IN THE HIGH COURT OF MALAWI
CIVIL CAUSE NUMBER 49 OF 2004
BEING MATTER NO. IRC 295 OF 2003
MALAWI ENVIRONMENTAL ENDOWMENT TRUST ... APPLICANT
FELIX M.D. KALOWEKAMO RESPONDENT
CORAM: POTANI, J.
Kanyuka, Counsel for the Appellant
Ngwira, Counsel for the Respondent
Balakasi, Official Interpreter
Chiume, Recording Officer
This is an appeal by the Malawi Environmental Endowment Trust (MEET) against the decision of the Deputy Chairperson of the Industrial Relations court dated April 6, 2004, and the consequential order of assessment of damages made by the Registrar of Industrial Relations Court dated August 24, 2004. The respondent to the appeal is Felix M.D. Kalowekamo, a former employee of the appellant. The appeal is premised on four grounds viz:
1. That the Industrial Relations Court erred in awarding the respondent 24 months salary as compensation in addition to the terminal dues that the appellant had given him.
2. The Industrial Relations Court erred in ruling that the respondent had successfully mitigated his loss.
3. The Industrial Relations Court erred in ruling that the respondent was not given an opportunity to be heard.
4. That the Industrial Relations Court erred in ruling that the contract of employment between the appellant and the respondent was a contract of an unspecified period.
It is the appellants prayer on the four grounds afore-mentioned that the whole judgment of the lower court, including the compensation award of 24 months salary should be set aside.
Counsel for the parties filed skeleton arguments and also made oral arguments and submissions. Looking at the grounds of appeal, it comes out clearly that ground 1 and 2 emanate from the assessment order of the Registrar, while ground 3 and 4 related to the judgment of the Deputy Chairperson. It appears to this court that it is the 4th ground of appeal which needs to be first dealt with as it appears the other grounds of appeal relate to matters which are a direct result of the lower courts finding being challenged in that ground of appeal.
It was the submission of counsel for the appellant that the lower court erred in deciding that the contract of employment between the appellant and the respondent was for an unspecified period because that was not an issue before the court on the pleadings in the matter. She further contended that even if the issue was before the court the contract have specifically provided for a 2 year term, it can not be said to be one for an unspecified period.
Authorities abound that issues to be decided by the court must be only those raised by the parties in their pleadings and Yanu Yanu versus Mbewe 10 MLR 417 cited by counsel for the appellant is a case in point. In order to demonstrate that the question as to whether or not the respondents contract was for an unspecified or fixed period was not an issue, counsel for the appellant referred the court to the respondents statement of claim in which he complained of unlawful and wrongful termination of employment as opposed to unfair dismissal which according to counsel is a different matter. According to counsel, the lower court erred in dealing with the issue of unfair dismissal which was not pleaded and which is different from unlawful dismissal which was what was pleaded. Indeed unlawful dismissal and unfair dismissal are different. According to Termination of Employment, Robert Upex, 3rd Edition Sweet and Maxwell 1991 at page 1, unlawful dismissal is to do with termination of contract of employment without giving notice or adequate notice while unfair dismissal is to do with the reasons for the dismissal. See also Employment Law C.J. Carr and E.J. Kay 5th edition page 131 and section 58, 57 and 60, of the Employment Act 2000. The two are therefore indeed different as submitted by counsel. However, it should be appreciated that the two are not mutually exclusive and may be pursued at the same time. This position is acknowledged by the learned author, Robert Upex, in his book Termination Employment cited earlier. That being the case and on the facts of this case, it the view of this court that although the respondent did not plead unfair dismissal, the lower court in dealing with the issue of unfair dismissal did not grossly misdirect itself especially considering that it is within the spirit of the Labour Relations Act that rules of procedure, including rules relating to pleadings, should be applied with some degree of flexibility in matters before the Industrial Relations Court. it is also important to appreciate that although the respondents contract of employment had a fixed term, modern employment protection philosophy treats the expiry of a fixed term employment as a dismissal especially when a term expires there is no renewal under the same contract. See Law of Employment, Norman Selwyn, 8th Edition Butterworths 1993 288 and Termination of Employment, Robert Upex 3rd Edition 1991 Sweet and Maxwell page 63. Thus as there was clear evidence that the appellants did not give the respondent reasons for not renewing his contract, the lower court was at liberty to consider whether that amounted to unfair dismissed or not. In considering that, the court inevitably had to decide whether or not the respondents contract was for specified period or an unspecified period. It can not therefore be said that court misdirected itself in dealing with that issue as it did that in order to determine whether the contract was lawfully terminated as provided for in section 29 of the Employment Act 2000 and indeed whether the dismissal was unfair as envisaged in section 58 as read with section 57 and 60 of the Employment Act 2000.
As stated earlier, it was also the contention of the appellant that even if the court was right in deciding on whether the respondents employment was for an unspecified period or a specified period, the court erred in finding that the contract was for an unspecified period of time. The court came to the conclusion that the contract, although it had a fixed term, was for the filling on a lasting basis of a post connected with the normal and permanent activity for an undertaking as such in terms of section 28 (3) of the Employment Act 2000, was to be deemed to be a contract for an unspecified period of time. The basis for the courts finding that the contract was the filling on a lasting basis of a post connected with the normal and permanent activity of an undertaking was that according to the evidence adduced, the post of Operations Director, which the respondent was employed on, was core to the appellants operations and still existed in the appellant organisation even after the termination of the respondents employment. It is the view of this court that much as section 28 (3) of the Employment Act provides for cases in which a contract purported to be for a specified period can be treated as one for an unspecified period, that does not necessarily take away the rights of parties to a contract to agree on terms and conditions of a given contract including matters relating to the period of the contract. It is important to remember that employment is a contract as such the relationship of an employer and an employee has to be governed by the general law of contract which recognises the parties right to freedom of contract. In this case the parties clearly agreed for a specific period of the contract and there is no dispute on this aspect. In the view of the court it is in cases where there is a dispute as to the nature of the contract was for an unspecified period of time. This however, does not automatically mean that the courts finding that the termination of the respondents contract amounted to unfair dismissal had no basis at all. As already noted, the expiry of a fixed term employment amounts to a dismissal if there is no renewal of the contract. Therefore, notwithstanding that the contract in this case was for a fixed period, it was still open to the court to consider whether the failure by the appellant to give reasons for refusing to renew it amounted to unfair dismissal. It is to be observed that section 31 of the Constitution endows upon every person the right to fair labour practices which covers a wide range of issues. As right observed by the Deputy Chairperson, fair labour practices, among others entails the duty on the employer to be transparent in dealing with an employee and this brings into play section 42 of the Constitution which provides as follows:
Every person shall have the right to lawful and procedural fair administrative action which is justifiable in relation to reasons given where his or her rights, freedom, legitimate expectations or interests are affected
To be furnished with reasons in writing for administrative action where his or her rights, freedom, legitimate expectation or interest if those are known emphasis supplied.
It is to be observed that there is no dispute on the facts that the respondents contract of employed was open to renewal. That being the case, the respondent has a reasonable and legitimate expectation that his contract would be renewed such that although the contract or the conditions of service did not require the appellants to give reasons for non renewal in terms of section 43 of the Constitution, the respondent has the right to be told reasons for the refusal to renew his contract, the appellant contravened section 57 (1) and (2) of the Employment Act and therefore the refusal to renew the contract without giving reasons amounted to unfair dismissal.
Having found that the respondents dismissal was unfair, the order of the Registrar of the lower court awarding compensation which is being challenged in ground 1 of the appeal cannot be set aside. However, it is to be observed that the Registrar awarded the respondent compensation amounting to 24 months salary. Counsel for the appellant took issue with this level of compensation as being immensely excessive and unfounded in law. She made reference to section 63 (4) and (5) which lays down guidance in arriving at compensation in cases of unfair dismissal. Relevant to this case is section 63 (5) which provides that where the service of an employee is not for more than 5 years, as in this case, the award has to be not less than 1 weeks pay for each year of service. What is important to note is that section 63 (5) provides for the minimum awards. The court therefore can award more than the minimum award set out in section 63 (5) depending on the circumstances of the case. The circumstances the court takes into account are laid down in section 63 (4). It appears the Registrar came to the compensation order of the magnitude he made on the basis that the respondent had not been able to get alternative employment and therefore awarded him compensation representing salary for the period he could have worked for the appellant if the contract was renewed. This leads to ground 2 of the appeal which is that the court erred in ruling that the respondent had successfully mitigated his loss. On this aspect there was no evidence on the basis of which the court could have found that the respondent had successfully mitigated his loss. The respondent did not demonstrate through employment application letters and negative responses thereto to show that he had tried in vain to seek alternative employment in order to mitigate the loss resulting from the non renewal of his contract. The court therefore would agree with the appellant that the respondent did not mitigate his loss and therefore ground 2 of the appeal succeeds. As for ground 1, it only succeeds to the extent of the level of the compensation awarded. The view of this court is that the unfair dismissal the court has found the appellant guilty of has no factors justifying invoking section 63 (4) and does not fall under section 57 (3) of the Employment Act. It is ordered that the compensation order of the Registrar be set aside instead the respondent be paid one weeks pay for every year of service.
Finally, with regard to ground 3 of the appeal which is that the lower court erred in holding that the respondent was not given an opportunity to be heard, the quick point to be made is that the court having contravened section 57 (1) and (2), it follows that the respondent was not given an opportunity to be heard. This ground of appeal therefore fails.
The appeal having failed and partly succeeded, each party shall bear its own costs.
Pronounced this day of March 22, 2005 at Blantyre.