Wrongful termination of employment, also called wrongful dismissal or wrongful discharge, is a situation in which an employee's contract of employment has been terminated by the employer, where the termination breaches one or more terms of the contract of employment, or a statute provision or rule in employment law.[1]
Wrongful termination of employment refers to the process of dismissing employee in the absence of a substantial reason. It is the removing of someone from a work for reasons which are not legally. Unfair dismissal claims normally cannot be valid in the grounds where an employee is dismissed for genuine redundancy, incapability, or misconduct.[2] The process of dismissing someone from work is categorized in the group of disciplinary action of the office, Disciplinary actions are formal actions taken by the management against an employee who fails to comply with rules established within the organization.
It is unlawful for an employer to terminate the employment of the employee unfairly as per section 37(1), Employment and Labour Relations Act, 2004. The law describes the grounds, procedures to be followed when terminating employment and the remedies thereof. These laid provisions regarding termination must be observed by both parties to the contract of employment thus, a fair termination is the one which is done according to the law.
Historical background.
The history behind the law of termination in Tanzania is founded on the ILO convention number 158 of 1982 on Termination of Employment. It was basically adopted by ILO member states in 1982. Much as Tanzania is a member of ILO, a large part of the Tanzania law on termination of employment originates for the convention and recommendation number 166. Lawful termination for the purpose of this paper means done within the law but not satisfaction while unlawful is out of legal scope such as termination due misconduct and termination after maternity leave respectively.[3]
.The law on termination of employment in Tanzania entails fundamental protections against unfair termination as provided for by the ILO Convention on Termination of Employment. Although Tanzania has not ratified the Convention, she conforms to it as a member of ILO. The objective of the Convention is to secure worker’s employment by stipulating that employment shall not be terminated unless the employer proves that there is a fair and valid reason connected with the capacity or conduct of the worker, or operational requirements of the services; and that the procedure should be fair, in the sense that an employee is given an opportunity to be heard before termination, right to appeal against termination to an impartial body or authority, consultations and representations.[4]
The term ‘reason’ refers to a set of facts known to the employer or beliefs held by him which causes him to dismiss the employee. In other words, the employer should have sufficient grounds for dismissing the employee not sham reasons.[5] The reason for termination should be the one likely to justify the employer’s action of dismissing an employee.
The laws governing termination of employment in Tanzania include: the Employment and Labour Relations Act 2004 and the Employment and Labour Relations (Code of Good Practice) Rules, 2007.[6] According to the Task Force,[7] a Code of Good Practice is called ‘soft law’, in the sense that it does not impose any hard and fast obligations on any person if such person justifies a departure from the same.[8] However, from practical point of view, the Code of Good Practice is binding on the employers, and where one has departed, it has always been difficult to convince the adjudicators to the contrary practice.
Unfair termination in the new labour laws enacted in 2004 substitutes unfair dismissal in the repealed labour laws. Though there is such replacement of unfair dismissal in the new labour laws with unfair termination, these two phrases are different In terms of the procedure, substance and resultant benefits. This paper however is confined to explore fair termination of the contract where both substantive and procedural termination, procedures must be properly complied
Thus, for one to conclude that a given circumstance amounts to fair or unfair termination, consideration must be given to the reasons for termination (whether fair and valid), and procedural aspects laid down by the laws. It must be clearly mentioned that to every reason of termination stipulated above, there is always a necessary procedure to be observed by the employer; short of that, a termination will be said to be unfair termination.
Contract of employment and its breach
Contract of employment
Is an agreement which establishes relationship between an employer and an employee this type of relationship is legally binding by the law. Is a formal contractual relationship between the contracting parties explaining legal rights, duties and remedies of the contractual parties.
This type of contract it has features of other contracts for example, offer and acceptance, lawful consideration, capacity, lawful object, intention to create legal relation and free consent.
According to the labour law in Tanzanian, contract of employment has three forms. Firstly, contract for unspecified period of time, secondly, contract for a specified period of time and thirdly, contract for a specific task. Section 14 (2) stipulates that the contract must be in writing especially when the employee will have to work outside the country.[9]
Breach of contract of employment
Means to put the contract of employment to an end by reasons of misconduct, impossibility or incompetence. the breach of contract may be by agreement of the two parties who agrees together to bring to an end their responsibilities, and rights this form of breach is known as formal or fair breach of contract, but upon one part to the contract breach the contract without the agreement of the other part in a contract of employment, this kind of breach is known as wrongful termination of the contact which is not accepted by the law.
Forms of Termination of Employment Contract
There are various forms of termination or breach of employment of contract, Section 36 and 37 of the Employment and Labour Relations Act of 2004 and Rules 4 to 25 of the Employment and Labour Relations (Code of Good Practice) Rules of 2007 enumerate several forms of termination employment and each form has its procedure, its reason and resultant implications.
1. Termination by Agreement:
This occurs when the employer and the employee(s) reach an agreement to terminate employment and it is reduced in writing and duly signed by both parties. This mechanism can be used only where the employees consents to termination of employment. The vivid example is on a fixed term contract. In this contract the parties agree in advance the date which the contract will end. And when it reaches the contract terminates automatically unless the contracts provides otherwise.
On the other hand, there are contracts for specific task which come to an end upon completion of the event/task, and employees are usually paid on daily basis, e.g., contracts for building a house. Both contracts of specific task and contracts for a specified period are discharged upon completion of the contractual period/task; and the engaged employees cannot claim terminal benefits other than those contained in the agreement, as it is deemed that parties mutually agrees to end the contractual relationship. In Abdallah M.Simba& 26 Others vs Said Salim Bakhresa,[10]when addressing the issue as to whether employees under specific task contract (those who are paid on daily basis) under s.14 (1)(c) of the ELRA are entitled to terminal benefits, including severance allowance, Moshi, J; held that the contract for a specific task under s.14 (1) (c) of the ELRA ends at the end of each day, hence the employee is not entitled to severance allowance and other terminal benefits.
The above decision was also observed in the case of 2000 Industries Ltd vsRehema Juma& 6 others. [11]In this case the court held that as the contract for specific task started in the morning and ended at the end of the working day, the employees were not entitled to severance allowance.
2. Automatic Termination:
The contract of employment terminates automatically in certain circumstances. For example, on death of sequestration of the employer. Death or bankruptcy of the employee equally terminates the contract of employment. Unless the contract of employment provides otherwise, a contract of employment may terminate automatically when the employee reaches the agreed or normal retirement age. In other words, it may be an implied term of an indefinite contract that the contract terminates on retirement.
3. Refusal to renew a contract:
This as well may be viewed as unfair termination by the employer. Where the employee reasonably expect the renewal of a contract may be considered as unfair termination. This may be applicable to seasonal workers. In this the employee must demonstrate that there is an objective basis for the expectation such as previous renewal. A clause in contract (if at all any) stating that the employee accepts that there is no reasonable expectation of renewal is not a conclusive proof of the matter.
However, the employer is duty bound to comply with the provisions on termination of employment where there is a legitimate expectation of renewal, including giving a prior notice to the employee that the contract will not be renewed; failure to do that, the subsequent termination will be said to be unfair as held in the case of Dar esSalaam Baptist Sec.School vs Enock Ogala.[12]The burden of proving that there was expectation of renewal lies on the employee. Rule 4(5) of the Code of Good Practice, provides that if a fixed term contract is not renewed and the employee claims a reasonable expectation of renewal, the employee must show that there is an objective basis for the expectation by giving evidence as to previous renewals, and employer’s undertakings to renew. This is a shift from the general rule under s.39 of the Act which requires the employer to prove the case of fairness/unfairness of termination.
4. Resignation:
Where the employee decides to give notice to terminate employment for whatever reason. It is hereby underscored that this avenue is available to the employee only. The employer cannot just decide to terminate employment like the way the employee can do.
Usually resignation of employee arises where there is a serious or material breach of the conditions of employment, e.g., refusal to pay wages by employer, verbal or physical abuse, sexual harassment of the employee or unfair discrimination, or “any other breach” of the terms which goes to the root of the existence of the employer-employee relationship.[13]The list of behaviors warranting termination by an employee is not exhaustive; hence determination of serious breach of the terms differs from one circumstance to another depending on the merits of each case.[14]
The employee may terminate the contract with notice or without notice. If there is a material breach of the contract, the employee may terminate the contract without necessarily giving notice to the employer since no agreement is sought. However, when terminating contracts of a fixed–term or a contract for an indefinite period (also known as permanent contract), an employee is obliged to issue notice as prescribed under s.41 of the ELRA (which may be changed depending on the agreement by the parties), and the employee must continue working during the notice period; or otherwise pay the employer one month salary in lieu of the notice.
5. Constructive termination:
This occurs in instances where the employer makes continued employee intolerable in order for the employee to resign. In such instances the law refers this as forced/constructive termination in the sense that it is as good as that the employer has terminated the employee. Working conditions may be considered intolerable if for instance, the employee is discriminated, harassed, suffering negative change in pay or workload for reasons that are not performance based.
This kind of termination arises where the employer makes continued employment intolerable for an employee. Practically, it is the employee resigning from the job due to unacceptable, discriminative and oppressive character of the employer towards an employee. According to Rule 7(1) of the Code of Good Practice Rules, 2007 where an employer makes employment intolerable that it leads to the resignation of the employee, that kind of resignation amounts to forced resignation or constructive termination. The burden of proof that a person was constructively dismissed lies on the employee.
The law provides circumstances under which the employee may claim to have been constructively terminated to include, but not limited to:
Sexual harassment (verbal, physical or environmental). According to Rutinwa (et al)
sexual harassment may be in the form of offensive words or advances, gestures or
whistling (verbal abuse), inappropriate touching (physical abuse), creation of a sexual
offensive environment such as displaying pornography or sending pornographic e-mails
to the other person (environmental abuse);[15]
sexual harassment may be in the form of offensive words or advances, gestures or
whistling (verbal abuse), inappropriate touching (physical abuse), creation of a sexual
offensive environment such as displaying pornography or sending pornographic e-mails
to the other person (environmental abuse);[15]
Where the employer acts in contravention of prohibited acts under s.7 (4) of the ELRA
i.e., the employer discriminates a person on grounds of colour, nationality, tribe/place
of origin, race, political affiliation, HIV/AIDs, age and so forth.
6. Termination of contract of employment due to Misconduct:
Where the employee does not conduct himself in the right manner. The misconducts are categorized into those punishable by warnings or reprimand on initial commissions according to the levels and those punishable by termination of employment on first commissions. The employer is obliged to have fair reason and follow fair procedure as given by the law.
7. Termination due to Incapacity:
Includes general incapacity to deliver in the work employed for poor performance, ill health and injury. It is important to deal with each case in its merit. To determine fairness of termination for poor work performance, it is important that the performance standard is not only reasonable but is also known to the employee.
8. Incompatibility:
Where the employee is unsuitable due to his character and disposition or that he relates badly with fellow employees and clients or with other people key to the business. Before terminating the employment on this ground, the employer shall give the employee a fair opportunity to.
- Consider and reply to the allegations of incompatibility
- Remove the cause for disharmony; or
- Propose an alternative to termination
Remedies for unfair termination (s.40)[16]
Where the arbitrator or labour court finds the termination to be unfair, it may order the employer to either:
(a) Re-instatement
Re instatement means that a person is restored to his pre-dismissal job and his benefits are retained, i.e., one is treated as not having been dismissed.[17] Likewise, s.40 (1)(a) of the ELRA provides that an employee goes back to his/her place of work without loss of remuneration and allowances. The law assumes that an employee has never been terminated from work by the employer. Thus, the employer takes back the employee on the same terms and conditions including benefits, job position, and other entitlements as per terms of the contract. In Precission Air Service vs Salvatory Kundy,[18]the respondent was suspended by the employer without pay pending the investigation of her alleged conduct causing loss of company monies. When the matter was taken to the Labour Court, Rweyemamu, J; held that the fact that the employer (applicant) suspended the employee with no pay toconduct investigation of the alleged loss of company monies constituted unfair termination with consequential remedies of reinstatement or compensation of 12 month salary as per s.40(3) of ELRA. In this case there was both substantive and procedural unfairness of termination by the employer.
Re engagement is partly defined under s. 40 (b) of the ELRA as to re-employ an employee on such terms as the arbitrator or labour court may decide, i.e., his employment starts afresh. So he may occupy a different position. The order as to re engagement is appropriate when the reason for termination is not fair and valid (substantive unfairness) regardless of fairness of the procedure to effect termination.
This must be at least 12 months remuneration compensation. It will only be given where neither of the above two remedies is possible. Section 40(3) of the ELRA provides that where there is an order of re-engagement or reinstatement and the employer does not take him back, the employer will pay 12 months compensation plus other benefits, i.e., full remuneration and allowances in those days of dispute, andother terminal benefits under s.44 of the ELRA.
CONCLUSION.
Now, in order to decide whether the contract of employment is terminated fairly, there is a need to look at whether there was a fair and valid reason for the termination (substantive fairness). Again, whether the there was a fair procedure (procedural fairness) as required by section 37 (2) of the Tanzanian Labour law. The main theme as one can read from this paper has been to show fair termination by explicating substantive rules to prescribe rights, obligation and standard the matter must be handled. On the other hand, procedural rule is prescribed to mean the rules governing administrative proceedings, evidences, documents legal and administrative processes which to mention but few. It obliging to these that brings fairness to termination of contract of employment.
Reference
Chandan, J.S; Management Theory and Practice, New Delhi: Vikas Publishing House, 1987
Bowers, J; A Practical Approach to Employment Law, 7th Edition, Oxford University Press
Jefferson M; The Principles of Employment Law, 4th Edition, London, 2000.
Kapinga, W.B.L & J. Shaidi; Labour Relations and Laws in Tanzania, Dar es Salaam, 1996.
Mark Lunney and Ken Oliphant; Tort Law: Text and Materials, 3rd Editions, Oxford University Press, London; 2008
OECD; Measuring Public Employment in OECD Countries: Sources, Methods and Results, Paris, 1997.
Rutinwa, et al, (eds.): The Employment and Labour Relations Law in Tanzania: An Analysis of Labour Legislation in Tanzania; Faculty of Law-University of Dar es Salaam
Citations
[1] https://en.wikipedia.org/wiki/Wrongful_dismissal
[2] (Economics Dictionary, 2011)
[3] Chapman,2009
[4] Rutinwa et al (eds) The New Employment and Labour Relations Law in Tanzania: An Analysis of Labour Legislation in Tanzania, p.96-97
[5] Jefferson M (2000) Principles of Employment Laws, 4th Edition, p.293
[6] The Code of Good Practice Rules,2007 were issued by the Minister for Labour Matters in consultation with the Labour Economic and Social Council (LESCO), made under S.99(1) of the Employment and Labour Relations Act, 2004
[7] Ministry of Labour, Youth Development and Sport; First Report of the Task Force on Labour Law Reform at p.293
[8] Also refer to S.99(3) of the Employment and Labour Relations Act, 2004
[9] Employment and Labour Relations Act’ 2004
[10] Labour Revision No.195 of 2009, High Court of Tanzania-Labour Division at Dar es Salaam (Unreported)
[11] Labour Revision No.39/2008, High Court of Tanzania-Labour Division(Unreported)
[12] Revision No.53 of 2009,High Court of Tanzania at Dar es Salaam (Unreported)
[13] Rule 6(4) of the Code of Good Practice Rules, 2007
[14] Rutinwa et al(eds)., The New Employment and Labour Relations Law in Tanzania, p.102-103
[15] Rutinwa et al (eds) op.cit p.115
[16] Employment and labour relation Act, Cap 366
[17] Jefferson M (2000) Principles of Employment Law, 4th Edition , p.358
