POINT OF LAW: REMEDIES FOR UNFAIR TERMINATION.
One of the many aspects of
the new labor laws concerns remedies for unfair termination. For clarity,
unfair termination refers to the wrongful dismissal of an employee by an
organization.
Hiring of an employee is
purposely done to facilitate a certain intended purpose and in order to fulfill
that purpose, a set of terms and conditions are laid down to regulate the
conduct between the two parties (a contract). Keeping these factors constant,
employers are, therefore, forbidden to terminate employment relationships
without proper causes and following the laid down procedures.
If it is established that
an employee was unfairly terminated, that is, there is no justifiable reason(s)
and termination procedures were not followed, an Arbitrator or a Judge may
under Section 40(1) of the Employment and Labor Relations Act No. 6/2004 order
the employer to:
-Reinstate the employee
from the date of termination without loss of remuneration for the period the
employee remained absent, or
-Re-engage the employee
on any terms deemed fit, or
-Pay compensation to the
employee of not less than 12 months remuneration
Employees terminated with
less than six months in service cannot allege unfair termination and therefore
these remedies do not apply to them.
It is the third point that
has drawn much controversy from employers and employees alike. On the face of
it, it implies that a Judge or an Arbitrator is bound to award compensation to
an employee of not less than 12 months, should unfair termination be
determined. However, in reality, the Judge or Arbitrator has discretion to
award compensation of any sum, that is less or more that 12 months, after
taking into consideration the peculiar circumstances of the case.
This conclusion was well
elaborated by the renowned Judge, Rweyemamu R.M.J in Revision No. 207 of 2008
High Court, Labor Division, between Sodetra (SPRL) Ltd and Njelu Mezza and
Another, where he refuted the literal interpretation that every compensation by
a Judge or an Arbitrator should be of not less that 12 months remuneration.
In this case, three
reasoning were laid down in justification for the conclusion. First, the order
for compensation is discretionary and the Act does not specify grounds when
compensation need be ordered. Second, Rule 32(5) of the Labor Institutions
(Mediation and Arbitration Guidelines) G.N 67 on remedies for unfair
termination itemizes the factors to be considered by an Arbitrator in
determining the amount of compensation to be awarded. And, third, the Law
abhors substantive unfairness over procedural unfairness. Under Guidelines
32(2)(d), the Arbitrator is mandated not to order reinstatement “where
termination is unfair because the employer did not follow a fair procedure”.
The clear intention of the above is to make consequences of substantive
unfairness direr than those of procedural unfairness.
An Arbitrator, therefore,
who has found unfair termination has discretion to award an “appropriate amount
of compensation” found fair and just to both parties and Section 40(1)(c) does
not mandate him or her to order for compensation of 12 months pay in all cases
of wrongful dismissal.
Mdau wa sheria Iddy
Hussein IT
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