IN THE INDUSTRIAL RELATIONS COURT OF MALAWI
MATTER NO. IRC 74 OF 2000
CORAM: R. Zibelu Banda (Ms): Deputy Chairperson
Salima; of Counsel for the applicant
Bakuwa; of Counsel for the respondent
Chinkudzu (Ms.); Court Clerk
Dismissal-Justification for Dismissal- Reason-Burden of proof- Employer to show reason-Operational Requirements- Redundancy- Procedure for Redundancy-Consultation
The applicant was employed in 1992. He was dismissed in April 1995. The reason for dismissal was redundancy arising out of a restructuring process within the respondent’s enterprise. The applicant challenged the termination alleging that the reason was not valid as the respondent did not comply with the redundancy procedures. He also stated that his post was re-advertised after his termination therefore the redundancy was not genuine. The applicant stated that the main reason for his termination was that the Chairman of the Board of Directors for the respondent did not like him. He gave an example of victimization, alleging that the Chairman victimized the applicant and wanted him out of ADMARC. The respondent on the other hand contended that the dismissal was fair, the reason was valid and that it arose out a genuine operational need for the respondent.
The issue is whether the applicant’s dismissal was fair? a dismissal is fair if it complies with the rules of natural justice as enshrined in the constitution and other relevant legal instruments, like international human rights and labour rights law.
Section 31 of the Constitution provides for fair labour practices. Section 43 of the same, provides that any administrative action with a tendency to negatively affect the rights of another must be justified with valid reason and the affected person must be given an opportunity to explain his side or know those reason before any action is taken.
The burden of proving the reason for dismissal is on the employer, see section 61 of the Act and Earl V Slater & Wheeler (Airlyne) Ltd  1WLR 51at 55, where it was held that:
“It is for the employer to show what was the principal or only reason for dismissal…. and that it was a potentially valid reason…. If the employer fails to discharge this burden, the tribunal must find that the dismissal was unfair.”
In section 43 of the Constitution, it is provided that every person shall be furnished with reasons for any administrative action that adversely affects him. The reasons must be furnished before that action is taken so that the affected person can defend himself, see Chawani V Attorney General [MSCA Civil Appeal No 18 of 2000 (unreported)].
In the instant case the court heard that the applicant was confronted with a dismissal letter on 5 April 1995. The letter was written on same day and the termination was effective the same day. The reason for termination was redundancy.
It is necessary for purposes of this case to define redundancy and find out whether what happened in this matter was what could be legally termed redundancy. Redundancy is where an employer terminates contract of employment because the employee’s position no longer exists or is to be temporarily or permanently scrapped off due to operational needs of the employer.
The Malawi local does not provide for redundancy procedures but section 31 of the Constitution, provides for fair labour practices. Fair labour practices is not defined in the Constitution but what constitutes fair labour practices can be obtained from general provisions of the Constitution, ILO Conventions, case law, texts and good industrial practice.
The ILO Convention 158, Concerning Termination of Employment at the Initiative of the Employer ratified by Malawi in 1986 is a good source of the law on redundancy. In Ngwenya and another V Automotive Products Ltd [IRC Matter Number 180 of 2000 (unreported) at 7,] the Chairman of the court held that:
“ …..section 211(1) of the Constitution provides….(that), any International agreement ratified by an Act of Parliament shall form part of the Law of the Republic if so provided for in the Act of Parliament ratifying the agreement. This is a Constitutional provision which mandates the courts to have recourse to International Labour Standards of the ILO ratified by Malawi.”
The ILO Conventions can be used to interpret national law where there is a lacuna in national law. The chairman in the Ngwenya case supra, at 9, explained that:
“……labour courts use International Labour Standards to assist them in understanding and interpreting national legislation and to decide on matters of equity and fairness. In these cases ILO Standards do not so much serve as legal basis on which questions (of law) can be decided, but serve as a tool to clarify issues on which national law is unclear or ambiguous.”
Article 13 of Convention No. 158 Concerning Termination of Employment at the Initiative of the Employer provides that:
When the employer contemplates termination for reasons of an economic, technological, structural or similar nature, the employer shall:
“provide the workers’ representatives concerned in good time with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out;
give, in accordance with national law and practice, the workers’ representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or minimize the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.”
Article 14 of the same convention provides that competent authority should be notified of the contemplated terminations in the same manner as in Article 13. Competent authority in the case of Malawi could be the Ministry of Labour .
Where an employer has a valid reason for dismissal, the general rule is that, the reason must be communicated to the employee so that he can say something in relation to that reason. In redundancy situations the process is referred to as consultation.
It was thus put in the English Court of Appeal in Polkey V A E Dayton Services Ltd 3 All ER 974 at 983-984; per Lord Bridge of Harwich:
“An employer having prima facie grounds to dismiss ……will in the great majority of cases not act reasonably in treating the reason as sufficient reason for dismissal unless and until he has taken the steps, conveniently classified in most of the authorities as ‘procedural’, which are necessary in the circumstances of the case to justify that course of action.”
See, also Bristol Channel Ship Repairers V O’ Keefe 2 All ER 183.
The requirement to consult is crucial in all redundancy cases because the consultation process brings out information pertaining to why the applicant and not someone else should be declared redundant; who made the decision; what information did he or they base their decision on; what period would be required to carry out the redundancy and whether there is any way of averting dismissal. It was held in Freud V Bentall Ltd  IRLR 443 EAT that:
“Consultation is one of the foundation stones of modern industrial relations practice. In the particular sphere of redundancy, good industrial relations practice in the ordinary case requires consultation with the redundant employee so that the employer may find out whether the needs of the business can be met in some other way than by dismissal and, if not, what other steps the employer can take to ameliorate the blow to the employee.”
In the instant case the respondent did not consult with the applicant on the restructuring that was being carried out. Although the respondent explained in the letter of termination the reason for the redundancy, this was not enough as this information must have been disclosed to the applicant before the termination so that the applicant could have an opportunity to prepare for his exit but also to try and suggest alternative employment within ADMARC or its subsidiaries. Such kind of ambush has been held to be unfair labour practice, see Chiume V SS Rent A Car [Matter Number IRC149/2000(unreported)] or Madinga V Petroleum Control Commission [Matter Number IRC 176/2001 (unreported)].
The manner in which the termination was carried out was not transparent and that was why the applicant attributed it to the animosity shown by the Chairman of the Board towards him. Needless to say that the applicant did not complain to relevant authorities about the problems he was having with the Chairman. The court finds that acts of an individual member of the respondent’s organization could not be attributed to the whole institution if the rest did not know about these acts. The court finds that reporting to a Human Resources Manager, a junior officer, in this particular case was not reporting to management or Board of ADMARC. Therefore the court finds that the reason, that the Chairman disliked the applicant is not valid as it was a personal matter that never was discussed at management level as an issue of concern raised by the applicant.
The applicant gave evidence of an advertisement placed in the local media by the respondent seeking to fill the position that the applicant held. The advert was featured exactly two years after the applicant’s termination. The applicant did not apply for the position. He however contented that this advert meant that the position which he held two years previously was still available. The respondent argued that new management and Board had been put in place and that it was possible the new management saw the need for this position unlike the old management. This seemed a valid explanation unless it was shown that the applicant made an application but he was refused employment despite meeting the qualifications demanded in the advert.
The court finds that the applicant’s termination was unfair on technicality because the respondent did not comply with the law in effecting the termination on ground of redundancy.
Section 46 of the Constitution provides that a court shall award a suitable remedy where a party complains that his/her rights and freedoms under the Constitution have been violated. A date shall be set down to assess an appropriate remedy.
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 26th day of June 2006 at BLANTYRE.
Rachel Zibelu Banda