Court name
Industrial Relations Court
Case number
IRC Matter 300 of 2006

Namijingo v Chitakali Tea Estate (IRC Matter 300 of 2006) [2006] MWIRC 131 (06 November 2006);

Law report citations
Media neutral citation
[2006] MWIRC 131

IN THE
INDUSTRIAL RELATIONS COURT OF MALAWI




PRINCIPAL
REGISTRY




MATTER
NO. IRC 300 OF 2006




BETWEEN




NAMIJINGO………………..….…………………………………………
APPLICANT




AND






CHITAKALI TEA ESTATE………….………….…………………..RESPONDENT






CORAM: R.
ZIBELU BANDA (MS); CHAIRPERSON


NICK CHIFUNDO KAJOMBO; EMPLOYEES’ PANELIST


AIMAN
M MALIJANI; EMPLOYERS’ PANELIST


Mpando; of Counsel
for the Applicant


Gwazantini; of Counsel
for the Respondent


Gowa; Official
Interpreter




JUDGMENT



  1. Employment-Terms
    and Conditions- Who determines- Parties agree- orally or in written
    documentation


  2. Burden on employer to
    produce written particulars of terms and conditions of employment

  3. Terminal
    benefits-Money paid out after termination of contract


  4. Notice pay-Including
    all other benefits-Severance allowance-Pension or gratuity where
    applicable




Background


The applicant was
effectively employed by the respondent on 1 April 2001 through a
letter dated 23 April 2001 marked as exhibit
AP1. It stated that a
contract of employment would follow. The employment was confirmed
after a probation period of six months
was successfully completed on
1 October 2001. The applicant’s salary was raised to MK 300 000 per
annum effective 1 November
following this confirmation in
appointment.
The contract of employment
containing terms and condition of
employment was never signed.



The
applicant however derived his terms and conditions from the general
terms and conditions applying to staff of the respondent
and also
from some verbal and written communication. AP5 was exhibited as one
such document where some fringe benefits were outlined.
The applicant
alleged that this was a contract for a fixed period of time, to run
for three months. While the respondent alleged
that the contract was
for unspecified period of time.



The
respondent terminated the contract effective 31 October 2002. Reasons
for the termination were not an issue in this matter.
The main issue
was in relation to terminal benefits. The respondent paid the
applicant equivalent of three months salary in lieu
of notice;
accrued leave pay; water allowance; electricity allowance; fuel
allowance; telephone allowance; cellphone allowance
and
accommodation. All these benefits were calculated for a three months
period.

The applicant contended that this
was not enough. He demanded to be paid benefits
covering the whole of
the un-expired of contract. This was because he reasoned that if the
contract did not provide for a notice
clause then it could only be
terminated upon expiry of the contract period, i.e. three years.



Issue


The
applicant brought the action to seek the court’s determination
whether there was a valid fixed term contract between the applicant

and respondent and whether if there was a valid contract after
termination the respondent paid out to the applicant his terminal

dues in full and according to law?




Assessment of Facts


The court
found that the respondent employed the applicant through a letter
exhibited as AP1. In that letter the respondent promised
that a
formal contract of employment would follow containing the terms and
conditions of employment. The applicant commenced work
on the
understanding that he was on a fixed term contract according to some
verbal communication. Other terms and conditions of
employment were
communicated to the applicant through written memorandums. One such
memorandum was exhibited as AP5. Providing
for the following:
accommodation; electricity; water; milk; firewood; telephone;
cellphone; fuel; education; club; bonus; watchmen;
garden boy and
house boy. The money value of these benefits were not indicated on
the memorandum.




A dispute
arose after the respondent unilaterally terminated the applicant’s
contract. They paid him terminal benefits as exhibited
in letter of
termination. However the applicant contended that the terminal
benefits were inadequate, arguing that under the laws
since he was
under a fixed term contract that had no notice clause for termination
he was entitled to benefits for the whole of
un-expired period of the
contract. The respondent on the other hand averred that there was no
contract between the parties and
in the alternative should the court
find that there was a contract, the respondent argued that they had
paid the applicant all
his dues but severance allowance for one year
and pension to calcualted.




The court
must point out that since the applicant did not have any issues with
the reason and the circumstances of the termination,
it is assumed
that the termination although instigated by the respondent was
mutually acceptable by the applicant. It was not contested.
The court
was not called upon to determine whether the termination was fair or
unfair.




The Law


Whether
there was a Contract of Employment?


Section 27 of the
Employment act provides that it is the duty of every employer to give
each employee a written statement of particulars
of employment. In
this case, the court heard in evidence that the respondent did not
comply with this provision. In the absence
of any written particulars
of employment from the respondent to the applicant, the respondent
cannot be heard to be saying that
there was no contract between
themselves and the applicant. The obligation was on them to produce
the statement containing the
vital terms and conditions of
employment, see; Chisowa v Ibrahim and Cash ‘N Carry [Matter
Number IRC 259 of 2003 (unreported)]. The court holds therefore that
there was a verbal contract of employment, which
was augmented by
written memorandums containing terms and conditions.




Whether
the Contract was for a Fixed Period of Time?


In the written memorandums
there was no clause on whether the contract was for unspecified
period of time or for a fixed period
of time. The applicant alleged
that the contract was for a fixed period of time commencing on 1
April 2001 expiring on 31 March
2004. The respondent on the other
hand argued that the contract was for unspecified period of time.
None of the parties had any
valid contract to substantiate their
assertions. However since the burden of adducing a written contract
of employment was on the
respondent, the court believes the applicant
that his was a contract for a fixed period of time. The respondent
had no basis for
disputing this fact. The court therefore finds that
the contract between the applicant and the respondent was for a
specified period
of time.




Whether
Terminal Benefits were fully Paid?


This being a unilateral
termination at the initiative of the employer, the applicant was
indeed entitled to be given terminal benefits.
The nature of the
benefits would largely depend on the reason and circumstances of the
termination. In this case the court was
not informed the reason nor
the circumstances leading to termination. The court was informed that
this was not an issue in this
matter.




This being
a contract for a specified period of time and in the absence of any
clause on notice of termination between the parties,
the court
resorted to the Employment Act. Section 29(3) provides that the
minimum period of notice in respect of a contract of
employment for a
specified period of time shall be fourteen calendar days. The court
finds therefore that in law the applicant
was entitled to be paid an
equivalent of 14 days salary in lieu of notice and all other benefits
that he was entitled to under
the contract for the same period of 14
days.



It is in
other words not correct that where a notice period is not provided
for in a fixed contract of employment, the employee
must be paid up
to the end of the contract even where he does not complete the term.
This interpretation would be absurd as it
would have the effect of
preventing parties to a contract of employment from pulling out of
the contract at any time before the
end of the term. Allowing such a
scenario would be turning a contract of employment into a contract of
servitude. It would also
result in unfair labour practice to an
employer who may be prevented from dismissing employees on fixed
contract even where such
employees had committed acts of misconduct
or were not able to perform (incapacity).






Finding


The court
finds that there was a contract of employment for a fixed period of
time between the applicant and the respondent. The
court further
finds that the applicant was in the absence of any notice provision
under the contract entitled to equivalent of
fourteen days notice and
severance allowance as terminal benefits. The respondent conceded
that they owed the applicant severance
allowance and pension. The
applicant argued that he was not on pensionable contract and the
court agreed with him above.



Order


The
respondent is ordered to calculate and pay the applicant all his
benefits under the contract as enunciated above less what was
already
paid. The notice period for calculating these benefits is fourteen
calendar days. The respondent must also pay severance
allowance for
one year at a rate of MK12500-00. This order is with immediate
effect.




Any party
aggrieved by this decision has the right of appeal to the High Court
within 30 days of this decision. Appeal lies only
on matters of law
and jurisdiction and not facts: Section 65 (2) of the Labour
Relations Act.




Pronounced
this 7th day of November 2007 at BLANTYRE.






Rachel
Zibelu Banda


CHAIRPERSON.






Nick Chifundo Kajombo


EMPLOYEES’
PANELIST






Aiman M Malijani


EMPLOYERS’
PANELIST