IN THE INDUSTRIAL RELATIONS COURT OF MALAWI
MATTER NUMBER 109 OF 2000
GERALD CHIMUTU NDAULE . .APPLICANT
CORAM: M.C.C. MKANDAWIRE, HON. CHAIRMAN
Mr. I. Kambuku, Employers panelist
Mr. B. Manda, Employees 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 applicants 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 applicants 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 applicants 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 respondents money from Mzimba to Mzuzu National Bank paymasters account. It is the applicants 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. Mteghas evidence, it is clear that they suspected the applicant to have been involved in fraudulent and dishonesty actions in relation to the respondents 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 Paymasters 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
91/265649 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 paymasters 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
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. Mteghas 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. Mwakihanas 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. Mteghas 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 respondents 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.