Phillips v Shire Bus Lines Ltd (IC 181 of 20011 ) (181 of 20011) [2005] MWIRC 8 (03 February 2005);

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IN THE INDUSTRIAL RELATIONS COURT OF MALAWI


PRINCIPAL REGISTRY


MATTER NO. IRC 181 OF 2001


BETWEEN:


PHILIPS...…….……. ………………………………………. APPLICANT


-and-


SHIRE BUS LINES LTD.……………………..………… RESPONDENT



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

Applicant, present

Masiku of Counsel for the Respondent

Ngalauka, Court Clerk



JUDGMENT

Dismissal- Summary Dismissal- Reason-Misconduct-Misappropriation of company funds-Employer to Prove-Failure of Employer to Attend Court-Procedure- Right to be Heard and Defend Oneself-Interference with Employer Decision-Effective date of termination-Retirement benefits.


FACTS

The applicant was employed in May 1984 as Chief Driving Instructor. He was dismissed on 10 October 2001 for misconduct involving misappropriation of company funds. His claim was for retirement benefits because he said at the time of dismissal he had already retired. The respondent did not attend court to respond despite several notices and adjournments at their instance.


ISSUE

Whether the applicant is entitled to retirement benefits? In resolving this issue there is need to find out whether the dismissal was unfair. A dismissal is unfair if it does not comply with section 57 of the Employment Act.




THE LAW

The Employment Act provides that an employee should be given a reason before dismissal. The employee should also be given an opportunity to explain his side and defend himself against the allegation leveled against him. Section 57 of the said Act provides that:


(1) “The employment of an employee shall not be terminated by an employer unless there is a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirements of the undertaking.”


(2) “The employment of an employee shall not be terminated for reasons connected with his capacity or conduct before the employee is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide the opportunity.”


Reason

The burden of proving the reason for dismissal is on the employer. See section 61 of the Act. In the instant case the employer who is respondent did not attend Court. There was no good cause shown why the respondent failed to appear for hearing when they were served with special notice of hearing. Willful disregard of Court summons is condemned because when a case is heard and it is in the respondent’s disfavor, they rush to Court for stay of proceedings, which is a process that delays Court proceess thereby waste of Court’s time and other valuable resources.


The Court proceeded to hear the case in the absence of the respondent pursuant to section 74 of the Labour Relations Act. The section is aimed at preventing court process being deliberately delayed, which would result in justice not being done. In such situations the High Court has held that the matter must proceed in the absence of the other party. The Honourable Justice Ndovi ordered in Fredrick Banda V. Dimon (Malawi) Ltd (Civil Cause No. 1394 of 1996(unreported)) that:


“trial should proceed, in the interest of justice, in the absence of the defendant. It has often been said in these courts that justice delayed is justice denied.”


See also the case of Chirimba Garments (EPZ)Manufacturing Ltd V Nyaika [Civil Appeal No.58/2003 (unreported)].

The evidence showed that the applicant was accused of misappropriating around K154 200-00 being money received by the applicant on behalf of the respondent for driving students. The applicant was confronted with this allegation.


The court finds that misappropriation of company money is serious misconduct. It was therefore imperative on the respondent to take disciplinary action against the applicant. The reason was valid. Misappropriation of company money is serious misconduct warranting disciplinary action. See the cases of Patrick V. Carlsberg Brewery (Mw) Ltd [(Matter No. IRC 157 of 2003 (unreported.)]; Ibrahim V Suncrest [Matter No.IRC 73/2003 (unreported)]; Phiri V Shoprite Checkers [ Matter No IRC74/2003 (unreported)] and Saidi and others V Press Bakeries [Matter No IRC38/2001 (unreported)].


The law provides that before an employer takes any disciplinary action against its employee, the employee must first be afforded with an opportunity to explain his side and defend himself. This is what is covered in section 57(2) of the Employment Act and termed ‘procedure’.

Procedure

The applicant was invited to explain his side concerning the missing of K154 200-00, under his custody on various dates before he was due to retire. The applicant admitted misappropriating the funds and agreed to reimburse the company. He paid back K28 600-00 remaining with a balance of K125 600-00. The respondent regarding misappropriating of money a serious misconduct dismissed the applicant.


The Court finds that the applicant was afforded an opportunity to explain his side and defend himself. The applicant admitted his misconduct and offered to make restitution.


The procedure taken by the respondnet was fair and the decision reached was fair under the circumstances. This court cannot interfere with the decision of the respondent. In County Fair Foods (Pty) Ltd V CCMA & others [1999]11BLLR 1117 (LAC), Kroon JA. held that:


“[interference] with the employer’s sanction “ is only justified in the case of ……..unfairness.” However, the decision of the arbitrator as to the fairness or unfairness of the employer’s decision is not reached with reference to the evidential material that was before the employer at the time of its decision but on the basis of all evidential material before the arbitrator. To that extent the proceedings are a hearing de novo”



FINDING

The respondent complied with fair labour practices provided in section 57 of the Employment Act. The dismissal was fair. This dismissal was in relation to the contract from 2 October 2001 after retirement to 10 October 2001.


Withheld Retirement benefits

The applicant claimed several items comprising his retirement package. These items were given to employee who reached normal retirement with the company. The applicant contended that he had reached retirement age. He said he was therefore entitled to the retirement benefits. The applicant produced exhibit AP2 as evidence of his retirement.


Exhibit AP2 is a letter from the Human Resources Manager to the applicant advising him of his retirement on 1 October 2001. However before 1 October 2001, there were allegations that the applicant had misappropriated company money over a period of time. In around September 2001, investigations were carried out, where the applicant was invited to explain the missing money. The investigations and meetings with the applicant revealed that indeed the applicant had misappropriated money for the company for which, he was dismissed on 10 October 2001.


The question is at what time did the applicant have an entitlement to retirement benefits? The court finds that the applicant was entitled to retirement benefits on 1 October 2001 as per exhibit AP2.


Effective date of termination

The applicant was dismissed on 10 October 2001 well after he had reached normal retirement age. The dismissal was therefore in relation to a different contract, which only the employer was able to show to the court. The effective date of termination was 10 October 2001 and it cannot be back dated, see Brown v Southall & Knight [1980] IRLR130 EAT, providing that:


Where dismissal is communicated to the employee in a letter, the contract of employment does not terminate until the employee has actually read or had a reasonable opportunity of reading it. It is not enough to establish that the employer has decided to dismiss a man”.


The court therefore finds that the applicant is entitled to terminal benefits as pleaded in his statement of claim. The applicant swindled the respondent of K125 600-00. The respondent is entitled to recover this amount from any money they owe the applicant in the terminal benefits package.


ORDER

The respondent is ordered to compute the applicant’s terminal benefits as pleaded in the statement of claim. The computations must be filed with the court showing all the pleaded items and their value at the date of retirement. The respondent is also ordered to show any deductions they make from the retirement package, including their K125 600-00 and government tax if applicable. Further the respondent is ordered to add 20% on the total sum computed to cater for devaluation of the local currency since 2001. This order must be complied with within seven days of this day.


Pronounced in open Court this 3rd day of February 2005 at LIMBE.




R. Zibelu Banda (Ms.)

DEPUTY CHAIRPERSON.