Putting anxieties to rest on the matter of damages and notice period in Employment disputes

PUTTING ANXIETIES TO REST ON THE MATTER OF DAMAGES AND NOTICE PERIOD IN EMPLOYMENT DISPUTES? THE JOURNEY TO KONKOLA COPPER MINES PLC V AARON CHIMFWEMBE AND KINGSTONE SIMBAYI SCZ JUDGMENT NO 33 OF 2016 AND BACK[1]

by

Reagan Blankfein Gates | LL.B (UNZA) | LL.M (UNISA) | Managing Partner | Head, Energy, Mining & Infrastructure | Reagan Blankfein Gates Legal Practitioners

1.0 Introduction

The question of what the normal damages ought to be where courts find that termination of employment was unfair/and or wrongful; has exercised the minds of not only once was the Industrial Relations Court, now the Industrial Relations Division of the High Court for Zambia and the Supreme Court alike. The general rule as set out in several decisions to come out of the Supreme Court over the years has been that the normal measure of damages in cases of wrongful employment ought to be money equal to the termination notice period or in its absence money payable for the notice period. That this is the position should come as no surprise as the whole essence of awarding damages is to put the innocent party in the position he would have been in had the wrong not been committed. This principle is somewhat circumscribed in employment matters by the fact not only of the independence of contract derived from the general principles of the law of contract but by statutory inroads made into that arena by a specific species of contracts such as Employment Contracts. The first port of call in this country is the Employment Code Act No 3 of 2019 and its attendant regulations. In interpreting its provisions as has been the case in interpreting provisions of previous statutes in the employment arena, our courts have had to revert to common law positions which do not run counter to employment statutory provisions. In that respect, they have had to look and apply the general principles of offer, acceptance, terms and conditions. It is in the last facet that we find the term relating to termination which is usually linked to provisions in a standard disciplinary code.

2.0 Imprecision and uncertainty in Supreme Court decisions

The foregoing notwithstanding, reading through a few Supreme Court decisions shows imprecision and uncertainty as to what the standard measure of damages ought to be. Part of the problem has been the instability in our economic dispensation which has seen major upheavals over the years. It also has to do with the differences in the types of disputes that come before our courts that could not be more varied in terms of the perks and the nature of terms and conditions relating to each. Perhaps the first reason is more convincing than the last one simply because no matter the facts, certain principles must be pretty standard and fit for use in any case no matter the terms and conditions and the nature of the dispute.

There appears to be no justification in the seeming apparent inconsistencies that have plagued Supreme Court decisions in this space. As Justice Malila has noted, “[…] the award of damages by our [Supreme] Court in wrongful termination or unlawful dismissal cases, has, at face value, appeared rather inconsistent.”[2] True to form “[s]uch awards have ranged from amounts equivalent to payment in lieu of notice-determinable with reference to the notice period – up to three years’ or thirty-six months’ emoluments.”[3] Be that as it may, as Justice Malila himself observed, and must be taken to be true, the Supreme Court has not veered away from the common law principle of awarding damages that equal the remuneration payable in place of a notice of termination. In circumstances where no such notice period is provided for, the Supreme Court has held that what was payable as damages was what was payable under reasonable notice of termination.

The foregoing is distillable from such cases as Chintomfwa v Ndola Lime Limited [1999] ZR 173 (one may say this was a dispute which was bound to happen anyway given the name of the appellant), wherein the Court below had made an award of 24 months salary. The Supreme Court left the decision untouched on the special facts of the case which given the time period within the context of the employment market showed that the appellant’s employment prospect following his dismissal was less than auspicious. The Court would be faced with a similar situation of claims of excessive award of damages some 17 years later in Konkola Copper Mines Plc v Aaron Chimfwembe and Kingstone Simbayi SCZ Judgment No 33 of 2016. This ought to be seen within the context of the Court’s decision in Kitwe City Council v William Ng’uni [2005] ZR 75 where the same Court had held that paying an employee (which it had let happen in Chintomfwa v Ndola Lime Limited [1999] ZR 173) was tantamount to unjust enrichment. How the Court could not have said this was the case for the 24 months’ worth of pay awarded in Chintomfwa is boggling. Was it judges being human and not automatons? or was it the case of Chintomfwa being decided on its own facts with no general application to other cases? or was it an authority reserved for times of economic depression and inapplicable to periods of economic prosperity when jobs were bountiful? These matters would require a multi-disciplinary approach in research in the field of law, economics and public policy and public administration.

No matter, two years after the rather curious decision in Chintomfwa, the Supreme Court held, in Jacob Nyoni v Attorney General [2001] ZR 65 that there could be no ‘one-size-fits-all approach to matters relating to matters of the award of damages in wrongful employment cases. Each case, said the Court, was to be decided on its own facts. In Swarp Spinning Mills Plc v Sebastian Chileshe & Others [2002] ZR 223, the Supreme Court returned to its theme of normally awarding, as damages, for wrongful or unlawful dismissal, an amount equal to the salary payable vis-à-vis the notice period. In Chilanga Cement v Kasote Singogo [2009] ZR 122, The Supreme Court took the view that there were exceptions to the common law (which presumably may be taken to be informed by the factual matrix of each case and statutory provisions, among other things) that may necessitate an award of damages that go far beyond the notice period equivalent. How this sits with the concept of unjust enrichment in William Ng’uni is debatable. Twelve years after Chintomfwa, the Supreme Court again declined to interfere with a 36-month damages award in Dennis Chansa v Barclays Bank Plc [SCZ Appeal No 111 of 2011] on a similar premise adverted to in Chintomfwa. A year later in Tom Chilambuka v Mercy Touch Mission International [SCZ Appeal No 171 of 2012] restricted going beyond the common law standard to traumatic circumstances.

Here again, it is difficult to see whether the facts and circumstances surrounding the employment situation in the general economy and the financial sector, in particular, justified the position taken by the Supreme Court. In its defence though, one can point to the lack of dynamism in the Zambian employment market that disadvantages those who lose employment in one sector especially at management level to find another job in another industry within a short period of time or indeed within the same industry. However, whether this ought to colour decisions that lead to uncertainty in precedent is debatable.

3.0 Enter Konkola Copper Mines Plc v Aaron Chimfwembe and Kingstone Simbayi

Following the preceding labyrinth of rather confusing decisions on the matter of what the correct approach was to the issue of the award of damages in cases of wrongful termination or unlawful dismissal, the Supreme Court had occasion to clarify the law in Konkola Copper Mines Plc v Aaron Chimfwembe and Kingstone Simbayi [SCZ Judgment No 33 of 2016]. The appellant had employed the two respondents as storekeeper and head of commercial stores respectively. Having charged them separately and found wanting, the respondents were dismissed on account of losing the appellant’s properties. In the action in the Court below, it was held that the dismissals were wrongful and unfair and awarded the first respondent eighteen months of the last earned basic salary complete with all regular allowances payable under the contract. As regards the second respondent, the court similarly awarded him 24 months of his last salary and all regular allowances payable under his contract of employment.

On appeal, it was gainsaid by the appellant that the awards by the lower court were excessive and ran counter to what were termed to be ‘clear pronouncements of the Supreme Court’ on the subject. It must be said that the only clarity that there had been up to this point for the court below, counsel and all concerned was the lack of clarity on the question that the court below had dealt with. Would the Court clarify the law? If anyone was looking for a specific answer, figures and percentages to be applied they were disappointed, and for good reason. As regards the contention that the awards were excessive, the court first noted its disinclination to interfere in factual decisions of the Court below, which it must be remembered is a principle derived from the proposition Lord Wright in Charles Osenton & Co v Johnston [1941] 2 All ER 245. The Supreme Court or indeed any court exercising its appellate jurisdiction can and will interfere if it is satisfied that the judge in the court below was wrong in the exercise of his judicial discretion. Thus, it will interfere if it can see that the judge has given no weight (or no sufficient weight) to those considerations which ought to have weighed with him […] Conversely it will interfere if it can see that he has been influenced by other considerations which ought not to have weighed with him, or not weighed so much with him [….]’

The Court went on to hold as follows:

The award of damages in wrongful termination of employment cases is subject at all times to a rather amorphous combination of facts peculiar to each case and perpetually different in every case. As no facts of any two cases can be entirely identical, it should not be expected that in applying the general principle for award of damages in these cases the courts will think in a regimented way.

Applying to the foregoing to the instant case the Court observed as follows:

In the present case, the trial court took into consideration the ages of the respondents and the number of years they had served the appellant company before determining the awards.

The Court, therefore, found no sufficient basis on the facts and the law to overturn the court’s decision. It stood.

4.0      Conclusion

It is difficult to see how the attempted clarification of the law in this space can be seen as a clarification at all. If there is anything that can be gleaned from the decision in Konkola Copper Mines, it is the fact that it is impossible to have clarity even when it can be argued that the principle that the normal measure of damages ought to be equivalent to the normal or notional reasonable period of notice where the contract of employment does not provide for any unless there are good and compelling reasons to depart from the common law norm, remain front and centre of what damages will be awarded where the termination is deemed to have been wrongful or unlawful. Therefore, things like the prospects of employment, the trauma of termination may all, as seen in authorities analysed in this essay are part and parcel of reasons for departing from the common law norm. Still, like authorities that came before it, it is difficult to reconcile Konkola Copper Mines with Kitwe City Council v William Ng’uni [2005] ZR 75 where the same Court had held that paying an employee which the Supreme Court okayed in Chintomfwa v Ndola Lime Limited [1999] ZR 173, among other cases, was tantamount to unjust enrichment. Quite clearly, the problems wrought by the interplay between common law rules, statutory law and public policy will continue to create difficulties for litigants, attorneys and courts alike. We are likely to continue seeing merit based and meritless appeals on this front for some time to come, some going as far as the Supreme Court in view of the relatively new and controversial Employment Code No 3 of 2019. In a way, we are back to where we started from – the certainty of uncertainty, and that may not be such a bad thing.

[1] While the author is an Attorney qualified to practice law in Zambia, the opinions expressed herein are his own and do not represent the views of Messrs. Reagan Blankfein Gates Legal Practitioners nor can they be used as a basis for taking legal action. If you need legal advice you can consult an attorney of your own choosing.

[2] Malila M, The Contours of a Developing Jurisprudence of the Zambian Supreme Court: Reflections on my first five years as judge (2014-2019) 278 (Mumba Malila, 2019).

[3] Ibid.