Wednesday, November 13, 2013

Article of the month to all my friends-POINT OF LAW: REMEDIES FOR UNFAIR TERMINATION.


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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