IN THE INDUSTRIAL RELATIONS COURT OF MALAWI
MATTER NUMBER I.R.C. 18 OF 2015
(PREVIOUSLY I.R.C MATTER NUMBER 568 OF 2014, PR)
ISAAC CHIMALIZENI PHIRI ............... ... ... .. .......... .. ....... .... .. ... . ..... ...... APPLICANT
G4S SECURE SOLUTIONS LTD ..........................................................RESPONDENT
CORAM: HIS HON. KINGSLEY D. MLUNGU, DEPUTY CHAIRPERSON
CECILIA T. NYIRENDA, EMPLOYERS' PANELIST
ALEXANDER LUNGU, AND EMPLOYEES’ PANELIST
CHIMWEMWE CHITHOPE MWALE, APPLICANT'S COUNSEL
M R . FRANKLIN MALISAWA, RESPONDENT'S REPRESENTATIVE
MR. W. MWENELUPEMBE, COURT CLERK
The applicant commenced this action against the respondent claiming compensation for unfair dismissal; damages for unfair labour practices, costs of this action and any further or other order as the court may deem fit in the circumstances of the case.
Brief facts of the case are that the applicant was employed by the respondent ' as National Health and Safety Coordinator in May 2012 and was based at the respondent's Headquarters in Blantyre. He is a holder of a Bachelor's of Science in Environmental Health obtained at the Polytechnic, University of Malawi.
Whilst in the course of his employment the respondent employed a Mr. Yamikani Muronya who had earlier resigned on the post which the applicant was holding to the position of National Training Coordinator. Consequently, in due course, the respondent started to assign the duties which were meant for the applicant’s position to Mr. Muronya. Later, the respondent informed the applicant that it intended to retrench his post and gave him a day notice on 5th August, 2014 for a meeting scheduled on 6th August, 2014. See exhibit I. C.P. 3. His contract was consequently terminated 9 days later - on 14th August, 2014 for on the alleged ground of retrenchment. See exhibit marked I.C.P.4.
The applicant submits that the termination of his contract by the respondent amounted to unfair dismissal and unfair labour practices in the circumstances because of the following:
- The respondent only targeted him and or his post and not anyone else or indeed any other position in the respondent organization as he was the only one who was dismissed on the alleged ground of retrenchment;
- The respondent barely four months after alleging that his position was no longer needed, created and advertised a vacancy for a similar post to one he was holding with similar responsibilities, being the post of Health and Safety Administrator, clearly indicating that the respondent still needed someone or a post to take care of Health and Safety issues in the respondent organization regardless of the specific naming of the post. This advert was tendered and marked as J.C. P 5.
- After advertising this post internally via an email of 9th January, 2015, presumably to secretly fill up the Health and Safety post, the respondent failed to recruit anyone and the respondent went further to advertise the Health and Safety post in the Nation Newspaper of 1 6th September, 2015 which was christened Health Safety Manager. See exhibit I.C.P. 6. In the said advert, I.C.P 6 the respondent clearly shows that it cannot do without someone manning Health and Safety issues by stating in the introduction to the advert: "G4S is the world's leading international security solution group, which specializes in outsourced business processes in sectors where security and safety risks are considered a strategic threat"That the above is also confirmed by the fact that before his contract was terminated the respondent through its Human Resource Director, Nargis Khan, specifically wrote all employees that it had " a seventh value as people first" to show the respondent's "commitment to Health and Safety": See exhibit marked I.C.P. 7.
- The respondent advanced no valid reasons for retrenching his post; indeed the creation of another similar post clearly proves that there were no valid reasons or need for retrenchment; He was given an unreasonably short notice of one day that there would be possible retrenchment via a letter dated 5th August, 2014 and he was dismissed nine days later on 14th August, 2014 without first being notified of the possible time frame of effecting the alleged retrenchment. Termination of his contract was hastily done and this indicates bad faith on the part of the respondent and resulted in him not having adequate time to adjust his affairs in light of the impending retrenchment;
- He was not given options of occupying other vacant posts available at the respondent organization, which he could ably take up regard being had to his qualifications, including the new post of Health and Safety Administrator, Business Development Manager and General Manager (Operations) North;
- The respondent alleged two different legal options, being retrenchment and redundancy, in the letter of possible retrenchment of 5th August,2014, when the two are different thereby clearly indicating that the respondent was fishing for a reason to get rid of him;
- Following this dismissal, the National Training Coordinator took over his job responsibilities. So it is probable that the respondent got rid of him so that the National Training Coordinator could took over his responsibilities, a thing which the respondent had allowed him to do even before it terminated the applicant's contract. He concluded by submitting that the unfairness of his dismissal is compounded by the fact that the respondent did not notify the responsible Ministry, being Ministry of Labour, about the retrenchment contrary to procedural requirement.
Thus, in light of the above, he is of firm belief that the termination of his contract amounted to unfair dismissal as above argued.
All this should be looked in the light of the submission that the applicant's performance was outstanding as per the performance review document tendered and marked as I.C.P.2 and also the advert of the vacancy of the position of National Training Coordinator, seeking a candidate with a Degree or Diploma in either Education or Human Resource Management marked as exhibit I.C.P. 2
The respondent opposes the applicant's statement of claim in general terms arguing that the applicant's termination of contract on the ground of retrenchment was fair and lawful.
Specifically, it submits that the restructuring of the position of Health and Safety Coordinator happened in the context of an ongoing organization restructure which resulted in the retrenchment of the post and that as a matter of fact, all the affected employees including the applicant were informed about the restructuring program.
The respondent further argues that the post of Health and Safety Administrator is lower to that of Health and Safety Coordinator and as such they are not similar; and that the post of Health and Safety Coordinator being restructured was stated in the respondent's letter dated 5th August, 2014.
It submits further that during consultations with the applicant, the post of Health and Safety Coordinator was mentioned to him, but the applicant showed no interest (Administrator, may be)?; that the vacancy of Business Development Manager arose in November, 2014 after the National Sales Manager resigned from the post and that this post required a chartered marketing professional with vast experience in sales and marketing; that the post of General Manager (Operations) (North) required a person with vast experience in Security Operations and management and the incumbent was already acting in that post and he was all the attributes for the post.
It went on to state that the Finance Director offered the applicant the post of Assistant Accountant but the applicant showed no interest, that the Heads of Department were consulted to check if they had any vacant post to be occupied by the applicant but none of them had any vacant post to be offered to the applicant.
The respondent concluded by submitting that the reason for the termination of the applicant's services is retrenchment as per the letters addressed to the applicant dated 5th and 14th August, 2014, and that the restructuring of the post involved devolution of Health and safety Coordinator's responsibilities to Departmental Heads so that they take responsibility of the Health and Safety in their Departments.
ISSUES TO BE DETERMINED
Whether the applicant was unfairly dismissed by the respondent when the contract of his employment was terminated on the ground of retrenchment/ redundancy in the circumstances of the case.
KIBLING, EMPLOYMENT LAW, Legal Action Group (2000) P. 188 cites three main retrenchment situations. They include closure of a business as a whole; closure of a particular work place where the worker was employed and lastly reduction in the size of the workforce.
In CHIMA -V-THE DEVELOPMENT CENTRE, IRC Matter No. 41 of 2001, the court said that retrenchment refers to workforce reduction as a result of economic downturn, and redundancy refers to workforce reduction as a result of technological innovation.
In modern Labour Law terms such as rationalization or restructuring of the organization are also used. See CHIRWA-V- COMMERCIAL BANK OF MALAWI IRC Matter No. 233 of 2002; MUHOME, A; LABOUR LAW IN MALAWI; (2012) P.76.
Section 31 of the Constitution guarantees every person a right to fair labour practices.
As it was held in the case of EDWARD PETROS -V- WORLD VISION MALAWI IRC Matter No. LL36/2007 that "these international standards are supported by our own constitution. Section 31 of the constitution guarantees every person a right to fair labour practices. This means on dismissal a person is entitled to know the reason for such dismissal as explained in section 43 of the constitution and section 57 (1) and (2) of the Employment Act. Further the burden for proving the reason for dismissal is on the employer to prove, on the balance of probabilities that the reason for dismissal was valid"
CHILUMPHA in his book, LABOUR LAW (2004) PP 478- 480 writes as follows:
Section 57 (1) recognizes the operational requirements of the employers undertaking as a valid reason for the termination of employment. For that reason, if the employment were brought to an end on that ground, the dismissal would not be unfair within the meaning of section 58.... However, although in terms of section 57(l) termination of employment in those circumstances is fair, it may become unfair because the employer does not use any discernible criteria to select the employee (s) for retrenchment or uses criteria that are subjective (i.e.based on the opinion of the person making the selection and not on some objective basis) or are applied in an arbitrary and inconsistent manner. Arguably any selection for redundancy dismissal which is not based on the employee's attendance record performance, efficiency qualification, skills experience and length of service easily lends itself to the charge of arbitrariness .
In a High Court case of CHANCY M_ ANC HAM BWE -V-BUNDA COLLEGE OF AGRICULTURE Civil Appeal No. 4 of 2014, (HC), P.R, Justice Mbvundula held as follows:
"Section 57 (1) of the Employment Act allows an employer to terminate an employee's employment based on the operational requirements of the undertaking. The provision does not lay down the procedure to be followed in such cases. The I.R.C. in its judgment applied, correctly, in my view, article 13(1) of the International Labour Organization Convention Number 158 on Termination
of Employment as a source of law on consultations and the position that employee's representatives must be consulted. The I.R. C. has previously held in Ngwenya and Gondwe v. Automotive Products Ltd I.R.C Matter number 180 of 2000 that in the absence of a laid out procedure in the Employment Act the court would resort to the convention and that where there is no union the employer may carry out group consultations and where the workforce is small the employer may carry out individual consultations.
Article 13 (1) (b) of the Convention is particularly relevant. It is there provided:
"When the employer contemplates termination for reasons of an economic, technological, structural, or similar nature the employer shall:
b) Give... the workers' representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or to minimize the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.
It is sufficient, under the convention, for the employer to consult with the workers representatives, and the employer need not consult individual employees, although it may do so where it is convenient or the circumstances specifically so dictate. I would therefore endorse the position taken by the IRC in Ngwenya and Gondwe v. Automotive Products Limited."
In this case, the respondent terminated the applicant's contract of employment on the ground of redundancy. However, the respondent could not show the basis of the redundancies or why is had laid off the two applicants only or the criteria used to arrive at the decision that they, and no other employees, should be retrenched. Moreover, the respondent never consulted the applicants or their Labour representatives on the matter before the alleged redundancies. And after terminating their services, the company immediately recruited two new individuals to replace the m. It was held that as section 57 (l) did not lay down any procedure for redundancies, the court would resort to Article 13 (l) of the ILO Termination of Employment Convention. Relying on the provision, the court found that on the basis of the above facts the applicants were unfairly dismissed. In the words of the Chairperson:
"The defendant] did not comply with the requirements stipulated by Convention No. 158 of ILO. There was no consultation. They did not even report the issue of the mass retrenchment to the Labour Commissioner. They did not afford to hear from the concerned employees so that they take into account the representations to these parties before effecting the redundancies. They did not disclose any information to the employees. They did not put it in the open as regards the selection criteria as to who should go and who should stay."
Article 14 of the Convention require that when an employer contemplates such terminations as are mentioned in article 13 (l), the employer must notify the competent authority under the national law of giving relevant information including the reasons for the terminations, the number and categories of workers likely to be affected and the period over which the terminations, are intended to be carried out.
Notifying the responsible ministry is very fundamental such that where the relevant Ministry (in our case Ministry of Labour) has been notified, termination of employment would be deemed fair. See: CHIKADYA V. SUNBIRD TOURISM LTD & LEMERIDIEN MOUT SOCHE HOTEL matter number IRC 141 of 2001.
In AIRTEL MALAWI LIMITED V. EDWARD KOMIHA & OTHERS Civil Appeal No. 59 of 2013, the Supreme Court in a judgement delivered on 26th May, 2016, in deciding that retrenchment was justified hence did not amount to unfair dismissal, noted that the Ministry of Labour was notified by the employer and that "the Ministry of Labour accepted the justification and approved there organization."
ANALYSIS OF THE EVIDENCE AND THE LAW
It cannot be disputed that the applicant's employment contract was terminate by the respondent on the alleged reason or retrenchment although redundancy was also alluded to. The only question therefore is whether there was a valid reason for terminating the employment contract of the applicant; put differently, whether the alleged retrenchment had any valid basis and or complied with the la w . If the answer is in the negative, then the termination of the contract amounted to unfair dismissal thereby warranting all the remedies the law accords a person who is unfairly dismissed.
From the arguendos, the applicant argues that he was targeted by the employer as he was the only one and it is his only post that was affected in this so called retrenchment to which it is replied to by the respondent that this happened in the context of an ongoing restructuring and that in fact, all the affected employees including the applicant were informed.
In MKWEZALAMBA V. MALAWI POSTS CORPORATIONS IRC Matter No. 154 of 2001,
the Chairperson (M.C.C. Mkandawire) in deciding that the applicant's retrenchment amounted to unfair dismissal took into account the fact that the applicant was the only one who "was retrenched on 3rd October, 2001," and "by 25th March, 2002 when the matter was heard , he was the only one who had been retrenched" hence the court found that "the respondents had really targeted the applicant"
On the applicant's argument number two under arguendos, one will appreciate that the only difference in the post is the use of 'Administrator' and ' Coordinator.' From the Dictionary meaning, the terms essentially mean someone responsible for handling and ensuring that there is organization in relation to the issues at hand, in this case, health and safety. The basic point is that the respondent still needed an overseer of Health and Safety issues in its organization. See Exhibit I.L.P 5
Again, even in the Post of Health and Safety Manager advertised on 1 61h September, 2015 this submission still makes sense. See Exhibit I.L.P 6 & I.L.P. 7
See also: Oxford Advanced Learner's Dictionary (Special Edition)
On the argument that the applicant was not given options of occupying other vacant posts available at the respondent organization, which he could ably take up regard being had to his qualifications, like that of the new post of Health and Safety Administrator, Business Development Manager and General Manager (Operations) for the North, it is replied by the respondent that the position of the Health and Safety Administrator is lower to that of Health and Safety Coordinator and the same was mentioned to the applicant but the applicant showed no interest. However, going through the exhibit marked respondent 3, which according to Mr. Franklin Malisawa, is the evidence of consultation meetings between the applicant and management held on 6th, 7th and 11 th August, 2014 and that minutes are scribbled thereon, there is nothing to that effect. In fact, on 07/08/14, it is scribbled that 'Company alternatives, Monday afternoon 4.00 pm and on 11 /08/14, it is stated 'No vacant position to fit right placement - retrench position. '
All this fits well with the applicant's statement that "on all of these meetings they pushed that I should give them (MD+ HRD) where I should work. On all occasions, I told them to suggest since they were in better position as they strategically know the company. On 10th of August, during our final meeting, they told me that there was no option (No Senior position ) that I can fill." See Applicant' s I.R.C. Form filed on 3rd November, 2014.
Again, the evidence that the applicant was offered a post in finance, that of
Assistant Accountant, is not captured anywhere in the exhibit respondent 3, - Proof of consultation/ meetings.
Further, Mr. Malisawa confirmed that an exhibit respondent 4, which is the retrenchment letter to the applicant, there is nowhere where it was written that the applicant was offered these two positions and turn them down or declined.
Again, Mr. Malisa w a stated that this position of Health and Safety Administrator as per exhibit I.C.P.5 & 6, was internally advertised and not specifically offered to the applicant. And that of Health and Safety Manager as per exhibit I.C.P6, was offered to the world at large .
Thus, the other argument by the applicant that "To ensure that the applicant never got the new post or indeed gets back into the respondent's organization, the respondent made sure to advertise the new post of Health and Safety Administrator internally after terminating the applicant's employment, may hold water."
All, "(T) his is despite the respondent indicating in its letter addressed to the applicant dated 5th August, 2014 that it would give 'consideration ' to possible re employment at a later stage" see exhibit I.C.P 3.
Coming to argument which talks of the National Training Coordinator taking over the job responsibilities of the applicant soon after his dismissal, one indeed may conclude that the applicant was gotten rid of with a view that the National Training Coordinator could take over the applicant's roles and this is buttressed by the fact that this National Training Coordinator was being given the applicant's responsibilities well before he was retrenched. Thus we agree with the applicant that "Defacto the respondent had retrenched the applicant way before actually terminating his contract on the alleged ground of retrenchment. By terminating the contract, it was simply making that which was defacto, dejure. This is unfair labour practice."
One may also take into account the fact that the N.T.C. was also a holder of BSc in Environmental Health just like the applicant, yet initially, the company advertised the post looking for a holder of Degree, Diploma in Education as supporting the above assertion.
Lastly, it was argued by the applicant that the respondent terminated the applicant's contract without notifying the Ministry of Labour about the retrenchment. The respondent made no reference or mention to this argument in their latest amended defense filed on 2nd December, 2015. It was only during the hearing of the respondent's case when Mr. Malisawa, the respondent's Human Resources Officer, stated that they wrote the Principal Secretary of the Ministry of Labour on 1st August, 2014 about ‘Redundancy due to Organization Restructuring.' He tendered this letter which was marked as exhibit respondent 1. During cross- examination on the same, he said that there was no indication on this letter that it was received by the Ministry, i.e. is acknowledgment. Further, no response was brought forward to be tendered as exhibit but the witness said that he can look for the m. He never brought them. When cross - examined on the issue of the letter head on exhibit respondent 1, he just conceded that indeed respondent 1 had no G4S letter head as did other letters from G4S which he had tendered before this court. Again, on the observable differences between the signature of Mr. N. Khan, the Human Resource Director of G4S on the exhibit marked Respondent 1 with the rest of the letters bearing his signatures, and tendered in this court, Mr. Malisawa agreed with the marked differences but said they are similar.
Thus, with all these doubts raised as to the authenticity of exhibit Respondent 1 by the applicant through cross examination, this court is at pains to believe that indeed there was due notification with the Ministry of Labour on this retrenchment exercise. Be this as it may, subjecting the entire evidence to the relevant law, the burden and requisite standard of proof applicable in this type of cases, we agree with the applicant's prayer that this court do find that this was a clear case of unfair dismissal. The applicant thus deserves the relief of compensation for unfair dismissal.
Having found that the applicant deserves the relief of compensation for unfair dismissal, we now deal with the law on this remedy as per section 63 (l) (4) & (5) of the Employment Act and the case law.
In FRASLO MAJAWA-V- AUCTION HOLDINGS LTD Matter No. 25 of 2001, the court said:
"Although the respondents had a valid reason to hold the applicant responsible for misconduct, the respondents on the other hand did not use a procedurally fair approach. Thus, the dismissal of the applicant cannot be described to be fair. It was unfair dismissal. The appropriate remedy is that of compensation as laid down in section 63 (1) (4) and (5) of the Employment Act. The applicant had worked for more than 10 years but less than 15 years. He therefore fall in the blanket of compensation which should not be less than two weeks' pay for each year of service. I therefore order that he be paid three week's pay for each year of service. This compensation to be paid immediately."
In CHAIMA & OTHERS-V- SECURICOR (MW) LTD, matter number IRC No. 50 of 2003,
the court held that:
"The award of compensation must be just and equitable to both the employer and the employee. Therefore, the court must not make an award to an employee who just sits home without trying to look for employment. An employee must try to look for alternative employment or income generating activity to reduce the loss.
The court should not assist a person who fails to assist himself first. In situations where there is a failure to mitigate the court must reduce the award of compensation."
Further, circumstances of the dismissal based on operational requirements will have a bearing on the quantum of compensation payable. In OMAR-V- MALAWI TELECOMMUNICATIONS LTD IRC Matter No. (PR) 70 of 2001, the IRC Opined that it would be unjust to award the applicant compensation up to the date of retirement as her contract of employment was terminated due to operational requirements save that she was not consulted. She was awarded compensation covering the period between the termination and the date of Judgement.
In the instant case, the applicant worked for the respondent for more than two years but less than five years. Thus he falls in the blanket of compensation which should be one week's pay for each year of service. This is the minimum he can get. Compensation must be which is just and equitable in the circumstances of the case.
It is in evidence by the applicant himself that by 5th day of January, 2018, he had secured another employment. Thus he had mitigated his loss.
In the considered opinion of this court, regard being had to all the relevant factors in the awarding of compensation for unfair dismissal coupled with the manner the dismissal herein was effected, we feel that a five months' salary will be the reasonable amount of compensation and we accordingly order it and to be paid immediately.
On damages for unfair labour practice, we feel that having awarded compensation for unfair dismissal, the same should not be ordered in the circumstances of the case.
On costs for this action, the applicant's counsel has addressed this court extensively and at length through his written submissions, praying that we award the applicant costs considering the manner in which the retrenchment was done amounting to unfair dismissal and also the fact that the applicant has incurred a great expenditure to have the matter heard and concluded up to this stage. Much as I sympathize with the applicant on this, we think we should not lose sight of what is the position of the law as regards costs in this court. In this court (IRC), no costs are recoverable except in specified circumstances as per section 72 (2) of the Labour Relations Act ....(w) - here the matter is vexatious and frivolous. The applicant argues that the way the respondent's acted, it falls in this category.
We hold the contrary view as the manner in which the unfair dismissal was effected is duly considered when dealing with the appropriate compensation to be paid to the applicant. As such, we make no order as to costs.
The applicant has also prayed to this court to grant-
(d) Any further or other order as the court may deem fit in the circumstances of the case.
To that we refer the applicant to the case of BARBARA KLOSER -V- A.E. OBEREM
t/o SUZANNE TRAVEL Matter number IRC (PR) 252 of 2014, where His Honour Mzonde Mvula, the Assistant Registrar of the court held as follows on this head of claim:
"The business of the court is to grant reliefs which have been expressly prayed if not pleaded for. Any other relief is a fishing expedition of which we could not say the respondent had a fair chance to defend themselves on. Such would be too broad and blanket a prayer. We do not wish to cover applicant with this blanket in areas she needed no warmth on. Had she wished, she could have expressly stated so....."
Thus, we make no further comment on the same.
RIGHT OF APPEAL
Any aggrieved party has a right of appeal to the High Court within 30 days from the date of this judgement as per section 65 of the Labour Relations Act.
MADE in court this ... ...................day of September, 2018 at Mzuzu.
KINGSLEY MLUNGU DEPUTY CHAIRPERSON
CECILIA T. NYIRENDA EMPLOYERS' PANELIST
ALEXANDER LUNGU EMPLOYEES' PANELIST