IN THE HIGH COURT OF TANZANIA LABOUR DIVISION AT DAR ES SALAAM REVISION NO 305 OF 2010 TANZANIA BUILDING WORKS LTD. APPLICANT VERSUS ALLY MGOMBA & 4 OTHERS RESPONDENTS (Original CMA/DSM/TEM/337/09) 17/09/2012 & 12/10/2012 RULING RWEYEMAMU, J:- The respondents were employed by the applicant as watchmen until they were terminated on 12/10/2009, and security sources outsourced from a specialized company instead. The respondents were dissatisfied and on 11/11/2009, they appealed the applicant s decision to the Commission for Mediation and Arbitration (CMA) on ground that termination was unfair. In the award dated 25/11/2010, the CMA arbitrator agreed with the respondents; found that their termination for operational reasons was both substantively and procedurally unfair, and ordered the applicant to reinstate them without loss of benefits. That decision displeased the applicants hence this application for its revision. Hearing of this application proceeded by way of written submission where both sides were represented by personal representatives in accordance with section 56 (b) of the Labour Institutions Act, 7/2004 read together with rule 43 (1) of the Labour Court Rules, GN 106/2007. These representatives were Mr. G. Murugaruga and Mr. S. Katerega for the applicant and respondents respectively. 1
In the supporting affidavit, the applicant faulted the CMA decision in essence, on grounds that the CMA arbitrator: 1. Erred in reaching a decision that termination was procedurally unfair because the respondents were not consulted despite applicant s evidence to the contrary. 2. Erred in deciding that retrenchment was unfair despite evidence that the applicant proceeded with the exercise after the respondents refused to cooperate in the consultation process. 3. Exercised jurisdiction not vested by law in that, because he arbitrated a dispute not referred to him by a party to a dispute as prescribed under section 86(7)(b) (i) of Act, of the Employment and Labour Relations Act, 6/2004 ( the ELRA). And: 4. That the award was improper for reason of being issued contrary to mandatory provisions of section 88(9) of the ELRA. In the submission, the applicant raised and argued the following additional grounds which I have resolved as follows: a. On the facts of the case, the arbitrator should have found for the applicant and awarded costs. I will not consider this ground. Issues not raised in the pleadings cannot be considered at the hearing because the respondents would not have had opportunity to prepare appropriate response. b. The application is not opposed because Mr. Ally Mgomba who swore the supplementary affidavit had no permission under the law to act in a representative capacity on behalf of 4 others. In view of my decision on the substantive aspect of the application however, I will not dwell on this aspect. 2
For convenience, I will consider the above grounds one at time, for each giving party s arguments in light of the undisputed facts, the arbitrator s findings and ending with my decision before moving to examine the next one. I begin with the last ground followed by ground three (3). At the outset, I dismiss the argument that the award was invalidated for reason of being issue after a period of 30 days prescribed under the mentioned provisions. I do so, because I find that in this case, quashing CMA proceedings and resultant award then ordering the process to commence afresh in the CMA as I must thereafter, will cause more injustice to both parties, such an action would not be in the interest of justice. Regarding the issue 3 on jurisdiction of the arbitrator, stemming from the manner arbitration was initiated, the applicant submitted that the award was improperly procured because no party referred the dispute to arbitration after failure of mediation, that they simply stated that they wished to proceed with arbitration which was contrary to section 86 (7) of the ELRA. The respondent s reply was that the arbitrator had powers by virtue of section 88(2) (a) of the same Act which empowers the CMA to appoint an arbitrator after mediation has failed to arbitrate the dispute agreeing with the arbitrator who said that there is no procedure requiring the parties to submit fresh application after failure of mediation. The arbitrator s decision was proper. First, if the ground was founded, the applicant should have raised it as preliminary objection before arbitration proceeded. The fact that the applicant did not, supports the arbitrator and respondent s position that there is no rule which prescribes filing of fresh application following failure of mediation. The practice has been that following failure of mediation, parties when signing Form No. 5 indicate whether they 3
choose to proceed with arbitration or not. Thereafter, if they have chosen arbitration, the CMA appoints an arbitrator. In this case, both parties signed F5 and indicated that they had agreed to proceed with arbitration. My decision is that, where parties have signed F5 indicating that they have chosen to proceed with arbitration and the CMA subsequently appoints an arbitrator, arbitration of such a dispute will be taken to have been properly initiated. For that reason, I dismiss ground 3 of the complaint. Ground 1 and 2 deal with the issue of substantive and procedural aspects of the respondents termination as such, I will deal with them jointly. The issues here are first whether operational reasons were proved to be valid grounds for termination and two, if so, whether fair/ prescribed procedure was followed. Let us commence with undisputed facts. The respondents were suspended on full pay pending investigations of theft incidences which had occurred at applicant s premises when the respondents were on duty as indicated in the applicant s letter dated 30/9/2009. Following that, on 5/10/2009, the applicant notified the respondents of the need to terminate them for operational requirements. In that letter, the applicants informed the respondents that following investigations, it believed that since it was not easy to assign responsibility of the theft to anyone under the existing work arrangements, it had decided to outsource security services from a specialized company with modern security equipments. In the same letter, the respondents were notified that the applicant intended to outsource security services, as a consequence their employment would be terminated on terms indicated; that the termination exercise would be carried on by 4
9/10/2009 and they had (7) days to each give their comments hoja kuhusiana na hatua zitakazochukuliwa in writing to the applicant. There was no response and on 12/10/2009, the respondents employment was terminated and they were paid their terminal benefits like salaries, leave, severance including certificate of service. On these facts, the arbitrator concluded that there was no proof that the respondents were terminated for operational requirements because in the termination letter, the applicant did not disclose reasons for the intended retrenchment and there was no proof that procedures of retrenchment for operational requirements prescribed under section 38 (1) (a-d) of the ELRA read together with rule 23 of the Employment and Labour Relations ( Code of Good Practice) Rules, GN 42/2007 were complied with. Put differently, the arbitrator found that the employer had failed to prove that termination was for a valid reason and followed a valid procedure. The applicant faults that conclusion submitting that in the notice letter to the respondents of 5/10/2009, it had valid reason for choosing a different security system, it had given the respondents necessary information for consultation being its intention and reason to retrench them and asked for their opinions. The respondents chose not to respond. Their reaction amounted to non-cooperation in the consultation process. That applicant submitted that under the circumstances, termination was for valid reasons and had followed mandated procedural consultation requirements. In reaction to that, the respondents agreed with the arbitrator, submitted that the applicants had instituted two different processes, investigations for disciplinary action and later retrenchment all within a short time span. It was submitted that the respondents were too confused with the suspension such that they could not react 5
to the notice of termination letter which followed shortly after. That the said letter had no reasons to warrant retrenchment nor did the applicant follow prescribed procedure for the process. That is, when consultation failed, the applicant did not refer the matter to mediation as prescribed under section 38(2) of the ELRA. In rejoinder, the applicant submitted that the applicant could not refer the matter to the CMA for mediation as prescribed under 38 (2) of the ELRA because there was no impasse in the consultation process rather, there was no consultation due to the respondents refusal to cooperate. As such, there was nothing to refer to mediation. The applicant repeated, referring to this court s decision in Metal Product LTD VMohamed Mwerangi & 7 Others, Revision 148/2008 holding that adequacy of consultation depends on the circumstances of each case, that, it is improper to apply provisions of section 38 in a check list fashion. After considering all the above, it is my decision that the arbitrator conclusion on the substantive and procedural fairness of the retrenchment exercise, was not a reasonable one in light of the evidence. The arbitrator said no reasons for retrenchment were given, yet reasons were well articulated in the notice letter of 5/10/2009. As regards consultation, the law puts the duty to engage in a consultation in good faith is put on both the employer and the employee. Once the employer gives notice to the employee, the duty moves to the employees to respond. If the time of notice is too short, the response could merely state so, and seek more time. The respondents in this case did neither made response nor sought for more time. My decision in the circumstances is that, where an employee refuses to cooperate in consultation evidenced by non response to notice as was the position 6
in this case, the employer will be taken to have complied with the procedural requirements for consultation in the retrenchment processes. In the end result this application succeeds. I find the arbitrator s conclusion that the respondents termination was substantively and procedurally unfair to have been on the evidence available, irrational. I accordingly confirm the applicant s termination decision; quash the arbitrator s award and the resultant remedies. R.M. Rweyemamu JUDGE 12/10/2012 Date: 12/10/2012 Coram: Hon. R.M. Rweyemamu, J. Applicant: For Applicant: Absent Respondent: For Respondent: Sammy Katerega Representative C.C. Josephine Mbasha COURT: This matter is for Ruling. Ruling delivered this 12/10/2012 R/A Explained. R.M. Rweyemamu JUDGE 12/10/2012 7