Court name
Industrial Relations Court
Case number
Misc Matter 109 of 2000

Ndaule v Admarc (Misc Matter 109 of 2000) [2001] MWIRC 10 (06 September 2001);

Law report citations
Media neutral citation
[2001] MWIRC 10

IN THE
INDUSTRIAL RELATIONS COURT OF MALAWI


MATTER NUMBER
109 OF 2000


BETWEEN:


GERALD CHIMUTU
NDAULE……………….………….APPLICANT


-and-


ADMARC…………………………………………………RESPONDENT


CORAM: M.C.C.
MKANDAWIRE, HON. CHAIRMAN


Mr. I. Kambuku,
Employers panelist


Mr. B. Manda,
Employee’s panelist


Mr. Ngwira of Counsel
for the applicant


Mr. Limbe of Counsel
for the respondent


Mr. Lora - Official
Interpreter


Mrs. Namanja –
Court Reporter


J U D G M E N T


This matter has been
filed by Mr. Gerald Ndaule the applicant. It is brought against the
Agricultural Development and Marketing Corporation
(ADMARC) the
respondent. In the applicant’s statement of claim, the applicant
says that he was dismissed on allegations that he
had a shortage of
K11,000 which statement the respondent has not substantiated. He is
therefore praying this Court to order for his
reinstatement or that
he should be paid all his dues. The respondent has filed in a defence
in their reply to the applicant’s statement.
They say that the
applicant was dismissed following his involvement in fraudulent
transactions aimed at defrauding the respondent
whereby the
respondent lost substantial sums of money. The respondent has also in
the alternative argued that the applicant’s conduct
and the
circumstances surrounding the case entitled the respondent to lose
trust and confidence in the applicant and accordingly
dismissed him
in accordance with the Conditions of Service. There are only two
witnesses in this case. The applicant represented
his side whilst the
respondent invited Mr. Mtegha as their witness.


In a nutshell, the
applicant joined the respondent on 5th June 1985. He rose
through the ranks up to the position of Regional Cashier (North) the
position he held up to the time this case
arose. The applicant did
explain to the Court how the accounting system with the Commercial
banks at Mzimba had changed in 1998.
He told the Court that prior to
1998, the respondent used to operate its bank account with National
Bank at Mzimba Boma for its satellite
markets. But when the agency of
National Bank was closed in 1998, the closure necessitated transfer
of the respondent’s money from
Mzimba to Mzuzu National Bank
paymaster’s account. It is the applicant’s evidence that this
arrangement did create confusion.


We would like to
point it out on the onset here that the applicant was not very clear
as to how this confusion came about. We observed
that he mixed up so
many stories. At one point he could talk of the problem of two
accounts which were paymaster and imprest account.
For example, he
said that when money was banked, it was banked to the paymaster
account. But when they requested for it, it was sent
through imprest
account. He said that there was thus a problem with reconciliation.
The applicant also referred to problems with
cheques. He said that
there was some duplication with the banking. Again, the applicant was
not clear on this. He did not elaborate.
The applicant then told the
Court about the problem which arose due to changes from manual to
computer system. He said that although
the accounting system had
changed to computer system, the audit system was still manual. We
however failed to grasp the point he
was driving home in relation to
how this had contributed to the problems at hand. The applicant said
that due to all these problems,
he was found with a surplus of K4,600
and he was put on suspension through a letter. Unfortunately, this
letter was not tendered
in this Court. The applicant said that he was
later on refunded this money after discussion with his bosses. Later
on, he was called
to the office by Mr. Mtegha the Regional Auditor.
Thereafter, a letter of dismissal followed. He tendered it as Pex2.
We would however
like to make an observation here. The applicant
mentioned that he was called by the Regional Auditor to his office.
He however did
not even mention in a single word as to what
transpired in that office. We made an observation again that the
applicant was fond
of leaving the Court in suspense when it mattered.
This we think was a deliberate scheme to confuse the Court.


The applicant
further tendered in Court a letter he wrote to management complaining
about the dismissal. The letter is App Ex3. The
applicant finally
told the Court that he was not afforded a chance to be heard because
he did not appear before a disciplinary committee
and that the
Regional Manager did not call him at all to hear his side of the
story. He also did disclose to the Court that the auditors
did not
show him the audit report.


The respondent
invited Mr. Herbert Oliver Mtegha the then Regional Internal Auditor
North at the time this matter arose. From the
totality of Mr.
Mtegha’s evidence, it is clear that they suspected the applicant to
have been involved in fraudulent and dishonesty
actions in relation
to the respondent’s property/money. These transactions or actions
are divided into two:-



(a) Fraudulent cash transfer


(b) Fraudulent payment voucher

We shall first look
at (a) above. The witness explained that following the closure of
Mzimba National Bank Agency there were ADMARC
cash transfers from
Mzimba to Mzuzu National Bank Paymaster’s Account. The witness
referred to the particular cash transfer vouchers
(C25) which were
tendered in Court. On those documents it is clear that the applicant
had transferred the following amounts:-


C2 No.
Amount


91/256759 K12,000-00


91/265649 K 1,211-00


91/201687 K 2,000-00


What is amazing
however is that later on the applicant purportedly made a similar
transfer from imprest account to paymaster’s account.
The
impression created on the books was as if there was a surplus which
surplus was accordingly appropriated by the applicant. It
later on
transpired that this trick was discovered by the authorities as per
checks in the cashbook. The applicant when confronted
quickly
deposited a similar amount of cash to make good the deficit. The
applicant admitted making these transactions in his written
statement
the witness said. This statement is Rex I (c). The witness then
referred to another transaction not accounted for in the
cashbook.
This transaction involved the following:-


Transfer
Voucher No
Amount


91/202466 K 400-00


91/202465 K9,750-00


K 735-07


As for the third
amount of K735-07, the witness said that they have been unable to
trace the transfer voucher. Unlike in the previous
transaction, this
second transaction to the tune of K10,885-07 was and has not been
refunded by the respondent.


All the transfer
vouchers were tendered as Rex 1 (a). The bank statements showing
refund were tendered as Rex 1 (b). From all these
transactions, the
only inference that the respondent made was that of fraud. For
example, if these transactions were as a result
of innocent mistake
or confusion, Mr. Mtegha stated that the audit team could have found
the surplus alleged. But there was no surplus
declared and none was
found on the applicant. It is also pertinent to note from Mr.
Mtegha’s testimony that the dubious transactions
herein were not
signed by the applicant. This omission to sign, he said, was a
deliberate one so that later on the applicant should
confuse the
audit team.


In relation to point
(b) as hereinbefore mentioned, Mr. Mtegha stated that a cheque No.
612064 dated 9th of April 1998 for K26,077-47 was prepared
for Mr. Mwakihana as gratuity payment. But before this cheque was
paid out, Mr. Mwakihana
lost a wife. He therefore requested for
K1,000-00 in order to meet funeral expenses. As a result of this
transaction, Mr. Mtegha
said that Mr. Mwakihana’s cheque for
gratuity had to be reduced by K1,000-00 which meant that the
respondent had to re-issue a
cheque of K25,077-47. As a result of
this, a new cheque for K25,077-47 was prepared. The witness referred
to a bunch of documents
where all these transactions are well
illuminated. These are referred to as Rex No. 2 (a). The witness
further told the Court that
the first cheque was cancelled by the
Regional Accountant but the payment voucher was not. What transpired
thereafter was that although
the cheque was cancelled, but the cash
was still paid out using the payment voucher which was not cancelled.
As evidence of payment,
the witness referred to payment vouchers
which are exhibit R2 (b). This payment has also been reflected in the
cash book which is
R2 (c). Mr. Mtegha said that even the signatures
on the two payment vouchers show that they are very different
compared to the genuine
one signed by Mr. Mwakihana on the voucher of
K25,077-47. This, he said, is very clear on Rex No. 2 (a). It was Mr.
Mtegha’s testimony
that as Regional Cashier, the applicant was
responsible for the transactions involving payment vouchers and cash
book transactions.
As paying officer, the voucher clearly shows that
he did effect the payment even on the voucher of K26,077-47 whose
cheque had been
cancelled by the Regional Accountant but inadvertedly
omitted to cancel the voucher. The applicant should therefore have
given an
explanation as to where this money had gone. Mr. Mtegha said
that the applicant as paying officer took advantage of the fact that
only the cheque was cancelled but not the voucher and he in turn
played with the cash which resulted to the respondent incurring
a
loss.


Before we further
delve into the case, we have taken note of the fact that counsel in
this case put up with very informative submissions.
We have gone
through these submissions and they have been of very big help to the
Court.


In cases of alleged
unlawful dismissal, it has always been the practice both in the
labour law and the International Labour Standards
of the ILO that the
onus is on the respondent to show that the dismissal was lawful or
justified. Thus the Labour Court or Industrial
Relations Courts look
at both substantive and procedural justice. In terms of substantive
justice, we look at the reasons that led
to the dismissal. We also
look at the Conditions of Service which were in place at the
respondent’s place of work. In particular,
we pay special attention
to provisions relating to dismissals. In this instant case, the
applicant, we are told, was dismissed pursuant
to clause 16 of the
Conditions of Service. We have taken judicial notice of clause 16
which clause was also referred to in matters
No. 110 and 111 both
against the respondent. This clause talks of dismissals on grounds of
dishonesty, fraud etc. We have looked
at the evidence that came from
Mr. Mtegha the Regional Internal Auditor. We have also looked at the
documentation tendered in this
Court in support of this oral
evidence. The documents tendered in this Court are so overwhelming
against the applicant that no any
other conclusion could have been
made but that of dishonesty and fraud. We heard the evidence of the
plaintiff. We were unable to
connect how the change in the bank
system could have affected the none-signing of crucial documents when
the applicant had purportedly
transferred cash. We also see no
connection between change of banking system to the fictitious payment
of K26,077-47. The applicant
as paying officer was certainly involved
in these very clandestine transactions. We were therefore satisfied
that the respondent
had all the reasons to invoke clause 16 of the
Conditions of Service.


The next point which
we have addressed is in relation to the issue of procedural justice.
The pertinent issue where the matters of
procedural justice is
involved is that a party should not be condemned unheard. This
principle of natural justice has also been enshrined
in the Republic
Constitution in particular under Section 43 that deals with the issue
of administrative justice. The Section says:-


"Every
person shall have the right to-



(a) 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;"

This therefore
requires that the person concerned should be aware of the allegations
leveled against him or her so that he/she can
effectively defend
himself/herself. In the instance case, there is evidence that the
applicant through the audit team was asked to
explain his side of the
story about the alleged fraudulent transfer of money. Indeed apart
from the oral explanation, the applicant
even put his explanation in
writing. Apart from that, there is unchallenged evidence that
actually the applicant was called before
the audit team to explain
what he knew about the transactions. There is evidence on record that
this led to the suspension of the
applicant. As the applicant was on
suspension, the audit team found yet another fraudulent transaction
in relation to the K26,077-47.
It is the evidence of Mr. Mtegha that
he took the trouble to go all the way to the house of the applicant
in order to hear his side
of the story. Unfortunately, the applicant
challenged Mr. Mtegha that since he was now on interdiction, he could
not explain anything.
He also said that since these discoveries were
made whilst he was out of office, there was no reason for him to give
any explanation.
We thus found that the applicant had become
deliberately evasive. He was afforded the opportunity by a well
mandated person in very
senior position to give his side of the
story. Moreover, Mr. Mtegha was the right person who was conversant
with audit matters.


As a Court, we found
that the challenge by the applicant not to explain his side of the
story on the K26,077-47 was not a wise decision.
The transactions
being referred to took place whilst he was still in the office as
Regional Paymaster. He should not have been so
adamant as not to
explain what he knew. We therefore find that the respondent cannot be
condemned today that they did not afford
him an opportunity to be
heard because they did that but he deliberately evaded it. We
therefore find that the applicant is to take
the blame for the
situation in which he found himself when the letter of dismissal had
come. All in all, we find that the applicant
was lawfully dismissed.
He was indeed engaged in fraud and dishonesty of very high turpitude.
As regards the deductions effected
on his dues, this is a matter of
working them properly between the two parties. If at all they
exceeded what was lawfully for the
respondent, then the balance
should be refunded to the applicant.


DELIVERED this
17th day of September 2001 at Mzuzu Industrial Relations
Court.


Signed:-------------------------------------------------------------------


M.C.C. Mkandawire


Signed:--------------------------------------------------------------------


Mr. Kambuku


Signed:--------------------------------------------------------------------


Mr. Manda