Kandoje v Malawi Housing Corporation (IRC 233 of20033) (NULL) [2004] MWIRC 13 (12 October 2004);

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IN THE INDUSTRIAL RELATIONS COURT OF MALAWI


PRINCIPAL REGISTRY


MATTER NO. IRC 233 OF 2003


BETWEEN:


KANDOJE...….…………….…...…………………………....APPLICANT


-and-


MALAWI HOUSING CORPORATION...................…...RESPONDENT



CORAM: R. Zibelu Banda (Ms); Deputy Chairperson

Applicant; present

Kazembe; of Counsel for respondent

Mbewe; Court Clerk


RULING

Contract of employment- Employer-Who is employer under section 3 Employment Act-Terms of contract-Temporary employment-Casual labourer-Definition of casual labourer-Employment Act- Seasonal worker-Who a seasonal worker is.


Facts

The applicant was employed by Management of Chiwembe Sports Club on 14 November 1998 as Waitress at the Sports Club. According to the letter of appointment, the employment was on temporary basis. The applicant was entitled to K850-00 salary per month; K1-80 house allowance per day; and 12 days leave per annum. The applicant was in this employment until a time when the club was closed due to mismanagement. After the closure of the club the applicant continued to be on the payroll until 12 June 2000 when she was engaged as casual labourer at Chimwankhunda Project working as Security Officer. In August 2000 the applicant received a letter of suspension from Chiwembwe Club stating that the club had been closed due to poor performance. It must be noted that this suspension was of no effect to the applicant because at this time the applicant was already in employment at Chimwankhunda Project and there had been no break of employment since November 1998.


On 20 February 2003 the applicant received a letter of termination citing reduction of work as ground for termination. On termination the applicant received one month pay in lieu of notice for March 2003; Overtime pay and accrued leave pay. The applicant did not receive severance allowance and she also alleged that during the time she was employed at Chiwembe she never went on leave. She was therefore claiming accrued leave days for 1998-2000 comprising 24 working days.


The respondent contested the claim for severance allowance and accrued leave pay on the basis that the applicant was not a permanent employee for Malawi Housing Corporation therefore she could not receive severance allowance and that the applicant was employed by Chiwembe and Chimwankhunda respectively which were independent from Malawi Housing Corporation.


The issues for the Court to determine were whether the applicant was employed by Malawi Housing Corporation; whether the applicant was a permanent employee; whether she was entitled to severance allowance and whether the applicant was entitled to accrued leave pay for 1998 to 2000 and how much?


The Law

Who is an employer?

Section 3 of the Employment Act defines an employer as any person, body corporate, undertaking, public authority or body of persons who or which employs an employee and includes heirs, successors and assignees of the employer.


In this case the Court heard that the applicant was employed by management of Chiwembe Sports Club. It was the applicant’s testimony that Chiwembe Sports Club belonged to Malawi Housing Corporation and operated under Malawi Housing Corporation. She confirmed her assertions by producing pay slips from Malawi Housing Corporation showing that her salary, house allowance and other benefits were in fact paid by Malawi Housing Corporation throughout her employment from November 1998 to February 2003.


The Court further noted that all communication during the employment of the applicant bore the Malawi Housing Corporation letterhead. Of particular interest is the alleged suspension letter of 14August 2000. The title of that letter is SUSPENSION FROM THE SERVICES OF THE MALAWI HOUSING CORPORATION. This communication was from Malawi Housing Corporation to the applicant pertaining to her employment at Chiwembe Club.


The Court noted with dismay that Counsel for the respondent, Mr. Kazembe, dwelled so much on irrelevances that he lost track of the issues in this case and did not therefore show on a balance of probabilities how the respondent in this case did not employ the applicant. Further, if at all Counsel for the respondent knew what he was dealing with in this case, he would have at the onset of the case have made an application that the applicant had sued a wrong party.


It is the Court’s finding that Malawi Housing Corporation employed the applicant from 1998 to 2003 when her services were terminated due to reduction of work in the department where she was working.


Who is casual / temporary worker?

The next issue for the Court to consider is whether the applicant was a casual or temporary employee. For purposes of this case the Employment Act defines seasonal employment in section 43 to be that:


“Where an employer is engaged in an undertaking in which it is customary to employ some employees only at certain seasons of the year and an employee is employed for successive seasons, the employee shall be deemed to have been continuously employed for the aggregate of all the time he has actually performed work for the same employer for continous seasons”.


In this case the respondent tried to show that the applicant had been employed a temporary worker at Chiwembe and thereafter she had been employed as a casual worker at Chimwankhunda Project to perform a specific task. The Employment Act does not define a temporary or casual worker other than what is provided in section 43 above.


However, our colleagues in England, have defined casual worker as those workers who are free to decide whether or not to work, and those they work for can decide whether or not to hire them. This lack of mutual obligations means that most casual workers will not be employees, see Clark V Oxfordshire Health Authority [1998] IRLR 125.


Where however, the work was regular and permanent and the worker had no choice whether or not to report and perform that work and where there are mutual obligations between the worker and those providing work that the worker shall consistently report and perform certain work and that the work provider shall consistently make available work for the worker at a remuneration then that mutuality of obligations gives rise to a contract of employment.


“In Carmichael V National Power plc [1998] IRLR 301, two power station guides were engaged ‘on a casual as required basis’. The guides were trained and given uniforms, and they were subject to the control of the operators when they did their work. However, they only worked as and when required and were not paid if they did not work. There were no notice or pension provisions, and no formal disciplinary or grievance procedures applied to them. The Court of Appeal said that ‘ casual work’ meant work which was temporary or occasional, and not regular or permanent. To make the contract workable, the Court found that an ‘ on required basis’ meant that the guides were under an obligation to take a reasonable amount of work when required to do so and the operators had an obligation to offer the guides a reasonable amount of work which was available. The Court decided that this mutuality of obligations gave rise to a contract of employment.” (Tolley’s Employment Service: Elaine Aarons (ed.) Termination of Employment, Issue 3 (November 1999, page A2/35


This was an extreme case where the English Appeal Court found that even persons employed as casual workers may be held to be under a contract of employment where they can show that there were certain mutual obligations to perform certain work and the work provider had an obligation to make available the work.


In the instant case the situation resembled even more of a permanent employment in that the applicant was required to perform her work on a daily basis and not ‘on required basis’ for over five years. The respondent had available work for her continously for five years. The applicant was on a monthly salary for five years, and was even entitled to house allowance, leave days and further, the applicant’s contract provided for notice period on termination.


The Court finds that the applicant though engaged as a casual or temporary employee to perform specific tasks, she had been in continous service for five years, she had work available for her to perform and was on a monthly salary for five years. Hers and the respondent’s contract was on a permanent basis terminatable upon giving each other one month notice as required by law.


Fixed contract?

Nor was the contract between the applicant and respondent one for a fixed term that was terminated upon performance of a fixed task. This is because, according to section 28(4) of the Employment Act, “where an employee is regularly and repeatedly employed and paid wages on the basis of completion of a quantity of work which can be completed in less than 24 hours, the contract of employment shall be deemed to be of an unspecified period of time.”


The applicant had been employed repeatedly and contiously for five years and paid wages for the whole period without a break. Therefore her situation falls under the subsection quoted above. She was employed for an unspecified period of time.


Severance allowance?

The next question is whether the applicant was entitled to severance allowance. Section 35 of the Employment Act provides that; “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, a severance allowance..”


There are categories of employees who are not eligible to receive severance allowance. None of these exceptions apply to the applicant. Therefore the Court finds that the applicant is entitled to severance allowance for five years.


Leave pay?

The last two issues can be combined and they relate to whether the applicant was entitled to leave pay for 1998 to 2000 and how much? The applicant adduced evidence that she was entitled to 12 days leave per annum under her contract. Exhibit RP 1 confirms that assertion. The applicant told Court that during her employment at Chiwembe as a Waitress for two years she never went on leave. The respondent failed to show that in fact the applicant was not entitled to leave or that in fact the applicant went on leave during the period in question. The Court finds that the applicant proved that she was entitled to 12 days leave and that she never took leave for two years. The applicant’s claim for 24 days accrued leave pay is allowed.


Devaluation: The cause of action arose in 2003 but the vents cover a period from 1998. The applicant was lowly paid as noticed from the payslips. The local currency has since devalued and the Court has discretion to award interest to cater for devaluation and inflation, see Chawani V Attorney General [MSCA Civil Appeal No18 /2000 (unreported)]. In this case the Court awards 40% of the total award to cater for devaluation since 1998.


ORDER

In view of the above findings, the Court orders that :

  1. The respondent compute severance allowance for the applicant for five years.

  2. The respondent compute accrued leave pay for the applicant for 24 days at the average rate of her salary between 1998 to 2000.

  3. The respondent compute 40% of the total award representing devaluation and add it on the total award.

  4. The respondent pay the applicant the total some computed for severance allowance, leave pay and devaluation interest within seven days of this order.


Pronounced in open Court this 12th day of October 2004 at LIMBE.



R Zibelu Banda (Ms.)

DEPUTY CHAIRPERSON.