IN THE HIGH COURT OF TANZANIA

LABOUR DIVISION
AT PAR ES SALAAM

REVISION NO. 251 OF 2020

BETWEEN

ERNEST MTOKOMA................................................ APPLICANT

VERSUS

AZANIA BANK LIMITED........................................ RESPONDENT

JUDGMENT

Date of Last Order:28/06/2021

Date of Judgement: 19/8/2021
T.N Mweneqoha, J.

This Application emanates from the Commission of Mediation and Arbitration

(CMA) Award issued against complaint no. CMA/DSM/ILA/795/17/by Hon.
Msina on 22/05/2020.

The Applicant is applying for revision after being aggrieved by the said Award
praying for the following reliefs:

i. That, the Honorable Court be pleased to call for the records of the
proceedings and the Award from the Commission for Mediation and
Arbitration for Dar es Salaam Zone at Dar es Salaam in Labour Dispute
 No. CMA/DSM/ILA/R.795/17 dated 22nd May 2020 delivered by Hon.
Msina H.H. Arbitrator and the Court to revise and set aside the same;
and
ii. That, the Honorable Court be pleased to make an order that the
Applicant was unfairly terminated and order for Applicant's
reinstatement to employment by the Respondent without loss of
remuneration from the date of termination or in the alternative, the
court to order for payment of salaries for nineteen months period
remaining in the fixed term contract signed between the Applicant and
the Respondent.
iii. Any other relief the Court shall deem fit to grant to the parties

The Application was supported by the affidavit of Daniel Mwakajila and

opposed by counter affidavit of Fatuma Kasimu Mtunyungu which all are
adopted herein.

The applicant provided grounds for revision as follows:

i. That the Hon. Arbitrator having found that the applicant was
terminated without being heard erred in law in deciding that the
termination was substantively fair.
ii. That the commission erred in law in fact holding that the applicant's
termination was substantially fair contrary to the evidence on

record.

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 iii. That the commission erred in fact that the applicant was suspended
on duty pending investigation of allegations was correct in holding
that termination was procedurally unfair.
iv. Whether the compensation of 12 months' salary were appropriate
to the circumstances of the case

In advancing their case, the Counsel for applicant, Advocate Moses Gumba
submitted on the first ground that the arbitrator erred in law in determining
that termination was fair. He referred this Court at page 54 and 55 of the
Award where the arbitrator had in mind that the applicant was terminated
without being heard. It was his further argument that the right to be heard
is constitutional right as provided under Article 13 (6A) of the Constitution of
Republic of Tanzania of 1977 as amended. Further that, Judge Rweyemamu
in Tanzania Telecommunication Limited vs Augustine Kibangu,
Revision No. 122 of 2009 stated that in the employment termination, an
employee has to be accorded full hearing before termination.

Mr. Gumba contended that having found that the respondent failed to accord
the applicant fair hearing before terminating the applicant, the Arbitrator had
a duty to nullify all the proceedings terminating the applicant. To back this
position, he referred the case of Abbas Shelaluu and another vs Abdul
Sultan Haji Mohamed Fazal Boy referred in Hamis Jonathan John
Mayage vs Board of External Trade.

It was the submission of the counsel for applicant that the Revision before
this Court emanated from a termination that was effected without hearing
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and therefore it was legal duty of the Arbitrator having found the illegality to
nullify the whole termination proceeding by the respondent. A duty that
administrator failed to exercise.

In continuing with his submissions, counsel for applicant argued the second
ground together with the 4th, 5th, 6th grounds as they were related.

It was his submission that, according to page 57th of the Award, the
Arbitrator held that the applicants were not faithful and abused office for
private gain. The Award shows substantive reasons for termination.
He proceeded to tell the Court that what amounts to substantive fairness in
employment termination was underscored by Rweyemamu J., in Martin
Oyier Vs Geita Gold Mine Ltd, Labour Revision No. 226 of 2008
where the Judge underscored the policy objectives provided under S.3 of
Employment & Labour Relations Act, 2004. The Judge in this case at page
4 felt that it is unfair to terminate an employee unless procedures have been
followed.

The counsel for applicant proceeded to tell the Court that the applicant's
contract with the employer was for fixed term of 3 years, as evidenced in
Exhibit ABZ. In that regard the termination of his contract was subject to
Rule 8 (2) (a) Employment & Labour Relations Code of Good Practice GN.
42/2007.
That the Rule requires termination of a fixed term contract only where an
employee breaches a contract. He continued to state that it is from that rule
that once the respondent established that the applicant breached his term
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of contract, the respondent had an obligation under Rule 13(1) of GN
42/2007 which mandatorily require an employer to conduct an investigation
to ascertain that there are grounds to be heard.

He said this is also the position of this court in the case of Salkaiya Seif
Khamis Vs JDM Travel Services (SATAURO), Labour Revision No.
658/2018, where in the case at page 11 Hon. Aboud J., in deciding on
what follows after employee has breached his contract, held that the
respondent ought to have followed the requirement of Rule 13 of GN.
42/2007.

It was counsel for applicant contention that in this case there was no
investigation conducted as per that rule. The Counsel further provided that
it is a legal principle that where equation of fairness termination is in question
it is employer who has to prove the fairness as per S.39 of the Employment
and Labour Relations Act of 2009 reading together with Rule 8 (1) (d) of GN
42/2007. Rule 8(1) (d) requires termination to be on fair reasons and fair
reasons are defined under S.37 (2) of the Employment & Labour Relations
Act, 2004. This provision provides that a termination of an employment is
unfair if the employer fails to prove that reason for termination is valid.
The Counsel further argued that the reason is fair reason if it is related to
employee's conduct, capacity, and compatibility or based on operational
requirement. He provided that in Kulwa Solomon Kalile Vs Salama
Pharmaceuticals, Labour No. 155/2019 at page 10, first paragraph
centered on the requirement of S.32 that termination of an employee to be
fair it should be based on valid reason. That reason for termination is
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communicated through notice of termination, as para S.41 (3) of
Employment & Labour Relations Act read together with R.13 (10) GN.
42/2007. All these provisions require a termination to be in writing stating
the reason for termination.

Counsel Gumba further referred to the applicants termination notice Exhibit

AB8. It was his contention that the exhibit in question communicated no
reason of termination related either to conduct, capacity capability as
required as per provisions. That reading through the notice of termination,
exhibit AB8, includes that the respondent evoked close 8 of the applicants'
employment and proceeded to terminate the applicant. That, the said clause
8 of Exhibit AB2, employment contract, states that after probation the
contract will be subject to termination on notice of 3 months. That the
respondent invoked clause 8 to end the applicant's employment as is
evidenced by the respondent's counter affidavit. It was Counsel Gumba's
contention that therefore, it was in error for the Arbitrator to hold that the
applicants were terminated because of being unfaithful due to going contrary
to the respondent's policy or that the applicant benefited themselves.

Mr. Gumba argued that the invocation of clause 8 of employment contract

without obsolesce of fair labour practices was contrary to provisions of
Employment and Labour Relations Act as was decided in the case of
Maxmillan Aidan Ltd Vs Blandina Lucas Mohamed, Rev. No.
292/2008 where at page 13, 2nd paragraph it was held that an insertion of
the clause that termination shall be by notice does not absolve the employer
from the duty to deserve fair practices in instances of premature termination.
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He further provided that referring back to page 15 of Salkaiya Khamis
termination of employer's will is not part of our laws. That the Arbitrator
based his ruling on Audit report Ex. AB18, a 15/02/2017 report. While the
applicant was suspended on 29/3/2017 in that regard that audit report
cannot be on investigation report subjected to the applicant in March 2017.
Testimony of DW1 page 20, DW2 at page 40, DW3 page 56, DW 4 at pages
64 & 65 together with testimony of the Applicants at page 112 & 113 in that
regard it was in error for the Arbitrator to base her decision against the
testimony and exhibit in court. Only to believe unsubstantiated oral
testimony of the respondents witness. He referred the case of MIC
Tanzania Vs Sinai Mwakisilile Revision No.387/2019 at P. 13 to
support position that unsubstantiated oral testimony of the witnessed can
not be relied upon.

On the last ground or revision (8th), it was Mr. Gumba's submission that
holding of the Arbitrator at p.58 and 59 of compensation of 3 months salary
was incorrect. He alleged that S.40 of Employment & Labour Relations Act
provides for reinstatement, compensation and other reliefs. He argued that
the Applicant prayed for reinstatement but when the Award was delivered
the contract had already expired. That, being a fixed term contract it is an
established principle of this court where a termination of a fixed term
contract is adjudged unfair the foreseeable remedy is to grant the remaining
time in the period of unexpired contact on the date of termination. For this
he referred to the case of Ultimate Security Vs Abubakari Abdallah

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Mkupasi. It submitted that Award of 3 months was illogical, unlawful and
improper. Having found that the termination was unfair.
He prayed for the court to revise and set aside the impugned Award under
the provisions of S.91(2) of Employment and Labour Relation Act.

The applicant's submissions were strongly opposed by the respondent's

advocate where Mr. Francis Ramadhan clarified to this Court that the main
issue the applicant's raising is on how the contract was terminated arguing
that the procedure was unfair.

It was Mr. Ramadhan's contention that the termination was termination of

contract under the terms of that contract. He cemented this argument by
elaborating to the Court that under the labour laws there are 5 forms of
termination as per R. 3 (1) a - c of the Code of Good Practice GN. 42/2007.
That R. 3 (2) of the Code of Practice GN 42 of 2007 provides for lawful
termination under common law where R 3 (2) c and d provides that. He
further referred to Rule 4 (1) & (2) of GN 42/2007 and contended that the
applicant was terminated in accordance with terms & conditions of a fixed
contract of 22/10/2015 as expressed in the respondent's Counter Affidavit.
Termination clause No. 8 talks about Probation, and during contract. Subject
to termination notice of 3 months. That under the clause it does require
reasons to be given. Referring to Court of Appeal case of Joseph
Mutashobya Vs M/S Kibo Match Group Ltd, Court of Appeal Arusha,
Civil App. No. 53 of 2001 where the facts are similar to the case at hand,
he referred to page 245 last paragraph where Clause No. 13 allowed the

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employer to terminate without reason by giving 3 months' notice and clause
14 allowed employee to do the same.
It was his argument that the case and clauses are similar to this case
and that employer can terminate a contract and if an employee had decided
to terminate the contract without reason, then the employer could ask no
questions about it because that is what parties agreed. Mr. Ramadhan
argued that in the principle of sanctity of contract parties are required to
honour obligations of a contract once they enter it. That the contract should
be held sacred and enforced by courts if broken. He pointed out further that
the applicant is not challenging the legality of contract but the form of
termination. This therefore means the applicant accepts and continue to
accept the terms of contract.

It was Mr. Ramadhan's contention that considering applicability and purpose

of termination clause 8 clearly, the parties anticipated that in event of
termination of their agreement no reasons will be given and that's why the
applicant is not challenging the legality of the terms of the contract.
In replying to the consolidated grounds, Mr. Ramadhan notified the Court
that procurement policy was tendered, as Exhibit AB 14. He also argued
that there is evidence that was tendered and accepted at the commission
that showed that the applicant exercised power that was not delegated to
him as acting director. He highlighted that the applicant was responsible for
signing a building contract under seal (exhibit AB 10) without the mandate
to do so awarding a contract 539 Millions Tshs contrary to clause 5.0,5.1, &
5.2 of the Procurement Policy (AB 14) and contrary to the expenditure
approval limits found in accounting and financial Management Policy (AB 15)
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and offering advances without approval (AB18) and that such misuse of
funds has never been able to be explained by Applicants.. He directed this
Court to read further all that was testified by Director of Internal Auditor
(DW6) which can be found at page 33 and 34 of CMA ruling.

It was Mr. Ramadhan's argument that the audit report was extensive and
highlighted several policy breaches and financial losses by the applicant as
by pages 4-18 of the report. He further noted that the report was routine
internal audit and all department heads including the applicant were involved
and they gave their input; and that since the applicant participated in the
making of this report and failed to challenge the report at the time hence
there is no reason at this point to avoid relying on this report

Mr. Ramadhan submitted that the respondent had many reasons and
grounds to terminate the applicant's contract. However the respondent
chose to rely on termination clause 8 as parties had agreed to rely on that
clause. For this he referred to Deloitte Consult Ltd Vs Dr. Menrad
Rwezaura, High Court Labour Division Rev. 219 of 2015, where in
the case, Hon. Nyerere J., at page 11 expressed that in a fixed term contract
one does not have to go to the length of it, it can be terminated at any time
by either party. He further submitted that there is nothing under the current
labour law that forces the employer to choose a particular type of
termination. That the law provides for 5 different forms of termination and
the respondent chose to rely on termination clause 8 requiring no reason to
be given. He therefore argued that procedure of unfair termination cannot

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be applicable to the current case due to the nature of the contract of
employment and to termination clause 8.

It was Mr. Ramadhan's submission that in order for the applicant to rely on
Rules 8 and 13 of Code of Good Practice GN 42 of 2007 to be applicable the
applicant ought to have challenged the legality of contract and that the
applicant has never challenged the validity of the terms of contract, of clause
8. Mr. Ramadhan prayed for this Court to dismiss the application.

In rejoinding the respondent's submission, Mr. Gumba argue that the Audit
Report (AB 18) was an Internal audit report that was done while the
applicant was still employed and there is no implication whatsoever in audit
report that implicated the applicant. That, if at all there was implication to
the applicant occasioning any loss as provided under R.27 of GN. 42 of 2007
read together with Rule 13 of GN. 42 of 2007, the respondent should have
produced a report that would have been a result of suspension of the
applicant of 27/3/2017. This was not the case. The applicant reiterated his
prayer and asked for the application to be granted and allowed.
The Court has considered carefully the arguments advanced by both parties
and records provided herein. The Court found itself with one issue to
determine; that is whether the applicant's termination was substantively and

procedurally fair.

In analyzing the arguments of the applicant, it is clear that he is arguing on

unfair termination hence his prayer that he should be reinstated to the

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employment by the respondent or in the alternative should be paid salaries
for the remaining period of his the fixed term contract with the respondent.

In proving his case that termination was unfair, the applicant submitted to
this Court that there was no investigation and that he was not given
opportunity to be heard. It was the applicant's argument employee's right to
be heard is crucial in employment termination and referred to the decision
of Hon. Judge Rweyemamu in Tanzania Telecommunication Limited vs
Augustine Kibangu (supra) which emphasized that in the employment
termination, an employee has to be accorded full hearing. He also referred
case of Abbas Shelaluu and another vs Abdul Sultan Haji Mohamed
Fazal Boy referred in Hamis Jonathan John Mayage vs Board of
External Trade (supra)

It was the submission of the counsel for applicant that Arbitrator having
found that the applicant was not heard, he had a legal duty to nullify the
whole termination proceeding by the respondent.

Mr. Gumba proceeded to tell the Court that the applicant's contract with the
employer was for fixed term of 3 years, as evidenced in Exhibit ABZ. In that
regard the termination of his contract was subject to Rule 8 (2) (a)
Employment & Labour Relations Code of Good Practice GN. 42/2007. That
the Rule requires termination of a fixed term contract only where an
employee breaches a contract. He continued to state that it is from that rule
that once the respondent established that the applicant breached his term
of contract, the respondent had an obligation under Rule 13(1) of GN
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42/2007 which mandatorily require an employer to conduct an investigation
to ascertain that there are grounds to be heard.

Mr. Gumba further provided that Rule 8 (1) (d) requires termination to be
on fair reasons and fair reasons are defined under S.37 (2) of the
Employment & Labour Relations Act, 2004 which provides that a termination
of an employment is unfair if the employer fails to prove that reason for
termination is valid. The same was held in Kulwa Solomon Kalile vs
Salama Pharmaceuticals, Labour No. 155/2019.

At this juncture, I would like to refer to the records of CMA which revealed
that the applicant was employed for fixed term of contract for 3 years, as
evidenced in Exhibit ABZ. That the applicant was employed in a position of
Director of Shared Services.

The CMA records further evidence that the applicant exercised power that
was not delegated to him as acting director, consequently occasioning loss
to the respondents. Among conducts testified in the CMA records are the
applicant's signing a building contract under seal without the mandate to do
so and contrary to clause 8.2 of the Procurement Policy of the respondent
(AB 14) as reflected at page 33 and 34 of CMA ruling.

Other conducts reflected in CMA records include applicant awarding a

contract of 539 Million Shillings contrary to the Procurement Policy and
expenditure approval limits found in Accounting and financial Management
Policy of the respondent (submitted at CMA as Annexure AB 15). Moreover,
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records further reveal that the applicant failed to explain advance payment
of 215 Million that was done without approval.

Going through the CMA records and ruling, it is clear that the respondents
had reasons to terminate the applicant as his conducts amounted to breach
of contract.

I therefore in agreement with the Arbitrator's finding echoed at page 56 of

the Ruling that the applicant's evidence reveals that the applicant was not
faithful, misusing their positions and going against their contracts. Therefore,
the respondent has proved fairness of termination in terms of Section 37 of
Employment and Labour Relations Act, Act No. 6/2004 as the termination of
the contract is on valid reason.

I hereby would like to emphasize the same case quoted by the Arbitrator at
page 56 of the Ruling and referred to this Court by the respondents, that of
Deloitte Consult Ltd Vs Dr. Menrad Rwezaura, High Court Labour
Division Rev. 219 of 2015, where it was expressed that
should be known to the employers that a fixed time agreement
does not mean that the employer or employee can always rely on
an end date of the employment contract. Either party may
terminate employment contract at any point in time in case of
misconduct and capacity or poor performance or any other contact
of an employee."

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It was also the applicant's contention that procedure for termination was not
followed. It was his argument that as the applicant's contract was
employment contract with fixed term of 3 years, then termination of his
contract was subject to Rule 8 (2) (a) Employment & Labour Relations Code
of Good Practice GN. 42/2007 which requires termination of a fixed term
contract only where an employee breaches a contract, where under the rule,
the action to follow would be for an employer to conduct an investigation
to ascertain that there are grounds for termination as per under Rule 13(1)
of GN 42/2007.

In respondent's submission, Counsel for the respondent, Mr. Ramadhan was

of the view that the respondent had many reasons and grounds to terminate
the applicant's contract. The facts above seems to support his contention.

Mr. Ramadhan submitted further that chose to rely on termination clause 8

of the contract because the parties had agreed on the clause. Mr. Ramadhan
referred to the case of Deloitte Consult Ltd Vs Dr. Menrad Rwezaura,
High Court Labour Division Rev. 219 of 2015, where Nyerere J, at page
11 expressed that "/n a fixed term contract one does not have to go to the
length of if it can be terminated at any time by either party" It was
contention of Mr. Ramadhan that R (13) of GN.42/2007 is not applicable to
the case at hand and therefore argued that the procedure of unfair
termination cannot be applicable to the current case due to the nature of the
contract of employment and to termination clause 8.

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I agree with the submission of the respondent above, apart from the contract
being a fixed term contract, the respondent had valid reasons to terminate
the contract. I further agree that the respondent had a right to invoke clause
8 of the contract.

In the case of Jordan University College vs Flavia Joseph, High Court of

Tanzania Labour Division at Morogoro, Revision No. 23 Of 2019, at page 10,
Hon. Mruke J., having similar situation to consider, she held that:
"By terminating respondent, applicant just exercised express
term of contract. Respondent cannot refute what they agree in
their legal binding agreement exhibit MKJ-1 tendered by herself
as witness of her own case. There is nothing wrong done by
applicant having exercised contractual rights. Thus, there is
nothing like unfair termination, in the presence of express term
previous agreed upon by parties. Thus...arbitrator was not
correct to treat the respondent to have been unfairly terminated.
... Clause 10 of exhibit MKJ-1 being express term that parties
agreed, while signing employment contract, respondent cannot
claim for breach of contract. To this court, applicant exercised
her contractual rights which respondent agreed when she signed
employment contract, on 7th January, 2016. Thus, it is odd to
think of breach of contract while there is express term to that
effect"

At this point, I wish to note that the Arbitrator, had awarded the applicant 3
months salaries as compensation for termination of the contract. Again,
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referring to the case of Jordan University College vs Flaviana Joseph (Supra),
Hon. Mruke J., at page 8 expressed "There is no unfair termination in a fixed
term contract. "The remedies if any in such circumstances would be not
remedies for unfair termination, but rather for breach of contract.

In the case at hand, the respondent had paid the applicant 3 months' salary
as part of his notice during termination as per their contractual agreement.
I therefore find no need for the additional payment. To this effect I vary the
arbitrator's award of 3 months compensation.

Consequently, the Arbitrator's decision is varied to the extent shown and the
application is dismissed accordingly. No order as to costs.

T. NzMwenegoha
JUDGE
19/08/2021

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