IN THE INDUSTRIAL RELATIONS COURT OF MALAWI
MATTER NO. IRC 285 OF 2002
MALOTE...... . APPLICANT
AUTOMOTIVE PRODUCTS MALAWI LTD RESPONDENT
CORAM: R. Zibelu Banda (Ms); Deputy Chairperson
Respondent; Simwaka: General Manager
Yona: Workshop Administrator
Ngalauka; Court Clerk
ORDER IN COMPENSATION
Principles of Compensation-Just and Equitable- Recover Contractual Entitlements and not Expectations- Heads of Compensation- Immediate Loss of Salary-Fringe benefits- Pension-Lunch and Refreshments Allowances-Bonus-Agricultural Input.
Having found that the applicant was unfairly dismissed, it is the duty of this court to make an award of compensation as provided under section 46 of the Constitution.
The factors to be considered when deciding an award of compensation are:
Just, equitable, appropriate and adequate;
Loss sustained by the employee in consequence of the dismissal;
Loss to be attributable to the action of the employer;
The court shall endeavor to arrive at a sum of money that is just, equitable and appropriate 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. The burden of adducing evidence of loss lies on the applicant. The court must then assess compensation with regard to the evidence and justify each award.
In Norton Tool Co. Ltd V. Tewson,  1 WLR, 45, it was held that a court must set out the heads under which compensation is awarded and how the figures have been reached. This is despite the fact that the court retains much discretion in quantifying the award of compensation.
Compensation is recoverable under a number of heads. The heads, relevant to this case are, immediate loss, future and loss of fringe benefits.
The court will take into account the period that the applicant has been unemployed since his dismissal. However, even here the court must exercise caution, and determine whether the unemployment was a result of lack of trying to get alternative employment or due to problems beyond the applicants control, for instance, lack of jobs due to economic problems of the country or because of the health status of the applicant after termination.
The court will also award compensation to cater for loss of fringe benefits which, formed part of the applicants contract. The Malawi Supreme Court of Appeal in Chawani V Attorney General, (MSCA No. 18 of 2000 (unreported)) held that the law of contract is concerned with legal obligations only and not with expectations, however reasonable they might be. Conversely, what the Supreme Court is saying in that case is that a court can award fringe benefits like lunch allowance, agricultural inputs, as long as those benefits were not mere expectations but legal obligations based on the contract of employment between the applicant and respondent or any other law.
In quantifying benefits in kind like Medical Aid, Free Issues, the court should value what they were worth to the employee. See Employment Law Bulletin, Issue 20, November 1999 on Remedies For Unfair Dismissal at 14.
The court must deduct notice pay paid by the employer. Such that in calculating the period to consider, the court should not take into account the notice period.
Where pension has been paid to the employee including the employers contribution or part thereof, the court should subtract the extent to which the employer already made a contribution at time of termination.
The court shall take into account any reasonable salary increments made after the dismissal.
In quantifying all these sums of money for which the court has wide discretion, it must be borne in mind that the aim is to compensate fully but not to over compensate or punish the employer. These principles of compensation were highlighted in Magola V. Press Corporation Limited, (Civil Cause No. 3719 of 1998 (unreported)) where the Honourable Justice Mwaungulu spent much time on the subject providing guidance on heads of compensation and considerations for the courts to bear in mind.
In the instant case the applicant claimed loss of salary and other benefits like bonus, pension, allowances for food and agricultural inputs from the date of termination to the time of retirement because the applicant is crippled due to occupational injury such that he can not get any gainful employment.
This is the period from date of dismissal less notice pay paid to date of judgment. The applicant is awarded salary loss, and all other benefits claimed namely, 5% pension, K60 per day food allowance on a 26- day month, bonus, medical aid contribution and agricultural inputs comprising one 5 kg bag of maize seed and 10 kg bag of fertilizer- the money equivalent at the date of judgments retail price.
Future loss: The applicant being poor in health due to occupational injury, is unable to secure any alternative employment or engage in gainful business. He is therefore entitled to the benefits specified above from date of judgment to date of retirement, which according to the respondent is upon attaining the age of 65 years old.
The applicant also claimed loss of fringe benefits as specified above and he is awarded those benefits.
Additions: The court awards 11% on the total sum to cater for annual salary increments.
The respondent to prepare computations of the above sums. The money to be paid into court within fourteen days of this order.
Pronounced in open Court this 10th day of January 2005 at LIMBE.
R. Zibelu Banda (Ms.)