IN THE INDISTRIAL RELATIONS COURT OF MALAWI
MATTER NO. IRC PR 281 OF 2004
E. CHIFULEMBA .. APPLICANT
THE ATTORNEY GENERAL (MINISTRY OF PRESIDENTIAL
AFFAIRS) . RESPONDENT
JACK NRIVA DEPUTY CHAIRPERSON
Ms E. Mtenje Employees Panellist
H. Chamba Employers Panellist
Represented by A. Muhome of Counsel
Represented by Gwedela CHRMO and Ngauma Assistant Director DHRMO
Ndovi Senior State Advocate
Court Official : Gowa
In terms of Section 67(2) of the Labour Relations Act the decision of the Court is the majority decision . In this matter the majority decision is that the applicants succeeds in his claims of breach of contract and unfair labour practices. The claim for discrimination is dismissed. The Court shall set down a date to consider the appropriate remedy to award the applicant.
Subject to section 65 of the Labour Relations Act, the respondent has a right to appeal against this decision.
MADE this 31st day of August 2010
THE MAJORITY DECISION
The applicant commenced this action claiming discrimination in terminating employment; breach of contract of employment, and unfair termination of employment.
The applicant was on a three year contract with the government of Republic of Malawi as a Principal Secretary in one of the ministries. The contract was renewable based on performance. Article III of the Contract Agreement stated as follow:
The term of employment shall be for a period of thirty six (36) months, renewable subject to satisfactory work performance, based on the relevant performance agreement to be reached between yourself and Government not later than three months from the effective date of this contract
The applicant told the court that at the end of the contract, the government did not renew the contract. The government further wrote the other officers that it had failed to put in place the assessment mechanism. Consequently, it proceeded to renew the contracts of contract officers.
It is worth pointing out, however, that the respondent called two witnesses. The first one was Mr Jeromy P. M. Gwedela. He is a Chief Human Resources Management Officer in government. Once, he served in that capacity in the office of President and Cabinet. In his evidence. During the period the minister responsible fir the ministry in which the applicant was working raised some concerns about the applicants performance. The minister also complained about the applicants abuse of resources and drunkenness. At the end of the applicants contract, the Minister did not fill a part she was supposed to fill so as to enable the contract to be renewed. The witness stated that was she first time the government has contracts for servant of grade P4 and above. For that reason, there were no instruments of assessments. The OPC was defending on reports from Ministers. The OPC decided not to renew the contract based on the sentiments by the Minister. They concluded that the applicant has a negative attitude towards work. Further, the government has discretion to renew the contract or not.
The second witness was Mr Patrick Aaron Ngauma. He is Assistant Director of Human Resource Management. His evidence bordered on communication the decision not to renew the applicants contract. The recommendation was from the OPC.
The issues is whether the applicant has proved his claims of discrimination, breach of contract of employment and indeed, unfair termination of the contract. Counsel for the applicant argues that the applicant has made out his case on the claims. Counsel for the applicant bases the claim on section 31 of the Constitution.
Section 31 (1) of the Constitution provides that:
Every person shall have the right to fair and safe labour practices and fair remuneration.
Counsel refers to Justice Chikopa sentiments in Kachinjika v Portland Cement Company; commenting on section 31 of the Constitution.
Looking at section 31 we are of the firm view that the framers of our Constitution were aware of the common law practice where the employer could terminate an employees employment by merely giving notice (or making payment in lieu thereof) without. Unless the employer wanted to, giving any reason for such termination it was fair labour practice at common law if the termination followed the letter of the employment contract in so far as notice was concerned the common law position was capable of and had actually been abused it is to counter such abuse (actual or potential)_, in our view, that the framers of our Constitution introduced the concept of fair labour practices. The objective was not to make the employees position unduly entrenched but to introduce an aspect to the contract of employment that would ameliorate the harshness of the common law .
Counsel also refers to section 43 of the Labour Relations Act to which is in the following terms:-
Every person has a right to a lawful and procedurally fair administrative action, which is justifiable in relation to reasons given where his or her rights, freedom, legitimate expectation or interest are affected or threatened: and be furnished with reasons in writing for administrative.
Counsel further refers to section 5 of the Employment Act as importing section 20 of the Constitution on ant-discrimination into labour jurisprudence. Counsel submits that the applicant, by not being given a reason for non-renewal of the contract, was discriminated against and the action was unfair. Counsel also referred to Article III of the contract and submitted that the provision indeed intended a fixed term contract. However, the said contract was readily renewable at the expiry of 36 months period. The renewal was based on conditionalities, to wit, the government putting in place a performance appraisal to be agreed by both the parties. However, the government failed to institute such appraisal. More to that, the government admitted having failed to institute the appraisal system.
Counsel further argues that had the applicant been insubordinate to the minister, the respondent would have disciplined him during the subsistence of the contract using the Malawi Public Service Regulations. Having not done this, counsel submits, the respondents breached the contract.
On the other hand counsel for the respondent, tackles the matter from the point of view of Law if employment. He states that the employment was for a specific period. Therefore, the contract came to an end at the end of the stipulated period. Counsel cites section 25 of the Employment Act.
1 Unless otherwise provided by this Act, this part applies to all types of contract of employment
2 A contract of employment shall be in anyone of the following forms-
contract of an unspecified period of time
contract for a specific task
section 28 (1) and (2) of Employment Act states that
1 Subject to section 29 and 57 a contract of employment for unspecified period of time may be terminated by either party
A contract of the Employment for specified period of time shall automatically terminate on the sate specified for its termination and unless it is expressly or tacitly renewed or prolonged, no notice shall be required for its term
Counsel cites Kalowekamo vs- Malawi Environment Endowment, Cause No. 28 of 2005 which holds that where a contract of employment is of fixed type and ends by the expiry of time, such a contract is not caught by section 57 (1) and (2) of Employment Act. In other words, in such contracts there is no need on the part of employers to give reasons or accord one the right to be heard when the contract period expires. In short there can be no unfair termination in fixed contract at the end of the contract. Counsel argues that the respondent discretion to terminate the employment without hearing the applicant. On discrimination, counsel referred to section 20 (1) of the Constitution and section 5 of the Employment Act which provides for non discrimination generally and in the employment set up respectively.
Counsel argues that in University Workers Trade Union v Council of the University of Malawi, Matter No. IRC 46 of 2003 (Unreported) IRC the court stated that whilst discrimination is unjustified, there are some differences in treatment, which are justified. For example, differences in rank may lead to different treatment. Thus this cannot amount to discrimination. Those with a higher rank have more privileges than others. This cannot be termed as discrimination.
Counsel argues that, the principle that comes out clear from such authorities is that discrimination on any basis is not allowed as a reason for termination of employment. In addition to that it is clear from the same authorities that one can not bring the ground of discrimination where people of difference are treated differently. In other words the difference in treatment on the basis of any difference does not amount to discrimination.
In counsels analysis, according to the evidence available, the applicant entered into contract as PS whose contract was supposed to end on 31st October, 2003. At the expiry date his contract was not renewed depending on the recommendation from the controlling officer after assessment. Not only that according to the performance agreement made between the Government and himself he had a target to accomplish. Counsel argues that the argument made by the applicant that there was no objective performance assessment carried out during contract period due to the absence of performance assessment criteria does not hold water.
On breach of contract counsel submitted that: In finding that there is breach of contract, the court has to look at documents available and see whether there is breach which can accord one the damages. The burden lies on the applicant to show the loss or injury his applicant has suffered as a result of the breach of contract in order for him to be accorded damages. Damages for breach of contract are compensation for the loss or injury one has suffered as a result of the breach. In analysis counsel made the following submission: The first question to be asked is whether there was breach of contract in this case at hand? From the reading of Article III of the contract what comes clear is that the renewal of the contract depended on satisfactory work performance which was to be based on the relevant performance agreement. Such performance agreement was to be reached between the Government and Mr Chifulemba not later than three months from the effective date of the contract. Further, The provision does not mention the mode of assessing work performance in order to say its satisfactory. However, The fundamental part in the provision is the assessment of work performance. Counsel argues that on the evidence available it is clear that the government made performance agreement in 2002 not at the date agreed. Secondly the government assessed the PS work performance depending on recommendation from the controlling officer not on performance appraisal. This was right because the provision did not specify the mode of assessing work performance. Basing on that, counsel argues that if there was breach, then it was minor. In this case, that of not following the date, but the fundamental part of assessing somebodys work performance was done. Counsel further argues that the applicant has not shown that he suffered any loss. In conclusion the respondent submits that all the three head of claim do not hold water.
Having outlined the claims and the evidence by the parties we make the following findings and determinations. In our view, the respondent engaged the applicant in a fixed term contract. The contract was therefore bound to terminate at the end of the specified time. The respondent was under no obligation to renew the contract. However, this obligation was subject to Article III of the contract on whether to renew the or not. One such a requirement was presence of an appraisal system. However, the system was not put in place. In our view, the interests and expectations of the contract employees would have been influenced by such an appraisal system. The absence of the system, therefore, caused a problem in this case to the contract employees. In the absence of the appraisal system, the applicant had no knowledge as to what the renewal of the contract would be based on. On that score alone, the respondent acted in an unfair manner and breached the contract. We are saying so well knowing that before these contracts the prior contracts were of open terms. The change to fixed contracts came a long the way. The very change meant a lot to the government officials concerned and that the respondent had to put in place a mechanism on which the officers would know the criteria of renewing or not renewing their contracts. Therefore, the very fact that there was no appraisal system affected the legitimate expectation of the applicants. This undermines the constitutional provisions on fair labour practices and natural justice, as per sections 31 and 43 of the Constitution. We therefore find that the respondent is guilty of unfair labour practice and breach of the contract. For avoidance of doubt, we observe that the applicant has not proved the claim of discrimination. He has not shown how and on what basis he was discriminated against. Discrimination is a wide issue. Section 20 of the Constitution provides that:
Discrimination of persons in any form is prohibited and all persons are, under any law, guarantee equal and effective protection against discrimination on grounds of race, colour, sex, language, religion, political or other opinion, nationality, ethnic or social origin, disability, property, birth or other status
Further section 5 (1) of the Employment Act states that:
No person shall discriminate against any employee of the prospective employees on the grounds of race, colour, sex language, religion, political or other status or family responsibilities in respect of recruitment, training promotion, terms and condition of employment, termination of employment or other matters arising out of the employment relationship
The applicant, therefore, had to show the basis on which he claims he was discriminated against. Apart from this observation, the applicants claim generally succeeds. The applicant ought to be remedied for this wrong. The court shall consider the appropriate remedy to the applicant at a separate hearing.
I have a dissenting view to this our decision.
I form the opinion that at the end of the contract, it was open for the respondent to renew the contract or not. A contract for a specified period of time automatically terminates the contract. An employer cannot be held responsible for not renewing the contract. Section 25(2) of the Employment Act states that:
A contract of the Employment for specified period of time shall automatically terminate on the sate specified for its termination and unless it is expressly or tacitly renewed or prolonged, no notice shall be required for its term.
To renew or not, in my view, is solely solely within the discetion of the employer. The employer has no duty to give a notice for the termination since the period of termination is knoen to both the parties.
In Kalowekamo v Malawi Environment Endowment, Cause No. 28 of 2005 the applicant was employed by the respondent as Operations Director. He was offered two years contract. It was renewable upon the application of the employee. Mr Kalowekamos contract of employment commenced on 1st October, 2001 and it was to expire on 30th September, 2003. About August 2003, Mr Kalowekamo applied for the renewal of the contract but the board of the respondent rejected the application. He was not told the reasons for the rejection. He was not given an opportunity to be heard before the decision to disallow the application. The issue before the court was as to whether there was unfair termination of employment because he was not told reasons and given the right to be heard. The court held there was no unfair termination or unfair dismissal. The court said:
We observe that section 57 (1) and (2) is about termination of employment for reasons connected with the capacity or conduct of the employees. It is not about a fixed contract where the contract ends by the affluxion of time. It would seem to us that a fixed contract of employment is not caught by section 57 (1) and (2) It can therefore be argued that fixed contracts of employment cannot be subject of an action for unfair dismissal under the provisions of the current Employment Act, especially after the expiry of the period of the contract or after the completion of the task envisaged by the contract.
Likewise, in this case the respondent was under no obligation to tell the applicant reasons for non-renewal, neither did they have the obligation to renew the contract. By the very fact of the expiry of the contract, the respondent had discretion to renew or not to renew. And if the Minister had recommended non-renewal of the contract, assuming that that allegation is true, the applicant had no right to be heard. The applicant would only have had that right to be heard if the matter had been brought as a disciplinary action had the respondents intended to terminate the contract. But the respondent let the contract to run until its expiry. It would not be right, in my view to fault the respondents exercise of its discretion not to renew the contract. Indeed, great expectations make frustrated men but the law on renewal of fixed term contracts is very clear. Granted, Article III gave the criteria for renwal. The absence of such criteria does not move away the employers right to choose whether to renew or not. Just like in the Kalowekamo v Malawi Environment Endowment case, the fact that there was a step to be taken did not entitle the applicant a right to be heard before the employer exercised the discretion not to renew the contract. Even the sentiments by Lord Chikopa J in can be distinguished. Apparently, the learned judge was making the comments in respect of cases of unfair dismissal. The sentiments cannot apply in cases where a contract has actually expired by time or the accomplishment of the work the contract was based on.
For these reasons, I dissent. I disagree that the respondent is guilty of unfair labour practices or breach of contract.