means of reducing his remuneration package. He thus attempted to rescind the plaintiff's
entitlement to the use of a company vehicle. The plaintiff was obliged to seek the advice from Lawson & Company who advised that
such an action would amount to breach of the contract of employment. The Acting Managing Director was thus forced to temporary suspend
By a letter dated 19th March 2002, FINCA Malawi effected a salary review of its
employees and his monthly salary was fixed at K49,500.00. The plaintiff's benefits at this time included:-
personal use of company vehicle;
lunch allowance of K2,000.00 per month;
personal use of mobile phone up to a limit of K2,250.00 per month;
leave allowance of K3,000.00.
In the month of March 2001, employees of FINCA Malawi presented grievances to do with salary and general working conditions through
the plaintiff as the Human Resources Manager. The employees further threatened to withhold their labour if management failed to respond
positively to their demands. Due to his position, the plaintiff was obliged to take the list of grievances to the Acting Managing
The immediate reaction of the Acting Managing Director upon being presented with the said grievances was that the plaintiff should
issue letters of termination of employment to all the employees who had appended their signatures to the list grievances. The plaintiff
then advised the Acting Managing Director that collective bargaining was one the rights of employees under current labour legislation.
He further advised that the most viable solution was through negotiation between management of FINCA Malawi and the representatives
of the employees.
The advice was not well received by the Acting Managing Director. The Acting Managing Director told the plaintiff that he was disappointed
that the plaintiff seemed more inclined to protect the rights of the workers than to enforce the interests of management. From that
moment onwards, the plaintiff was completely sidelined in all management decisions.
In or about April 2001, the Acting Managing Director managed to reduce the plaintiff's
remuneration package by ordering that the plaintiff henceforth, share use of the company vehicle assigned to him with Internal Auditor.
The relevant instruction was however given through the Chief Finance Officer. This was done in spite of the clear legal advice previously
given to FINCA Malawi by its legal practitioners, Messrs Lawson & Company.
On Monday, the 21st May 2001, the Acting Managing Director summoned the plaintiff
and informed him that the post has been declared redundant. At this meeting, the Acting Managing Director intimated that he would
assign the plaintiff another job of equal status and benefits. The plaintiff was then asked to specify what job would be relevant
to his qualifications and experience.
However, the Acting Managing Director called the plaintiff in his office for another
meeting on 30th May 2001 and confirmed the declaration of redundancy of the post. And instead of offering the plaintiff an alternative
post of equal status and benefits as intimated earlier by him, the Acting Managing Director asked the plaintiff to either leave FINCA
Malawi immediately or take a junior post of Zone Manager in Karonga.
It is quite surprising to the plaintiff that out of 150 positions in FINCA Malawi
at the material time, only the position of Human Resources Manager was declared redundant. This is even more surprising considering
that the position was only five months old.
Further, FINCA Malawi advertised for the job of a Human Resources Practitioner with
10 years experience about twice in the months of May and August 2000 which convinced the plaintiff that the company was committed
to establishing the post of Human Resources Manager.
In addition, management approved in April 2001 to expand the Human Resources Department
by appointing a Training Supervisor and a Personnel Assistant. And in general, FINCA Malawi had been employing more in response to
an expansion in the company's programmes in all the three regions of the country. The growth in staff numbers thus only confirmed
the company's need for a full-time Human Resources Manager.
Although the Acting Managing Director insisted that the declaration of redundancy
of the plaintiff's post was a result of corporate restructuring, the Human Resources Director and the International Audit Manager
were both not aware of this development. They were the people who should have initiated the whole exercise.
When the plaintiff eventually left FINCA Malawi's employment, terminal benefits
were paid to him. However, the said amounts only took into account salary, leave pay and housing allowance. Other benefits such phone
allowance, lunch allowance, pension contributions, medical aid contributions, leave grant and transportation were not paid to the
Apart from the failure to pay him all of his terminal benefits, he was convinced
that the termination of his employment was totally unfair as the reasons given were manifestly untrue and therefore, invalid.
He also tendered a number of exhibits including additional conditions of service,
various correspondences between the plaintiff and the defendant and newspaper cuttings. He stressed that he had already accepted
on 4th June 2001 to work as a Zone Manager with the hope that the economic climate would improve. The plaintiff concluded that the
redundancy was not a genuine one but a way of getting rid of him. He was cross-examined and re-examined.
Section 58 of the Employment Act provides as follows:-
A dismissal is unfair if it is not in conformity with section 57 or is a constructive dismissal pursuant to section 60.
Sections 57 and 60 provide as follows –
The employment of an employee shall not be terminated by
an employer unless there is valid
reason for such termination
connected with the capacity or conduct of the employee or based on the operational
requirements of the undertaking.
The employment of an employee shall not be terminated for reasons connected with his capacity or
conduct before the employee is provided an opportunity to defend himself against the allegations made, unless the employer cannot
reasonably be expected to provide the opportunity.
An employee is entitled to terminate the contract of employment without notice or with less notice than that to which the employer
is entitled by any statutory provision or contractual term where the employer's conduct has made it unreasonable to expect the employee
to continue the employment relationship.
In the present case section 60 does not apply because the defendant expressly dismissed the plaintiff.
Section 61 makes provision for proof of reason for dismissal in the following terms:-
In any claim or complaint arising out of dismissal of an employee, it shall be for the employer
to provide the reason for dismissal and if the employer fails to do so, there shall be a conclusive presumption that the dismissal
In addition to proving that an employee was dismissed for reasons stated in sections 57 (1), the
employer shall be required to show that in all circumstances of the case he acted with justice and equity in dismissing the employee.
Lastly, severance allowance has been provided for in section 35 (1) as follows: -
On termination of contract, by mutual agreement with the employer or unilaterally by the employer, an employee shall be entitled to
be paid by the employer, at the time of termination, a severance allowance to be calculated in accordance with the First Schedule.
The evidence does not show that the plaintiff committed any act of misconduct. Further,
there is no evidence to show that if at all the plaintiff committed any such act of misconduct there was fair opportunity to defend
himself. According to the evidence, the employment of the plaintiff was not terminated for valid reason connected with his capacity
or conduct. The next question is whether it was based on the operational requirements of the undertaking. The evidence of the plaintiff
clearly shows that there were discussions between the plaintiff and the defendant touching on restructuring of the defendant company.
The plaintiff, in my view, fully cooperated with the defendant despite his having some misgivings. He accepted a post of Zone Manager
for Karonga Branch – notwithstanding that he would be moving away from the city of Blantyre to go to the rural town of Karonga
and in a position which appeared to be junior. The u-turn in the arrangement was the sudden dismissal of the plaintiff by the defendant
on the 28th June 2001 by letter which reads as follows:
June 28, 2001
Mr Keith Banda
Private Bag 382
Dear Mr Banda,
Re: Termination of Services
Further to your letter of 19th June 2001 and the letter from the Ombudsman dated 20th June 2001, it is clear that you have turned
down our offer for the post of Zone Manager.
We therefore write to advise you that your services have been terminated on grounds of redundancy as already explained to you. Your
terminal benefits will be paid to you immediately after you are through with the handover to the Internal Auditor by 29th June 2001.
Arrangement will be made to process your pension benefits immediately and you will be paid accordingly.
We take this opportunity to thank you for the period that you have been with us; and wish you all the best in your future endeavours.
Managing Director, Finca-Malawi
From this letter it is quite clear that there are other letters which the defendant
ought to have produced to the court namely, the letter of 19th June 2001 from the plaintiff and the letter from the Ombudsman dated
20th June 2001. The defendant did not even list down these letters in its list of documents. The burden to prove that the plaintiff
had turned down the offer of post Zone Manager was on the defendant and was not discharged. To the contrary it is the plaintiff who
proved that he had accepted the alternative employment on 4th June 2001, albeit, with reluctance. This letter reads as follows: -