Banda (N) v Admarc - Matter No. 111 of 2000 (111 of 2000) [2002] MWIRC 1 (01 January 2002);

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IN THE INDUSTRIAL RELATIONS COURT OF MALAWI

MATTER NO. 111 OF 2000

BETWEEN

NATHAN O. BANDA………………………………..…APPLICANT

-and-

ADMARC …………………………………………….RESPONDENT

CORAM: 

HON M.C.C. MKANDAWIRE

CHAIRMAN

Mr. I. Kambuku, Employers’ panelist

Mr. B. Manda, Employees panelist

Mr. C. Ngwira of counsel for the applicant

Mr. A. Limbe of counsel for the respondent

Mr. Lora, official interpreter

J U D G M E N T

HON M.C.C. MKANDAWIRE

The applicant in this case is Mr. Nathan Banda. The respondent is Agricultural Development and Marketing Corporation (ADMARC). The applicant has brought this matter against the Respondent alleging that the Respondent has terminated his employment without furnishing him with details of the audit report. The Applicant would therefore like this court to order for his re-instatement or payment of all his dues.

The Respondent entered a defence in this matter. In their response, the Respondent has said that the Applicants’ services were terminated following failure by the Applicant to account for stocks valued at K131,420:00 or thereabouts for which he gave an unsatisfactory and unconvincing explanation. In the alternative, the Respondent say that the Applicant’s services were terminated due to his gross negligence which resulted in the Respondent’s corporation sustaining huge losses. We heard three witnesses in this case. The Applicant was the only witness for his side whilst as the respondent invited two witnesses. We shall first look at the Applicant’s story.

The Applicant got employed by the respondent in 1992. The Applicant was initially employed as an accounts officer and he worked in various ADMARC depots in Mzuzu and Karonga. In the year 1999, he was appointed as Unit marked officer, and was posted to Ng’onga in the district of Rumphi. As in charge of the Ng’onga ADMARC Unit, the Applicant told the court that he was also responsible for buying tobacco. It is the evidence of the Applicant that the year 1999 was the first time for him to purchase tobacco. Before the tobacco season started, the respondent organized a workshop for all the Unit buyers so that they get sensitized on the requirements of buying this so called green gold. That year, the workshop took place at Mzimba and he was exposed to the type of tobacco and the grades that the respondent expected the buyers to purchase. It is his evidence that at Ng’onga he had a shed which was only 8 meters long. Half of it was occupied with maize and a good part of the enclosure was occupied with pesticides. He therefore said that he had very little space where to keep the tobacco. As the buying season went on, the Applicant said that he bought a lot of tobacco. But all this tobacco was packed in this very narrow room.

He then asked for a balling machine from the respondent. But there was no help coming from them. He referred the matter to his immediate supervisor at Rumphi office who later on advised him to hire the machine. He hired one which was costing K50.00 per bale. He only managed to bale 25 bales thereafter, the respondent complained that the machine was too expensive. Thus the balling exercise was suspended. As a result of the delay, the tobacco which he had purchased in very good condition became burnt whilst on the grounds. He explained that the condition of the tobacco deteriorated as a result of the nature of space available. He said that tobacco left on grounds for months as his tobacco had stayed could not maintain its good condition. He said that there was no space in the shed hence lack of fresh air hence the tobacco generating moisture on itself and getting burnt.

The Applicant further told the court that the Respondent only came to his rescue in August, 1999 some four months after the tobacco had been on the grounds. As such, the tobacco which was underneath all got burnt hence the poor quality and grading. The applicant said that he personally went to deliver the tobacco which in total was around 39 metric tonnes.

It is the Applicant’s evidence that after having delivered all the tobacco to Mzuzu at the respondent’s grading shed, he was later on summoned to Mzuzu. When he went there, he was invited to explain something about his tobacco. The Respondent had established a commission of enquiry and he said that he explained to the Commission what he has told this court. He was later on advised not to repeat this. On the 15th of March, 2000, as he was busy at his station, that is when he received a letter of termination through a delegation sent by the Respondent. He tendered the letter in court as App Ex No 1. This letter said that the Applicant had failed to account for stocks valued at K131,420.00 and as such, the services were being terminated immediately. The Respondent in the same letter advised the Applicant that he would get:

a) three months salary in lieu of notice amounting to K16,170.00
b) three months housing allowance amounting to K10,500.00
c) gratuity for your services amounting to K48,510
d) refund of your accumulated credit from the pension fund.

This letter finally said that these benefits will be paid minus the outstanding shortage of K131,142.00. The Applicant told this court that he was not at al informed about the exact tonnage which the stock of tobacco the respondent had alleged he had failed to account for. He tried to make enquiries with the regional office in Mzuzu. But they told him that the headquarters in Blantyre were in a better position to explain. The Applicant however tendered in court the document from Mzuzu grading centre. It is App Ex No 3. This document summarizes what tobacco the Applicant had brought and the classifications after grading.

The first Respondent’s witness was Mr. Chinseu. Mr. Chinseu is the grading Manager for the Respondent based at the grading centre in the city of Mzuzu. He told this court that he received 39437 metric tonnes of tobacco from the Applicant. When this tobacco arrived at the grading centre, the Applicant had classified it as follows:-

i. 29854 kgs grade 1
ii. 3984 kgs grade 2
iii. 5599 kgs grade 3
But when this tobacco was re-graded at the centre it was actually

found that the tobacco was in the following categories:-

i. 5235 kgs grade 1
ii. 7196 kgs grade 2
iii. 21601 kgs grade 3

There was also 3.3283 tonnes which could not even be sold. The witness said that later on a Commission of enquiry followed up the matter. As per this witness he said that this tobacco was bad and had black leaf. He said this could only arise as a result of the Applicant purchasing wet tobacco or deliberately spreading water on the tobacco. He said this is sometimes done in order to increase weight. The witness said that he confronted the Applicant about the state of his tobacco. The Applicant said that he had problems at his station like lack of balling machine and space. He advised him that this was management problem. It is his evidence that in relation to the nesting of the tobacco; the Applicant may be thought that the responsibility will be transferred to the grading centre. Fortunately, things were discovered.

The second witness is Mr. Julious Kawalewale. He is the Deputy Audit and Evaluation Manager based at the Respondent’s head office in Limbe. This witness told the court that he was a member of the commission of enquiry which visited Mzuzu. According to the witness, the Applicant had told the commission that cause of black leaf was as a result of delay in collecting the tobacco from his unit. The commission he stated found that the Applicant’s tobacco must have been bought when it was still wet or if it was bought in good condition, then the Applicant must have deliberately over-conditioned it. As per the evidence of this witness who has vast experience in tobacco, he said that if tobacco is bought whilst in good condition, it can stay even in squeezed condition without changing its condition.

Mr. Kawalewale went on to say that in this case, the Respondent has lost a lot of money. This loss has come about because the Applicant had indicated as if he had purchased a lot of tobacco in grade I whereby pausing as if he had paid prices for grade 1 yet what he bought was trash and he should have paid the prices for lesser grades. As such, the Respondent put on the market tobacco of very low grade yet it had parted with a lot of cash for higher grades. As per the conditions of service which he tendered as Res Ex No 2, the Applicant had violated clause 16(b) (c) which are acts of misconduct, hence the termination of his services.

Before we assess the evidence on record, we would like to thank both counsel for their wonderful submissions which they made in this case. These submissions have been of very big help to this court.

The pertinent issues that this court would like to focus on are the following:

(i) whether or not the Applicant incurred a stock shortage.
(ii) whether or not the termination was justified.

We have pondered over the evidence from both sides. We note that after the Applicant had delivered his tobacco at the grading centre, the grading Manager confronted him about the condition of his tobacco. A close analysis of the summary tendered in court by the grading manager clearly shows that the Applicant’s tobacco was contrary to what he had indicated on delivery. The number of kilograms put by him as being of grade 1 is in total contradiction with what the grading master had found. The disparity is so wide that one can not believe the Applicant that the cause of it all was overstaying on the grounds. We were of the view that apart from the sporadic problems of space, balling machine and transport, the Applicant should indeed have purchased bad tobacco. We also observed on the onset that the Applicant was aware that he had space problem. Why did he keep on pilling the tobacco in that same small space. These are elements of an employee who does not want to take care of the employer’s property. Certainly, the Applicant should not have continued loading the tobacco in a shed which had no space. In other words, he should have stopped buying more tobacco. He displayed an element of carelessness or negligence. As a result of all these things, the Respondent ended up receiving tobacco which was bad. This badness can be said to be two fold. Firstly, the buying of poor tobacco. Secondly the overzealous attitude of the Applicant by buying too much tobacco whilst there is no room.

We therefore agreed with the Respondent witness number two when he said that this led to a stock shortage. We are aware that the Applicant had delivered the right number of kilogram at 39.4 tonnes. But the weight on its own is not complete. We have also looked at the quality. In the tobacco industry, we were told that its not only weight that matters. It is both weight and quality of the leaf. One can have good weight of a leaf yet the leaf is adultered with water and hence of very poor quality. All these culminated into stock shortage.

We would therefore move to the next issue of termination of services. Termination of services in employment relationship is looked at from two facades. These facades are:-

(a) substantive justice
(b) Procedural justice

We are aware that this matter arose in April, 2000. By that time, the provisions of our Employment Act, 2000 were not yet operational because that Act was operational from September, 2000. Moreover this Employment Act was assented to by the President on the 14th of May, 2000 after the matter herein had already arisen. In situations such as these, we have always resulted to the provisions of section 211 (1) of the constitution which mandates these courts to have recourse to International Law. This court has now and again in the absence of any relevant National Law on this issue referred to the International Labour Standards of the International Labour Organization. Convention number 158 concerning Termination of Employment at the Initiative of the Employer provides as follows:-

"The employment of a worker shall not be terminated

unless there is a valid reason for such termination connected

with the capacity or conduct of the worker……………."

In this case before us, we have looked at the reason why the Respondent had decided to terminate the services of the Applicant. We find that the Respondent had valid reasons.

In relation to procedural fairness, we have now and again referred to the provisions of section 43 of the Constitution which 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 expectation or
interests are affected or threatened ;"

Article 7 of convention 158 of the ILO also provides:

"The employment of a worker shall not be

terminated for reasons related to the
workers conduct or performance before he
is provided an opportunity to defend himself
against the allegations made, unless the
employer cannot reasonably be expected to
provide this opportunity."

There is abundant evidence in this case that the Respondent constituted a Commission of enquiry. The Applicant was invited to Mzuzu. He was asked to explain about the state of his tobacco. He made his representations and later on the Respondent came to a conclusion that this case merited a termination. We take it that this was a fair hearing of the Applicant before any administrative action was meted out. We are therefore satisfied that the Applicant’s termination was justifiable.

We have however been at pains to appreciated how the Respondent came to the conclusion that the stock shortage was worth K131,420.00. The Audit report has not been well explained. The two witness representing the Respondent were not even in a position to shed light on that. Witness number two who is the Deputy Audit and Evaluation Manager was himself at pains to answer questions from the Applicant as to how they came to that amount. He could not even explain as to what rate in pricing they had used in order to come to the this amount. This we found to have been very strange. Much as we do accept that there was a stock shortage, the specific weight and value in pricing should have been well articulated by the audit team.

The court has also observed that the Respondent would like to put the full blame of negligence on the applicant. But our findings are that to some extent, the Respondent too should share the blame. It is very clear and quite amazing that the Respondent did not provide the necessary equipment at the right time. Tobacco purchased in April was hipped on grounds up to the month of August. We find that such neglect by the Respondent did compound things. Whilst as the Applicant must have purchased some bad tobacco, but the good tobacco due to overstaying on grounds certainly got affected in quality. Thus we order that the Respondent should be liable to some extent for the laxity shown in this case. The Respondent did not come to this court with clear hands. We order that the Applicant’s liability is 80% whilst that of the Respondent is 20%. Thus from the total figure which has to be ascertained, the percentage herein have to be reflected. The difference should be refunded to the Applicant with immediate effect.

DELIVERED this……………………..day of ………………2001 at Mzuzu Industrial Relations Court

Signed ……………………………………….

M.C.C. Mkandawire

Signed……………………………………….

I. Kambuku
Signed ………………………………………
B. Manda