Majawa v Auction Holding Ltd - Matter No. 25 of 2001 (25 of 2001) [2002] MWIRC 14 (01 May 2002);

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IN THE INDUSTRIAL RELATIONS COURT OF MALAWI

LILONGWE REGISTRY

MATTER NO. 25 OF 2001

BETWEEN:

FRASCO L. MAJAWA………………………...…………..APPLICANT

-and-

AUCTION HOLDINGS LIMITED……………………RESPONDENT

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

Applicant – Present (Unrepresented)

Respondent – Present (Represented by Counsel Likongwe)

George Chapalapata – Official Interpreter

J U D G M E N T

Matters in Issue : Unfair dismissal.

BACKGROUND

On the 25th of September 2001, the Applicant filed this case against the Respondent on a trade dispute of unfair dismissal. The Applicant was praying for a relief that he should be given his severance allowance for all the 13 years that he had worked for the Respondent. In response, the Respondent said that the Applicant was fairly dismissed.

SURVEY OF EVIDENCE

The Applicant Frasco Majawa got employed by the Respondent on the 24th of March 1988. He was initially employed as a seasonal mailing clerk. He rose through the ranks up to the position of Senior Computer Operator. It is the evidence of the Applicant that as one of the conditions of employment, as an employee of Auction Holdings (the Respondent) he was not supposed to grow tobacco, sell any tobacco to the Respondent or deal in any tobacco transactions on someone’s behalf. The Applicant said that this was a serious condition of employment and memos and circulars were issued out by Management to remind all the employees on the seriousness of this condition.

The Applicant told the Court that his late father from whom he got all the names as junior Majawa Mbewe was a tobacco grower. He had an estate in Salima. When he died in 1994, his father left all the names on him. Thus the tobacco licence was also handed over to him since they had similar names. The family members unanimously agreed that the Applicant who had similar names like those of the deceased should continue using the licence. The Applicant said that he even opened a bank account in similar names like those on his later father’s licence and he did all this in order to assist members of his family sell tobacco since he himself was not allowed by the Respondents. The Applicant told the Court that in the year 2000, a Mr. Dawa who was the Manager at Tobacco Investment Limited approached him if he could use his licence number to sell his tobacco. It is important to note here that Tobacco Investment Limited was a wholly owned subsidiary of the Respondents and that employees of this subsidiary were also barred from selling their tobacco at the Auction Holdings. The Applicant said that he accepted to sell Mr. Dawa’s tobacco through his number and all the money was credited to his account. He later on withdrew the money and handed over to Mr. Dawa.

In May 2001, the Applicant said that he was amazed when the Floor Manage called him to his office. Whilst at that office, the Floor Manager accused him of this and that in relation to the tobacco, which he sold on behalf of Mr. Dawa. The floor Manager confronted him to explain what he knew of this tobacco. He explained as he has done here. Later on the matter was referred to the police where he was personally taken in the company of the Company lawyer Mr. Likongwe. After interrogations the police released him but later on Mr. Dawa was locked up. It was then that the Applicant heard that the tobacco was allegedly stolen at the Tobacco Investment Limited. The Applicant said that after he was cleared by the police, he went back to his place of work. He worked for 30 days only and on the 1st of June 2001, he got a letter of dismissal. The Applicant said that he was thus very amazed as to why he was not given the chance to be heard before they dismissed him. He told the Court that there is a disciplinary committee at the Respondent’s place but he never appeared before this committee. He thus said that he was unfairly dismissed. The Applicant said that he was discriminated against because most people appear before this committee and he further said that he was not even aware of the charge he was facing.

The Applicant’s brother came as witness number two. He confirmed about the Applicant taking over his later father’s licence because they had similar names. He also told the Court that before Mr. Dawa’s tobacco was sold through this number, the Applicant approached them for authority, which they gave.

The Respondent brought one witness who is Mr. Patrick Chitokwe. He is the Assistant Floors Manager at Auction Holdings. He told the Court that there was a time during this material time when they discovered that a lot of tobacco bales went missing at the Tobacco Investment Limited where the tobacco had gone for rehandling. An enquiry was instituted and it later on transpired that the Manager of Tobacco Investment Limited (TIL) Mr. Dawa had sold a lot of tobacco through the licence of the Applicant. It would appear that there was a syndicate between TIL and Auction Holding Limited the witness said. Thus the stolen tobacco at TIL was sold through the Applicant’s number (licence) and the money was transacted through the Applicant’s account.

After these findings, the matter was reported to the Group General Manager of Auction Holding Limited Mr. Msonthi. The Group General Manager then appointed the Floor Manager and the Assistant Floors Manager (himself) to constitute a disciplinary committee to hear the Applicant. Thus on the 14th of May 2001, the Applicant was summoned to meet the two in the office. Whilst at the office, the Applicant was asked to give his side of the story in relation to the stolen tobacco that was sold through his number. The Applicant gave an explanation in great details. He told them that he indeed sold the tobacco for Mr. Dawa through the number in issue. After selling the tobacco, the money went through his account. The Applicant told them that the number is not his but does belong to the family since their later father the original owner of the licence had died. The witness said that a statement was written by the Applicant, which he tendered as Res Ex No. 5. After having heard the Applicant, the team submitted its report to Management and Management thereafter took an action.

THE LAW

In a case of termination of services, this Court is now governed by Section 57 of the Employment Act. This Section has put in place two fundamental points that are supposed to be fulfilled before any termination related to misconduct, incapacity or operation grounds could be said to be fair or justifiable. These are:-

(i) Valid reasons for the alleged termination.
(ii) The employee has to be given chance to be heard before any decision is taken.

Thus the Court in looking at the case at hand will be addressing its mind towards these requirements.

ANALYSIS

From the totality of the evidence, it is clear that all employees of Auction Holdings and those from Tobacco Investment Limited were not allowed to sell tobacco to Auction Holdings. This condition was spelt out in black and white in the conditions of service. Clause 21 provides as follows:-

"It is a condition of service that under no circumstances may an employee of Auction Holdings Limited or Agriculture Trading Company Limited or Tobacco Investment Limited be a registered grower or seller tobacco on the Auction Floor."

Apart from this condition, the Respondents sent reminders through circulars about this prohibition not to sell tobacco. The Applicant argued that the licence was for the entire family only that it was with him because he took over all the names of his deceased parents.

The Court had problems to accept that. The Applicant had assumed ownership of this licence and he even opened a bank account to which he was the sole signatory. He should not today hide under the guise of family ownership. It was thus very clear that the Applicant was the assumed owner.

Certainly, this policy that prohibits employees to sell or be registered growers of tobacco should have some background to it and it is not the province of this Court to canvas on the merits or demerits of the policy. The evidence on record is very clear that the Applicant was aware of this policy. It is again clear from the evidence that after the Applicant’s father had died, he assumed ownership of the licence to grow in fragrant violation of the strict rules at his place of work not to sell tobacco to the Auction Floors. The Applicant not only sold tobacco to Auction Floors but he sold tobacco on behalf of another employee of a subsidiary of Auction Holdings who was also barred from transacting in tobacco. The Respondents therefore had valid reasons to call that a misconduct.

I would now turn to the issue of the procedure that the Respondents followed before terminating the employment of the applicant. The principal requirement of procedural fairness in the event of alleged misconduct is that the employee should be given a fair hearing. Where there is a disciplinary procedure laid down at the place of work, this procedure should be substantially followed, failing to do so will amount to unfair labour practice. It is thus generally agreed that the employee should be given reasonable notice of the charge against him/her and should receive adequate opportunity to answer it and bring extenuating circumstances to the employer’s notice.

In this case, there is a heavy dispute about the issue whether what transpired in office of the Floors Manager was a hearing as envisaged in Section 57 )2) of the Employment Act. The Applicant said that he never appeared before a disciplinary committee as has been the case with friends of his.

The Applicant further said that he was not charged with any misconduct so that he should have been given time to properly respond. All he was confronted with in the office of the Floors Manager were abuses, castigations and threats. He said that he did not consider this as a hearing but interrogation. On the other hand, the Respondent’s witness said that this was a hearing and that the two of them constituted a disciplinary committee as mandated by the Group General Manager a Mr. Msonthi.

In order to properly resolve this issue, the Court has looked at the Conditions of Service tendered in Court by the Respondents. Clause 20 (5) (d) supported by appendix M deal with the issue of discipline and it says:-

"An employee may be required to appear before a disciplinary committee to answer any charges that may be levelled against him. Where an employee has been summoned for a disciplinary hearing, he will be given at least 3 days written notice advising the date of the hearing and the charges to be answered.
The employee will have the right to bring his own witness and to be represented by a Company employee if he so wishes.
(e) All proceedings in a disciplinary matter will be reduced to writing and maintained on record files."

The provisions of this clause speak for themselves. The Respondents have an excellent procedure laid won in black and white on procedural fairness before effecting termination. The billion question is did they follow this procedure? I do not think so. If indeed the Floors Manager and his Assistant were a disciplinary committee, we could have seen the outcome of that hearing reduced in writing. What the Court has found from the foregoing analysis is that there was no fair hearing of the Applicant in this matter. He was not levelled with any charge of misconduct. He was not given any notice to prepare for any hearing. In actual fact, there was no hearing. What transpired in the office of the Floors Manager was a mere interview which later on culminated into an interrogation.

This Court has stressed in several of its decisions on procedural fairness that it should be an effective hearing and not just an academic one. The Court cannot hold here that there was a hearing as envisaged by Section 57 (2) of the Employment Act.

FINDING

Although the Respondents had a valid reason to hold the Applicant responsible for misconduct, the Respondents on the other hand did not use a procedurally fair approach. Thus the dismissal of the Applicant cannot be described to be fair. It was an unfair dismissal. The appropriate remedy here is that of compensation as laid down in Section 63 (4) (5) of the Employment Act. The Applicant had worked for more than 10 years but less than 15 years. He therefore falls in the blanket of compensation, which should not be less than two weeks pay for each year of service. I therefore order that he be paid three weeks pay for each year of service. This compensation to be paid immediately.

DELIVERED this ----------- day of May 2002 at Lilongwe Industrial Relations Court.

M.C.C. Mkandawire

HON. CHAIRMAN