PRINCIPAL REGISTRY
MATTER NO. IRC 25 OF 2001
BETWEEN:
-and-
CORAM: R.
Zibelu Banda (Ms), Deputy Chairperson
Ngwira for applicant
Hara for the Respondents
Ngalauka – Court Clerk
Dismissal-
Procedure for dismissal-Opportunity to be heard- Procedure to comply with the
law-Remedies-Factors to be considered-Contributory fault.
Facts
The applicant was employed as
Group Sales Manager by the respondent on
Assessment of Facts
The applicant testified and he mostly explained what happened in relation to the alleged reasons for dismissal. The respondent brought three witnesses to prove that the applicant had failed to carry out his duties to the satisfaction of the respondent. The following came out clear from evidence:
Offering credit facility without authority
The applicant had extended credit facility without
authority to a client who was not creditworthy. The respondent provided credit
facility to some of its clients. In the case of Mr. Tembo the client in issue,
the respondent had offered him credit terms prior to this incident. Mr. Tembo
was however not in good books with the respondent for purposes of further
credit. This was the crux of the problem. If Mr. Tembo had paid up within 30
days, the applicant would have been vindicated. This was evident from the
pieces and bits of correspondence and communication between the applicant and
the Acting General Manager, Ms. Sauti Phiri.
Quoting wrong prices
There was no proof that the applicant had quoted
wrong prices to a client. The respondent proved that the applicant was
responsible for advising clients on any new prices. However, in this case there
was no direct evidence to show that the prices quoted to Packaging Industries
were provided by the applicant. Even if there was proof that the prices were
quoted by the applicant, there was no direct loss to the business of the
respondent. The client was distressed, but the respondent was able to explain
and correct the situation. The reaction from the respondent to the applicant
was blown out of proportion especially considering that clients brought wrong
quotations all the time. A witness for the respondent explained that this was
not the first time that a client had come with wrong prices and in fact even
after the applicant left employment with the respondent, the respondent
continued to receive wrong prices. In other words there are several factors
that can cause the situation and no single person can be blamed.
Failure to meet deadline
The applicant was advised to prepare a list of
distributors. He prepared the list and submitted it to the Acting General
Manager. The issue of deadline did not come up in any of discussions or
reminders. The respondent produced documents and memorandums but none of them
had a deadline by which time the list should be submitted. The respondent could
not complain about failing to meet a deadline when she herself was vague and
failed to properly direct her subordinate.
The general assessment of the facts was that the
Acting General Manager was inconsistent and failed to give proper guidance to
the applicant. Her approach towards the applicant was casual and under normal
circumstances she would not be taken seriously. Even in her testimony she
struck me as one who failed to take a bold stand and tell an employee in clear
and no uncertain terms what she expected and when she expected results.
Issues
The court is called upon to decide whether the
dismissal was fair or unfair. In determining this question the court must look
at the reasons for the dismissal, whether they are valid and justify the
respondent’s action. The court must then look at the procedure that was used
before, during and after termination.
Sources of the Law
The cause of action arose in December 2000,
therefore the Employment Act 2000 apply in this case and shall be used where
necessary. The Constitution is the supreme law of the land. However, in this
case it can only be applied where the Employment Act is inadequate or contain
provisions that are inconsistent with the Constitution. Common law and case law
shall be used to interpret and support the statutory provisions, since the law
in this court is just developing. It is also the practice in common law
jurisdictions to illustrate statutory provisions with case law and texts books
by renowned authors.
While on this point may it be pointed out as obiter
that the legal point raised by counsel for the respondent that section 43 of
the Constitution does not apply in this case is outdated law and was un called
for. Without going into detail may counsel for the respondent read the decision
of the Honourable Tembo J. in Chidzulo V. Blantyre Netting Company ( Civil Cause No.
2188 of 1994 (unreported). This decision clearly puts the issue of
interpretation and application of provisions of the Constitution especially
provisions in Chapter IV dealing with Human Rights to which section 43 belongs
into the right perspective. This decision was upheld by the Malawi Supreme
Court of Appeal in MSCA Civil Cause No. 17 of 1995 (unreported). Further, this
court has addressed the point in a number of cases including Ngwenya V.
Automotive Products Ltd (IRC No. 180 of 2000
(unreported)) One would expect that counsel would be familiar with such
precedential decisions especially since they concern interpretation of Constitutional
provisions that affect human rights.
The point was uncalled for because in this case
there was no need to go into the Constitution. The Constitution only proscribes
and regulates conduct, in this case fair administrative action. What
constitutes fair and unfair administrative action is provided in the Employment
Act which is applicable in this case.
The Law
Section 57(1) of the Employment Act provides that:
“The employment of an employee shall not be terminated by an employer unless there is a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirements of the undertaking.”
The burden is on the respondent to show that the
reason for dismissal was valid. It was thus held in Earl v. Slater and
Wheeler, [1973] 1 WLR 51 where the court of appeal held:
“It is for the employer to
show what was the principal or only reason for dismissal…. and that it was a
potentially valid reason…. If the employer fails to discharge this burden, the tribunal
must find that the dismissal was unfair.”
In the instant case the employer was able to
demonstrate and prove the reasons for the dismissal. The court therefore holds
that the respondent had reasons for dismissing the applicant. The question is
whether the reasons were valid to necessitate the action of dismissal. An
answer to this question can be found by considering factors raised in Polkey
v A E Dayton Services Ltd
[1987] 3 All ER 974,at 983, where
the House of Lords quoted with approval the following factors of Neill LJ
sitting in the court of appeal in the same case [1987] 1 All ER 984 at 989:
“Where an employee is
dismissed for alleged misconduct and he then complains that he was unfairly
dismissed, it is to be anticipated that the industrial tribunal will usually
need to consider (a) the nature and gravity of the alleged misconduct, (b) the
information on which the employer based his decision,(c) whether there was any
other information, which that employer could or should have obtained or any
other step which he should have taken before he dismissed the employee.”
In the instant case the second and third grounds of
dismissal were not grave in nature to warrant dismissal. The first ground
however was serious because the respondent’s business was affected by the loss
that was occasioned or anticipated through the credit facility offered to the
client. The principal reason for dismissal was therefore potentially valid in
nature to entitle the respondent to dismiss. The second point is whether there
was any other information that the respondent could have based her decision to
dismiss. There was no other information, since the court has decided that the
two other reasons were not valid reasons for dismissal. There were no previous
warnings against the applicant for incapacity or misconduct.
Thirdly was there any other step, which the
respondent should have taken before
dismissing? This step is provided in Section 57(2) of the Employment Act, which
states that:
“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 the opportunity.”
The facts were clear that the applicant was not
afforded an opportunity to defend himself or explain his side of the story
before an impartial committee constituted for that purpose. Affording an
opportunity to be heard is wider than a one to one discussion between the
offending employee and the supervisor in this case the Acting General Manager.
The discussions which the applicant had with the Acting General Manager do not
fall under the right provided in section 57(2).
The respondent must have conducted an investigation
into all the allegations, then constitute a disciplinary hearing where the
applicant was allowed representation by a fellow employee or union members or
any representative of his choice. The hearing must be fair and not
predetermined. In the hearing the allegations must be outlined to the applicant
and he must be asked to answer to the allegations separately. The applicant
must have been allowed to explain his side and defend himself. A decision would
have been reached whether to dismiss or to take other action against the
applicant. Other action would include warning, demotion, suspension or other
such action other than dismissal.
Further, natural justice demands that an employer
should make relevant investigations and consultations prior to taking a
decision affecting an employee’s employment.
This is because:
“Consultation and warnings
are relevant in a number of different cases including dismissals for
misconduct. An employer is entitled, moreover, to have regard in a misconduct
case to the fact that the employee has received a previous warning in deciding
whether or not to dismiss. This is so even where, that previous warning related
to behaviour which, was different from that which is the potential basis for
dismissal.”
(See Edwards M. ed. Dismissal
Law; A Practical Guide For Management, 1991, Kogan Page, London
at 126 to 127.) Also see Prindella v. Limbe Leaf Tobacco Company
(IRC No. 49 of 2000 (unreported))
Where the allegation complained of is lack of
capacity, the employee must be warned to improve and that if he did not improve
by a certain date or time he would be dismissed or demoted or such other action
would be taken against him. The employee is also entitled to be provided with
training or proper guidance to meet the expectations of the employer before
taking the extreme action of dismissal at the first instance of failure to meet
employer’s expectations. See Dismissal Law; A Practical Guide For
Management supra.
Further, section 61 (2) of the Employment Act
further provides that
“ In addition to proving
that an employee was dismissed for reasons stated in section 57 (1), an
employer shall be required to show that in all circumstances of the case he
acted with justice and equity in dismissing the employee.”
In the instant case there was no justice or equity
in dealing with the applicant’s dismissal. The case of Prindella v. Limbe
Leaf Tobacco supra provides an excellent example of how
employers should treat and deal with disciplinary actions in their
establishments. The court would recommend that employers borrow a leaf from
Limbe Leaf and incorporate the procedure in their code of conduct.
Ironically the code of disciplinary procedure
applicable for the respondent company in the instant case contain disciplinary
procedures but none of the provisions were followed in dealing with the
applicant. The respondent failed to provide the applicant with a hearing before
an impartial disciplinary committee. The Acting General Manager was an accuser,
an investigator and the judge in her own case. She made the decision to dismiss
and that decision was rubber stamped by the Group General Manager Industrial
Division- PCL in exhibit “RP2” without much ado.
Finding
The court finds that the respondent complied with section 57(1) by providing reasons for dismissal. However the respondent failed to comply with section 57(2) and according to section 58 of the Employment Act, a dismissal must comply with section 57 in order for this court to rule in favour of the respondent. In the instant case the respondent failed to comply with procedure (section 57(2)) and hence the court finds that the dismissal was unfair.
Remedies
Where the court finds that a dismissal is unfair, it
shall endevour to provide a suitable remedy taking all circumstances of the case
into consideration. Reinstatement is the remedy that a court must consider
first before considering other remedies. See section 63 (2) of the Employment
Act .
The facts of this case show that the applicant was to a certain extent to blame and contributed to the dismissal through his conduct. Reinstatement is where an employee is put back to his previous position and treated as though nothing had happened. If the respondent had complied with procedure the dismissal could have been fair or other action could have been taken which would still have been to the detriment of the applicant like demotion. Therefore the court finds that reinstatement would not be a just remedy. The next remedy to consider is the remedy of compensation.
Compensation
Compensation is an award that is made to a
successful applicant in unfair dismissal claim. The award must be just and
equitable taking all the circumstances of the case into consideration. The
award is aimed at compensating the applicant for loss suffered due to the dismissal.
The loss must be a direct result of the conduct of the respondent in dismissing
the applicant. The burden of proving such loss is on the applicant. See Norton
Tool Company Ltd v. Tewson [1973] 1 All ER 183.
Contributory Fault
Where the court finds like in the instant case, that
the employee contributed to the dismissal, any compensation to him shall be
reduced by a percentage of his contribution. See section 63(4) of the
Employment Act that provides:
“An award of compensation shall be such amount as
the court considers just and equitable in the circumstances having regard to
the loss sustained by the employee in consequence of the dismissal in so far as
the loss can be attributable to action taken by the employer and the extent, if
any, to which the employee caused or contributed to the dismissal.”
Also
see general guidelines in Dismissal
Law: Practical Guidelines For Management, supra, where on page
238 it says:
“It is for the employee to show that he has suffered
loss and, if he has suffered no loss because the employment would have ended at
the same time in any event, there will be a nil award.”
Further
construction is provided in Croner’s
Employment Law Bulletin, (1993), at D15 to D16, where it says:
“
If the decision to dismiss the employee was to any extent caused or contributed
by the acts of the employee it will reduce the amount of compensation….it is
rare to make 100% reduction for contributory fault….this will normally occur
where a dismissal has been found unfair merely on procedural grounds.”
Assessment of Compensation
The court shall assess compensation in chambers on a date to be fixed.
Terminal Benefits
The only dispute on terminal benefits was on issues
and use of company car while on notice.
Issues
The issues were made available to the applicant at
the time of termination of contract. He did not collect at the time. The court
orders that due to inflation and devaluation of the local currency it would be
economically detrimental for the respondent to provide the issues in kind three
years after dismissal. Their market value has since gone up therefore the
applicant shall receive the money equivalent of the issues at the time that
they were first offered for collection.
Company Car
The applicant adduced evidence that he was paid
money equivalent in lieu of use of company. He was paid the equivalent of 1000
kilometres per month. The court finds that this was reasonable considering that
the applicant was no longer doing work for the respondent. He was using the
money equivalent for private business or other business not connected with
promotion of the respondents business for which the company car was initially
provided. The court therefore orders that the money equivalent paid in lieu of
actual use of company car adequately compensated the loss of use of the car.
Made in Open Court this…day of………………….2003 at LIMBE
R. Zibelu Banda Ms.
DEPUTY CHAIRPERSON