CIVIL CAUSE NO. 3828 OF 2000
ENCOR PRODUCTS LIMITED...............................DEFENDANT
CORAM: HON. JUSTICE A.C. CHIPETA
By Originating Summons based on Section 31 of the Constitution and 35
of the Employment Act the plaintiff seeks a number of declarations and
Orders consequent on the defendant’s termination of his employment with
it. The Originating Summons is duly supported by an affidavit to
which are annexed exhibits “DGK1" to “GDK5". The defendant having
acknowledged service of this Originating Summons filed and served an affidavit
in opposition buttressed by exhibits “TZN1" and “TZN2.” It subsequently
followed this up with a supplementary affidavit in opposition carrying
with it exhibits “TZN3" to “TZN5". It is then that I heard arguments
from both sides on the matter.
Act No. 6 of 2000 is the new Employment Act which came into force on 1st September, 2000. It replaces the Employment Act of 1964, (Cap. 55:02) of the Laws of Malawi. At the time the plaintiff herein was terminated from his employment the law in force was that in the current Act which had then just been in operation for only one week.
At the center of the present dispute is Section 35 of this new Act.
The said Section 35 addresses the question of severance allowance on termination
of employment as is the case here. The law is coached in plain and
unequivocal language, but in applying it to the facts of this case the
plaintiff gets one result while the defendant gets a different result and
they have completely failed to compromise on this. The question for
consideration is who is right and who is wrong in the circumstances of
This far what has been paid to the plaintiff under the head severance allowance after a quarry from him is a sum of K9,461.54 only. It represents that allowance paid at the rate of two weeks wages for each completed year of service for a period of five years from 1995 to 2000. The plaintiff feels cheated in this regard and that he was in fact supposed to be paid at the rate of four weeks’ wages for a period of fifteen years from 1985 to 2000. In his calculation therefore the payment he so far managed to wrestle out of the defendant falls short of the legitimately due amount by K52,038.46 and, inter alia, that is the sum he seeks to recover.
In this matter the defendant company’s argument was that the payments made under the 1998 agreement in respect of Long Service Awards should be taken to be severance allowance for the period up to end of 1994. For this reason the defendant company feels its obligation therefore remains one of paying severance allowance from 1995 to the date of termination only and no more and that in pressing for full severance allowance for fifteen years it is the plaintiff who is trying to ...........the company. I have heard learned Counsel for the two sides argue and counter argue on the subject and as I rule I bear all their arguments in mind although I will not repeat them here.
I have taken ample time to study all the documents presented before me. I have equally given lengthy and sober consideration to the arguments advanced by both sides. I have next tried to match all these against the material Section 35(1) herein and its First Schedule. I am in the end, all in all, convinced that the defendant company, in this case is simply seeking to evade its obligations under the new Act.
I equally cannot comprehend argument that somehow the defendant should be taken to have been complying in advance with payment of an allowance that was going to be payable under a law yet to be enacted. Besides, even if it was possible to comply with legislation in advance, which it is not, the rates and periods applicable in the case of Long Service Awards differ quite markedly from the rates and periods covered under the schedule Section 35(1) refers to. It then begs the mind how with such disparities the one payment can be said to be in lieu of the other.
The fair thing to say here is that when the defendant company was terminating the employment of the plaintiff, under a law that was only one week old in force, it was under obligation to pay him severance allowance in respect of his entire period of continuous service. It is obvious that at the material time the defendant was actually ignorant of the fact that a new obligation had thus come its way. It is indeed so confessed in paragraph 7 of the first affidavit in opposition, and this explains the fact that even the firs K9,461.54 was only paid more than a month after the termination and only after a demand had been made. The impression one gets from the scenario in this case is that since the new law sort of brings about a burden the defendant was not aware of before as far as possible: the defendant is trying its best to avoid paying any more money than it has so far already done to the plaintiff, hence the attempts to explain this allowance away through reference to Long Service Awards and to reduce its period of liability. I see no merit in the arguments of the defendant company and accordingly dismiss the same as being worthless. The period over which this allowance is due and payable is fifteen years and the applicable rate is four weeks wages for each completed year of service. Of course with the existing part-payment the defendant company has only an outstanding balance of K52,038.46 to pay under this head. And this sum cannot just be wished away.
The plaintiff’s case, is fully made out as outlined in his Originating Summons. I accordingly declare as follows:-
(I) that the defendant has infringed the plaintiff’s right to fair labour practice under Section 31 of the Constitution, and
(ii) that the defendant is in breach of a statutory duty under Section 35(1) of the Employment Act, 2000 in failing to pay him full severance allowance this far.
I further order as follows:-
(ii) that the defendant also do pay to the plaintiff interest at bank lending rate from 14th September, 2000 on the outstanding amount, the day it has lost due for payment, and
(Iii) that the defendant stand condemned in the costs of this action.
Pronounced in Chambers this 23rd day of March, 2001 at Blantyre.