Amadi v Limbe Leaf Tobacco Company (66 of 2008) (66 of 2008) [2008] MWHC 217 (07 April 2008);

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IN THE HIGH COURT OF MALAWI
LILONGWE DISTRICT REGISTRY

CIVIL APPEAL NO. 66 OF 2008
BETWEEN

FRANCIS AMADI ………………………………………………………………………….. APPELLANT

AND

LIMBE LEAF TOBACCO ………………………………………………………………… RESPONDENT


CORAM             :        HON. JUSTICE MZIKAMANDA, J
                          
:        ……………….., Counsel for the Applicant
                           :        ……………….., Counsel for the Respondent                                                :        S. Baziliyo, Court Interpreter

JUDGMENT

         This is an appeal against an Order of assessment of compensation made by the Deputy Chairperson of the Industrial Relations Court on 30th July, 2008. There are five grounds of appeal being that:

(1)     
Inadequate compensation award.
(2)      Interest accrued on withheld pension benefits (Breakdown MK102,209.08 and K6,216.41 for 12 years 1996-2007).
(3)      Damages put in police cell for no good reason.
(4)      Losses suffered due to dismissal and withholding of pension benefits.
(5)      Assessors were not present to assist the assessment.

The back ground to the matter is that the appellant was employed by the respondent on 1st April, 1979. He worked for 17 years before he was dismissed on 2nd December, 1996 on the ground of gross negligence. He had failed to account for K20, 000.00 being part of the wages he drew from the bank. He failed to convince a disciplinary hearing that he had been underpaid by the bank. He sued for unfair dismissal in the Industrial Relations Court. The industrial Relations Court found that the appellant had been given a fair hearing in accordance with Section 31 of the Constitution and upheld the dismissal as valid. The appellant appealed to the High Court against the decision of the Industrial Relations Court. Honourable Justice Chinangwa presided over the appeal and on 6th February, 2007 allowed the appeal observing that in the absence of conditions of service on the court record it was not shown which disciplinary offences attracted summary dismissal, surcharge, and demotion in rank or withholding salary increments. His Lordship also observed the fact that the appellant had served the respondent for 17 years means that he had served the respondents satisfactorily, with a clean record, which fact the respondents should have taken into consideration in taking a decision on the appellant. The court also observed that while it was regrettable that a considerable amount of K20, 000.00 was lost, the form of penalty meted was out of proportion to the disciplinary offence committed, considering his clean record and years of service. The court opined that:

It would have been appropriate to met such penalty, which would at the same time secure his employment. A surcharge or demotion in rank would have been appropriate. I find that an outright dismissal was unwarranted and unfair in the circumstances.”
The matter then went back to the Industrial Relations Court for computation of appropriate compensatory award for the appellant. The Deputy Chairperson of the Industrial Relations Court observed at page 1 of her applicant claims were as follows:-

(1)      Compensation for unfair dismissal.
(2)      Leave grant at rate of 23 days per annum.
(3)      Travel allowance.
(4)      Respondents 11
% pension contribution.”

On the first item the lower court noted that according to the fulfillment of Hon. Justice Chinangwa, the procedure and substantive aspects of a dismissal were satisfied except that the punishment on the appellant was harsh and unfair. Thus the lower court observed that compensation could not be assessed on the basis of Section 63(5) of the Employment Act. The court then went on to say that:

However taking into consideration that the applicant had been in the respondents employ for 17 years it is our considered opinion that a 10 months salary would be adequate compensation for the applicant herein. He told the court that he was getting K4,513.13 per month. This multiplied by 10 translate to K45,131.30 which I award the applicant.”

On the second claim the court found it difficult to award the claim. Even section 63(5) of the Employment Act talks only of pay, which is basic monthly wage, and does not include benefits like leave grant and allowances, so the court observed. Thus the second claim was dismissed. On the same basis the third claim was dismissed.

The court however awarded the 11 % pension contributions by the respondents as per the Judgment of Hon Justice Chinangwa. It was ordered that the final award be made within 14 days. The lower court refused to award an interest on the sums awarded observing that the judgment of Hon Justice Chinangwa was silent on that issue and as such there was nothing the lower court could have done about it.

Regarding appeals the Labour Relations Act provides in Section 65(1) and Section 65(2) that:-

(1)      Subject to subsection (2) decisions of the Industrial Relations Court shall be final and binding.
(2)      A decision of the Industrial Relations Court may be appealed to the High Court on a question of law or jurisdiction within thirty days of the decision being rendered.”

Thus this court can only entertain an appeal from the Industrial Relations Court if it is on a question of law, not fact, or on question of jurisdiction. In this appeal it
is not stated whether it is on a point of law or on the question of jurisdiction. I have examined the grounds of appeal as amended. The first four grounds appear to raise factual matters which the fifth suggest some question of law involving. The fifth ground of appeal is that accessories were not present to assist in the assessment of compensatory awards. In dealing with the grounds of appeal herein I will be limited to the extend that they raise points of law. The factual issues were dealt with by the lower court and by the High Court when His Lordship stated at page 4 of the judgment that:

I have carefully examined the import of section 65. It is on the whole a good legal provision. However in certain circumstances it causes untold injustices. This is the position in the present appeals. I would therefore choose to depart from the claims of this section for the sake of achieving justice.”

On the question of inadequacy of the compensation awarded by the Industrial Relations Court I have examined the assessment order itself. The law is settled that awarding compensation is within the discretion of the court. (See Stanbic Bank Limited v Mtukula MSCA Civil Appeal No. 34 of 2006; Peoples Trading Centre v Ngoma MSCA Civil Appeal No. 1996). In DHL International Ltd v Nkhata Civil Appeal No. 50 of 2004, Twea J. as he then was, observed that in exercising its discretion in awarding compensation, the court must not award any amount it wants but must give reasons and must award only such sums as would by law be allowed. I agree with Sir John Donaldson in Norton Tool Co, Ltd v Tenson 1972 ICR 501 that a court is enjoined to assess compensation which is just and equitable in all the circumstances. Mwaungulu J. cited this reasoning with approval in Magola v Press Corporation Ltd Civil Cause No. 3719 of 1998. What emerges out clearly from these authorities is that working out appropriate compensation for unfair dismissal is a matter of the exercise of courts discretion in accordance with principles of law. Indeed Section 63 of the Employment Act provides for the compensation as a remedy for unfair dismissal. Section 63 (4) of the Employment Act provides that an award of compensation shall be such amount as the court considers just and equitable in the circumstances having regard to the loss sustained by the employee in consequence of the dismissal in so far as the loss is attributable to action taken by the employer and the extent, if any, to which the employee caused or contributed to his dismissal. In the case at hand the lower court found that the appellant contributed to his dismissal and that neither the reason for his dismissal nor the procedure for his dismissal were faulted. The main consideration for awarding the compensation would be the loss sustained by the employee in consequence of his dismissal taking into account the fact that he had long service and a clean record. The lower court also observed that Section 63 (5) of the Employment Act did not apply in the circumstances of the present case. I think that observation by the lower court is correct.

The appellant argued that the lower court had rejected the decision of the High Court. I do not think that is correct. What the lower court was doing was to apply the correct principles of law to the assessment exercise. The appellant challenged the figure of K4,513.13 as not being correct. Yet the court record shows that that was the figure of his pay which he told the lower court. In stead he claims K13,834.34 as his monthly pay. He referred to pay slips that he tendered but I am unable to see the said figure on the slips. For example on pay slip Exhibit A P 1 the basic pay is K4,513.13. Then there are three types of overtime the first one being normal and has K393.39. the second one being overtime (1.5) being K2,533.91 and overtime (double) for K1,573.57. The total pay was K9,014.00. Deductions were K3,944.67 and net was K5,069.33. What is clear here is that overtime pay is paid only for over time worked. It would be strange for overtime to be paid for no overtime worked. It also depends on the overtime type that the employee has worked. It cannot be said to be an entitlement even before one has actually worked overtime. It therefore cannot be part of a claim for compensation. Again I observe on exhibit A P 2 annual bonus varies. One was for K2,500.00 and another for K2,200.00. Again annual bonus clearly is not a matter of entitlement. It has to be earned. I am unable to accept the appellants contention that the pay on the basis of which compensation should be calculated is anything else other than the basic pay of K4,513.13. The correct figure of pay is as established by the lower court of K4,513.13. I am however not able to appreciate how the multiplier of 10 was arrived at. The lower court stated that 10 months pay would be adequate compensation. I would not agree. I am mindful of the cases earlier cited that an award of compensation falls within the discretion of the court. The appellate court is always slow to interfere with the discretion unless it is glaring large or small and shows no reasonable proportion between the amount awarded and the loss sustained. (See Dangwe and Another v Banda 16 (2) MLR 509; Peoples Trading Centre v Ngoma MSCA Court Appeal No. 30 of 1996).

In my view this is an appropriate case where the multiplier should have been higher. I set aside the multiplier of 10 and substitute therefore a multiplier of 15 months. This would translate to a compensation of K67,696.95 less K45,131.30 already paid. The balance is K22,565.65 which should be paid.

As to the second ground of appeal which is interest claimed, I do not see any basis for the same. Like the lower court I would refuse to grant any interest as claimed or at all. The appellant argues that the agreed rate of interest was 24.50866% per annum and for 12 years. That percentage has not been substantiated. The terms and conditions which he tendered in evidence contained nothing of the sort. (See Exhibit A P 4).

As to damages for being put in police cell for no good reason it would appear that this is being raised for the first time. It appears not to have been raised in the Industrial Relations Court at commencement of the proceedings nor was it raised with the High Court on appeal before Hon. Justice Chinangwa.

In the case of Frackson Chitheka v The Attorney General (Ministry of Finance Civil Appeal No. 67 of 2008 this court dealt with an appeal against an order of assessment of compensation by the Industrial Relations Court. The appellant in that case sought damages for defamation, unlawful imprisonment for 42 days and 42 nights and for having contracted TB, dysentery and Malaria while in incarceration among other claims. This court was emphatic that the Industrial Relations Court is there to give compensation for unfair dismissal and not to award damages in relation to criminal prosecutions which have nothing to do with the Industrial Relations Court; being a specialized court. Claims for defamation or unlawful imprisonment should be made through fresh proceedings in regular courts and not the Industrial Relations Court. The claims for damages cannot succeed here. The same can be said regarding the claim for losses suffered due to dismissal and withholding pension benefits. It is also rejected in this court.

In the last ground the appellant complained that accessors were not present to assist in the assessment herein. In the case of Frackson Chitheka v The Attorney General (Ministry of Finance), Supra, this court observed that the issue of compensation for unfair dismissal is a matter governed by the law with the discretion of the court built in. It involves the interpretation and application of legal principles to guide exercise of judicial discretion. Such judicial discretion cannot be showed with accessors who are not equipped to interprete and apply legal principles. I think that there are the circumstances that bring an assessment of compensation by the Industrial Relations Court within the armbit of Section 67 (3) of the Labour Relations Act which provides that:

Where the dispute involves only a question of law, a sitting of the Industrial Relations Court may be constituted by the presence of the Chairperson or Deputy Chairperson sitting alone.”

I would therefore not fault the Deputy Chairperson for sitting alone without assessors in assessment of compensation.

This appeal therefore succeeds to a limited extent as to the quantum of the compensation assessed as stated above.

PRONOUNCED in Open Court this 7th day of April, 2010 at Lilongwe.



R.R. Mzikamanda
J U D G E