Fote v Limbe Leaf Tobacco Company (MATTER NO. IRC PR 156 OF 2009) (NULL) [2010] MWIRC 10 (13 August 2010);

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IN THE INDUSTRIAL RELATIONS COURT OF MALAWI

PRINCIPAL REGISTRY

MATTER NO. IRC PR 156 OF 2009

BETWEEN

FRIDAY GIBSON FOTE ………………………………………………..………… APPLICANT

AND

LIMBE LEAF TOBACCO COMPANY

LIMITED ……………………………………………………………………………......... RESPONDENT


CORAM: J. N’RIVA; DEPUTY CHAIRPERSON

D. Z. Namandwa Employer’s Panellist

E. Mtenje Employees Panellist

Applicant Present, Represented by M. Tembo, Legal Practitioner

Respondent Represented by F. Chikungwa, Legal Practitioner

Court Clerk:


JUDGMENT



N’riva D C P:


INTRODUCTION

The applicant was working for the respondent. He was supervising the respondent’s warehouse at Limbe in Blantyre. Sometime in 1999, the company suspended him on the allegation of stealing some bales of tobacco. The allegation was that the applicant failed to account for the missing bales. When the respondent asked him to submit a report on the issue, the applicant failed to do so. Instead, for some days he did not report at his duty station. The respondent reported the matter to police and the police arrested him on the said allegation of theft. The matter proceeded to trial in a Magistrate’s Court whereby and the Court discharged the applicant in January 2009.

After he was arrested, the respondent invited the applicant for a disciplinary hearing. However he declined to go.

In this action, therefore, the applicant seeks reinstatement to his position and refund for the unpaid salaries. In the alternative, he seeks damages for unfair dismissal and also severance allowance.


ISSUES, EVIDENCE, ANALYSIS AND FINDING VS THE LAW

According to the pre-hearing conference, this Court has to determine three issues. These are: whether the applicant should be compensated for unfair dismissal; whether the applicant is entitled to severance pay; and whether he is entitled to the withheld salary.


We will, in this Judgment, deal with the issues one after the other.


Should the applicant be compensated for unfair dismissal?

For this claim to succeed there must be dismissal. For a dismissal not to be unfair the reason for dismissal has to be valid and the employee has to be accorded an opportunity to defend herself. Section 58 of the Employment Act is the authority for this proposition. If the opposite is the case, the dismissal is unfair. That is to say unfair dismissal is where the reason for dismissal is not valid. The reason could be untrue or a mere sham. Secondly, a dismissal is unfair if the employee was not accorded a chance to defend herself. In short, before a dismissal, the employer must hear the employee’s side of the story with the aim of defending herself as practicably and reasonably possible. Fairness has two limbs and these are procedural fairness (the right of the employee to be heard) and substantive fairness that is the genuineness of the reason for dismissal.


In this case, the applicant states that he was not dismissed. He says he never received any communication termination his employment. Thus, he has been on suspension all along. The respondent, on the other hand, through a witness, Mr Chatata, states that they discharged the applicant. In other words, in our understanding, Mr Chatata testified that they somehow dismissed the applicant. Alternatively, that statement may be understood to mean that they performed an action short of a dismissal. However, they have not exhibited any document to the effect that they dismissed the applicant. For that reason, on the evidence, we are unable to hold that the applicant was dismissed. In any event, the duty to prove the dismissal lied not with the respondent but the applicant. However, it may appear contradictory on the part of applicant. Although he was claiming unfair dismissal, he testified that he was not dismissed. So, the contradiction is that the applicant is seeking damages for unfair dismissal (as well as severance pay) yet he says he was not dismissed. Nonetheless, for purposes of evidence, and the claim in this case, he was not dismissed. But, for the argument’s sake, even if the onus to prove the dismissal was on the employer, the respondent failed to prove this aspect. They have not exhibited the actual form that the dismissal took.

Chilumpha C in Labour Law 2004, holds a more or less similar view i.e. that the onus to prove dismissal lies with the employee for him to show that the dismissal was unfair. The learned author states as follows on page 458:

Therefore an employee whose employment is terminated by notice or summarily dismissed can challenge the action on the ground that it is unfair dismissal under Section 58 as read together with Section 57. But before the court can grant him any remedy for that, he will need to prove two preliminary points. First, [he must show that he has had worked beyond the period of probation]. Second, assuming that the employee is terminated after the period of probation, the employee will need to demonstrate that he [was] ‘dismissed’. This is because an employee’s employment may come to an end in a manner that does not necessarily amount to dismissal for purposes of Sections 57 and 58. And if there is no dismissal there can be no ‘unfair’ dismissal that entitles him to the legal remedies discussed below.

In short, for wasn’t of evidence of dismissal, the claim for unfair dismissal cannot, and should not, succeed. The claim is dismissed.


Can the applicant claim severance pay?

In the view of our finding that the applicant was not dismissed, it follows that the applicant cannot claim severance allowance.

Section 35 of the Employment Act is the provision that talks of the instances where a person would be entitled to severance allowance. There has to be termination of the contract by mutual agreement or unilaterally by the employer. For purposes of the case before us, in the light of the claim, there had to be some unfair dismissal. That could qualify as unilateral termination of the employment. Subsection (1) provides as follows:


35.--(1) On termination of contract, by mutual agreement with the employer or unilaterally by the employer, an employee shall be entitled to be paid by the employer, at the time of termination, a severance allowance to be calculated in accordance with the First Schedule.

And subsection (3) provides as follows:

 (3) The employment of an employee shall not be terminated for reasons connected with his capacity or conduct before the employee is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide this opportunity.

Furthermore, subsection (6) paragraph (b) provides that:

(6) Subsection (1) shall not apply where the employee—

…..

(b) is fairly dismissed for a reason related to his conduct;


As we have stated before, the evidence of dismissal is gloomy. It was not clear that the respondent dismissed the applicant. Further, our finding, on the evidence before us, has been that there was no dismissal. Therefore, at least, there was no termination of employment. However, even if there was a dismissal, and, therefore, a termination of the contract, the applicant would not, in our view be entitled to severance allowance. Practically, the employment would not have been had unilaterally terminated by the respondent. Neither would it have been mutual. And, in any event the philosophy behind the scheme of severance allowance would not apply to the circumstances of this case. We will deal with this issue more after tackling the final question for determination.


The final question for determination is:


Whether the applicant is entitled to salary during the suspension.


We think the answer to this question should be no.


The respondent suspended the applicant without pay. The respondent, in our agreed view, had discretion to send suspected employees on an unpaid suspension from duties. We cannot, therefore, impeach that discretion and order them to pay the applicant. Clause 16 of the conditions of service talks of cases of disciplinary action. Suspension from duties with or without pay is one such option. In all the circumstance we cannot order the respondent to pay the applicant during the time of the suspension. Therefore, the claim of salary during the suspension is dismissed.


General and Final Observations


In summary, all the three claims fail. The applicant is not entitled to pay during the suspension. He is not entitled to severance pay. Nor is he entitled to damages for unfair dismissal. He was not dismissed, as we observed. But, to reiterate, even if we had found that he was dismissed, we could not have ordered any compensation. Had he been dismissed, we would have found the reason to be justifiable. The applicant was suspected of a criminal offence. When he was asked to write a report on the accusation, he did not do as advised. He stopped going to work for some days until he was arrested by the police. When he was called for a disciplinary hearing his lawyer wrote the respondents that the applicant could not go because his matter was in court. We believe the applicant was accorded the right to be heard but he chose not to be heard. The respondent wrote back to the lawyer representing the applicant then in the following terms:



Please be advised that the criminal proceedings in the matter are being dealt with by the police and we consider them separate from the employment relationship between your client and the company. We made this point clear in paragraph 8 of our letter of 10th May 2000. Your client as an employee of the company is subject to the Disciplinary Rules of the company and as such the company wishes to hear his side of the story through a disciplinary hearing to which you are saying no. we insist that your client makes himself available for a hearing as the hearing is the only means through which the company will hear and appreciate your client’s side of the story.


We therefore invite your client to a hearing on the 28th June 2000, time and venue remains the same. Your client is free to be represented and to bring witnesses. If for some reason the above date is not convenient to your client please propose a date. We hope your client will make himself available for the hearing. If we do not hear from you and or your client we will assume that your client is no longer interested in the work relationship with us.


In our finding the respondent, accorded the applicant another opportunity to be heard but turned down the invitation. There was also the report that he did not write. And there were two hearings that he was invited to and chose not to attend. Either way, the report as well as the actual hearing would have amounted to an opportunity for the applicant to defend himself. The applicant ignored this right to defend himself or to be heard. There are many words of hearing an employee. As Chikopa J said in Illovo Sugar Company Ltd v Phiri Civil Appeal No. 60 of 2008,

… there is no uniform way of hearing a matter or a party. One can be heard orally. They can be heard through reports written or oral. They can be allowed to cross-examine witness or not. … What matters in our view is whether or not the party to be heard was made sufficiently aware of the charge against him and was given a decent chance to put across their side of the story.

We do agree with respondent that the disciplinary hearing was independent of the criminal proceedings in the Court. Further to that the applicant did not respond to the second letter which made the clarification on the dichotomy between the criminal matter and the disciplinary hearing.


Even after his discharge from the criminal matter, he never availed himself for a hearing or ask for a hearing or, at least make a follow up on his case. Neither did he write the report he was asked to write before he disappeared from his duty station. After the discharge, the matter was no longer in the Court. After all, in his understanding, the applicant referred to the discharge as an acquittal. Could he not have made a follow up on his case? Therefore, our view is that the applicant tried all he could do to avoid meeting the disciplinary panel.

Apart from the issue of being heard, if it had dismissed the applicant, the respondent would have had valid reasons. These were the applicant absenting himself from duties as well as failing to provide the shipping supervisor with details of shipment and other documents concerning the missing bales. In the circumstances of the case, and in accordance with our observations, the reasons were pretty valid. Chikopa J said in Illovo Sugar Company Ltd v Phiri the decision cited above,

[Section 57 of the Employment Act] if we may say so is an extension of section 43 of the Constitution. So that mere telling is not enough. The reason given for one’s termination should actually be truthful. It should stand up to scrutiny. It should not be a sham reason. That in our view is the full extent of section 57. So that if a reason given for an employee’s termination turns out to be wrong, invalid or a sham reason or [cannot] for one reason or the other stand up to scrutiny the termination will be deemed to have been unlawful.

In summary, assuming the respondent dismissed the applicant we would have said there was a reason and a valid one for that matter for terminating the employment.


That is why, to come back to the second issue, we also formed the opinion that the applicant would not have been entitled to severance pay. Elsewhere, this court once stated that in layman’s language, severance pay is a “thank you” to the employee for good services he rendered to the employer. For that reason, severance allowance is not payable to employees whose employment has been terminated due to bad conduct. See Banda v Blantyre Sports Club IRC Matter 197 of 2007 and Kapolo v Securicor (Mw) Ltd IRC Matter 152 of 2001. Section 35(6)(b)of the Employment Act, needless to say, is the authority for this line of thinking.


CONCLUSION

To crown it all, the applicant’s claims fail in their entirety and the claims are hereby dismissed.


THE RIGHT TO APPEAL

The Court grants right to appeal against the decision subject to terms of section 65 of the Labour Relations Act . Within the next thirty days, the applicant has the right to appeal to the High Court of Malawi.


MADE this day of 13th August 2010



J. N’riva

DEPUTY CHAIRPERSON



D. Z. Namandwa

EMPLOYERS PANELLIST



E. Mtenje

EMPLOYEES PANELLIST