Lourenco v Terrastone Ltd (IRC 188 of 2004) (188 of 2004) [2007] MWIRC 65 (16 November 2007);

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IN THE INDUSTRIAL RELATIONS COURT OF MALAWI



PRINCIPAL REGISTRY



MATTER NO. IRC 188 OF 2004



BETWEEN


LOURENCO…………………………………………………………….. APPLICANT



-and-



TERRASTONE LTD…………………………………………………...RESPONDENT



CORAM: R ZIBELU BANDA (MS), CHAIRPERSON

MRN PADAMBO; EMPLOYEES’ PANELIST
JE CHILENGA; EMPLOYERS’ PANELIST
M Chizuma (Ms); Ag Deputy Chairperson
Ngwira; Of Counsel for the Applicant
Katundu; Of Counsel for the Respondent
Ngalauka; Official Interpreter



JUDGMENT

  1. Dismissal-Constructive dismissal-Justification-Reason-Verbal abuse-Breach of Contract

  2. Burden of proof-Employee to show that the working conditions were too unbearable to continue with the employment relationship.



Background

The applicant was employed on in 1990. This contract was terminated in 1996 when the applicant was paid his terminal benefits. On 23 August 1996 the applicant signed a new contract which was terminated on 31 March 2004 the subject of this action. He alleged in the resignation letter that he had found the working conditions so unbearable that he could not be expected to continue with the employment relationship. He specifically mentioned that the company breached terms of his employment in relation to school fees allowance; failure to provide accommodation; reducing his house allowance; working more hours without any consideration; being verbally abused by the respondent Managing Director’s daughter who was also an employee at the company. The applicant tried to bring these matters to the attention of the Managing Director (MD) but the MD was not interested and readily accepted the resignation. The applicant now brings this action for unfair dismissal alleging that this was constructive dismissal. The respondent denied that the applicant was ill-treated.


The Law

Section 57 of the Employment Act provides for fair termination. Termination is fair where the employee is given a valid reason for the termination and that where the reason relates to capacity or conduct, the employee is afforded an opportunity to be heard. Termination is unfair if it is constructive dismissal, under section 60 of the Employment Act.


Constructive dismissal

An employee can claim that her resignation was not of her own volition but was forced due to unreasonable conduct of the employer. Where the employer breaches a fundamental term of the contract or more, an employee is entitled to repudiate the contract. The burden is on the employee to show that fundamental term(s) of contract was breached by the employer, which made the continuation of the employment contract unreasonable, see section 61(3) of the Employment Act and Fernandes V BIC Malawi (PTY) Ltd [Matter Number IRC 308/2002 (unreported)].


In this case the Court agrees with the applicant that he was subjected to such terrible conditions that he could not be expected to continue with his employment relationship with the Respondent. The applicant was treated inhumanely by the Managing director’s daughter. She persistently verbally abused and humiliated him. She called him names and swore at him, some times in the presence of people. The respondent did not bring her to refute these allegations. The respondent did not say anything in response to this accusation by the applicant. The court found that indeed the applicant was verbally abused and castigated by the respondent. This conduct has been held in this court to constitute unfair labour practice, see generally; Changa v SS Rent A Car [Matter Number IRC


In Palmanor Ltd V Cedron [1978]IRLR 303 EAT, the Employment Appeal Tribunal, held that: Where an employee resigns because of an employer’s foul language, the Industrial Court/ Tribunal should ask itself whether the employer’s conduct was so unreasonable that it went beyond limits of the contract. Although tribunals have to be careful not to attach too great importance to words used in the heat of the moment or anger, there comes a time when the language is such that even if the person using it is in a state of anger, an employee cannot be expected to tolerate it.


The applicant also proved that his house allowance was unilateral reduced from MK35 000-00 to MK20 000-00 and that even after this reduction, the applicant had to struggle to obtain rentals from the respondent to pay the land lord. The court finds that this was in breach of contract. It was unfair labour practice because an employee’s benefits cannot be reduced or tapered with to his detriment without being informed of the reason or without giving him an opportunity to make representations why the benefits should not be reduced.


The court further agreed with the applicant that the respondent stopped paying school fees for his children. However the court noted that the respondent had a valid reason for not paying the school fees. During the material time the applicant never produced and submitted school fees invoices to the respondent. The respondent was not obliged to pay school fees without proof that the school fees was due or that it was owing. This claim therefore fails. It does not constitute ground for constructive dismissal and the applicant can not recover any school fees from the respondent.


Finding

Where an employee proves on a balance of probabilities that the dismissal is in fact constructive dismissal, the Court must find that the dismissal is unfair, see section 58 of the Act. The court finds that the termination was unfair because it was constructive dismissal under section 60 of the Employment Act. the applicant was entitled to terminate the contract because of the verbal abusive at the hands of the respondent and because of the respondent’s breach of contract in terms of house allowance and payment of rentals.


Remedy

The matter shall be set down on a date to be fixed to consider an appropriate remedy. Both parties are encouraged to attend the assessment.


Any party aggrieved by this decision is at liberty to appeal to the High Court within 30 days of this judgment, in accordance with section 65 (2) of the Labour Relations Act.



Made this 16th day of November 2007 at BLANTYRE.




Rachel Zibelu Banda

CHAIRPERSON



Maxwell RN Padambo

EMPLOYEES’ PANELIST



Joel Evalisto Chilenga

EMPLOYERS’ PANELIST