Fungatira and Others v Auction Holdings Ltd (IRC 374 of 2005 ) (374 of 2005) [2006] MWIRC 48 (25 April 2006);




MATTER NO. 374 OF 2005





CORAM: Rachel Zibelu Banda; Chairperson
Likongwe; of Counsel for the respondent
Gulumba; of Counsel for the applicants
Chinkudzu, Official Interpreter


Terminal benefits-Pension-Section 35 Employment Act-Whether payable or not-First Schedule to section 35 Employment Act-Khawela Case-Whether the declaration was void ab initio- has retrospective effect.


The issue in this case is whether the respondents were obliged to pay pension and other terminal benefits to the applicants after the declaration in the Khawela case. The issue is determinable by referring to the meaning of a declaration of the type made by the court in Khawela and ors V Commercial Bank of Malawi [Civil Cause Number 7 of 2004 (unreported)]. One of the successful orders sought by counsel in that case was a declaratory order that the amendment was unlawful, unconstitutional and void ab initio.

In pronouncing the order the court held that:

In the face of the law, therefore, the minister acted in excess of the powers conferred by section 35 of the Employment Act and indeed section 58(1) of the Constitution and therefore the purported amendment is invalid and is hereby quashed on that account.

The issue is whether this declaration as it appears and read in its natural and ordinary meaning has the effect alluded to by counsel for the applicants that the amendment was never at any time valid and hence the applicants are entitled to pension benefits other than severance allowance.

This court’s reading of the Khawela decision, finds that the determining factor is what the honourable Judge ordered. It is the view of this court that the Judge nullified the amendment by the Minister and the nullity was with effect from the date of inception.

Barron’s Law Dictionary defines invalidity as:

An act having no legal force. It is the highest degree of irregularity ..and is such a defect as renders the proceeding in which it occurs totally null and void, of no avail or effect whatsoever and incapable of being made so.

Various sites under define an act that is declared void ab initio as that act which, is null and void from its inception; and entitled to no legal significance whatsoever.

Perhaps this is to prevent the executive arm of government from usurping the powers of Parliament in law making. In a democracy separation of powers is the air that the society breath without which total anarchy would reign.

Pension, gratuity, ex gratia and all other gratuitous terminal payments are matters of contract negotiated and agreed upon between the employer and employee, different from severance allowance, which is a matter of statute and non negotiable, see Japan International Co operation Agency V Jere [Civil Appeal No. 25 of 2002 (unreported)].

In this case the contract of employment provided for pension benefits and this mater was not in dispute. However the pension benefits were not paid because of an invalid regulation sanctioned by a body acting ultra vires.


The court finds that the respondent is under contractual and statutory obligation to pay pension and other terminal benefits to the applicants. The parties to calculate the money owed and payment be effected after any lawful deductions within seven days of this order.

Any party aggrieved by this decision is at liberty to appeal in terms of section 65 (2) of the Labour Relations Act.

Made this 25th of April 2006 at BLANTYRE

Rachel Zibelu Banda