Thompson v Leyland DAR Malwai Ltd ((IRC 919 of 2003)) [2005] MWIRC 40 (25 April 2005);

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IN THE HIGH COURT OF MALAWI

 


PRINCIPAL REGISTRY

 


CIVIL CAUSE NO. 919 OF 2003

 


 


BETWEEN:

 


K. THOMSON…………………………………………………………………………………………..PLAINTIFF

 


and

 


LEYLAND DAF (MALAWI) LIMITED…………………………………………….DEFENDANT

 


 


CORAM: THE HON. JUSTICE F.E. KAPANDA

Khondiwa, of Counsel for the Plaintiff

J. Chirwa, of Counsel for the Defendant

S.M. Selemani, Official Interpreter

Mrs Chingota, Court Reporter

 


  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  • Yours faithfully

     

    (Signed)

    Gordon Pickering

    DIRECTOR

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  • MK271,826”

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  • Yours faithfully

     

    (Signed)

    Gordon Pickering

    DIRECTOR

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  • MK271,826”

  •  
  •  


    Date of judgment : 25th April 2005

     


     


     


     


     


     


     


     


    JUDGMENT

     

     


    Kapanda, J:

     


    Introduction

     


    The Plaintiff, Mr E.K. Thomson, is a former employee of the Defendant Company. He was declared redundant. On 4th April 2003 he took out an action claiming a number of terminal benefits from the Defendant. The terminal benefits will be described in detail later in this judgment. Suffice to say that he alleges that the benefits are payable to him pursuant to the provisions of the Employment Act, 20001.

     


    The Defendant Company charges that the Plaintiff was paid all that was due to him in terms of its contract with him. Accordingly, it has asked this Court to dismiss the Plaintiff’s action with costs.

     


    The Court would like now to set out the fine points of the contention by the Plaintiff and the response of the Defendant to the allegation being made by the former. It is not the intention of this Court to set out in full, in the main body of this judgment, the particulars of the allegations made by the Plaintiff and the reply thereto by the Defendant. I will instead give a sketch of the pleadings. However, the pleadings will appear as footnotes at appropriate places.

    The complaint by the Plaintiff and the Defendant’s rejoinder are contained in the pleadings that were exchanged between the parties. These are the Amended Statement of Claim and the Amended Defence the Plaintiff and the Defendant exchanged on 4th November 2004.

     


    The Plaintiff’s Amended Statement of Claim2

     


    The Plaintiff alleges, which allegation is not denied by the Defendant, that he was an employee of the Defendant from the 2nd day of April 1970 until the 24th of January 2003 when his services were terminated by the Defendant on grounds of redundancy. He does not state what position he held at the time he was engaged in 1970 but further asserts that in August 2002 he was promoted to be in charge of vehicle sales in the Defendant company. Moreover, the Plaintiff states that in the same month of August 2002 he withdrew from membership of the pension scheme operated by the Defendant for its employees. It is further alleged by the Plaintiff that on or about the 9th of December 2002 the Defendant caused the sum of K256,443.92 to be paid to him as his pension withdrawal benefits. This sum, the contention goes, represented pension contributions made by both him and his employers.

     


    Further, the Plaintiff avers that he was getting a monthly salary of K57,620 and was also entitled use of company car plus fifty(50) litres of fuel per months as fringe benefits but that on termination of his employment the Defendant only paid him the sum K143,618.98 being notice and leave pay. Indeed, the Plaintiff is of the view that what he was paid on termination of his services with the Defendant Company is not adequate. Accordingly, the Plaintiff alleges that the Defendant wrongfully failed, refused and neglected to pay him severance allowance for the thirty-three(33) years of continuous service he rendered to the Defendant. He has alleged that the sum of K1,901,460 is the amount of severance allowance he ought to have been paid. Additionally, the Plaintiff contends that notwithstanding his entitlement to use of the company car the Defendant neither allowed him to use the company car nor paid him a sum proportionate to the amount of hire charges of a comparable vehicle for three months. The three months, it would appear, is the notice period that was required if either party wanted to terminate the contract of employment.

     


    It is, therefore, the prayer of the Plaintiff that this Court should order the Defendant to give him the following:

    1. the sum of K1,901,460 being severance allowance

    2. the sum of K488,250 representing hire charges at K34.50 per kilometre and insurance of K700 per day of a comparable vehicle for three(3) months

    3. 150 litres of fuel or its equivalent value, being his fuel entitlement for a period of three(3) months

    4. interest on all the above mentioned sums at 1% above base bank lending rate

    5. collection fees on all the above sums in paragraphs (a) to (d).

     


    The Plaintiff also claims costs of this action. I wish to point out that the claim for interest only appears in the prayer for the relief. In point of fact the Plaintiff has only pleaded interest in the main body of his Amended Statement of Claim.

     


    The Defendant Company’s Reply3 to the Plaintiff’s Claim

    The particulars of the Defendant’s response to the Plaintiff’s claim are in the Amended statement of Defence dated 4th November 2004. The essence of its reply is that it does not deny that the Plaintiff was an employee of the Defendant from 2nd April1970 until 24th January 2003 when it terminated his services on the said grounds of redundancy. Further, the Defendant admits that it is a limited liability company in the business of selling vehicles in Malawi. Furthermore, the Defendant accepts that in August 2002 the Plaintiff withdrew from the Defendant’s pension scheme and adds that the withdrawal was as a result of the Defendant’s intention to retrench some of its employees. Additionally, the Defendant concedes that it caused the sum of K256,443.92 to be paid to the Plaintiff as his pension benefits and goes on to add that the Plaintiff has since received an additional pension benefits in the sum of K649,519.97. The Defendant also admits that the two pension benefits which the Plaintiff received comprise of contributions made by both the Plaintiff and the Defendant. Finally, in so far as admissions are concerned, the Defendant does not take issue with the Plaintiff on the monthly salary that he was receiving viz K57,620.00.

     


    The above notwithstanding there is a point of departure between the Plaintiff and the Defendant. Indeed, the Defendant has joined issues with the Plaintiff on the rest of the latter’s allegations of fact in the Amended Statement of Claim. The long and short of it is that the Defendant denies that the Plaintiff is entitled to any severance allowance or hire charges or the so-called 50 litres of fuel (fuel allowance) or interest or collection fees.

     


    The foregoing is a synopsis of what the pleadings are in this action. At this point I will move on to set out the issues that arise and fall to be decided by this Court.

     


    Questions for Determination

     


    As I appreciate it, from the pleadings that were exchanged between the Plaintiff and the Defendant, the issues that have to be determined in this matter are, viz:

     


    1. whether the Plaintiff is entitled to payment of severance allowance.

    2. Whether, after termination of his services, the Plaintiff was entitled to use of company car or to be paid hire charges for three months.

    3. Whether, the Plaintiff was entitled to 150 litres of fuel or its equivalent after his services with the Defendant were terminated.

    4. If the answer to the above questions be in the affirmative, whether the Plaintiff is entitled to be paid interest on the sums found due to him.

    5. Whether any collection fees is payable in this matter.

     


    The above are what I understand to be the issues that have arisen from the pleadings herein. The court will shortly proceed to decide these issues but before that is done I will have to comment on the evidence that was adduced by the parties in this action. Further, I wish to observe that the Court’s determination of the issues enumerated above will be done after I have given a narration of the facts that have come out from the evidence that was put on record by the parties.

     


    The Testimony and the Facts

     


    Evidence

     


    Both the Plaintiff and the Defendant offered one witness statement each to support the assertions in their own pleadings and also to challenge the allegations of fact in the opposite party’s pleadings. Further, there was attached to each of the said witness statements a number of exhibits. The authors of these two written statements adopted their statements during trial. They were each one of them cross-examined and re-examined by Counsel for both the Defendant and the Plaintiff. As a result of this, the evidence that was offered by these witnesses could rightly be said to have been written, oral and documentary. It is from this type of evidence, and the admissions in the pleadings, that the facts of this case are obtained.

     


    Facts of the Case

     


    The Court shall now proceed to summarise the facts that emerged from the evidence on record. The material facts in this matter are as follows:

    Plaintiff’s employment

    The Plaintiff was employed by the Defendant on 2nd April 1970 as a Storeman. He was later discharged from the Defendant Company’s employment. In point of fact his position was declared redundant on 24th January 2003. It is not clear what position he held at the time he was discharged from employment. However, it is common cause that at the time of his discharge he was in receipt of a salary of K57,620 per month. Further, there is no denying of the fact that before being declared redundant, i.e. on 3rd September 2002, the Plaintiff had been advised as follows regarding his fringe benefits:

     


    “3rd September 2002

     


    Dear Mr Thompson,

    Reference: FRINGE BENEFITS

     


    With immediate effect your fringe benefits will be as follows:

    • USD20 for cell phone use

    • Company use of personal telephone will be refunded against documented call usage

    • A fuel allowance of (up) to a maximum of 50 litres per month will be paid against fuel invoices supplied .

     


     


    Terminal Benefits

     


    At the time of his discharge the Plaintiff was advised as follows:

     


    Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

     


    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

     


    You will be paid your final pay as follows:

     


    Notice Pay K172,860.00

    Leave Pay K20,952.73

    Total K193,812.73

    Tax K50,193.82

    Net K143,618.91

     


    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER”

     


    Accordingly, the Plaintiff was paid the total sum of K143,618.91 as his terminal benefits .

     


    Pension Benefits

     


    The Defendant was operating a contributory pension scheme for its employees. The Plaintiff was a member of such pension scheme. It be noted though that there was no evidence on the percentage of contributions that were made by either the Plaintiff or the Defendant Company. However, as already mentioned above, the Pension Scheme that the Defendant was operating was a contributory one.

     


    The Plaintiff voluntarily withdrew from the Pension Scheme. He actually withdrew sometime in August 2002 but was given his pension withdrawal benefits sometime on 9th December 2002. The amount of K256,443.92 was paid to him on the said 9th of December2002. There was then an additional payment of pension withdrawal benefits made to the Plaintiff on 1st November 2004. The sum of K649,519.97 was the additional pension withdrawal benefits that was paid to the Plaintiff.

     


    Severance Allowance

     


    As mentioned earlier, the Plaintiff’s services with the Defendant Company were terminated on 24th January 2002. On termination of his services he was paid the sum of K143,618.91 which consisted of notice and leave pay. I reproduce hereunder the letter advising him of the termination of services:

     


    “Ref. No. 006

    Mr E.K. Thomson

    C/o P.O. Box 581

    BLANTYRE

    24th January 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    TERMINATION OF SERVICE

    We regret to inform you that due to circumstances beyond the Company’s control, it has become necessary to re-organize the functions of the Parts Department and others. Consequently, your position has been declared redundant and your services are no longer required with effect from 24th January 2003.

    You will be paid your final pay as follows:

     


    Notice Pay K172860.00

    Leave Pay K20952.73

    Total K193812.73

    Tax K50193.82

    Net K143618.91

    Your severance allowance, if any, will be forwarded to you in due course.

    We thank you for the services rendered to the Company.

    Yours faithfully

    For Leyland DAF (Malawi) Limited

    (Signed)

    S.Z. CHIKOPA

    HUMAN RESOURCES MANAGER

     


    The letter shows, inter alia, that the Plaintiff was advised that if there was any severance allowance payable he was going to be informed of same.

     


    It would appear that the Plaintiff did ask for payment of the severance allowance. This is apparent from the letter of 12th February 2003 written by the Defendant Company to the Plaintiff. The said letter was in the following terms:

     


    “Mr E.K. Thomson

    C/o Mrs M. Thomson

    A.C. Opticals

    P.O. Box 151

    BLANTYRE

    12th February 2003 Tel: 01687777

    Fax: 01687325

    Dear Mr Thomson

    SEVERANCE ALLOWANCE

    On the assumption that you would be entitled to the payment of Severance Allowance, which is, however, not the case, your Severance Allowance would have been K271,826.00 calculated at your earnings during the years served.

    Our records show the Pension you received is K352,272.18, which is more than the Severance Allowance, therefore, there is no Severance Allowance payable to you.

    Yours faithfully

    (Signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER

    SEVERANCE ALLOWANCE – MR E.K. THOMSON

    MK

    1. 110

    2. 120

    3. 145

    4. 275

    5. 334

    6. 354

    7. 397

    8. 550

    9. 578

    10. 635

    11. 730

    12. 898

    13. 1032

    14. 1109

    15. 1275

    16. 1402

    17. 1542

    18. 1850

    19. 2035

    20. 2238

    21. 2962

    22. 3275

    23. 3845

    24. 4457

    25. 6075

    26. 8980

    27. 13884

    28. 18206

    29. 21839

    30. 25052

    31. 40010

    32. 48012

    33. 57620 ______

  •  

    PENSION RECEIVED MK352,272.18”

     

    The Plaintiff was not amused with the stance taken by the Defendant. He therefore lodged a labour complaint with the Regional Labour Officer (South). The Regional Labour Officer (South) then wrote the Defendant Company as follows:

     


    “Comp/2/1 Regional Labour Officer (South)

    P.O. Box 110

    BLANTYRE

    18th February 2003

    Acting General Manager

    Leyland DAF

    P.O. Box 581

    BLANTYRE

    Dear Sir

    LABOUR COMPLAINT: MR E.K. THOMSON

    Mr Thomson has lodged a complaint in this office over his entitlement to severance allowance following the termination of his employment contract with your company. He alleges that:

    • Your computation of severance allowance is faulty.

    • You included his own contribution to the pension when comparing it with severance allowance.

    If these allegations are true, I would like to advise as follows:

    • He is entitled to 4 weeks pay multiplied by the number of years of service. The pay referred to is the basic pay on the date of termination (S35(1) Employment Act 2000).

    • His own pension contribution should not be considered when comparing the allowance with pension. Only the companies contribution plus interest should be subtracted from the severance. The balance if any, should be paid to him. (S35(1.4)).

    You are being requested to submit your comments on this case to this office as soon as possible.

    Yours faithfully

    (Signed)

    J.K MHONE

    FOR: REGIONAL LABOUR OFFICER (S)

     


    As requested, the Defendant responded in the following manner:

     


    “The Regional Labour Officer(S)

    P.O. Box 110

    BLANTYRE

    For the attention of Mr J.K. Mhone

    21st February 2003

    Dear Sir

    RE: LABOUR COMPLAINT BY MR E.K. THOMSON

    We wish to acknowledge receipt of your letter of the 18th of February 2003 regarding the complaint made to your office by a Mr Thomson. We have obtained legal advice in the matter and, as requested, wish to comment as follows:

     


    1. At the termination of his services Mr Thomson was entitled to pension, gratuity and other terminal benefits. Our records clearly show that the pension which Mr Thomson received at the termination of his services exceeded any severance allowance which he would have been entitled to. In terms of paragraph 2 of the First Schedule, to the Employment Act, as amended, Mr Thomson was thus not entitled to the payment of severance allowance.

    2. According to our Rules of the Pension Fund when we talk of a pension we talk of the contributions made by both the employee and the employer to the Fund. Please be advised that the contributions of the employer do not per se purchase a pension. We, therefore, fail to appreciate your argument that Mr Thomson’s contributions to the Fund should not be considered when comparing the severance allowance with pension. We believe that had the intended interpretation been what you allude to, then the wording of the provision in the Schedule should have been “the employer’s contributions to pension” as opposed to “pension.”

    3. As regards the computation of the severance allowance we find no basis for your view that the terms “basic pay” refers to “the basic pay” on the date of the termination of the service. It is our view that Mr Thomson did no earn “the basic pay at the termination of his service” throughout his service with us. Like any other employee Mr Thomson’s basic pay at the termination of his services had come about as a result of the increments earned during his service. We would add that the words “wages for each completed year of continuous service” make a direct reference to the earnings during each year of one’s service. In the circumstances we regret to advise that we are not prepared to change our stand in the matter. We would, however, be prepared to seek the Court’s interpretation of the relevant statutory provisions should it become necessary.

    Yours faithfully

    For LAYLAND DAF (MALAWI) LIMITED

    (signed)

    S.R. ANDREWS

    ACTING GENERAL MANAGER”

     


    The Regional Labour Officer (South) did not accept the Defendant company’s explanation on why it was refusing to pay the severance allowance. There then followed a meeting between the Regional Labour officials and the Defendant company. The Regional Labour Office thereafter advised the Defendant company as follows:

     


    “Ref. No. Comp/2/1/2 Regional Labour and Vocational

    Training Office

    P.O. Box 110

    Blantyre

    The Acting General Manager

    Leyland DAF Limited

    P.O. Box 681

    Blantyre

     


    Dear Sir

    RE: LABOUR COMPLAINT: MR E.K. THOMSON

    Refer to the discussion I had with you on 24th February 2003 in your office on the above referred issue.

    I have discussed the matter with other senior officials in the Ministry. The general conclusion is that you still have to act as per my advice both in my letter and orally during our discussion i.e.

      • to pay the difference between severance allowance and pension (company contribution plus interest.

      • Calculate severance allowance based on basic pay at time of termination.

     


    Note that the merit of your concerns were fully evaluated against current labour legislation and practices before arriving at this conclusion.

    Lastly I request you to act accordingly. This will avoid further costs on this matter.

    Yours faithfully

    (Signed)

    J.K. Mhone

    For: REGIONAL LABOUR AND VOCATIONAL TRAINING OFFICER(S)

     


    As will have been seen from the letter above the bottom line is that the Defendant company still did not pay the severance allowance. The ground for refusal being that, in its view, the pension was paid to the Plaintiff exceeded the severance allowance that would have been payable to the plaintiff. The Plaintiff is of the contrary view that he is entitled to be paid severance allowance. Indeed, the Defendant’s insistence that severance allowance is not payable did not go well with the Plaintiff. Thus, the action herein commenced on 4th April 2003, where the Court will principally be considering whether or not the severance allowance is payable.

     


    Law and Consideration of the issues

     


    Statutory framework and legal authorities

     


    Severance allowance

     


    Payment of severance allowance in Malawi is governed by statute4. In particular, and for the present purposes, Section 35(1) 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 to be calculated in accordance with the First Schedule.”

     


    Both parties in this matter submitted that the first schedule being mentioned in Section 35(1) of the Employment Act is the Employment Act (First Schedule) (Amendment) Order,5 2004. Indeed, the Court has observed that both Counsel have sought to rely on the amended schedule to support their respective arguments on the issue of severance allowance. Unfortunately, the amended First Schedule being relied on by both parties was declared invalid and the decision of the Minister to amend the First Schedule was quashed by this Court on the ground that the Mininster had acted in excess of his power to amend the First Schedule6. Consequently, the First Schedule to be used in the calculation of severance allowance is the one that came into operation on 1st September 2000. This is the date when the Employment Act, 2000 became effective7. The said First Schedule, referred to in Section 35(1) of the Employment Act, provides that severance allowance shall be calculated as follows:

     


     


    Length of service

     


    Severance Allowance Payable

    Not less than one year but not exceeding four years

    Two weeks wages for each completed year of continuous service

    Not less than ten year

    Four weeks wages for each completed year of continuous service

     


     


    Terminal (other) benefits other than severance allowance

     


    The Employment Act, 2000 also provides for the payment of benefits other than severance allowance on termination of employment. The provision that immediately comes to mind is Section 30 of the said Employment Act, 2000. The stipulation that is relevant to the present proceedings is Subsection (2) of Section 30 which states that:

     


    (2) 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.” (underlining supplied by me)

     


    Further, Section 3 of the Employment Act, 2000 states that unless the context otherwise requires:

     


    “ ‘remuneration’ means the wage or salary and any additional benefits, allowances or emoluments whatsoever payable, directly or indirectly, whether in case or in kind, by the employer to the employee and arising out of the employee’s employment.”

     


    I must add that the requirement of the payment of a sum equal to the remuneration that would have been received and other benefits due to the employee up to the expiration of the required period of notice, is a new phenomenon. Indeed, it is my understanding of the law that with effect from 1st September 2000 the payment and conferring of these terminal benefits up to the expiration of the required period of notice is a matter of statutory law. Thus, any decision of the Court made before 1st September 2000 having a hearing on these benefits must be deemed to have been overruled by the legislature. In saying this I am alive to the fact that the Defendant has sought to rely on some decisions of the High Court that appear to suggest that some of the benefits that the Plaintiff is claiming are not payable. Unfortunately, the decisions in question were made prior to the enactment of the Employment Act, 2000.

     


    Is severance payable in the circumstance and how much, if any, is payable?

     


    The Defendant company is of the view that severance allowance is not payable to the Plaintiff. It has been submitted by the Defendant that severance allowance is not payable since the Plaintiff was paid pension benefits which exceed the severance allowance that would have been paid to him. The Defendant further contends that the Plaintiff is not entitled to be paid severance allowance over the same period that he was paid pension benefits. The Plaintiff is of the contrary view and argues that severance allowance is payable to him.

     


    It is obvious that both the Plaintiff and the Defendant base their arguments on the Employment Act (First Schedule) (Amendment) Order, 2004. Sadly for them the said First Schedule they wish to rely on was declared invalid and is of no effect8. Further, the Court found the following dictum of Potani, J. instructive and adopts it in this matter:

     


    It would be necessary at the juncture to set out the relevant part Section 35 of the Employment Act 2000 and it reads:

    1. On termination of contract, by mutual agreement with the employer or unilaterally by the employer, the employee shall be entitled to be paid by the employer a severance allowance to be calculated in accordance with the First Schedule.

    2. The minister may, in consultation with organizations of employers and organizations

     

    There can be no doubt from the reading of the above provisions of Section 35 that indeed as submitted by Counsel for the applicants, Subsection(1) deals with eligibility to payment of severance allowance while Subsection(2) provides the mechanism for calculating the severance allowance payable. It is also very clear from the two Subsections that the power the Minister has is only to amend the formula or mechanism for calculating severance allowance payable. What is curious to note is that on a plain reading of Subsection(1), an employee’s entitlement to payment of pension, gratuity or other terminal benefits has nothing to do with his or her entitlement to severance allowance. However, the effect of the amendment by the Minister is to forfeit payment of severance allowance to employees who are entitled to payment of pension, gratuity or other terminal benefits. As already noted, the schedule the Minister is empowered to amend only deals with the calculation of severance allowance and not the conditions or requirements that would entitle one to payment of severance pay as those are already laid down in Subsection(1) of Section 35. It appears the driving force behind the Minister’s decision was to avoid a situation in which an employee whose contract has been terminated would get double payment, that is, pension or gratuity or other terminal benefits on the one hand and also severance pay on the other hand. The problem the Minister sought to address mainly comes about because Section 35 and indeed the Employment Act in its entirety does not define severance pay. It appears in the Minister’s view and thinking, payment of pension, gratuity or the power to amend conferred upon the Minister is not to amend the meaning of pension, gratuity or severance pay but simply to amend the mode of calculating severance allowance which can not be the same thing as pension or gratuity. Thus, much as the Minister’s intention might perfectly be right on economic and moral considerations, the decision made by the Minister exceeded the power conferred by the law. To borrow the words of Counsel for the applicants, the Minister sought to do something which is morally and economically right through the back door. This is a Court of law not one of morality. In the face of the law, therefore, the Minister’s acted in excess of the powers conferred by Section 35 of the Employment Act and indeed Section58(1) of the Constitution and therefore the purported amendment is invalid and is hereby quashed on that account. This order being of the nature of an order of certiorari, the Minister of Labour and Vocational Training is directed to reconsider the amendment and should the Minister still be desirous of making severance pay not payable in cases where an employee is entitled to gratuity, pension or other terminal benefits, such an amendment to the law should be properly done say for example by asking the legislature to give the Minister power to so amend or the legislature itself can do so by amending Section 35(1) of the Employment Act.”

     


    It follows, therefore, that the position at law is that severance allowance would still be payable. There is nothing to stop this Court from awarding severance allowance to the Plaintiff. Indeed, the fact that the Plaintiff had already obtained pension benefits is no bar to this Court in ordering that severance allowance be paid to him. It is clear from the provisions of the relevant First Schedule to the Employment Act, 2000 that the legislature has not said that severance allowance would not be paid where an employee’s pension benefits exceed the severance allowance. Further, the said schedule is clear and unambiguous in that it says that severance allowance would be paid on termination of service. It does not give further explanation as regards to what circumstances the said severance allowance will not be paid. Accordingly, this Court finds and concludes that severance allowance is payable in the circumstances. The Court has come to this conclusion upon looking at the natural and ordinary meaning of Section 35(1) of the Employment Act, 2000 as read together with the original First Schedule made under the said Section 35(1) of the Employment Act.

     


    How much severance allowance is payable to the Plaintiff?

     


    This Court has found that severance allowance is payable to the Plaintiff. Additionally, I have come to the conclusion that the severance allowance will be paid and calculated pursuant to the provisions of the First Schedule of the Employment Act, 2000 and not the Employment Act (First Schedule) (Amendment) Order, 2004.

     


    There is evidence on record to show that at the time the Plaintiff’s employment was terminated he had worked for the Defendant company from 2nd April 1970 to 24th January 2003. This Court does not agree with the Plaintiff when he submits that he worked with the Defendant company for 33 years. The Plaintiff, in my judgment, would have worked for 33 years if his period of service was from 2nd April 1970 to 2nd or 3rd April 2003. Consequently, he had worked for the Defendant company for a period of 32 years. It follows, therefore, that having worked for these numbers of years the severance allowance payable to him would be the equivalent of “four weeks wages for each completed year of continuous service9.”

     


    As regards how much is payable as severance allowance the Plaintiff’s calculation is faulty. It is flawed in that his calculation is premised on the last salary multiplied by the length of service. The correct approach to determining the severance allowance payable would be for the Court to interpret the meaning of the words “four weeks’ wages for each completed year of conditions service.” These words have been interpreted before by our own industrial Relations Court10 and this Court concurs with the interpretation that was given to the phrase “four weeks’ wages for each completed year of continuous service.” The Deputy Chairperson of the Industrial Relations Court made the following observation which this Court adopts:

     


    The phrase [four weeks’ wages for each completed year of continuous service] can be broken into three parts namely:

     

    1. Each completed year should be understood to mean that the employer must have worked for at least a year.

    2. Continuous service in the phrase mean without break. The employee must have worked without a break for a number of years up to the date of termination of employment.

    3. Wages for each completed year’ must mean the wages for that completed year.

    The use of ‘number of years’ [of continuous service] is only for the purposes of ascertaining whether to award the employee two weeks or four weeks wages. In this Court’s view the number of years is not meant to be used as a multiplier. The employee must receive the aggregate of cumulative wages, which has accumulated over the years during his continuous service by adding up the wages to the point of termination --- The intention of Section 35 was to cater for employees at termination of their employment but not to give them a bonus to the disadvantage of the employer--- The calculations contended by the applicants which are based on the last salary of the employee multiplied by the number of years would lead to absurd results---.11[underlining supplied by me]

     


     


    I hasten to add that if one were to base the calculation of severance allowance on last salary and the number of years that would lead to unfair labour practice12 in that employees would become instant millionaires at the expense of employers. This Court, will not, therefore use the Plaintiff’s last salary and multiply it by the number of years he worked with the Defendant company. The Plaintiff wants us to multiply the number of years he served in the Defendant company as a multiplier which comes to the sum of K1,901,460.00. As put above, the severance allowance payable to the Plaintiff should consist of the aggregate of the cumulative wages accumulated in the 32 years he was continuously with the Defendant company. The Court has observed that the Defendant company had calculated the cumulative wages for the 32 years which came to MK271,826.00 ( two hundred and seventy one thousand eight hundred and twenty six kwacha. The plaintiff has not contradicted this evidence. Accordingly, the correct amount that should be paid to the Plaintiff as his severance allowance is the said sum of Mk 271,826. It is so ordered.

     


    Fringe benefits

     


    The Plaintiff is claiming fringe benefits in the form of hire charges, insurance cover and 150 litres of fuel. Indeed, the Plaintiff claims that he was entitled to use a company car and draw 50 litres of fuel every month. Thus the claim for hire charges, insurance, and fuel for three(3) months being the required period of notice.

     


    The Defendant company disputes that the Plaintiff is entitled to these fringe benefits. This Court agrees with the Defendant that the Plaintiff can not be allowed to claim these benefits. It is well to note that it is in evidence that on 3rd September 2002 the Plaintiff was categorically informed that his fringe benefits included, inter alia, USD20 for cell phone where the expense is documented and a fuel allowance of up to a maximum of 50 litres per month but only payable on production of invoices. It follows, therefore, that the Plaintiff can not claim use of a company car or hire charges when at the time of the termination of his contract of employment he was not entitled to use a company car as part of his fringe benefits. Further, and in any event, the claim for hire charges or insurance is a claim for special damages. It is trite law that such a claim must be specifically proved otherwise the Court will refuse to compensate a claimant13. The Plaintiff did not adduce any evidence to prove that he hired a car and/or that he paid insurance in respect of any hired car or at all. Accordingly, it can not lie with him to claim the said hire charges and/or insurance. The claim for hire charge and/or insurance is consequently dismissed. As regards the claim for fuel allowance the terms of his contract are clear as to when same became payable. The fuel allowance was payable on production of invoices. The Plaintiff has not produced invoices for the purchase of 150 litres of fuel he is claiming in this Court. In any event, a claim for 150 litres of fuel or the equivalent cash thereof is a claim for special damages and same ought to have been specifically proved14. The Plaintiff did not specifically prove the purchase of 150 litres of fuel. The claim for 150 litres of fuel, or its equivalent in cash, must fail.

     


    The Claim for Interest

     


    The Court has noted that one of the relief sought by the Plaintiff is interest on the sums that he was claiming. Further, it is observed that this claim of interest only appears in the prayer for the relief sought. Moreover, the Plaintiff has indicated in his prayer that he wants this interest at 10% above base bank lending rate. However, the Plaintiff did not plead, in the substantive part of his statement of claim, the material facts and the basis upon which he was seeking interest at the rate mentioned. This is contrary to established rules as regards pleadings15.

     


    As I understood it, the position at law is that a claim for interest must be pleaded not only in the particulars of relief but also in the main body of statement of claim. The same applies with regard to the basis and the rate at which such interest is claimed.16 The Plaintiff’s statement of claim was not in compliance with this law.

     


    Further, there is a settled proposition of law that an award of interest at a rate over and above the normal rule of interest awardable in a judgment is done when a Court is exercising equitable jurisdiction.17 Moreover, the position at law is that unless a claimant is seeking for no more than simple interest at a normal rate he should also put before the Court evidence on which the Court can decide what amount (if any) to allow: Profinance Trust SA vs Gladstone [2002]1 BCLC 141 at 152; http://www.courtservice.gov.uk (last visited on 7th November 2003. There was no such evidence offered to justify the award of interest at more than the normal interest rate payable on a judgment debt. Further, having regard to the fact that the claim for interest was not properly pleaded, the Plaintiff’s claim for interest ought not to succeed.18 The interest that should be awarded is the normal interest payable on a judgment debt and the rate is 5 per centum per annum as from the date of this decision.19

     


    The long and short of it is that there ought not be an award of interest on the severance allowance found due to the Plaintiff at the said bank lending rate claimed by the Plaintiff. Instead, the normal rate of interest on a judgment debt shall apply. It is so ordered.

     


    Legal collection charges

     


    As seen earlier, the Plaintiff has claimed collection fees. The point I wish to make is that the claim for collection fees has no basis in law. Why does this Court say so? This is said in view of the provisions of the Legal Practitioners (Scale and Minimum Charges) (Amendment) Rules.20 My understanding of these rules, in particular table 6 of the First Schedule, is that with effect from 13th March 2002 legal collection charges (collection fees) are payable by the collecting party and not the paying party.21

     


    The Plaintiff’s action was commenced on 4th April 2003, well after the Legal Practitioners (Scale and Minimum Charges) (Amendment Rules, 2002 came into force on 13th March 2002. Consequently, the collection fees claimed by the Plaintiff are not payable by the Defendant company.

     


    Further, it is my understanding of the recent amendment that where proceedings are commenced, legal practitioners may charge their clients solicitor and own client costs (charges). In addition a claimant only gets party and party costs from the paying party.

     


    In the light of the observation made above, the Plaintiff erred in claiming legal collection charges. Actually, if the relevant law had been consulted Counsel for the Plaintiff would have noted that such legal collection charges (collection fees) ought to have been paid by the Plaintiff to them and not otherwise.

     


    Conclusion

     


    The Plaintiff’s claim for severance allowance has succeed albeit that the sum payable is MK271,826.00. The claims in respect of hire charges and/or insurance, 150 litres of fuel or its equivalent value interest and collection fees are dismissed.

     


    As regards the question of costs this Court makes no order as to costs. Actually, it is the view of this Court that this matter ought to have been taken before the Industrial Relations Court. I am of this view because this action is an employment matter which could have been better dealt with by the Industrial Relations Court.22 Since the Industrial Relations Court would not have ordinarily made an order of costs23 I see no reason why this Court should award costs to either party. The Court orders instead that each party shall bear its own costs of, and occasioned by, these proceedings.

     


    Pronounced in open Court this 25th day of April 2005 at the Principal Registry, Blantyre.

     


     


    F.E. Kapanda

    JUDGE

     


     


     

     


     


     


     


     


     


     


     


     

     

     

     

     

     

     


     


    1 Act No. 6 of 2000

    2AMENDED STATEMENT OF CLAIM

     

    1. The Plaintiff was an employee of the Defendant Company from 2nd April 1970 to 24th January 2003 when he was declared redundant by the Defendant.

    2. The Defendant is a limited liability company engaged in the sale of vehicles (DAF trucks) in Malawi.

    3. The Plaintiff states that in August 2002, he was promoted and made in charge of vehicle sales.

    4. That in the year 2002, the shareholders of the Defendant company made an announcement to the managers of the various departments of the Defendant company about a huge theft that had apparently been committed although to the surprise of many no arrests were made.

    5. That following the alleged theft, the Plaintiff’s benefits were drastically reduced and eventually some 35 employees including the Plaintiff were laid off by the Defendant company.

    6. In or about the month of August 2002, the Plaintiff withdrew from the membership of the pension scheme operated by the Defendant for its members of staff.

    7. Pursuant to the Plaintiff’s withdrawal from the said pension, the Defendant caused the sum of K256,443.92 to be paid to the Plaintiff on or about 9th December 2002 which sum comprised pension contributions made by both the Plaintiff and the Defendant.

    8. That on the date of termination of Plaintiff’s employment, the Plaintiff was receiving a monthly salary K57,620.00 and was entitled to the following benefits:

     


      1. Use of company car

      2. 50 litres of fuel per month

     


    1. That on the termination of the Plaintiff’s employment, the Plaintiff was paid the sum of K143,618.98 being payment in respect of notice pay and leave pay.

    2. The Defendant wrongfully failed, refused and neglected to pay the Plaintiff upon termination of employment, severance allowance for the 33 years of continuous service rendered by the Plaintiff to the Defendant amounting to K1,901,460.00.

    3. Further, notwithstanding the Plaintiff’s entitlement to use the company car, the Defendant has wrongfully refused the Plaintiff use of the company car nor has he been paid the sum proportionate to the amount of hire charges of a comparable vehicle and fuel for the three months notice period.

     


    AND the Plaintiff claims:

     


      1. The said sum of K1,901,460 being severance allowance payable to the Plaintiff by the Defendant.

      2. The sum of K488,250.00 representing hire charges at K34.50 per kilometer and insurance of K700.00 per day of a comparable vehicle for 3 months.

      3. 150 litres of fuel or its equivalent value being the Plaintiff’s fuel entitlement for a period of 3 months.

      4. Interest on all the above sums at 1% above base bank lending rate.

      5. Collection fees on all sums falling due in paragraphs (i) to (iv) inclusive.

      6. Costs of this action.”

     


     


     


     


     

     

     

    3 The following is what the Defendant Company has given as its answer to the Plaintiff’s claim:

     


    AMENDED DEFENCE

     


    1. The Defendant admits paragraphs 1 , 2, and 9 of the Amended Statement of Claim.

    2. The Defendant denies paragraph 3 of the Amended Statement of Claim and contends that the Plaintiff could not have been promoted when he had received warnings as regards drastic drop in the sales of the spare parts of which the Plaintiff was in charge.

    3. The Defendant denies that there was any such announcement as alleged in paragraph 4 of the Amended Statement of Claim and puts the Plaintiff to strict proof thereof. The Defendant states that since it was the Plaintiff who reported to the Police of a theft which had occurred in his department he was and is in the premises in a better position to explain why no arrests had been made by the Police.

    4. The Defendant denies that the laying off of some of its employees was for the reason alleged in paragraph 5 of the Amended Statement of Claim but contends that the same was due to the fact that the sales of the spare parts and of the vehicles and the maintenance services by the Defendant had become very low resulting into the low income to the Defendant.

    5. The Defendant admits paragraph 6 of the Amended Statement of Claim but will at trial contend that the withdrawal of the Plaintiff from the Pension Scheme was specifically stated on the Notification of Withdrawal to Old Mutual to be on grounds of retrenchment after the Defendant had intimated to its employees its intention to retrench some of its employees.

    6. The Defendant admits paragraph 7 of the Amended Statement of Claim and States that after the payment referred to therein the Plaintiff has received a further sum of K649,519.97 as additional pension benefit.

    7. The Defendant admits that at the termination of his employment the Plaintiff was in receipt of a monthly salary of K57,620.00 as alleged in paragraph 8 of the Amended Statement of Claim but denies that the use of a company car by the Plaintiff was part of his conditions of service and puts him to strict proof thereof. In the premises the Defendant denies that the Plaintiff is entitled to claim the sum K488,250.00 as hire charges.

    8. The Defendant refers to paragraph 10 of the Amended Statement of Claim and states that in terms of paragraph 2 of the Employment Act (First Schedule) (Amendment) Order, 2002 no severance allowance is payable where an employee is entitled to pension, gratuity or any other terminal benefits which exceed severance allowance payable under paragraph 1 of the said Schedule.

    9. The Defendant states that the pension paid to the plaintiff upon the termination of his employment exceeds the severance allowance payable under paragraph 1 of the said Schedule. In the premises the Defendant is not liable to pay any severance allowance to the Plaintiff in terms of the said Schedule.

    10. (a) The Defendant repeats paragraph 7 hereof and contends that albeit the Plaintiff was entitled to a fuel allowance as alleged in paragraph 8 of the Amended Statement of Claim the Plaintiff is not entitled to the same after the termination of his employment with the Defendant.

     


    1. The Defendant repeats paragraph 6, 7, 8 and 9 hereof and denies that the Plaintiff is entitled to the payment of any of the claims particularized in the prayer of the Amended Statement of Claim.

    2. Save as hereinbefore expressly admitted the Defendant denies each and every allegation of fact in the Amended Statement of Claim contained as if the same were herein set out and traversed seriatim and prays that the action be dismissed with costs.

     


    Dated the 4th day of November 2004.

     

    (Signed)

     

     

    JOHN M. CHIRWA & PARTNERS

    Legal Practitioner for the Defendant”

     

     

    3 The following is what the Defendant Company has given as its answer to the Plaintiff’s claim:

     


    AMENDED DEFENCE

     


    1. The Defendant admits paragraphs 1 , 2, and 9 of the Amended Statement of Claim.

    2. The Defendant denies paragraph 3 of the Amended Statement of Claim and contends that the Plaintiff could not have been promoted when he had received warnings as regards drastic drop in the sales of the spare parts of which the Plaintiff was in charge.

    3. The Defendant denies that there was any such announcement as alleged in paragraph 4 of the Amended Statement of Claim and puts the Plaintiff to strict proof thereof. The Defendant states that since it was the Plaintiff who reported to the Police of a theft which had occurred in his department he was and is in the premises in a better position to explain why no arrests had been made by the Police.

    4. The Defendant denies that the laying off of some of its employees was for the reason alleged in paragraph 5 of the Amended Statement of Claim but contends that the same was due to the fact that the sales of the spare parts and of the vehicles and the maintenance services by the Defendant had become very low resulting into the low income to the Defendant.

    5. The Defendant admits paragraph 6 of the Amended Statement of Claim but will at trial contend that the withdrawal of the Plaintiff from the Pension Scheme was specifically stated on the Notification of Withdrawal to Old Mutual to be on grounds of retrenchment after the Defendant had intimated to its employees its intention to retrench some of its employees.

    6. The Defendant admits paragraph 7 of the Amended Statement of Claim and States that after the payment referred to therein the Plaintiff has received a further sum of K649,519.97 as additional pension benefit.

    7. The Defendant admits that at the termination of his employment the Plaintiff was in receipt of a monthly salary of K57,620.00 as alleged in paragraph 8 of the Amended Statement of Claim but denies that the use of a company car by the Plaintiff was part of his conditions of service and puts him to strict proof thereof. In the premises the Defendant denies that the Plaintiff is entitled to claim the sum K488,250.00 as hire charges.

    8. The Defendant refers to paragraph 10 of the Amended Statement of Claim and states that in terms of paragraph 2 of the Employment Act (First Schedule) (Amendment) Order, 2002 no severance allowance is payable where an employee is entitled to pension, gratuity or any other terminal benefits which exceed severance allowance payable under paragraph 1 of the said Schedule.

    9. The Defendant states that the pension paid to the plaintiff upon the termination of his employment exceeds the severance allowance payable under paragraph 1 of the said Schedule. In the premises the Defendant is not liable to pay any severance allowance to the Plaintiff in terms of the said Schedule.

    10. (a) The Defendant repeats paragraph 7 hereof and contends that albeit the Plaintiff was entitled to a fuel allowance as alleged in paragraph 8 of the Amended Statement of Claim the Plaintiff is not entitled to the same after the termination of his employment with the Defendant.

     


    1. The Defendant repeats paragraph 6, 7, 8 and 9 hereof and denies that the Plaintiff is entitled to the payment of any of the claims particularized in the prayer of the Amended Statement of Claim.

    2. Save as hereinbefore expressly admitted the Defendant denies each and every allegation of fact in the Amended Statement of Claim contained as if the same were herein set out and traversed seriatim and prays that the action be dismissed with costs.

     


    Dated the 4th day of November 2004.

     

    (Signed)

     

     

    JOHN M. CHIRWA & PARTNERS

    Legal Practitioner for the Defendant”

     

     

    4 Section 35 of Employment Act, 2000 (Act No. 6 of 2000)

    5 Government Notice No. 24 of 3rd February 2004

    6 The State vs Attorney Genera (Minister of Labour and Vocational Training) Ex parte Mary Khawela and Others Misc. Civil Cause No. 7 of 2004 [unreported] High Court decision of 5th November 2004

    7 Government Notice No. 47 of 17th July 2000

    8 See Foot Note 6 above

    9 First Schedule of the Employment Act, 2000

    10 Phiri and Another vs Leyland DAF (MW) Ltd Matter No. IRC 128/224 of 2003

    11 Ibid PP 2-3

    12 Liquidator, Import and Export (MW) Ltd vs J.L. Kankhwangwa and Others Civil Appeal No. 52 of 2003 (unreported) High Court decision of 22nd November 2003 where the Court observed that the Court must take into consideration that fair labour practices entails being fair to both the employer and the employee

    13 Yanu -Yanu Company Ltd vs Mbewe and Mbewe 10 MLR 377

    14 Yanu - Yanu Company Ltd vs Mbewe and Mbewe 10 MLR 377

    15 Zomba Municipal Assembly vs Council of the University of Malawi, Civil Cause No. 3567 of 2000 unreported (High Court)

    16 Zomba Municipal Assembly vs Council of the University of Malawi C.C. No. 3567 of 2000

    17 Wallersteiner vs Moir (No.) [1975]1 All ER 849

    18 Zomba Municipal Assembly vs Council for the University of Malawi supra

    19 Section 65 of the Courts Act (Cap 3:02) of the Laws of Malawi

    20 Government Notice No….. of 2000 dated 13th March 2002

    21 Table 6 of the said First Schedule provides, inter alia: “nature of Work Collection of moneys, solicitor and own client charge on collecting moneys to be charge on receipt of moneys: provided that where proceedings are commenced the percentage may only be charged on the amount up to the date commencement of such proceedings. Where proceedings are commenced solicitor may charge solicitor and own client charges in addition to party and party but, subject to any special agreement between solicitor and client on a percentage basis.”

    22 Kamphoni vs Malawi Telecommunications Ltd Civil Cause No, 684 of 2001 (unreported) High Court decision of 18th May 2001

    23 Section 72 of the Labour Relations Act. See also Kamphoni vs Malawi Telecommunications Ltd Ibid