IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO 24 OF 2023

HOLDEN AT NDOLA
(Civil Jurisdiction) COURT OF

BETWEEN
z
KINGFRED PHIRI L APPELLANT
CIVIL RGI5Tjy 2
AND
0X 5Ofl(7.

LIFE MASTER LIMITED RESPONDENT

CORAM: SIAVWAPA JP, MCHENGA DJP, CHASHI, KONDOLO,

MAKUNGU, CHISHIMBA, SICHINGA, NGULUBE,
BANDA-BOBO, SHARPE-PHIRI, MUZENGA, PATEL AND
CHEMBE, JJA

On 21st November and 10th December 2024

FOR THE APPELLANT: MR. M. NSAPATO AND MR. C. CHUNGU,

BOTH OF MESSRS NSAPATO & CO
ADVOCATES

FOR THE RESPONDENT: NOT IN ATTENDANCE

JUDGMENT
SIAVWAPA JP delivered the Judgment of the Court

CASES REFERRED TO

1. Alistair Logistics v Dean Mwachilenga, CAZ Appeal No 232 of

2019
2. Albert Mupila v Yu Wei, COMP/IRCLK/222/2021
3. Tom Chilambuka v Mercy Touch Mission International, SCZ
Appeal No 171 of 2012
4. Swarp Spinning Mills Plc v Sebastian Chileshe & others (2002)
ZR 23 (SC)
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5. Midlands Milling Ltd v Lloyd Tembo, CAZ Appeal No 297 of
2022
6. Zubao Harry Juma v First Quantum Mining & Operations Ltd
CAZ Appeal No 102 of 2022
7. Redrilza Ltd v Abuid Nkazi & others, SCZ Judgment No 7 of
2011
8. Stanbic Bank Zambia Limited v Natasha Patel CAZ, Appeal No
274 of 2022

9. Jackson Distribution Ltd v Turn Yeto Inc. Ltd [2009] EWHC 982
QB

STATUTES REFERRED TO:

1. Employment Code Act No 3 of 2019

2. Minimum Wages and Conditions of Employment (General)
Orders 2011, 2012 and 2018, Statutory Instrument Numbers 2
of 2011, 46 of 2012 and7l of 2018

OTHER WORKS REFERRED TO

1. A Comprehensive Guide to Employment Law in Zambia, 2021,
UNZA Press: Dr Winnie Sithole Mwenda & Chanda Chungu
0.0 NOTE: When we sat to hear this appeal in Ndola, on 21st
November 2024, the expanded panel comprised thirteen
Judges of the Court. However, two of the Judges who sat,
namely, the Honourable Mr. Justice D.L.Y. Sichinga SC and
the Honourable Mrs. Justice N.A. Sharpe-Phiri, were not
available at the time of delivering the Judgment. This
Judgment is therefore, that of the majority Judges that sat to
hear the appeal.

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1.0 INTRODUCTION

1.1 This appeal is against the Judgment of the Honourable Lady

Justice Dr Winnie Sithole Mwenda delivered in the High Court,
Industrial Relations Division, on 11th January 2023. By the
said Judgment, the Honourable Judge held that the Appellant
was unfairly and unlawfully dismissed and awarded him the
various amounts as claimed.

2.0 BACKGROUND

2.1 The Appellant entered into an oral contract of employment

with the Respondent on 18th August 2018, by which the
Respondent employed him as a driver.

2.2 On 23rd June 2021, the Respondent terminated the Appellant's

contract of employment verbally without stating the reason.
Further to the above, the Respondent did not pay the
Appellant his terminal benefits.

2.3 The Appellant reported his circumstances to the Labour Office.

The Labour Office in turn computed the Appellant's dues
which the Respondent refused to pay.

2.4 Subsequent to the Respondent refusing to pay the Appellant,

the Labour Office referred the dispute to the Industrial
Relations Division of the High Court. The referral letter is at
page 30 of the Record of Appeal and it is dated 28th July 2021.

2.5 Armed with the referral letter stated above, the Appellant filed
a Complaint in the Industrial Relations Division of the High

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 Court on 291h July 2021. He also filed an affidavit in support of
the Complaint on the same date.

2.6 In the Complaint and the attendant affidavit, the Appellant

sought the following reliefs;

a. Leave days
b. Gratuity
c. Underpayment
d. Unfair and Unlawful Dismissal
e. Salary Arrears for one month which is June
f. Costs and any other benefits the Court may deem fit

3.0 IN THE HIGH COURT

3.1 The Respondent filed an affidavit in opposition to the

Complaint on 17th September 2021. In essence, the affidavit
deposed to by Josaya Simutowe is to the effect that the
Appellant initially worked for Shine Share Limited from 18t
August 2018 until 1st October 2020.

3.2 He further averred that the Appellant worked for the

Respondent for only nine months and twenty-two days.

3.3 The Respondent denied dismissing the Appellant unlawfully,

stating that he perpetually reported for work late and knocked
off early without valid reasons.

3.4 The Respondent did not attend the hearing after being served
with the Notice a second time. The Learned Judge proceeded
to hear the Appellant's Complaint and adjourned the matter
for Judgment.

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4.0 DECISION OF THE HIGH COURT

4.1 After considering the affidavit evidence, the exhibited

documents and the oral evidence tendered by the Appellant,
the learned Judge set out to determine whether the Appellant
was unfairly and unlawfully dismissed and if he was entitled
to the claimed benefits.

4.2 After reviewing the Appellant's evidence and referring to

Section 52 (5) of the Employment Code Act No 3 of 2019,
(hereinafter, the Act) and the Respondent's failure to attend
the hearing, the learned Judge found, as a fact, that the
Respondent had failed to discharge its burden to prove that it
had dismissed the Appellant for good reasons.

4.3 In dismissing the Appellant's claim that he worked for two

years, ten months, the learned Judge relied on the pay
schedules exhibited by the Respondent which showed that the
Appellant worked for twelve months.

4.4 As for the Appellant's conditions of service, the learned Judge

applied the Minimum Wages and Conditions of Employment
(General) Orders of 2011, 2012 and 2018 to award the
Appellant some benefits in the absence of a written contract.

4.5 The learned Judge rejected the claim for gratuity because the
General Orders do not provide for it. However, the learned
Judge also adverted to Section 73 of the Act which provides for
gratuity at the end of a long-term contract. The learned Judge

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 however, discounted the claim because the twelve months the
Appellant served did not amount to a long-term contract as
defined by Section 3 of the Act.

5.0 THE APPEAL

5.1 The Appellant filed the Notice and Memorandum of Appeal on

19th January 2023. The Memorandum of Appeal contains two
grounds of Appeal set out as follows;

1. The Court below erred in law and fact when it held that the
Appellant was not entitled to gratuity despite section 54 (1) (c) of the
Employment Code Act providing the benefit to the Appellant; and

2. The Court below erred in law and fact when it only awarded the
Appellant three (3) months' salary as damages in spite of the fact
that the Appellant's dismissal was unfair and unlawful, the
traumatic manner in which the dismissal was carried out, the
mental torture, anguish, stress, inconvenience caused and the
Appellant's reduced job prospects.

6.0 ARGUMENTS IN SUPPORT

6.1 The Appellant filed heads of argument together with the

Record of Appeal on 30th January 2023, through Messrs
Nsapato and Company Advocates. It is noted that in the High
Court, the Appellant prosecuted the Complaint in person.

6.2 The thrust of the Appellant's arguments, in the first ground of

appeal, revolves around the interpretation of Section 54 of the
Act. The Appellant has tied Section 54 to Sections 3, 53 (6)
and 73 of the Act which all refer to long term contracts in
relation to entitlement to gratuity.

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6.3 The gravamen of the Appellant's argument is that Section 54
(1) (c) of the Act entitles employees on fixed-term contracts
whether long-term or otherwise to severance pay.

6.4 The Appellant takes this argument further by riding on our

Judgment in Alistair Logistics v Dean Mwachilenga', in which
we stated as follows:

"There is no contract that is indefinite and has an 'until death do us

part' clause"

To that effect, the Appellant argues that all contracts in

Zambia are of fixed duration and therefore, covered by Section
54 (1) of the Act.

6.5 Building upon the preceding view that all contracts are of fixed
duration, the Appellant introduces the argument that
permanent contracts of employment are equally covered by
Section 54 (1) of the Act.

6.6 The Appellant has sought to buttress the above view with the
opinions expressed by the learned authors of the book titled; A
Comprehensive Guide to Employment law in Zambia co-
authored by the Hon. Lady Justice Winnie Sithole Mwenda
and Mr. Chanda Chungu. The Appellant also referred to the
case of Albert Mupila v Yu-Wei2 , a decision of the High Court
and an article by Mr. Chanda Chungu published in the
SAIPAR case review, commenting on the said case.

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6.7 All the above references lead to the Appellant's held view that
because permanent and pensionable contracts of employment
have a known commencement date and a known retirement
time, they fall within the definition of a fixed-term contract
and are therefore, covered by Section 54 (1) (c) of the Act.

6.8 In summation, the Appellant's arguments are anchored on the

interpretation assigned to Section 54 of the Act by the learned
authors of 'A Comprehensive Guide to Employment Law in
Zambia' in their academic, scholarly and judicial capacities.

6.9 The Appellant firmly holds the view that severance pay, as
provided for under Section 54 of the Act, applies to all
employees on fixed and permanent and pensionable contracts
of employment.

6.10 In the second ground of appeal, the Appellant has challenged

the decision of the Court below to set the quantum of damages
at three (3) months on the view that the dismissal was
traumatic, and caused mental torture, anguish, stress and
inconvenience to the Appellant.

6.11 The issue in this ground is that according to the Appellant,

where unfair and unlawful dismissal has been established, the
Court, in awarding damages, should depart from the normal
measure. The Appellant, through his counsel, Mr. Chanda
Chungu, argues that in view of Section 52 of the Act, which
requires an employer to give valid reasons for terminating a

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 contract of employment; the Common Law position equating
the normal measure of damages to the employee's salary
commensurate with the notice period is no longer tenable.

6.12 The Appellant has backed the argument with reference to the
cases of Tom Chilambuka v Mercy Touch Mission
International3 and Swarp Spinning Mills Plc v Sebastian
Chileshe & Others4.

7.0 ARGUMENTS IN OPPOSITION

7.1 The Respondent did not file heads of argument in opposition.

As already observed, the Respondent did not attend the
hearing in the Court below despite being properly served with
the Notice of hearing. It would appear the Respondent had no
desire to defend the Appeal.

8.0 THE HEARING

8.1 We heard the Appeal on 21st November 2024, in the absence of

the Respondent after satisfying ourselves that it had been duly
notified of the date. This did not however, surprise us because
it appears the respondent had made up its mind not to
participate in the appeal as noted in paragraph 7.1 above.

8.2 At the start of the hearing, we attended to an application by

Notice of Motion filed a week before the hearing date. The
application was at the instance of the Appellant seeking an
order to vary, reverse or discharge two rulings delivered by a
single Judge of the Court.

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8.3 After hearing Mr. Chungu's arguments in support of the Notice
of Motion, which was not opposed, we rendered an extempore
Ruling dismissing the application. The full text of the Ruling
and the reasons for the decision is contained in a separate
Ruling under CAZ/8/31/2023, delivered on 28th November
2024, annexed to this Judgment.

8.4 In his opening statement to the appeal, Mr. Chungu summed

the two grounds of appeal as relating to the severance pay
under Section 54 of the Act and the normal measure of
damages for unfair and unlawful dismissal.

8.5 In relation to severance pay, the question is whether an

employee dismissed from a permanent and pensionable
contract of employment is eligible under Section 54 of the Act.

8.6 Mr. Chungu argues that based on the definition of a

permanent contract in Section 3 of the Act that it expires at
retirement unless terminated; a permanent contract is
therefore, of a fixed duration and covered by Section 54 of the
Act. He has also solicited the support of our decision in the
case of Mwachilenga (supra), to the effect that there is no
indefinite contract of employment.

8.7 Further, Mr. Chungu has relied on Section 54 (3) of the Act
which lists the contracts that are excluded from the effect of
Section 54 (1) and our decisions in Midlands Milling Limited v
Lloyd Tembo5 and Zubao Harry Juma v First Quantum Milling

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 & Operations Limited6 cases. To that extent, he argues that
contracts not excluded are included.

8.8 In ground two, Mr. Chungu questions the relevance of the

common law measure of damages under the new dispensation.
This is in light of Section 52 of the Act which has made it
mandatory for employers to furnish reasons for terminating a
contract of employment.

9.0 OUR ANALYSIS AND DECISION

9.1 In this appeal, we are once again called upon to interrogate

Section 54 of the Act. We have been on this route a few times
before and we have rendered our decisions.

9.2 The said Section has generated considerable debate on two

fronts namely; whether a dismissed employee is entitled to
gratuity in form of severance pay and whether the section
applies to an employee who served on a permanent and
pensionable contract of employment.

9.3 To settle the debate, it is important to understand what

severance pay is as defined by the Act. In that regard, Section
3 of the Act provides as follows;

"Severance pay means the wages and benefits paid to an employee

whose contract of employment is terminated in accordance with
section 54"

9.4 From the above definition, it means that severance pay should
only be understood within the context it is presented in
Section 54 of the Act. Importing other provisions of the Act
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 which do not speak to severance pay would be in breach of the
interpretation and the spirit of the Act.

9.5 With the guidance from the definition, we go directly to Section

54 of the Act which is reproduced hereunder for ease of
reference.

1) An employer shall pay an employee a severance pay, where the

employee's contract of employment is terminated or has expired, in
the following manner:

(a) where an employee has been medically discharged from

employment, in accordance with section 38 (5);

(b) where a contract of employment is for a fixed duration,

severance pay shall either be a gratuity at the rate of not less
than twenty-five percent of the employee's basic pay earned
during the contract period or the retirement benefits provided
by the relevant social security scheme that the employee is a
member of, as the case may be;

(c) where a contract of employment of a fixed duration has been

terminated, severance pay shall be a gratuity at the rate of
not less than twenty-five percent of the employee's basic pay
earned during the contract period as at the effective date of
termination

(d) where a contract of employment has been terminated by

redundancy in accordance with section 55, the severance pay
shall be a lump sum of two months' basic pay for each year
served under the contract of employment; or

(e) where an employee dies in service, the severance pay shall be

two months' basic pay for each year served under the contract
of employment.

Sub-section (2) is irrelevant for the purposes of this appeal so we go to sub-

section (3) which provides as follows;

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 The severance pay under this section shall not be paid to a casual
employee, a temporary employee, an employee engaged on a long-
term contract or an employee serving a period of probation.

9.6 The starting point is that Section 54 (1) of the Act, provides in
general terms the eligibility criteria for payment of severance
pay namely; termination or expiry of an employee's contract of
employment.

9.7 In paragraph (a), of subsection (1), the Section provides the

first mode of termination, as by medical discharge as
prescribed by Section 38 (5) of the Act. Paragraph (b) appears
to be linked to the first mode of termination as it provides for
the two options of payment of severance pay. This is so
because paragraph (a) specifically refers to an employee
terminated via medical discharge while paragraph (b)
prescribes the two options of severance pay as twenty-five
percent of basic pay or retirement benefits where applicable.

9.8 This benefit however, only applies to employees on fixed-term

contracts. The two payment options under paragraph (b)
clearly mean that if an employee on a fixed-term contract is
covered by a social security scheme, then the benefits under
the scheme shall comprise the severance pay in lieu of a
gratuity computed at twenty-five percent of the basic pay.

9.9 When we come to paragraph(c), the indication is that it covers

terminations other than by medical discharge under
paragraph (a). This is so because it is separated from
paragraph (a) which relates to medical discharge and qualified
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 by paragraph (b). Further, if paragraph (c) were linked to
paragraph (a), it would amount to a repetition of the first part
of paragraph (b) thereby serving no purpose.

9.10 Paragraph (d) introduces a second mode of termination, by

redundancy as prescribed under Section 55 of the Act and the
rate at which severance pay shall be computed.

9.11 The last eligibility criterion is termination by death under

paragraph (e) which also provides for the mode of computing
severance pay.

9.12 It is noted, and clearly so, that Section 54 of the Act does not
speak to a dismissed employee and neither does it refer to an
employee on a permanent and pensionable contract of
employment. The question then is where do the arguments on
the two categories of employees come from in relation to
whether or not they are entitled to severance pay under
Section 54 of the Act?

9.13 The first argument is based on subsection three which lists

the categories of employees not eligible for payment of
severance pay upon termination of their contracts of
employment. Based on this sub-section, it is argued that since
an employee on a permanent and pensionable contract of
employment is not listed, it means that such an employee is
eligible for severance pay.

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9. 14 At this point, it is necessary to state that a contract of
employment can be terminated in a number of ways and one
of them is by summary dismissal. This is important because,
in this appeal, the Appellant's contract of employment was
terminated by dismissal. On that basis the question whether a
dismissed employee is entitled to severance pay under Section
54 of the Act finds legitimacy.

9.15 In the recent past, we had occasion to pronounce ourselves on

the same issue in the case of Midlands Milling (2011) limited v
Lloyd Tembo (supra). We delivered Judgment on 22nd August
2024. In that case, the Court below found that the
Respondent, who had been summarily dismissed from
permanent and pensionable employment, was eligible for
severance pay under Section 54 of the Act.

9.16 In our Judgment, we held that the natural and ordinary

meaning of the Section was that severance pay was only
payable to an employee whose contract of employment had
either been terminated or had expired.

9.17 We also distinguished termination from dismissal with

reference to the case of Redrilza Limited v Abuid Nkazi and
Others7 in which the Supreme Court of Zambia stated that; "f---
---dismissal involves loss of employment arising from
disciplinary action, while termination allows the employer to
terminate the contract of employment without invoking
disciplinary action."

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9.18 In view of the guidance by the Supreme Court, we held that
since the word "dismissal" is not used in Section 54 of the Act,
a dismissed employee was not eligible for severance pay. We
also drew from Section 51 of the Act, which sets out the
benefits of an employee who has been summarily dismissed
from employment. The benefits are stated as; "wages and
other accrued benefits due to the employee up to the date of the
dismissal."

9.19 Yet again, in the same month that we heard and delivered
Judgment in the Midlands Milling case, (supra) we had
occasion to pronounce ourselves on the import of Section 54
(1) of the Act. This was in the case of Stanbic Bank Zambia
Limited v Natasha Patel8. In this case, a second limb was
added to the issue of a dismissed employee and this was
whether, an employee dismissed from a permanent and
pensionable contract of employment was eligible to severance
pay under Section 54 (1) (c) of the Act.

9.20 The facts in the Natasha Patel case (supra), are that she was
employed by the Bank on a permanent and pensionable
contract of employment as a teller in 2015. In April 2021, she
was charged under the employer's disciplinary code of conduct
for a dismissible offence. After the disciplinary proceedings
were concluded, she was found liable and dismissed. She
commenced an action against the employer, claiming wrongful
and unfair dismissal among others.

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9.21 The learned Judge in the Court below dismissed the claims
after finding that the dismissal was in accordance with the law
and procedure. However, she ordered that the Applicant,
Natasha, be paid a severance pay under Section 54 (1) (c) of
the Act.

9.22 The Bank appealed on two grounds as follows; challenging the

lower Court's decision to award severance pay to an employee
who was dismissed from a permanent and pensionable
contract of employment, that the Court below was wrong to
incorporate a fixed contract of employment in the definition of
permanent contract of employment under Section 3 of the Act.

9.23 In the Natasha Patel case, (supra) we distinguished between a

permanent and pensionable contract of employment and a
fixed-term contract as the Respondents argued that they were
similar. We then held that Section 54 (1) (c) of the Act does not
apply to employees on permanent and pensionable contracts.

9.24 On 18th September, 2024, we delivered yet another Judgment

in the case of Zubao Harry Juma v First Quantum Mining &
Operations Limited (supra). It is regrettable that this
Judgment, which should have been delivered ahead of the
Natasha Patel case, was only delivered nearly a month after
Natasha Patel was delivered. To make matters even worse, we
quoted excerpts from the Zubao case in the Natasha Patel
case, which caused anxiety and disappointment among the
public.

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S

9.25 The case of Zubao was rather dramatic and unusual in that he
was initially employed on a fixed term contract running from
14th September 2014 to 19th September 2016. On 20t
September 2016, he was engaged on a permanent and
pensionable contract of employment on the same conditions
and terms as he served under the fixed term contract.

9.26 On 1st November 2020, the employer notified the employee

that his employment would be terminated by redundancy with
effect from 301h November 2020. However, on 12th November
2020, the employee was found in unlawful possession and
removal of company property. He was charged and ultimately
dismissed from employment.

9.27 He challenged his dismissal in the High Court claiming unfair

dismissal. The Court below rejected the claims giving rise to
the appeal.

9.28 In the appeal, the main issue was that the Court below should
have found that he had laid sufficient evidence of entitlement
to accrued benefits based on his letter of redundancy and that
he was on a fixed-term contract.

9.29 In the case in issue, we separated the two phases of the

employee's terms of employment, with the first phase running
from 2014 to 2016 under a fixed-term contract. It is noted that
the first phase of employment ran its full course. But because
the contract subsisted before the enactment of the Act, that

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 phase was to be dealt with in accordance with the terms of the
contract and the law in force at the time.

9.30 We then went on to hold that upon the Act coming into force,
existing contracts became subject to Section 127 thereof which
provides that where a contract, a collective agreement or a
statute provides more favourable conditions to an employee,
such conditions shall prevail to the extent to which they are
favourable.

9.31 Having held as above, we went on to hold that Section 54 (1)

(c) of the Act was applicable to the employee and his benefits
fell to be computed thereunder as an accrued benefit. We
interpreted severance pay under Section 54 (1) of the Act as an
accrued benefit, as read together with Section 51 (1) of the Act
which entitles an employee who has been summarily
dismissed to accrued benefits.

9.32 Ultimately, we held as follows at J 18 of the Judgment;

"Our interpretation of the above provision is that employees engaged

on a permanent basis are entitled to a severance package under
section 54 (1) (c) of the Employment Code Act."

9.33 This is clearly in contradiction of our earlier held positions in

Midlands Milling and Natasha Patel. We therefore, wish to put
the record straight through this Judgment and correct the
contradiction that has emerged on the applicability or
otherwise of Section 54 of the Act to employees who have been

Jig
 dismissed and those terminated while serving on permanent
and pensionable contracts of employment.

9.34 With regard to a dismissed employee, we simply wish to

reaffirm our position in the Midlands case that for the reasons
we articulated there, an employee who has been dismissed
whether from a fixed term contract or a permanent and
pensionable contract of employment does not qualify for
severance pay under Section 54 of the Act.

9.35 As for an employee on a permanent and pensionable contract

of employment, whose contract has been terminated or has
expired, in accordance with Section 54 of the Act, the answer
lies in the interpretation of Section 54 (1) of the Act and its
intention.

9.36 The starting point would be to look at the definition of

"contract of employment" in the Act which is set out as follows
in Section 3;

"Contract of employment" means an agreement establishing an

employment relationship between an employer and an employee,
whether express or implied, and if express, whether oral or in
writing.

9.37 In that definition, there is no distinction between a fixed term

contract and a permanent and pensionable contract. This is
also reflected in Section 54 of the Act which does not
distinguish between a fixed term contract and a permanent
and pensionable contract.

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9.38 From the wording of Section 54 (1) of the Act, there is one
point to consider, this is that whereas a permanent and
pensionable contract of employment can be terminated, it only
expires upon the employee attaining the retirement age as
stipulated by Section 58 of the Act.

9.39 It follows therefore, that Section 54 of the Act does not apply
to a permanent and pensionable employee whose contract has
expired by reason of retirement.

9.40 However, on a proper reading and construction of Section 54

of the Act, an employee on permanent and pensionable
contract of employment can only qualify for a severance pay if
he/she is terminated by reason of redundancy under
subsection (1) (d).

9.41 In the previous decisions and the current one, the Appellants
have consistently argued, through Mr. Chungu, that an
employee on a permanent and pensionable contract of
employment is entitled to severance pay under subsection (3).
This argument is anchored on the view that if it is not
excluded, it is included.

9.42 The Appellant has called in aid the case of Albert Mupila v Yu-
Wei (supra), a High Court decision. In that case, the learned
Judge pointed to the fact that "the prohibition in Section 54 (3)
has not been extended to employees engaged on a permanent
basis"

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I

9.43 Based on the above referred to case, the Appellant has drawn
further inspiration from a view expressed by the learned
authors of A Comprehensive Guide to Emploqment Law in

Zambia, (Winnie Sit hole Mwenda and Chanda Chungu.)

According to the learned authors, "a permanent contract of
employment is also a contract offixed duration in the sense that
it is certain to expire on the retirement date if not terminated in
the various ways specified in the Employment Code."

9.44 At page 288 of the same book, the learned authors state as
follows with reference to Section 54 (3) of the Act;

"The foregoing provision proscribes the payment of a severance

package to employees engaged on, among others, long term
contracts. As such, it would seem that Section 54 (1) (b) and (c) of the
Employment Code Act was designed for employees on permanent,
short-term and seasonal contracts to receive gratuity when their
employment terminates for a reason other than redundancy, medical
discharge or death. A contract for a fixed duration includes
permanent contracts and thus, although the definition of gratuity
provides the entitlement for long-term employees, permanent
employees get this benefit in the form of severance pay when their
employment terminates for a reason other than redundancy, medical
discharge or death."

9.45 In the Natasha Patel case, we adequately distinguished

between a fixed-term contract and a permanent and
pensionable contract. We made the point that while a fixed-
term contract has a set end date; a permanent and
pensionable contract of employment does not. We stand by
that decision and the distinction therein.

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4

9.46 In the opinion the leaned authors have expressed through the
above cited quotation, a permanent and pensionable employee
whose employment has been terminated in any way other than
as set out in Section 54 (1) (a), (d) and (e) of the Act, is eligible
for a severance pay. In their view, even where the termination
is by way of dismissal, Section 54 of the Act applies.

9.47 We do not find the views expressed by the learned authors

persuasive at all. We believe that Section 54 of the Act
provides sufficient guidance on the parameters within which
eligibility for a severance pay applies.

9.48 In view of the similarities of circumstances of the three cases

we earlier decided upon, and the position of the law as
elucidated above, we have no reason to depart from our
decisions in the Midlands Milling case (supra) and the Natasha
Patel case (supra).

9.49 Our firmly held position is that employees who are summarily
dismissed are dealt with in accordance with Section 50 of the
Act and the extent and scope of their benefits are as provided
in Section 51 of the Act.

9.50 For avoidance of doubt, employees dismissed from

employment for disciplinary reasons and those terminated
otherwise from permanent and pensionable contracts of
employment are not entitled to a severance pay under Section
54 (1) of the Act.

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9.51 The second ground of appeal is an attempt to depart from the
long-standing position at law that the normal measure of
damages in an employment case is equivalent to the notice
period.

9.52 According to Mr. Chungu, the advent of Section 52 of the Act

which requires the employer to give proper reasons for
dismissing an employee rendered the notice period
requirement redundant.

9.53 In our view, the requirement for the employer to give valid
reasons for terminating a contract of employment does not
nullify the common law measure of damages equivalent to the
notice period. This is because there will continue to be
contracts that will provide for termination by notice.

9.54 Where a contract does not provide for a notice period, either
party may still terminate the contract upon giving reasonable
notice. Reasonable notice will depend on the nature of the
contract and discernible intentions of the parties on the
intended duration of the contract.

9.55 As a matter of fact, this common law principle is now

enshrined in Section 53 of the Act. Even where the contract
does not provide for a notice period, subsection (2) prescribes
notice periods for contracts of various durations,

9.56 In this appeal, the contract was oral and it was terminated
orally. It was not a fixed term contract and therefore, deemed

J24
 to have been permanent. That being the case it was not
covered by Section 53 of the Act.

9.57 In her Judgment, the learned Judge in the Court below found
that the Appellant had worked for one year at the time he was
dismissed. She then awarded damages equivalent to three
months salaries in lieu of notice.

9.58 In the circumstances of the case and the nature of the job of a
driver, we accept that three months was reasonable notice. In
the English case of Jackson Distribution Ltd v Turn Yeto Inc,9
the learned Judge held that it was an implied term that either
party was entitled to terminate the agreement on reasonable
notice to the other party.

9.59 In that case, the parties had negotiated a sole distribution

contract which was never formalized. After holding that there
was an implied contract, which had run for a period of two
and half years, the learned Judge held that six months was a
reasonable notice period.

9.60 We therefore, find no merit in the second ground of appeal and

dismiss it accordingly.

10.0 CONCLUSION

10.1 Through this Judgment, we re-affirm our position that Section

54 of the Employment Code Act No 3 of 2019, does not apply
to an employee who has been dismissed regardless of the type
of contract of employment they served on.

J25
10.2 We also re-affirm our position that an employee on permanent
and pensionable contract of employment, who is terminated
other than through the circumstances set out in subsection (1)
(a), (d) and (e) of Section 54 of the Act, is not eligible for
severance pay.

10.3 The Appellant in this case was not terminated under any of
the above listed circumstances. He was instead summarily
dismissed. The appeal therefore, lacks merit in both grounds
and we dismiss it accordingly.

10.4 In light of the position we have taken in this Judgment, we

hereby depart from our decision in the case of Zubao Harry
Juma v First Quantum Mining and Operations - Road
Division, (supra), in so far as it holds that employees engaged
on a permanent basis are entitled to a severance package
under Section 54 (1) (c) of the Employment Code Act.

J26
10.5 This being an appeal from the Industrial Relations Division, we
order each party to bear theipown costs.

M.J. SIAVWAPA
'RESIDENT

Al - ME
WC _F. '.M
DEPUTY JUDGE PRESIDENT

CA M.M. KONDOLO SC
COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE

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C.K. MAKUNU F.M. CHISHIMBA
COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE

P.C.M NGULUBE A.M. BANDA-BOBO

COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE

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C
A.N. PATELSC
COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE

LlAfQQ
Y. CHEMBE
COURT OF APPEAL JUDGE

J27