MALAWI
IN THE HIGH
COURT OF MALAWI
PRINCIPAL
REGISTRY
CIVIL APPEAL
NO. 52 OF 2003
BETWEEN:
LIQUIDATOR,
IMPORT & EXPORT (MW) LIMITED…………….APPELLANT
-and-
J.L.KANKWANGWA AND
OTHERS.........…..................DEFENDANT
CORAM: THE HON.
MR. JUSTICE F.E. KAPANDA
Messrs Makhambera and Njobvu of Counsel for
the Appellant
Mr Kankwasi of Counsel
for the Respondent
Mr Rhodani, Official Interpreter/
Recording Officer
Dates of hearing : 17th , 18th
and 19th September 2003
Date of judgment: 22nd December
2003
Editorial Note
This is an appeal against the decision of the Industrial
Relations Court Chairperson. In this regard, this court has been called upon to
determine the following issues arising in this appeal:
1. Whether, as a requirement of fair
practices under Section 31 of the Republic of Malawi Constitution, the
respondent, are entitled to be repatriated to their home districts regardless
of the circumstances and/or place of recruitment.
2. Whether the court in quo had jurisdiction
to award interest on any of the sums payable to the respondents following the
termination of their employment with Import and Expert (MW) Ltd (now in
liquidation).
3. Whether, if the respondents were entitled
to interest, same was payable in the circumstances of this case.
4. Whether the Order that the appellant
should pay legal practitioners collections charges was properly made in the
circumstances.
________________________________________________
JUDGMENT
_____________________________________________________
Kapanda, J:
Introduction
This is an
appeal against the judgment of the Chairman of the Industrial Relation Court.[1] The appellant is the liquidator of Import
and Export (Malawi) Limited. The
respondents are former employees of Import and Export (Malawi) Limited[2] (the company).
Their employment was terminated following the winding up of the said Import and
Export (Malawi) Limited.
Factual Background
For an appreciation of the matters in issue in this appeal
there is need to set out some factual background on how the matter came to
engage the attention of the Industrial Relations Court. As far as practicable, the court will set
out the relevant factual background in a chronological order.
Appointment of Receiver and Manager
The most relevant event that eventually led to the fall out
between the appellant and the respondents begun on 29th April
2002. On this day the Commercial Bank
of Malawi appointed a Mr Ray Davies to be a Receiver and Manager of Import and
Export (Malawi) Limited. The
appointment was in pursuance of the terms and conditions of various debentures
issued by the company in favour of the said Commercial Bank of Malawi.
Termination of Employment
The Receiver and Manager then proceeded to terminate all
contract of employments that the company had with the respondents. In his letter of 13th May 2002[3]
the Receiver and Manager informed the respondents that the termination of their
employment with the company was going to be effective 15th May
2002. He further advised them of the
terminal benefits that they were going to get.
Three days later, ie. On 16th May 2002, there was another
letter[4] to the
employees advising them of further benefits that were due to them. The additional benefits included, inter
alia, severance payment and provision of transport to those requiring
repatriation. As regards severance
allowance, the respondents were eventually
paid sums of money as recommended
by the Labour Commissioner. The
respondents were never satisfied with
the quantum of the severance allowances paid to them. There were of the view that the severance allowance was wrongly
calculated. However, there were no
details regarding where the respondents
would be repatriated to. The
question of repatriation was eventually discussed at some forum. I will come
back to the issue of repatriation later in this judgment. For now let me go on to deal with some event
that occurred concerning the company.
Winding up of the company:
Appointment of Liquidator
Before the additional benefits were given to the
respondents, there was a development that has a bearing on this matter. On 2nd July 2002 the company was
wound up pursuant to an order of the High Court.[5] Further, the Court appointed a liquidator
(Mr Kelvin Carpenter).
Meeting on Repatriation Issue
As mentioned earlier, the respondents were not given
details of their repatriation benefit.
Indeed, the respondents did not know whether they were going to be
repatriated to their respective places of recruitment or to their places of
origin. It was during a meeting that
the Receiver and Manager had with the respondents that the latter came to know
that the repatriation was going to be to their places of recruitment. This is borne out from the Minutes[6] of the meeting
that the Receiver and Manager had with the Union Representatives of the
respondents.
The Respondents were not repatriated albeit that there was
an intimation that they were to be repatriated to their respective places of
recruitment.
The Industrial Relations Court Litigation
As mentioned above, the respondents were of the view that
the severance allowances paid were inadequate.
Further, the respondents were not in agreement with the arrangement
regarding repatriation.
The respondents then, on 12th August 2002,
resorted to instituting legal proceedings in the Industrial Relations
Court. At the time of the commencement
of proceedings the respondents were not legally represented. They later had legal representation.
In the proceedings that they instituted the respondents
claimed the following relief:
(a) severance
allowance
(b) interest on
the said severance allowance
(c) repatriation
(d) legal
collection charges
It is to be observed that
in the amended statement of claim dated 10th February 2002 the
respondent’s lawyers did not give the statement of the
material facts on which the respondents intended to rely on. This notwithstanding the court proceeded to
hear the parties.
At the end of trial the court found for the respondents on
all their claims. The Chairperson of
the Industrial Relations Court handed down his judgment on 14th July
2003. In point of fact, the Chairman
found that the respondents had been underpaid on severance pay. Regarding the issue of repatriation the
court in quo wrote:
“On the issue of
repatriation to their respective homes, the court finds that it is a
requirement of fair practices as put in Section 31 of the Constitution, that
upon termination of employment, the employee has to be repatriated to his/her
place of abode.
This is more so
where the termination has no blame worth on the part of the employee. As the court was told, most of those who
were terminated of their services are just languishing in the cities or districts stations. Some, the court was told have been evicted from the houses by the New owners. This, I take is a catastrophic situation and
it is a human rights abuse.
Repatriating a former employee should not be looked at as a privilege on the part of the
employee. It is a right in terms of
fair labour practice. ---The Court
orders that all those who are ready, able and willing to go back to their
homes of origin(s), they should be immediately repatriated by being provided
with hard cash so that they can make their transport arrangements on a personal
level. The Registrar of the Industrial
Relations Court to assess the costs on an individual basis. Those who are willing to go to their places
of recruitment also be assisted in the same manner---”[7]
As regards the claim for interest on the severance
allowance the Chairman wrote:[8]
“As for the
claim of interest on the late payment of dues the law is very clear under
Section 53(1) [of the
Employment Act, No. 6 of 2000] that such benefits are payable within six
weeks. This is put in a mandatory way
and there is no excuse about it. In the
case of Encor Products,[9] Justice
Chipeta made an order on interest in the following manner:
‘(ii) that the
defendant also do pay to the plaintiff interest at bank lending rate from 14th
September 2002 on the outstanding amount, the day it was last due.’
Thus interest
is indeed payable in these cases. In the instant case, after termination of
employment, the applicants (Respondents) were supposed to be paid their
benefits within six(6) weeks from the
13th of May 2002. But this
was not followed. I therefore order
that interest at the current bank lending rate should be levied on the delayed
payments including the under payment”---
On the claim for legal collection charges the Chairman had
this to say, at page 9 of his judgment:
“With regard to
the issue of collection charges, this court already made a decision in the case
of Mrs W.P. Zamaere vs. SUCOMA Limited[10]--- where I ordered
that collection charges are payable and are not costs as envisaged in Section
72 of the Labour Relations Act.
I therefore
order that the applicant’s Counsel is entitled to his collection charges---”
The appellant was aggrieved by the decision of the
Chairman. Accordingly, he appealed
against the decision of the court in quo.
The liquidator filed a Notice of Appeal[11] in the
Industrial Relations Court in which be intimated that the respondent was
appealing to this court against the whole decision of the Chairman.
The Appeal to this Court
However, the Memorandum of Appeal[12] that the
Appellant filed with this court indicated that not all the findings of the
Chairman were being challenged. Indeed,
during the course of argument in this court Mr Njobvu, who appeared for the
Appellant, indicated that the appeal was not going to be on the payment of
severance allowance. He said the only
findings of the Chairman that the Appellant was going to challenge were those
holding that: The respondent’s should be repatriated to
their home of origin; that interest at bank lending rate should be paid on both
the under paid and the delayed payment of severance allowance; and that the
Respondent’s Legal practitioner is entitled to collection
charges.
There is no cross appeal on the part of the respondents. In
the light of this, the only issues that have to be decided in this appeal are
those that arise from the grounds of appeal set out in Memorandum of Appeal
filed by the Appellants on 16th September 2003. Accordingly, the issues that require this
court’s consideration are as follows:-
(a) Whether or not, as a requirement of labour
practices under Section 31(1) of the Republic of Malawi Constitution, the
respondents are entitled to be repatriated to their home districts regardless
of the circumstances an/or place of recruitment.
(b) Whether or not the court in quo had
jurisdiction to award interest on any of the sums payable to the respondents
following the termination of their employment with Import and Export (MW) Ltd
(now in liquidation).
(c) Whether or not, if the respondents were
entitled to interest, same was payable in the circumstances of this case.
(d) Whether or not the order that the Appellant
should pay legal practitioner’s collection charges was
properly made.
The fact that the issues have been outlined seriatim does
not mean that this court will decide these issues in the order as set out
above. However, the court proposes to
deal with this appeal in a such a manner that at the end of judgment there will
be a determination on the questions of: repatriation, interest and legal
collection charges.
At this juncture I will now turn to deal with the issues
for consideration in this appeal. When doing so I will be alive to the fact
that this court is only expected to deal with matters of law or jurisdiction[13]
CONSIDERATION OF THE
ISSUES
Repatriation
The
appellant submits that he is not obliged to repatriate the respondents to
either their places of recruitment or to their places of origin. Mr Njobvu has contended in argument that
this is the case since there is no provision in the contract of employment
providing for such repatriation. It is
the further view of the appellant that there is no obligation to repatriate the
respondents because the Employment Act, 2000[14] does not provide for repatriation. This is unlike, so the contention goes, the
situation that was obtaining under Section 16[15]of the
repealed[16] Employment Act which obliged employers to
repatriate employees.
The
appellant has also made an alternative argument. In this regard it was contended that if at all the appellant is
obliged to repatriate the respondents then such repatriation must be in respect
of those employees who were brought to their respective places of employment by
the company. The obligation, so the
argument goes, would be to send the concerned respondents to their places of
recruitment or their homes where the homes are nearer that their places of
recruitment.
Mr Kankwasi, of Counsel for the respondents essentially
submitted that the finding of the Chairman on the question of repatriation
should be maintained. It is contended
in argument, on behalf of the respondents, that by custom and conduct the
company had been repatriating its employees to their places of origin. Thus, the contention goes, the appellant is
obliged to repatriate the respondents to their homes and not to their places of
recruitment.
As stated earlier, the Chairman found that it is a
requirement of fair labour practices that an ex-employee has to be repatriated
to his/her place of origin. In support
of this finding the Chairman sought to rely on the provision of Section 31 of
the Constitution. It must be said that
this observation by the Chairman is erroneous.
The said Section 31 does not provide that it is a requirement of fair
labour practice that on termination of employment an employee should be
repatriated to his home. Further, if
this was an attempt to construe the stipulation in Section 31 of the Constitution
then such construction or interpretation was, as shall soon be demonstrated,
wrong. In any event, it is trite law
that the Chairman has no jurisdiction to interpret the Constitution but only to
apply the provisions of the Constitution.
What then does
the Constitution mean by “fair labour practices” in Section
31? As was rightly pointed out by
Justice Chipeta in Guwende vs. Aon Malawi Limited:[17]
“Whereas Section
31 of the Constitution is quite plain in its provision, inter alia, of the
right to fair labour practices, I must
hasten to point out that that provision and even the Constitution in general
does not quite help us to define
or categorize what safe (fair)
labour practices are---”[18] emphasis
supplied
In order to determine the issue of what constitutes fair
labour practices, it may be helpful to set out the relevant text of Section 31
of the Constitution.
Section 31(1) provides that:
“Every person
shall have the right to fair and safe labour practices and to fair
remuneration.”
As already observed the Constitution has not defined what
is meant by fair labour practices.[19] Further, it is noted that both the Labour
Relations Act,[20] and the
Employment Act, 2000 have not defined what constitutes fair labour
practices. Indeed, there has been no
decision of either the High Court or the Supreme Court on the point. In the light of this, the court will have
recourse to what the courts within the region have said about this right to
fair labour practices. The basis for
this approach is our own Constitution.[21] In this regard, the court has in mind what
the Constitutional Court of South Africa said in National Education Health
and Allied Workers Union vs. University of Capetown and Others[22] whilst
construing a provision similar to our Section 31(1) of the Republic of Malawi
Constitution.[23] Whilst interpreting Section 23 of the
Constitution of the Republic of South Africa,[24] the
Constitutional Court of South Africa said the fairness that is required is
towards both the employer and employee.
This seems to me sound sense and I adopt it for the purpose of this
judgment. Accordingly, it is the view
of this court that the Chairman should have taken into account the interests of
the company as well. It is advisable to
remember that it was common cause between the parties, and the court in quo,
that the employer of the respondents was in liquidation. In the judgment of this court it was not
fair to order the liquidator to provide the employees with hard cash. Why order the payment of hard cash. The liquidator should have been given a
choice on how it was to repatriate those willing to repatriate. Indeed, it was not being fair to require
that the employees be repatriated to their home origin even where that would
entail incurring more expenses on the part of a company that is in liquidation.
In the circumstances of this case, and in the light of what
this court has said constitutes fair labour practices, fairness should have
entailed repatriating the respondents to their respective places of recruitment
or home origin, whichever is nearer. An
order along those lines would be seen to take into consideration the fact that
the company was in liquidation.
Finally, it is a trite proposition of law that at the end of the
contract of employment the employer is responsible for repatriation expenses of
the employees to place of recruitment or to any other place which the two
parties have agreed. In the instant
case the parties did not agree as regards the place they were to be
repatriated. The appellant, in a meeting with respondent’s reprehensive,
only gave an indication of the amount that repatriation would cost.[25] There is accordingly no merit in the
contention by Counsel that repatriation was to be on the alleged custom or
practice of repatriating employees to their home origin. Indeed, the so called custom or conduct of
repatriating employees to their respective places of origin must have had its
basis on the statutory law as it stood then.[26] The statute, as already observed, has since
been repealed. Upon its repeal the
statutory provision, in Section 16 of the said repealed Employment Act, must be
considered as if it had never existed.[27] Further, it is well to remember that it is
not known if the so called practice or custom of repatriating employees to their home origin continued
after the Employment Act, 2000 came into effect. Indeed, there is no finding of fact by the court in quo that such
was the case.
In the light of the observations made above, the position
should be that repatriation should be to the places of recruitment or home origin,
whichever is nearer. This will be in
keeping with what constitutes fair labour practice. It is so ordered.
The award of interest
As regards the issue of interest the court has noted that
one of the relief sought by the respondent was interest on the severance
allowance. Further, it is observed that
this claim of interest only appears in the column for particulars of relief
sought. Moreover, the respondents did
not indicate that they were claiming the interest at any particular rate. This notwithstanding, the Chairman decided
to award interest on the said severance allowance at the then current bank
lending rate. Furthermore, the
respondents did not plead, in the substantive part of its statement of claim
form, the material facts and the basis upon which it was seeking interest on
the severance allowance. This was
contrary to the provisions of the Industrial Relations Court (Procedure) Rules
1999 which require a party to plead the material facts on which such party
relies.[28]
The appellant has contended in argument that the court in
quo had no jurisdiction to award the interest herein. It is the further contention of the appellant that interest ought
not to have awarded as a matter of law.
The respondents have a different view on this question of interest. It is argued on their behalf that the
Industrial Relations Court had an equitable and/or inherent jurisdiction to
award interest. Further, it was
submitted by the appellant that the court in quo was entitled to award interest
as a matter of law.
As I understand it, the position at law is that a claim for
interest must be pleaded not only in the particulars of relief but also in the
main body of statement of claim. The
same applies with regard to the basis and the rate at which such interest is
claimed.[29] The respondents statement of claim was not in compliance with this law. With due respect, this court does not
understand the basis on which the Chairman decided to award interest at the
current-bank lending rate. The
respondents never claimed interest at the rate at which it was awarded. The Chairman erred at law in departing from
what the respondents were claiming in their claim form.[30]
Further, there is a settled proposition of law that an
award of interest at a rate over and above the normal rule of interest
awardable in a judgment is done when a court is exercising equitable
jurisdiction.[31] Moreover, the position at law is that unless
a claimant is seeking for no more than simple interest at a normal rate he
should also put before the court evidence on which the court can decide what
amount (if any) to allow: Profinance Trust SA vs. Gladstone [2002]1 BCLC
141 at 152; http://www.courtservice.gov.uk (last visited on 7th November 2003. There was no such evidence offered to
justify the award of interest at more than the normal interest rate payable on
a judgment debt. The Subordinate Courts in Malawi do not exercise equitable
jurisdiction. As a matter of fact, the
Industrial Relations Court, which is a subordinate court,[32] is not a court
of equity. Surely, if it was such a
court that had equitable jurisdiction it should have had jurisdiction to grant
equitable remedies. Moreover, the
jurisdiction of the Industrial Relations Court is clearly spelt out in the
Constitution and the Labor Relations Act, 2000. It has jurisdiction to determine disputes brought to it under the
Labour Relations Act or any other written law.[33] It is trite knowledge that equity is not
written law. There is accordingly no
equitable jurisdiction conferred on the Industrial Relations Court.
Consequently, it was wrong for a subordinate court to
exercise equitable jurisdiction and award interest on that basis. This observation is made in the light of the
contention that the Chairman was entitled to exercise equitable jurisdiction
and that the court in quo made this award on equitable principle. Further, having regard to the fact that the
claim for interest was not properly pleaded the respondent’s claim for
interest ought not have succeeded.[34] The interest
that should have been awarded is the normal interest payable on a judgment debt
and the rate is 5 per centum per annum as from the date of the decision by the
Chairman.[35]
The long and short of it is that there ought not have been
an award of interest on the said severance allowance at the said bank lending
rate. The award of interest is therefore set aside. Instead, the normal rate of
interest on a judgment debt shall apply.
Legal collection charges
As stated earlier, the respondents claimed legal collection
charges. The court in quo awarded the
respondents their prayer for legal collection charges. The court has already noted the basis upon
which the Chairman made the order of what it termed legal collection
charges. The Chairman thinks that
collection charges are not costs as envisaged in Section 72 of the Labour
Relations Act. The said Section 72 of
the Labour Relations Act provides that:
“(1) Subject to
subsection (2), the Industrial Relations Court shall not make any order as to
costs.
(2) The Industrial
Relations Court may make an order as to costs where a party fails to attend,
without good cause, any conciliation meeting under this Act, or where the
matter is vexatious or frivolous.”
This provision is very
clear. It is, therefore, not necessary
for the purpose of this judgment to express a view on what the said Section 72
mean.
As regards the proposition that collection charges are not
costs this court would like to make an observation. It is not correct to say that collection charges are not costs
and are therefore not taxable.[36] Accordingly, the Chairman’s view that
collection charges are payable in the Industrial Relations Court is
erroneous. Indeed, the costs that are
not payable in Section 72 of the Labour Relations Act include legal collection
charges.
Finally, the court would like to point out a blatant error
of law that the Chairman made when he ordered the payment of legal
charges. The point I wish to make is
that the order made had n o basis in law.
Why does this court say so? This
is said in view of the provisions of the Legal Practitioners (Scale and Minimum
Charges) (Amendment) Rules.[37] My
understanding of these rules, in particular table 6 of the First Schedule, is
that with effect from 13th March 2002 legal collection charges are
payable by the collecting party and not
the paying party.[38] Consequently, even if were it be accepted
that legal collection charges are not costs, the said legal collection charges
ought to have been paid by the respondents and not the appellant. This is the case because the respondent’s action was
commenced, on 12th August 2002, well after the Legal Practitioners
(Scale and Minimum Charges) (Amendment) Rules, 2002 came into force.
Further, it is my understanding of the recent amendment
that where proceedings are commenced, legal practitioners may only charge
solicitor and own client charges in addition to party and party costs. It is trite law that both solicitor and own
client costs, and party and party costs, are taxable. Accordingly, it was idle talk on the part of the Chairman to say
that the legal collection charges herein were payable because they are not
taxable. In the light of the fact that
these legal collection charges are taxable costs, it follows that the
respondents are not entitled to party and party costs by virtue of Section 72
of the Labour Relations Act. As already
seen, Section 72 precludes the Industrial Relations Court from making any order
as to costs except as allowed by the said Section 72.
In the light of the observation made above, the Chairman
erred in making an order for payment of legal collection charges by the
appellant. The court in quo had no
jurisdiction to make such an order. Actually,
if the relevant law had been consulted the Chairman would have noted that such
legal collection charges ought to have been paid by the respondents to their
Legal Practitioner.
Conclusion
The appeal in respect of the order for interest and legal
collection charges must be and is successful.
As regards the issue of repatriation the appellant has failed to show
that such an order was unlawful expect with regard the place of
repatriation. The law, as demonstrated
above, allows for repatriation and payment of repatriation expenses by an
employer.
As regards the question of costs this court makes no order
as to costs of this appeal. The court
orders instead that the parties will pay their own costs. Actually, it is the view of this court that it
would be an improper exercise of discretion to make an order of costs. I am of this opinion because such an order
of costs would not have bee made by the court below.
Pronounced in open Court this 22nd day of
December 2003 at Principal Registry, Blantyre.
F.E. Kapanda
JUDGE