THE High Court, Morogoro District Registry, has ordered the Kilombero Sugar Co. Ltd to compensate 29 former employees 12 months salary each for termination of their employment services during implementation of a project for restructuring and improving company operation system.
Judge Paul Ngwembe ruled in favour of the employees, the applicants, after allowing their application for revision they lodged to challenge the findings of the Commission for Mediation and Arbitration (CMA), which had awarded them tiny compensation.
“Under section 91 of the Employment and Labour Relations Act, the employees are awarded compensation of 12 months instead of five months’ salaries granted by CMA, including other benefits if not yet paid,” the judge ruled.
Before the CMA, the applicants had demanded for compensation of 20 months’ salary for everyone, arrears, repatriation costs, subsistence allowance and damages, totaling at 253,025,015/01.
The finding of CMA was to the effect that procedurally partially were followed, as notice of intention to retrench employees was not sufficiently issued to the employees and consultative meetings were not proved to have been convened.
Thus, the CMA proceeded to award compensation of five months’ salary to every employee, fare, arrears and severance pay forming a total of 95,651,133/-. Both parties were aggrieved by the award of CMA delivered and decided to take the matter to the High Court for revision.
Before the High Court, it was questioned whether the employer had sound reason to retrench the employees and whether he followed the laid down legal procedures. It was also questioned the propriety of the compensation awarded by CMA.
In his judgment delivered recently, the judge pointed out that labour disputes are governed by a good number of legal principles, among them in sections 37, 39 and 40 of Employment and Labour Relations Act.
He noted that statutorily it is the duty of the employer to prove that termination of an employee was fair and termination includes justifiable grounds for termination and followed the prescribed procedures.
“Failure to satisfy both substantive fairness and procedural fairness, the termination will be unfair and that duty is performed by the employer,” the judge further said.
According to him, when the employer unfairly terminates the employee, the law is strict that the employer is bound to compensate the employee in terms of salaries, among other remedies. He said that the CMA may award twelve (12) months’ salary for compensation, less or more.
On the issue of whether the procedure for retrenchment were followed, the judge observed that employees were not informed clearly the purpose of the project named ‘Fit for Future Project’, in relation to the fate of their employment.
Furthermore, he said, it was on record that up to the date when employees attended the meeting purported to be a consultative meeting, the employer pressed much emphasis on the project not on retrenchment.
The judge was, thus, satisfied that it was not clearly presented that what was going to happen in the employer’s company was retrenchment.
“I have no slight doubt in my mind to conclude that consultation was not properly made in respect of retrenchment, thus hard for this court to accept the submission by the employer’s counsel who forcefully argues that the employer followed the procedure in retrenchment of the employees,” he said.
The judge went on to say, “I am confident to declare, just as the arbitrator did, although retrenchment was substantively fair for having a valid reason to retrench employees, yet procedurally it was quite unfair. As such the employees’ complaint is merited.”
As regard to the compensation given by the CMA, the judge also observed that the criteria and method applied by the employer for selection of the retrenched persons were unknown and the time of service on some employees, among other relevant factors, were not considered.
He pointed out that even the allegation that some personnel employed after retrenchment were of the same qualification holds merit and that the defiance of legal procedure in this case was nothing of inadvertence, but a calculated device.
Under the circumstance, the judge said, though the CMA had the authority to award less than 12 months’ salary compensation, it ought to have awarded at least twelve months’ salary as compensation.
“To award compensation less than 12 months’ salary must be accompanied with sound reasons. For example, where retrenchment or termination was in substance due to the employee’s misconduct. Otherwise, compensation should be proportionate to the circumstance,” he said.
The applicants were employed permanently by Kilombero Sugar Co. LTD on different dates, capacities and in sections, including at the Management, Supervision, Service Hand, Weeder or Cane Cutter and Watchmen, respectively. They all served on their respective job posts up to March 31, 2020.
What brought their employment to the end is the project, the employer devised by the name of Fit for Future Project, aimed at restructuring and improving the operation system of the company.
Some of the employees were unsuccessful even after applying for the new job positions, hence retrenched.
