IN THE INDUSTRIAL RELATIONS COURT OF MALAWI
MATTER NUMBER 10 OF 2000
KEITH BANDA APPLICANT
BIBLE SOCIETY OF MALAWI RESPONDENT
R. ZIBELU BANDA (Ms.) Deputy Chairperson
Byson Nakutho for Respondent
Ngalauka Court Clerk
Justification for dismissal; opportunity to defend oneself; employees contribution to dismissal.
The applicant instituted these proceedings through IRC FORM 1 issued on 12 January 2000. He contends that the respondents who were his employers unlawfully dismissed him.
The issue of employment was not in contention as it was agreed that the applicant was employed on 1 January 1997 as Faith Comes By Hearing (FCBH) Promoter.
The applicant was in the service of the respondents discharging his duties till December 1999 when his services were terminated by letter of that date.
The applicant believes that his termination of services was unlawful as he had a right to bargain with management for better salary according to the Labour Relations Act 1996; he was justified in asking for a raise in salary because his net pay of K371.00 from K7, 300.00 was contrary to the Employment Act; he felt he was used as an example to others to intimidate them and prevent them from bargaining for better conditions of service; he was never issued with any warning letter throughout his service with the respondents and that he was not given opportunity to be heard before the dismissal.
The grounds for dismissal were insubordination, which according to the respondent warranted summary dismissal. The insubordination was as a result of tone of the applicants communication in a letter of 26 November 1999 to Mr. Nakutho the Executive Director in the respondents establishment; and for lies and half-truths told by the applicant; poor work performance and bad attitude towards work; and failure to agree on salary issues with management.
This was a written contract and conditions of service were expressed in a document called Revised Conditions of Service which document was relied upon by both parties as exhibit 13 and 22.
Condition 9 deals with termination of employment and it says:
The employment of permanent staff may be terminated by either party by giving: -
In the case of management and middle management, three months notice in writing or payment of three months salary in lieu of notice
Although the tone of the letter of termination of employment expressed summary dismissal this was not carried out as the letter suggests. The court will therefore deal with the issue of termination of employment as provided in the conditions of service and the Employment Act 2000 (hereinafter referred to as the Act).
The Act states that:
A contract of employment for unspecified period of time (as it was in this case) may be terminated by either party upon giving the other party minimum period of notice in writing. In lieu of providing notice of termination, the employer shall pay the employee a sum equal to the remuneration that would have been received and confer on the employee all other benefits due to the employee up to the expiration of the required period of notice (sections 28, 29 and 30 of said Act)
The respondents had complied with their conditions of service and the Act only to a certain extent as quoted above respectively. The applicant was paid the equivalent of three months salary in lieu of notice, he was also paid for any leave days not taken. However, he stated that he was not paid all other benefits due to him.
Condition 9, provides for three months period of notice or three months salary in lieu of notice. This was done. However, the Act goes further than that as per quotation above. The applicant should have received other benefits due to him and these will be looked into during assessment of damages.
The second element that needs to be looked into is whether rules of natural justice were applied before the termination. Natural justice requires that:
· The employee should know the nature of the complaint made against him/her (valid reasons must be given for the termination);
· He/she should have an opportunity to state his/her case (the right to be heard; defend oneself)
· The employer should act in good faith.
The first two requirements above are also enshrined in Convention No. 158, concerning Termination of Employment at the Initiative of the Employer, especially articles 4 and 7 respectively.
The Act in section 57 (1) and (2) has similar provisions worded as follows;
Section 57 (1) The employment of an employee shall not be terminated by an employer unless there is a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirements of the undertaking.
Section 57(2) The employment of an employee shall not be terminated for reasons connected with his capacity or conduct before the employee is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide the opportunity.
The evidence on record is that the applicant was invited by the Executive Director in the presence of another person to witness the termination of employment. At this meeting the applicant was informed that his services were terminated. The applicant was neither accorded the opportunity to defend himself nor was he given the opportunity to appeal against the decision to terminate his employment. Instead he got a letter from chairman of the board confirming his termination.
This was a violation of the Act. In the old days it was possible to terminate the employment of an employee without giving him the opportunity to defend himself. It was also possible and legal to terminate the services of an employee without giving him/her reasons for the termination. The prevailing law both locally and internationally under the International Labour Organisation (ILO) Standards, demand that before an employees services are terminated, s/he must be furnished with valid reasons and be accorded the opportunity to defend her/himself.
The respondent did not show why he could not reasonably have accorded the applicant the opportunity to defend himself. It is therefore presumed and concluded that the respondent failed deliberately to allow the applicant to defend himself after the allegations leveled against him.
These allegations were that he was insubordinate, he was incompetent, and he failed to discharge his duties satisfactorily and that he disagreed with management on issues of salary increment. The allegations in substance, point to conduct and capacity of the applicant as such the respondent was compelled by law to apply section 57 of the Act, which deals with justification for dismissal.
A dismissal is unfair where; an employer violates section 57 of the Act. (See section 58 of the said Act.) The applicant was not given an opportunity to defend himself when his employment was terminated.
This court finds that the applicant was unfairly dismissed because the respondent violated section 57(2) of the Act.
The applicant initially sought reinstatement with full compensation and other remedies. During hearing the applicant amended particulars of his relief and stated that he wished to be compensated in form of loss of salary, housing allowance, transport allowance, medical support, education fund, pension fund, severance pay, bonus, water allowance, education loan, electricity allowance, leave days, lunch allowance and loss of economic rights. He further claimed damages for shame and embarrassment suffered due to the unfair dismissal.
The Act gives this court power to order relief and each case is decided on its own merits depending on the nature of the contract of employment and the circumstances of the case. In deciding which remedy to grant, the court shall first consider an order for reinstatement.
It came out clear during proceedings that the respondent would not take back the applicant under any circumstances. This position was made so clear that the applicant did not dwell on that relief. Instead he substituted it with the list that has been enunciated above.
In reality reinstatement and/or re-engagement are seldom used. This is presumably because industrial realities often militate against reinstatement. An employer cannot be forced to take an employee back on even if reinstatement was ordered. Similarly, an employee cannot be forced back to work with an employer.
It has been established elsewhere that reinstatement is normally not practical especially where:
Re-instatement would provide serious industrial strife or cause profound disruption within a very small business or organisation;
The individual to be reinstated is a senior employee in the establishment as compared to a general duties unskilled worker.
It was submitted and observed during hearing that the respondents organization operated as a family unit because members were so close to each other. The applicant was not a general worker in the organization but held a post at Middle Management level as per memorandum of November 11, 1998 from the Executive Director to the applicant.
The test is whether reinstatement is practicable, not just whether it is expedient. In anticipation of this possible dilemma section 6 as read with section 8 of the Labour Relations Act 1996 provides that reinstatement will be ordered, Unless it is clearly not practicable.
In addition section 63 (2) of the Employment Act 2000 states that,
In deciding which remedy to award, first consider the possibility of making an award of reinstatement or engagement taking into account in particular the wishes of the employee and the circumstances in which the dismissal took place, including the extent, if any to which the employee caused or contributed to the dismissal.
These factors suggest that reinstatement though should be the first remedy to be considered in these cases, it must be practical.
The circumstances, which led to the termination of services, were presented in detail to this court. It was evident that the applicant contributed to a large extent to his fate.
The applicant was engaged in negotiations with management on salary raise and other conditions of service. He was a member of a select committee to bargain on behalf of fellow employees. The procedure for the bargain was that the committee would arrange to meet with members of management and discuss. Eventually all other members of the employees committee except the applicant reached an agreement with management. The applicant continued to negotiate with management to advance his own grievance. The grievance was that his net pay of K371.00 out of a gross salary of K7, 300.00 was unfair. The reason for this state of affairs was that the applicant was staying in a rented house whose rent was beyond his housing allowance of 80% of his salary. Therefore a huge deduction was made on his salary to cover for the shortfall in rent. The Executive Director wrote to the applicant raising his concerns on this issue in a letter dated November 26, 1999. The deduction was therefore made with full knowledge of the applicant.
It is not up to this court to say whether the net pay was reasonable or not because that is a term of contract which an employee and employer agree upon on the signing of contract of employment. This court could interfere if the gross salary was below the statutory minimum rate.
The applicant suggested to this court that he had a right under the Labour Relations Act 1996, to bargain for better salary. This is true, however, one of the principles of collective bargaining is stipulated in section 31 of the Labour Relations Act 1996 as follows: -
All parties to the negotiation of a collective agreement shall bargain in good faith and make every reasonable effort to conclude a collective agreement.
The view of this court is that the applicant was not bargaining in good faith and to that extent he contributed to the escalating conflict between himself and the respondent.
Further, it was submitted and noted during hearing that the applicant had sent communication to South Africa alerting the Regional Secretary of the Society about problems at his work place. The letter of December 17, 1999 from the applicant to Mr. Nkolesha and copied to Board Chairman, Executive Committee Chairman, Honorary Treasurer, Media Consultant (Africa) and Program Consultant (R&C) is of particular interest. The letter is reproduced below to show how the applicant took concerted efforts to discredit the respondent and bring the organization or its officers into disrepute.
SUBJECT: STAFF ARE LOSING JOBS AFTER YOU ASKED THEM ABOUT THEIR PROBLEMS IN THE BIBLE SOCIETY OF MALAWI.
With reference to your visit in September, 1999 to the Bible Society of Malawi where you had among other things identified 39 problems staff meet in course of their employment, I am sad to inform you that the Executive Director has resolved to discharge employees. This is a confirmation of what we told you.
As I am sending you this fax now, I have been told to leave employment of Bible Society against my call to work for God. Others are also being scrutinized as to how they can leave.
Since you are the one who asked us about the problems we face and we honestly told you our situation in confidence as Christians, we ask you to intervene for us. The Executive Director is openly challenging in staff meetings that you cannot do anything to him since you are not his direct boss. Please help us for Gods sake before we seek outside help. The Press are already interested.
(Emphasis supplied by this court.) A reading of this letter, which was purportedly sent by fax, could create many problems between an employee and an employer. More so since the applicant could not substantiate the allegations of mass dismissals. Other than that, the tone of the letter is questionable and one would be justified to wonder what the motive behind this letter was. This court would not scrutinize each and every phrase, needless to say the contents contributed to the unresolved conflict. The letter was sent after he had been dismissed and it is the view of this court that it foreclosed any opportunities for reconciliation or reconsideration to return to work. The letter reflects the general attitude of the applicant even when he was negotiating with management. This confirms the fact that he was not negotiating in good faith. It is therefore, the conclusion of this court that re-instatement is not an option. Ultimately the most practicable and sure way of providing relief to the applicant is an award for compensation.
Having found that the applicant was unfairly dismissed, it is the duty of this court to make an award of compensation as specified in section 63 (4) of the Act. This section 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 can be attributable to action taken by the employer and the extent, if any, to which the employee caused or contributed to the dismissal.
The factors to be considered when deciding an award of compensation under the section are:
Just and equitable;
Loss sustained by the employee in consequence of the dismissal;
Loss to be attributable to the action of the employer;
Employees contribution to the dismissal; and
Guidelines under section 63 (5) of the Act.
The court shall endeavour to arrive at a sum of money that is just and equitable to adequately compensate the applicant without leaving him poorer or richer. The applicant must show that he incurred loss due to the dismissal and that the loss was a direct consequence of the action taken by the employer. When this loss has been verified, the court shall reduce the amount to the extent that the applicant contributed to the dismissal.
The respondent counter claimed a sum of money, which had been loaned to the applicant during his service with the respondent. However, the counter claim was later withdrawn because the amount had been recovered.
ASSESSMENT OF DAMAGES
The court shall assess damages at a date to be fixed and both parties will be required to attend the assessment. In assessing damages the above factors shall be taken into consideration.
Pronounced in open court this 2ND day of October 2002 at LIMBE.
R.Zibelu Banda (Ms.)