IN THE INDUSTRIAL RELATIONS COURT OF MALAWI
MATTER NO. IRC 184 OF 2005
IMANI ....... . ...APPLICANT
BLANTYRE PRINT AND PUBLISHING CO ... RESPONDENT
CORAM: R. Zibelu Banda (Ms); Chairperson
Makiyi; of Counsel for the Applicant
Mwantisi (through written submisions)Counsel for the respondent
Chinkudzu; Official Interpreter
Severance allowance-Whether it is payable where employee is entitled to pension benefits? Section 35 Employment Act-Khawela Ruling.
The applicant was declared redundant and was paid her pension contributions. The applicant felt that she was also entitled severance allowance. However, the respondent was of the view that where pension was payable, and in fact paid to the applicant, the respondent was not under any legal obligation to pay severance allowance.
Before the High Court ruling in Khawela and others V Commercial Bank of Malawi [Miscellaneous Civil Appeal Number 7/2004 (unreported)] the position regarding severance allowance was indeed as submitted by Counsel for the respondent. However, after the Khawela ruling which in essence nullified that provision in the First Schedule to section 35 of the Employment Act, the position now is that both pension and severance allowance are payable.
Severance allowance being an obligation under statutory law, Counsel for the respondent can not be heard to be saying that an employer can opt not to pay it if that employer can pay something else like pension in this case. Indeed pension is contractual and therefore parties can choose whether or not to have pension in their terms and conditions of employment. This option is not available where the obligation is mandated by law.
Order- it is this courts order that the applicant be paid her full severance allowance calculated in accordance with the High Court ruling in Thomson V Leyland DAF (Malawi) Ltd [Civil Cause Number 919 of 2003(unreported)]. Any amount due to be paid to the applicant with seven days of this order.
Right of appeal
Any party aggrieved by this decision is at liberty to appeal to the High Court within 30 days of this judgment in accordance with section 65 (2) of the Labour Relations Act.
Pronounced in Open Court this 26th day of October 2005 at LIMBE.
R Zibelu Banda (Ms.)