Jere v Lever Brother (MW) Ltd (IRC 10 of 2003 ) (10 of 2003) [2006] MWIRC 14 (07 March 2006);






JERE …………………………………………………………………… APPLICANT




Victor Jere Counsel in Raymond and Hughes -
Representing the Applicant
Baxton Kayuni – Representing Unilever as Human Resource
Christopher Mnangala Representing Unilever Assistant
Ngalauka – Court Clerk

Jere: The applicant will give testimony in his own case.

AP 1: Takes oath and states: I am Winston Churchill Makubalo Jere, P. O. Box 1304, Blantyre, or Box 51668, Limbe. I am Operations Manager at a Publishing House – Pride Publications I’ve been with this company from July last year. This was the only employment I was engaged in since I left Lever Brothers. I joined Lever Brothers on 1st December, 1974. this document is a copy of my appointment letter.

Court: “AP 1”.

I left lever Brothers in December 1997. in May 1997 I was called by the Managing Director to be informed that I had to go on early retirement. They said they would retire me as if I had reached 60 years so that I don’t lose out on retirement benefits. I was put in writing that the respondent would make my pension benefits as if I had retired at 60 years. The effect was that I would get benefits calculated reflecting salary projections that I would have earned until the retirement age at 60 years. This document is a memo written after my discussions with Marketing Manager. It was written to Personnel Manager then with a copy to the board. The memo contains issues about the pension benefits. I would like to tender the memo as part of my evidence.

Court: “AP”.

We had a contributory pension scheme at the company. This document is a copy of the respondent’s pension fund rules. It stipulates how the pension benefits are supposed to be calculated. The rules state that in calculating retiring employees pension it would be ²/3 of final pensionable salary or pay earned by the ……………… the last three years of pensionable service. The average of that becomes the final pensionable pay. Its ²/3 of that company the length of pensionable service. I would like to tender these rules as part of my evidence.

Court: “AP 3” especially clause 5 on page 3.

IN December 1997, I was paid a lump sum which was ¹/3 of the pension fund – K248,791.00 and a monthly pension calculated at K3180.56 effective from 8th January, 1998 which I was told had been calculated ……….. to the retirement package that I had been given. I queried about this and I was told that this was the right calculation. Only to discover later that this was not the true reflection of what was in the package. It is important to project salary also pensionable salary to the time I would’ve retired because the salary at which one retires the number of years with service i.e. length of pensionable service.

The higher the salary and the longer the pensionable service the higher the retirement benefits one gets. The full potential of this, is reached in the final year of the normal retirement age since this was how I was retired, calculation of benefits had to be based on factors as at 60 years, hence the need for projection of both salary and pensionable service to the time I could retired.

Another factor is that the pension formular uses the final pensionable pay defiled in the pension rules as the average of the pensionable by payable to the member during the last three years of pensionable service. This is my case means the last three years to age 60 years which I earned in July 2002, we are looking at salary payable from August 1999 to July 2002 (36 months) the total of the 36 months earnings and then divide by 3 years to find the average – this comprises the final pensionable pay which is then used in the pension formular.

I had rendered the company good service and rose to a senior position of Marketing Services and Public Relations Manager, which I held for 11 years till I left the company. I was enjoying my job. And career was secure. By 1997, my 23rd year of service I began to contemplate my future as I had come to within 5 years of retirement which was due in 2002. I had planned to use the remaining years of service to prepare myself for retirement. In this process my salary earnings for these remaining five years would be very actual to me.

Secondly, it was a momentum time of my career when my salary earnings stood to be substantially boosted with each salary increase. For example over the last four years i.e. 1994 – 1997 was annual salary increase averaged 39% per annum. This means and I was looking forward to that by the time I had reached 60 years in 2002 my salary would have grown to over K1 million per annum or K83,000.00 per month.

This was the scenario at the time I was being told to retire. I was abruptly deprived of a job at the most critical and exciting point of my career. I was being made to lose my remuneration while at the same time being denied the opportunity to plan and prepare for my retirement. At the same time, I had done no wrong to the company there were no extenuating circumstances necessitating my early retirement. There was no in the public interest to necessitating bring being retired off. It was for these consideration that the company felt me a package that would represent a fair and reasonable compensation. The company was simply observing the dictates of natural justice and fair play.

The company knew that unless they gave me a good offer, I was likely to reject it and refute to go on retirement. I believe that I had been paid in accordance with the agreed package. It was only 3 years later that I discovered that the company had honoured its pledge in full. While it had mightly projected my pensionable serve through to age 60 years, I discovered that they did not likewise project the salary to when I would’ve been 60 years which was in bad faith. I thought it was a mistake but the attitude that this was deliberate. I took up the issue which the company in my letter to the company dated 27th June, 2001, this is a copy of the letter I sent to the company. This letter was expressing of views that the pension benefits had not been calculated in accordance with the package that I had agreed to. I explained but they had used a lower salary and this affected the pension.

London ignored the information given that I was 55 years but I had to been given pension benefits as if I had retired at 60 years. I asked for clarification on what salary they had used. By then I had got a copy of the ……… pension division in London – I had asked how the had been arrived at I would like to tender the document of my evidence.

Court: “AP 4”

This document was a response to my letter of the 26th June, 2001. This letter was from then pay roll manager responsible for pension matters. I would like to tender it as part of my evidence.

Court: “AP 5.

This is another, letter I wrote drawing the company’s attention to the fact that I wanted to make a claim for the under payment which I had discovered. I was also claiming for salary for leave, transport allowance, pension etc plus interest. These things over the time which were refined and I would not want the issue to be revived but the court may have resource to paragraph 3 of this letter.

Court: “AP 6”

I got a response to “AP 6” their letter of 27th September, 2001 in which the company went to the defensive stating that I had retired under the early retirement clause the pension fund rules. It took several months (6 months) for the company to concede that I had been retired while the normal retirement age rules. This was in a letter dated 26th November, 2001. By this time they had recalculated my benefits admitting that an error had been made. They then wrote a cheque for the balance. I would like to tender the document as part of my evidence.

Court: “AP 7”

In the recalculation – they had used cosmetic/premeditated act of cheating and falsification and instead of projecting of final pensionable salary they used my exist salary as at July 1997 when I left. The company did this so that the recalculated sum could show none noticeable increases. In this scheming the company must have banked on the fact that I would not be able to discover the anomaly.

I would like to give an idea of what the cause action had meant to me. I am seeking the following remedies:

  • Order Lever Brothers now Unilever to fulfill its obligation to me and pay my full pension benefits as claimed in the statement of claim and interest at 1% above commercial bank lending rate from the date on which the sums would’ve be paid to the date of actual payment at any other rate with this court may deem fit. The applicant is now claiming for damages proceedings. For claims under pension I do not mind to levert to the ………. Document that was served on the other party.

I would also pray that the court considers inflation factors and my research us shown that inflation has averaged 60% - but this is not verified. It is only a bank that can verify this inflation rate.

XXN: I am not going to cross examine the applicant.

Court questions: The basic salary at the time that I was leaving was K16171.00. I have a copy of the last pay slip for December 1997.

Court: “AP 7”

Salary increases – We usual to have salary increases twice a year. An annual increment effective 1st April each year. In October we used to have a second salary increment which was basically for cost of leaving adjustments. I have letters with me explaining salary increases. These are letters from 1994 – 97 explaining the salary increments from the respondent.

Court: “AP 8”

At the time of retirement one is entitled to ¹/3 of the lump sum (pensionable sum) the remaining ²/3 is paid in equal monthly instalments which are revised from time to time. My monthly pension has since been revised twice. I have documentation to that effect. This is a calculation sheet that comes from Unilever and this particular document of 20th November 2001 explain on the 1st page on the two last pension increases.

Court: “AP 9”

My pension calculations were based on K16171.00. This was the old salary.

According to my calculations they should have used K470005.89. I arrived at this sum per month by: I projected the salary to 2002 I added salary from August 1999 to July 2002. This salary was changing. Annual increment of 36% on the basic pay > K16171.00 initial pay – the first salary increment was on April 1999 at 36%. Next was 1999 and next 2000, 2001, 2002. after I arrived at this amount I applied it into the pension formula.

27.67 years x 1 (²/3) x 564070.68 = K260130.60


Lump sum ¹/3 x 260130.60 x 13.037 = K1130440.88 as departure

Pension = ²/3 x 260130.60 = K173470.40

K173470.40 per annum paid in monthly instalments.

Pension inceases – no formula ( )

What I actually received as lump sum was K388896.00

Monthly pension per annum K38166.96 this translated to K3180.56 per month.

AP: This is the close of my case.

Court: At 2.00 p.m. this afternoon when we were supposed to call the case for hearing, I got a message that Mr Hara, lawyer for Savjani and Company would be attending court and that we should give him 30 minutes. We waited up to 2.40 p.m. but Mr Hara did not appear and neither was here any other word as we commenced court at 2.45 p.m. unfortunately Mr Hara is not on record as representing any of the parties in this case nor is Savjani and Company. Under the circumstances there was no basis for this court to adjourn or keep waiting for Mr Hara who has not turned up and this 5.27 p.m.

Further, this matter was specially set down to day using our new and special notices which are aired at expediting matters considering the huge back log accumulated since 1999. The matter was to proceed and I am adjourning this case to a date to be fixed for an order of the court.

R. Zibelu Banda




Jere of Counsel for Applicant

Respondent – Absent

Ngalauka – Court Clerk

Jere: The applicant’s testimony is a heading on record, this was supposed to be rehearing – I would suggest that the applicant should testify – so far as his testimony will touch on figures – with passage of time, the figures outlist to be reached, otherwise we have no problem in the applicant adopting the respondent on file. The claim is for underpayment of retirement benefits – the respondent withheld part of the benefits with interest since the respondent wrongly and without proper justification withheld pension benefits.

Cvourt: The matter is adjourned to a date to be fixed for a rehearing on the issue of underpayment of terminal benefits. the respondent were called for today’s hearing but without any reason given have failed to appear for hearing. This is second time that we have had such problems from the respondent. In the interest of justice this matter which was approved to be disposed of summary long time ago must be disposed of without any further delay. Ruling in 21 days time.

R. Zibelu Banda



2.14 P.M. 09/08/05


Jere of Counsel for the Applicant

Katundu of Counsel for the Respondent

Ngalauka – Court Interpreter

Court: I suppose we shall have to have a hearing a fresh and the documents tendered in evidence shall have to be re-marked in the course of the evidence.

Jere: I think we should to re-mark them and may be we’ll have fresh documents.

Katundu: I think so too, the respondent should represented then, so that documents have to be re-marked.

Court: The Applicant shall have documents removed from the record since the same ones shall be used on this re-hearing. Otherwise it shall be cumbersome. How may witnesses does applicant have?

Jere: One.

Katundu: I’ve one witness too.

Court: Then we shall proceed with the witness for the applicant.

PW1: Adult/Male. Sworn and states in English. I am Wiston Churchill M. Jere of P.O. Box 1304, Blantyre. I am a retired employee of Lever Brothers I joined the respondent on 1st December 1974. (shown document). This is my letter of appointment of December 1974. I tender it in evidence.

Court: The letter of applicant’s appointment shall be Exhibit AP 1.

APW 1: I left the respondent employment on 31st December 1997. I left because the respondent had offered me early retirement but full normal retirement which I found reasonable and accepted. (shown another document). This is a memo by the then Marketing Director (my boss) to the then Head of Personnel detailing the discussions he’d has with me on my early retirement it contains my early retirement package. I tender this in evidence.

Court: The memo of 20th June 1997 shall be Exhibit AP 2

APW 1: The normal retirement at respondent then was 60 years. At the time of my retirement herein I was 55 years old. The terms of my retirement were that I was to be given full retirement benefits as if I retired at 60 years. (reads on paragraph in Exhibit AP 2). This was so because my early retirement my benefits would be projected. I was assured that my benefits would be projected. I was told that when calculating the pension benefits my pensionable service would be projected to when I would attain 60 years of age i.e. to 2002. also that my final pensionable pay would be baged on my salary as it would be at the age of 60 years i.e. the salary would involve realistic projections from 1997 to 2002. my monthly salary at time of my retirement was K16171.00 per month.

I was a member of the respondent’s pension scheme. (shown document). These were the respondent’s pension fund rules as they stool at that time. The rules provide for calculation of pension dues. the pension formula as given in rules says; pensionable service (years) to time of retirement multiplied by 1²/3 % if final pensionable pay. As someone retiring at normal retirement age the respondent would have used the formula using factors obtaining at the age of 60 years namely salary and pensionable service (years). Since I was being retired off in 1997 which then was 4 years and 7 months before my 60th year it would ‘ve meant projecting my salary as well as my pensionable service to my 60th birthday in 2002.

Final pensionable pay is defined ass the average of pensionable pay i.e. net of basic salary, overtime payable to the member during the last 3 years of pensionable service. In my content terms means stating with my retirement written of July 2002 backwoards to 36 months which given 3 year. That’s the period between August 1999 to July 2002 – these due my last 3 years of pensionable service we get the average monthly salary for those 3 years which is the final pensionable pay that is used in the formula to calculate the pension due. As it can be seen projecting of salary and pensionable service were necessary. The fact the respondent did calculate this was deliberate act of cheating. I tender the pension Rules in evidence.

Court: The Pension Rules shall be Exhibit AP 3.

APW 1: The importance of projecting pensionable salary and service lies in the fact that the sum of the pension depends on 2 factors namely salary at which one refers and the umber of years in service such that the higher the retirement salary and the longer the pensionable service the higher the pension benefits one gets – of these 2 factors the more important is the salary because it has a greater impact on the pension benefits.

In 1997 I was paid a lump sum of K248791.00 which in …………….. is only 20% of what I should’ve got if had calculating been done according what I’ve explainly – the monthly pension from 1st January 1998 was K3180.56 which only translates to 20% of what I ought to totally been started with had calculations been done properly done, they were done as if I would left service before normal retirement age which was a contradiction. The Respondent retired me on normal retirement age but the calculated the pension as if I have left before normal retirement age based on pensionable service and pension salary at time of early departure before 60 years of age. My pensionable service and pensionable salary was not projected but I got benefits based on 1997 pensionable service and salary. I wrote the respondent on 21st May and 27th June 201 in which I drew the respondent’s attention to the normaly and I expressed my suspicion that the 60 years parameter had been ignored in computing my pension. (shown document). This is my preliminary enquiry letter referred to I tender this in evidence.

Court: The letter of 21st May 2001 shall be Exhibit AP 4.

APW 1: (shown another document).

This is my follow up letter of 27th June 2004. I tender it in evidence.

Court : Letter of 27th June 2001 shall be Exhibit AP 5

APW 1: The respondent respond by letter of 13th July 2001 and they said they would referred this matter to the pension division in London and further that they would introduce me on what would be the response. (shown another document) is the response by respondent. I tender it in evidence.

Court: The letter of 13th July 2001 shall be Exhibit AP 6

APW 1: After this letter I wanted to see how the respondent calculated my benefits. I wrote respondent against on 27th August 2001 and I told them that they would not followed the 60 years provision on my retirement. (APW1 shown another document) this is the letter I was referring to and I tender kit in evidence.

Court: The letter of 27th August 2001 shall be Exhibit AP 7

APW1: In respondent letter of 17th September 2001 the respondent said they were still consulting the wrote against to my response the respondent claimed that I will taken early reference and that I will be paid for the early retirement, this was in comprehensible as it was a deliberate lie. (shown document) there was this letter of 17th September 2001 I referred to earlier on about the respondent’s investigation. And I tender it in evidence.

Court: The letter of 17th September 2001 shall be Exhibit AP 8

APW 1: (shown another document) by this letter respondent says I was paid an early retirement bonus and I tender it in evidence.

Court: The letter of 27th September 2001 on early retirement pension shall be Exhibit AP 9

APW1: The company then confirmed in a complete turn around that I would been referred on normal basis and they attached a cheque for the difference in my pension dues. (Reads document) I noted that the formula used my exit salary but this was wrong as the rules talk of final pennsionable pay. The pensionable pay was to be an average of last pay for 3 years I tender the letter in evidence.

Court: The letter of 25th November 2001 shall be Exhibit AP 10

APW1: I would have been happy of the respondent had used the projected 2002 salary and not the 1997 salary. The re-calculation was only partially correct in so far as the pensionable service used was up to 60 years age of retirement. But my salary wasn’t projected to that due at my attaining 60 years.

I was being told things by respondent that weren’t in official communication. I would like this court to order the respondent to pay me my rightful pension benefits. The company still owes me an additional lumps sum of K741544.88. I arrived at the figure by suing the format used by the respondent pension division that’s pensionable service to 60 years of 27 years 8 months i.e. 27.67 years x 1/60 (i..e. 1 ?%) x final pensionable pay as per me is K5641070.68 which equals K260130.60 per annum. Then we take ? of that left sum commutation to pension lump sum i.e. 10000 x K260130.60 x an actual factor of 13.037.

Court: We should strict to the ? of whether the correct formula was used instead of going into the actual calculations. If its formal that the wrong formular was used there will be an assessment.

APW 4: I also claim loss of investment suffered for 7 years now when the respondent is holding and using my money. My suffering has been caused unnecessarily.

I would also like to mention that when the London offer respondent to Malawi is office I was told by phone that the London office agreed .

Katundu: I object to such hearsay

Jere: I agree

Court: carry on Mr. Jere

APW 1: That’s all

End of XN of APW 1


I discussed with respondent on the issue of my retirement and we agreed on the terms of early as May 1998. The issue discussed was not whether I was to get a lower grade position or to go on early retirement. The company decided to retire me off because they knew I would not be happy with the lower grade job. I was to go on a lower grade job I was given an option to work up to the end of the year. There was no option given to me. (shown Exhibit AP 4) this is my letter (Reads 1st paragraph). I was offered and I accepted early retirement. I had no choice of going on the lower grade job.

The terms of my early retirement package are get out in Exhibit AP2. This is what we do discussed. There are 2 key issues in calculating pension i.e. final salary and pensionable service. On receipt of Exhibit AP 2 I went on working with respondent up to December. I was happy with the terms in Exhibit AP 2 I never objected to the terms in Exhibit AP 2. I didn’t write back on Exhibit AP 2 because there was nothing in dispute. I got a draft of Exhibit AP 2 even before it was written to me. The letter doesn’t say that there will be salary projection. I didn’t think anybody would cheat me hence I didn’t ask for the issue of salary projection to be clearly stated in Exhibit AP 2. you wouldn’t use a formula to project a salary. I would project the salary using accepted methods. One method is intranasal i.e. looking at progression for the past years. We could use actuals. No its only the instonical method. There could be some other methods that I don’t know. There couldn’t be other methods for projecting my salary up to 2002. I do not know. I dint think its necessary to sort the formula for projecting my salary to 2002. That’s the duty of respondent’s pension division. I think on sight I should’ve insisted on the clearly spelt out salary projection formula.

If the pensionable service were increased from 55 years to 60 years I would have had an increase in pension benefits. I worked for respondent for 23 years and a month. Economic factors are taken into account and issues of weren’t too in deferring one salary the respondent’s. profits of respondent are also a factor. One who retires an employee risks of the inflation in the next 5 years in the present case. Profits cannot be predicted. But should the company perform better I am at a disadvantage. If I would known of the issuing at state now I would have asked for the issue of salary for 2002 to have been included in the present case. I know respondent has done well in the relevant period herein. But there could be losses for a company in future year. There is no early retirement in the Rules of pension. I used the word early retirement but its of no importance it doesn’t caused in Lever Brothers. (shown Exhibit AP2 clause number 7) under paragraph A. starting with words a member.

Pensionable service can be less than 60 years as per the Rules. I left respondent 5 years before my 60 years of age. I ask to be paid pensionable salary protected up to my 60 years of age. The respondent choose to pay me pension as if I have worked and retired at 60 years of age. (shown Exhibit AP 10). The respondent used my 60 years but my last salary of K16271.00 and not average of my last 3 years of pensionable service. Assuming I normally retired in 1997 the average pensionable salary for the last 3 years I have been less than the K16271.00 used herein. End of XXN of APW1 by Katundu.

XXN of APW1 by Jere:

I would no option of the discussion of my pension issue. Formal planning of respondent we planned for human resource. Others would have no role to play in the formal plan. That occurred to me and the respondent didn’t see a role for me in future of 1997 and respondent offered me early retirement. And as a member of management for a long time for respondent to say no would have meant bad of understanding. After all I was being offered full retirement in advance. I would have been unlucky the respondent would have found sought fault and it happens in life and I would have gone off on worse terms.

The Exhibit AP2 was supposed to be read together with the pension rules. If there wasn’t enough money the respondent would top up the pension in the.

Katundu: Availability of pension funds wasn’t an issue.

Court: Yes indeed it wasn’t.

APW 1: In some years some employees of respondent would not get increments on merit. But inflation related increments would be made across the aboard. I always got both merit and inflationary increments. I got my benefits like somebody who went on full retirement. End of XXN of APW 1 by Jere.

Katundu: I would like to consult with my client for a few moments.

Court: Yes, you can go and we will proceed after 5 minutes.

Court reconvenes after 5 minutes with same coram.

Katundu: The defence shall refer and shall not call any witness.

Court: In that case this case shall be adjourned for judgment to be deliver with the next 21 days on notice to both parties written submissions if any to be handed in within the next 7 days.

M. Tembo




Katundu of Counsel for the Respondent

Jere of Counsel for the Applicant

Applicant – Present

Chinkudzu – Official Interpreter

Court: I would rather you should file written submissions on the matter. It is cumbersome sitting on assessment. The Ruling is clear on what should happen and therefore just follow the order in the Ruling. Submission within 14 days of this date. Order 21 days thereafter.

R. Zibelu Banda




R. Zibelu Banda