INDUSTRIAL RELATIONS COURT OF MALAWI
MATTER NO. 81
BANDA .. APPLICANT
INVESTMENTS LIMITED ... .RESPONDENT
Mr. Likongwe of
Counsel, for the Respondent
Mr. Davie Mpakani
issue: Severance allowance pursuant to Section 35 of the Employment
Act. An employer resigning from employment is he/she
This matter has been
brought by Mr. World S. Banda the Applicant against Cusmarcos
Investments Limited the Respondents. In the Applicants
of claim, the Applicant seeks a relief that he should be paid
adequate long service benefits for the 15 years that he had
for the Respondents. The Applicant disclosed in his statement of
claim that he was paid K5,000 only which he takes to be far
The Respondents filed
in a response. The Respondents aver that the Applicant did resign on
his own through a letter dated the 2nd of April 2001. The
Respondents further aver that pursuant to Section 35 (1) of the
Employment Act, the Applicant is not entitled
to any severance
allowance. The K5,000 that was paid to him was a mere ex-gratia
I should now delve into
the facts of this case. The Applicant got employed by the Respondents
on the 21st of October 1985. On April 2001, the Applicant
wrote the Respondent in the following fashion:
W.S. Banda Clerk
P O Box 578
P O Box 578
I HAVE BEEN
GIVEN A ONE MONTH NOTICE
I have been given a one-month
notice from 2nd of April 2001 to the 30th of
April 2001 this month. The REASON is this that our Church Executive
of the Full Gospel Church of God appointed me to fill a position
Regional Evangelist. This was announced last Sunday on 1/04/2001.
Therefore I thank God for this that its much better to serve
in full time.
I am yours
The Applicant said
that as a result of this letter, he was given leave pay. Both
documents are tendered as App Ex 1 and App Ex 2 respectively.
On the 30th
of April 2001 the Respondent paid the Applicant K5,000 as ex-gratia
payment. This payment is reflected on App Ex 3. As a result of this
payment, the Applicant said that he was aggrieved because the
was far too low. He tendered in Court App Ex 4 and App Ex 5 which he
said represented the correct formulas for ex-gratia payment as
advised by Ministry of Labour. He also tendered in Court App Ex 6
which is the New Employment Law on payment of severance
therefore said that as per the New Employment Act, he was entitled to
a balance of K31,875:00 as severance allowance.
The Respondent had
one witness too. He is Mr. Mathews Thawe who is a building foreman.
He told the Court that all he knows is that
the Applicant who was a
site clerk resigned in the year 2001. He gave one months notice
and after serving the notice, he was paid
his dues and off he left.
The Court is mindful
of the fact that the Applicant during cross-examination by the
Respondents Counsel openly admitted that he
resigned on his own.
He even put his resignation into writing as exhibited in App Ex No 1.
I am aware that the letter he wrote was
not as clear as one would
expect. But I am aware that English is not our mother language as
such, people like the Applicant cannot
express themselves in such
clearer terms as he had done. But the fact of the matter is that the
Applicant resigned on his own volition.
He had received a call of God
which is rather irresistible. I therefore have to look at what the
law on severance allowance says.
The relevant provision here is
Section 35 (1) of the Employment Act. It says:-
"(1) on termination of
contract, by mutual agreement with the employer or
unilaterally by the employer, an employee shall be entitled to
be paid by the employer, at the time of termination, severance
allowance to be calculated in accordance
with the first schedule."
Thus Section 35 (1)
of the Employment Act entitles an employee to be paid by the employer
a severance allowance on the occurrence
of either termination by
mutual agreement or unilaterally by the employer. Section 35 (1) does
not entitle an employee who does unilaterally
terminate the contract.
In this instant case, the termination was at the initiative of the
Applicant who even wrote a letter to the
Respondent that he was to
follow the call of God.
As per the
requirement of the law pursuant to Section 35 (1) of the Employment
Act, the Applicant is not at all entitled to severance
further raised the issue of ex-gratia payment. The term
ex-gratia is self-explanatory. It means a token of thanks.
There is of course no hard and fast rule on ex-gratia payment.
Ex-gratia payment is at the instance of the employer. The
Employment Act does not at all cover ex-gratia payments. If an
employee has on his own initiative resigned from employment, that
employee should already have weighed the advantages
of doing so. He or she cannot later on saddle the employer with the
blame. In this instant case, the Respondents
out of sheer goodwill
decided to pay K5,000 as ex-gratia. This money is now being
challenged by the Applicant to be inadequate. The Applicant has based
his arguments on two letters which
the Ministry of Labour had written
to the Respondents in April and May 1996 respectively in relation to
a former employee Mr. Paul
Wyson. These letters are App Ex 4 and 5.
The contents of these letters are to the effect that the Ministry of
Labour was making a
recommendation that the Respondents had to
consider an ex-gratia payment to Mr. Paul Wyson of 2 weeks pay
for each year of service.
Mr. Wyson had worked
for 13 years. I take it that these letters of recommendation by the
Ministry of Labour have no legal force. They
were just mere
recommendations and they were and are not binding on the employers. I
am also mindful of the fact that these recommendations
been meaningful in 1996 when the Minimum Wages and conditions of
Employment (Severance Pay) Order 1976 were operational.
case is a 2001 matter and the New Employment Act has changed the
whole formula and terms for payment of severance
allowance. This in
actual fact has in turn affected what might have been a reasonable
recommendation then on ex-gratia payment. I therefore find
that the Applicant cannot dictate the parameters here as to whether
the K5,000 ex-gratia was adequate or not.
I do dismiss this
application. Each party to meet its on costs.
day of March 2002 at the Lilongwe Industrial Relations Court.