Makuta and Others v Nico Holdings Ltd (IRC 276 of 2003 ) (276 of 2003) [2006] MWIRC 136 (22 November 2006);

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IN THE INDUSTRIAL RELATIONS COURT OF MALAWI


PRINCIPAL REGISTRY


MATTER NO. IRC 276 OF 2003


BETWEEN


MAKUTA AND OTHERS ………………………………………………. APPLICANT


-and-


NICO HOLDINGS LIMITED ……………………………………… RESPONDENT



CORAM: R.ZIBELU BANDA – CHAIRPERSON
Njobvu of Counsel for the Respondent
Applicants – Present
Ngalauka – Court Clerk


RECORD FOR THE HONOURABLE CHIEF JUSTICE


Court: We need to find one person who can lead evidence on behalf of the rest since from the preliminary fact finding it seems the issues are similar to all the five as raised by the spokesman – Mr Makuta.


Applicant: Takes oath to and states: I am Moxcy Edward Makuta, Box 84 Soche Blantyre 4. I was employed on 8th February 1988. Dismissed on 29th March 2001. Letter of dismissal –


Court: AP 1


We were in different departments.


Events


The company was making losses. Therefore there was need to reduce staff. We were told at a meeting on 29th February 2001 in the boardroom. There were 10 employees in the room. On management side there was Human Resource Manager, Mr Kapanga, General Manager for General Insurance and Mr Singo General Manager Life Insurance. We were phoned from our places of work to meet in the boardroom.


We were given letters of redundancy. We asked for the CEO for a discussion but he refused to see us. We were asked to surrender company property. We were prohibited from going back into our officers after this day. We were asked to meet the Human Resources Manager on about 1 – 2 April to discuss the issue. They advised us to wait for our benefits.


Terminal benefits – Mrs Mtonyo


  • Refund of pension

  • 3 months notice

  • Severance allowance

  • Leave pay

  • Repatriation


Mkundo


  • Pension

  • Severance allowance

  • 3 months notice

  • Repatriation

  • I dint have accrued leave days


Makuta


  • Pension

  • 3 months notice

  • Severance allowance


Blaimu


  • Pension

  • 3 months notice

  • Severance allowance

  • Repatriation

  • I didn’t get leave pay


Ngoma


  • Pension

  • 3 months notice

  • Leave pay

  • Repatriation

  • Severance allowance

  • Bereavement allowance (I lost my wife)

  • Refund of medical expenses for 3 months


UNFAIR DISMISSAL WHY


  • We were not consulted before hand about the redundancy. We were not warned.

  • We were told that the company was not making profits. The first instance was around 2000 December, when the CEO, Mlusu told us that the company was going through financial problems but he assured us that nobody was going to lose his job.


  • We got a press release from management that the company was going through restructuring but the company would still maintain its employees.


Court: ‘AP 2’ – 13th March 2000


  • Our senior manager used to brief us on the financial progress of the company.


  • Memos were written by management to all staff about the financial problems that the company was going through. The memos were kept by the secretary – we used to read them, they were posted on the notice board.


  • In 2001 was when we were invited for dismissal.


Makuta: I was underpaid on my benefits. I was supposed to get repatriation. I was supposed to get transport money K40000.00. Conditions of service say transport would be provided to drop an employee to his/her place of abode. I am also claiming leave pay for 42 accrued leave days.


MASM: I was supposed to get three months MASM contribution. I went to the hospital early May 2001 and I was told that my file had been closed. I did not get treatment. I did not try to find out why from management.


Loan: I had a company loan for a house. I paid my pension benefits towards the house loan. I expected that mortgage policy of NICO would be given to me. This was in relation to death cover – retrenchment is like death.


MRA – I was cheated in tax because they did not take into account K50000.00 tax free. I was supposed to get K50000.00 tax free in accordance with the parliament discussions on Employment Act.


Our terminal benefits came late – I was paid seven days after the dismissal. This was a problem – the money came late. We got our first pay on 10th April 2001:-

  • Severance allowance

  • 3 months notice

  • Leave pay


The next payment was pension which we got on 5th June 2001.


The next payment was on 12th February 2002 supplementary pension.


The next payment was bonus on the pension – this was paid in December 2001.


I also got my salary refund for under payment – I got Christmas bonus and OT for that period. I was dismissed because I took NICO to Ombudsman.


Pension: I did not get all my pension interest from 1997 – 2001.


Mtonyo: I had worked for 23 years I only had seven years to go before retirement. I had loans and other responsibilities which I did not fulfill due to the dismissal. I did not get MASM.


Mkundo: I was supposed to retire after five years on early retirement. I was given an option to receive my money immediately or have it with the company, I withdraw later. I had been employed for 29 years. I was dismissed, yet some who had just joined later were retained.


* My Masm was not paid for 3 months. I did not get leave pay for six months. January – June 30 2001. I went to the hospital but I was sent back.


Blaimu: I worked for 22 years. I had a house loan. They deducted K45000.00 instead of the monthly repayments of about K500.00. They stopped paying my masm, during the notice period. I was supposed to retire at 55 years but I was dismissed while I was 49 years. I was performing well and I contributed to NICO’s prosperity.


* Redundancy – I was dismissed yet they employed someone else to take over from me. I was filing – I was the only one who was filing in the Accident Department. There is someone else now doing filing in the Accident Department.


Ngoma: I was supposed to be provided with transport to ferry my wife’s remains home. I spent K70000.00. I was refunded K5000.00. I am claiming about K70000.00 for transport and coffin.


Njobvu: I would like to consult with my client. A number of issues have been alleged which I did not know about, like death benefits. I would seek an adjournment before I can proceed to XXN: I need to go into the files to dig out more information from what has transpired. I am seeking a different date for continuation of the case.


Questions by court.


Mtonyo – I was never under any disciplinary proceedings


Mkundo – I was never a subject of disciplinary proceedings –


Makuta – I was never at any time taken for disciplinary proceedings – no warning neither verbal nor written –


Blaimu – I was never subject to any disciplinary proceedings –


Ngoma - I was never subject to any disciplinary proceedings.


Court: Matter is adjourned to a date to be fixed for continued hearing.


3/03/2005

R. Zibelu Banda

CHAIRPERSON



CORAM: R. ZIBELU BANDA – CHAIRPERSON

Dr. Mtambo – of Counsel for the Applicants

Njobvu of Counsel for the Respondent

Chinkudzu – Official Interpreter



Njobvu: I intend to XXN each and every one of the applicants separately.


Court: That is how we shall proceed then.


XXN: Makuta: I was employed by NICO, I registered that I came from Thyolo. We had conditions of service. They referred to redundancies.


* Looks at conditions of service – procedure clause 21 – I know about the clause on retrenchments. I knew about the clause – that we could get information on retrenchments. I never asked to know the retrenchment procedures. We knew about the financial problems management told us. Circulars were posted on the boards for all to see and read.


* Looks at circulars – 8th July 1999 I don’t remember all the contents in this notice. This memo is referring to financial problems. It was addressed to all staff including myself. The memo is referring to restructuring exercise -


* Looks at document – 4th January 2000 I remember this memo – Addressed to all staff – Restructuring exercise – Also refers to redundancies.


* Looks at 14th April 2000 – memo – change of shareholding in NICO. At this time the company had not started retrenching.


Looks at 4th January 2000 – memo – redundancies – According to this memo only one person was retrenched.


* Looks at 12th December 2000 memo – Refer to restructuring at management level -


Looks at newspaper press release dated 13th March 2000 – it supercedes all other press releases.


The Article refers to the change of shareholding – this article promises me that I would not be dismissed on redundancy.


* Looks at 4th January 2000 memo last paragraph – Talks of review of jobs independently on merit to achieve the mission and efficiency.


The Newspaper assured us that staff structure would not change. My understanding is that nobody would lose their jobs.


* On 30th March 2001 – memo – About my restructuring – I was not given a chance to say anything on the restructuring – I signed the memo – I asked that my debts should be deducted from my pension. I didn’t know anything about the restructuring until the date I was dismissed. I got the letter suddenly – we were invited to the Boardroom, no agenda was given. I was not given a chance to defend myself or prepare. I was dismissed suddenly. I was not given a chance to repay loan for a period of 3 years.


* I was dismissed because I had complained to the Ombudsman – on an employment matter. I am not an avionic litigant. Before the termination I had been to the Ombudsman three times. After the termination I went to the Ombudsman several times. I reported to the Ombudsman that NICO had not reported to MRA that they had declared us redundant. I also went to complain about my benefits – the MRA report came first before the benefits report – I was advised to institute the benefits claim -


* Letter to the Ombudsman – 7th March 2003 – page 2 – accepting the redundancy – but disputing the redundancy benefits -


* Looks at letter from Ombudsman 27th October 2003 – stating that we had no case. I know the letter. It is true that we had not received our benefits.


Clause 21 3 – Redundancy package –


      • 3 months notice

      • Employers Account payment


I did not receive my employee’s account pension – I explained that I did not get my full pension benefits. The company told me that they would not pay me.


Court: Its 12.00 noon. There shall be disruptions now. Can I suggest that we adjourn to this afternoon.


Dr. Mtambo: No problem.


Njobvu: No problem.


Court: Matter is adjourned to 3 p.m. this afternoon.


XXN resumes: I did not take any medical receipts to the company about my MASM. I was expecting transport to take me home after termination.


Looks at letter –


In May 2000 we got letter to claim our transport within 6 months (repatriation). After I received this letter I claimed reimbursement of K40000.00 from NICO. This was transport cost I was interviewed in Blantyre before I got employment. I was working in Blantyre. I was operating from Blantyre at time of termination. I registered that I come from Thyolo seven days after termination I submitted a receipt to NICO for reimbursement - I moved on 15th April 2001. This was one year after termination. I moved to Mangochi. I knew that NICO was supposed to repatriate me. I knew from my letter of termination. I knew I would be given cash. The K40000.00 claim was genuine – I got quotations and choose the cheapest. I was given a cheque for severance allowance which I used to transport myself home.


Re examination: NICO did not follow the laid criteria in clause 21 for redundancies – I was also a productive employee – I was not redeployed – I was never told that I was unqualified and unproductive. I was promoted and got increment while at NICO – I accepted the retrenchment because I had no choice – there was no time to defend myself. I was invited to the boardroom without agenda only to be told that we had been retrenched. Reads last two paragraph of termination letter.


Looks and reads Article from Newspaper – Relation of employees – I was an existing staff of NICO I was retained in the company but was fired in 2001. I was not given any retrenchment criteria – The Newspaper assured me that I would be retained therefore there was no need to look for information on the retrenchment criteria.


Consultation – I was never consulted at any point to make representations on the retrenchment – All memos retained to management decision. I did not lie to the Ombudsman – certain benefits don’t appear on the termination letter, like MASM and long service award. NICO was supposed to pay my contributions – but I was sent back at the hospital NICO stopped paying immediately after termination. We were serving notice. We were supposed to get medical cover during this period. The case was suspended from the Ombudsman. We were told that the case had no merit. I was not given all the benefits – e.g. pension –


Question by Court: I did not ask for transport to go back home after termination. I just decided to take myself home, after expiry of seven days from termination. I believed that I was not supposed to ask NICO for transport when the letter of termination indicated that they would give me transport.


Court: I don’t accept your explanation on repatriation. It has no merit.


AP 2: Mkundo: Takes oath and states: I am Mc Pherson Chifulumira Mkundo, c/o Private Bag 157, Blantyre.


XXN: This address is for ZIMRE Malawi, that is where I work – I started in February 2004. I joined NICO in 1972 – I did my interview in Blantyre, I was employed to work in Blantyre. I was never warned through out my career – I started as a messenger – I don’t remember an issue in 1973 on destruction of any letter for purposes of personal use of the postage stamp money.


* I remember a Photostat machine incident but the facts are not true. I sat on my desk. I can’t remember whether or not I received a warning for this incident.


Looks at letter – 12th May 1975 – warning misuse of company property. I can’t remember this warning.


* Looks at letter – regarding doors and windows in the General Manager’s office – I cant remember this letter – warning – 1976 – in 1979 – 5th March – I cant remember receiving any warning this time – since the letter is in my file, I might have received it. We had conditions of service – I had supervisors – I knew that the company was going through financial problems – Nobody lost their job because of these issues – I used to read memos on restructuring but later there was a newspaper press release informing us that nobody would be retrenched due to the change of shareholding.


Terminal benefits – I got my benefits. I complained to the Ombudsman that I did not receive all my benefits. I got my last warning in 1979. I was terminated in 2001. I never got any warning the rest of the time. I was previously a messenger. I rose to filing clerk. I was promoted after the warnings. The newspaper article came out in 2003 even after the warning which I had received. They said they would not dismiss me even after all those warnings. I was not consulted, I just got message to go to the boardroom where I got my dismissal.


AP 3: Takes oath and states: I am Y. Blaimu, Box 1478, Blantyre.


XXN: This is my personal box number. I come from Thyolo. I was a filing clerk – I can’t remember whether the company was going through financial problems. I was retrenched in 2001. I can’t remember that the company was going through any financial problems.


AP 4: Takes oath and states: I am K. Ngoma, Box 1272 – Blantyre.


XXN: I was employed in 1978. I had interviews in Blantyre. I was working in Blantyre. My address is 1272 – its personal box. I was a clerk. I used to read board messages. I attended Christmas parties – I used to learn about financial problems affecting NICO. I was never informed that I was dismissed as a measure to improve financial status of the company. My letter of termination just said I was declared redundant. I had supervisor – I was never consulted by immediate boss on the retrenchment. I complained to the Ombudsman.


Re examination: None.


Question by court: I was dismissed on 31st March 2001 Notice period was 3 months from 31st March 2001 – effective date of termination was 31st June 2001. The conditions of service stipulated that if I lost a wife the company would take the remains home – I spent K70000.00 – I don’t have receipt – I took her to Chileka. I was refunded K5000.00 by the company.


Dr. Mtambo: I would like to apply to add two more applicants. Mrs Newire and Mrs Mkandawire.


Court: Please amend the statement of claim accordingly. Matter is adjourned to a date to be fixed for continued hearing at which hearing I will expect all the parties to attend who have not given any evidence yet or those who are yet to be cross examined.



R. Zibelu Banda

CHAIRPERSON

07/11/05



CORAM: R. ZIBELU BANDA – CHAIRPERSON

Njobvu of Counsel for the Respondent

Applicants – Present

Chinkudzu – Official Interpreter


Njobvu: I wrote on 13th March that our only witness will not be available today – we seek an adjournment.


Court: At least there was an attempt to inform us in advance of the adjournment and the communication to the applicants counsel. I will allow this adjournment: continued hearing not later than 4 weeks from to day or else will proceed with the case.



R. Zibelu Banda

CHAIRPERSON

21/03/06



CORAM: R. ZIBELU BANDA – CHAIRPERSON

Dr. Mtambo of Counsel for the Applicants

Njobvu of Counsel for the Respondent

Chinkudzu – Official Interpreter


Court: The matter is proceeding to respondent case today.


Njobvu: I have one witness.


RP 1: Takes oath and states: I am Betty Kacelenga. I am Human Resources Manager and Company Sec for NICO. I know the Applicants. They left NICO in March 2001 at the time I was working as Human Resources Manager. The applicants were made redundant because at the time the company was not doing well. The company went into a restructuring exercise and some positions were declared redundant. Sections in NICO General – motor assessing unit was reduced in workplace.


We communicated the position of the company to members of staff. The JCC was aware of what was going on during this period. Management discussed issues with them. We wrote circular addressed to members of staff, we also had one to two meeting addressed by the Managing Director to staff. We had Head of Sections who would talk to their subordinates about the issues at the time. The JCC had representatives from different departments they would attend the meetings with management on the company’s position. The JCC members were employee representatives.


Looks at minutes – December 1998 Devaluation of the kwacha – meant the company was financially affected.


Court: ‘RP 1’


Looks at document – 6th October 1999 – minutes – JCC and management. company had taken away some benefits due to economic problems – issues were discussed on minimizing the expenses – reduce hotel allowance; reduce travel expenses; reduce living costs reduce repair/maintenance costs;


Court: ‘RP 2’


Circular were also sent out

Looks at docucment - circular 8/7/1999

Emphasizing financial problems and information of the need to carry out a review –

Looks at document - 4/1/2000-

Circular to all staff –

Follow up on the earlier circular on the review process – and also need to strike off a department - motor examining

Reads last part – redundancy


Court: ‘RP 4’


Looks at document – circular – all staff – 12 –12- 00; splitting the holding company into different separate units. We now have different subsidiaries.


Court: ‘RP 6’

NICO had been broken up into different subsidiaries by January 2001


Looks at document – Newspaper article tendered in ‘AP 2’

Employees status in view of the change in share holding – the communication was to the general public – the employees communication was internal-

The press release did not say that these were not going to be restructured – the company was going through restructuring at the time of termination – Departmental heads were responsible for making assessments of their departments.


Conditions of service – looks at document


Terms and conditions of service - clause 21 definition of redundancy and retrenchment; of proceeds and benefits - These requirements were adduced to C21:2:0 Criteria for redundancy


Looks at document - criteria for redundancy – the criteria document was in the Human Resource Management Office. Some Members of staff came to check on the criteria while others did not. Heads of section were aware of this criteria.


They were supposed to use the standard criteria in assessing staff in their department for purposes of redundancy.


Clause 2 – criteria


Court: ‘RP 7’ - condition of service


Clause 21`


Court: ‘RP 8’

Looks at document – letter to specific individuals – on the retrenchment

Blaimu: 30 – 3 – 2001: retrenchment effected 31 – 3 – 01

Makuta: 30 – 3 – 2001:

Mkundo: 30 - 3 – 2001:

Ntonyo: 30 – 3 – 2001:


The letters are uniform – we did not surprise the applicants because we made provisions of notice pay in lieu of service. This was an on-going process – the applicants were not taken by surprise.


They were paid salary in lieu of notice because of the review process going on – keeping them would have had a psychological effect on them financially this was a better option than actual serving notice


Court: ‘RP 9’ - Mkundo endorsement

Court: ‘RP 10 - Makuta endorsement

Court: ‘RP11’ - Blaimu endorsements

Withdrawal benefits

Court: ‘RP 12’ Mkundo

Court: ‘RP 13’ Ntonyo


Additional payment

Pension bonus

Medical expenses

Looks at document – payments

5 June 2001 – pension benefits


Court: RP 14 Newiri


May 2001 salary increment - notice period


Court: ‘RP 15’ Ngoma


July 2001 – pension withdrawal benefits

February 2002


Pension Scheme bonus –

Court: ‘RP 16’ Ngoma


April 2002 – bonus pension


Court: ‘RP 17 – Ngoma representing all


All applicants got these benefits


MASM


Looks at document – further payment refunds on MASM contributions for the notice period


Mr. Ngoma – dated 24-08-2001 representing all


Court: ‘RP 18’


Funeral expense – bereavement assistance death within the 3 months notice period


Court: ‘RP 19’


The applicants were not treated as if they were dismissed. If they had been dismissed they would not have received any terminal payments.


Repatriation >


Looks at document – letter to mandate – the conditions only provide for actual transport organized by the company and not cash payment to employee.


Looks at document – letter to Blaimu on repatriation – I cant remember whether any of the applicants were repatriated.


Criteria


RP: I would be able to bring witnesses who actually came up with the list of the applicants to be retrenched. The process affected 12 people.


Court: There shall be need for the criteria that was used in respect of each individual and there is need for evidence of consultation on one on one considering the number involved are manageable –


Njobvu: In that case I would like to seek an adjournment so that we can go back to the drawing board and source the witnesses – I have some documents which I would like to give to counsel –


Dr. Mtambo: I have no objection to the adjournment.


Court: In that case we will adjourn the case to a specific date.



R. Zibelu Banda

CHAIRPERSON

24/05/06



CORAM: R. ZIBELU BANDA – CHAIRPERSON

Dr. Mtambo of Counsel for the Applicant

Njobvu of Counsel for the Respondent

Chinkudzu – Official Interpreter



Dr. Mtambo: Issues – Applicants were subjected to unfair labour practice – they were retrenched without hearing or consultation – the criteria was not revealed-


RP 1: Continuation of examination in chief. I am Mrs Betty Kacelenga –


Conditions of service – clause 21 – on retrenchment –


The staff were consulted through the JCC and circulars –

Court: RP 21; RP 22;


Court: The issue as at last hearing was on criteria used to select the Applicants – for retrenchment.


RP: The Applicants wrote to the Ombudsman that they were not objecting to the retrenchment – RP 23.


Court: The issue at hand is on the criteria used to select the applicants for retrenchment and whether there was one on one consultation before the terminations


Njobvu: We want to address the issue of credibility. The Ombudsman made a ruling in favour of the respondents.


Court: RP 24 –


Court: We have to adjourn here because I have to attend a meeting. We meet on 24th November 2006 at 8.30 a.m.



R. Zibelu Banda

CHAIRPERSON

30/10/06



CERTIFIED A TRUE COPY OF THE ORIGINAL RECORD



R. Zibelu Banda

CHAIRPERSON


22 November 2006