By Faustine Kapama-Judiciary
HUNDRED former employees with the FBME Bank Limited
have lost their terminal benefits claims of over 60bn/- they were demanding
following a retrenchment exercise carried out by the Deposit Insurance Board
(DIB), which is within the Bank of Tanzania (BoT).
This followed a decision of the Court of Appeal to
dismiss the appeal the employees lodged to challenge findings of the High
Court’s Labour Division, which ruled that the DIB, the liquidator of FBME Bank,
was not bound to follow retrenchment procedure under section 38 (2) of Employment
Labour Relations Act.
We (….) do not find any fault in the reasoning and
holding by the High Court. In the premises, all four grounds of appeal fail. In
the final analysis, we hold that the appeal is unmerited. It stands dismissed,”
Justices Gerald Ndika, Ignas Kitusi and Sam Rumanyika ruled.
They recalled that after the revocation of its license,
FBME was placed by BoT under compulsory liquidation pursuant to sections 41 (1)
(a) and 61 (1) of the Banking Act with DIB serving as the liquidator.
According to the justices, the role of DIB was to
wind up the affairs of FBME and to take such other actions as might be
necessary for the orderly realization, conservation and preservation of FBME's
assets and the settlement of its obligations in accordance with the law.
“Once DIB is appointed by BoT as liquidator of bank, as happened in (this)
case, the appointment would have the same effect as that of a court-appointed
liquidator and that DIB must carry out the liquidation in accordance with the
provisions of the liquidation regulations made under the Act,” they said.
They justices pointed out that by indicating that
section 41 was enacted "Notwithstanding any other written law", the
legislature must have meant that the liquidation process must be executed
solely in accordance with provisions of that section and provisions of other
written laws would have no effect.
“As we are cognizant of the fact that the
liquidation process would also entail settlement of the obligations of the bank
under liquidation to its employees, we hold without doubt that the legislature
intended that such obligations be dealt with within the legal framework of
liquidation,” the justices said.
The centre of the controversy in the appeal related
to Central to whether termination of employees of a bank under liquidation is
subject to the retrenchment procedure stipulated by section 38 of the
Employment and Labour Relations Act.
FBME Bank Limited was a commercial bank licensed to
carry on business in the country. On
July 24, 2014, the BoT as the central bank in the country placed FBME under
statutory management.
Subsequently, BoT revoked the license of FBME and
placed it, vide Government Notice No. 986 of 2017 of 5th May, 2017, under
compulsory liquidation pursuant to sections 41 (1) (a) and 61 (1) of the
Banking and Financial Institutions Act. 2006.
The DIB, a statutory body existing under section 37
(1) of the Banking Act, was appointed the liquidator effective May 8, 2017 and was
specifically charged to wind up the affairs of FBME.
DIB was also to take such other actions as might be
necessary for the orderly realization, conservation and preservation of FBME's
assets and the settlement of its obligations in accordance with the law.
In carrying out its statutory mandate and being
aware that following the ensuing liquidation the termination of employees was
unavoidable, DIB issued a notice dated May 17, 2017 to all employees intimating
its intention to terminate all employment contracts within one month of the
notice.
The DIB indicated that it would hold consultative
meetings with the representatives of the employees and undertook to pay all
terminal benefits upon conclusion of the consultations.
Such planned consultations were conducted and DIB
indicated its inclination to pay salaries for June and July, 2017, severance
pay, accrued leave pay, repatriation expenses and pension contributions as well
as issuance of certificates of service.
The appellants were not satisfied with the proposed
package of terminal benefits. On June 23, 2017, DIB issued another notice of
termination to all employees after the first one had lapsed.
This was followed up on July 21, 2017 with letters
of termination issued to the employees along with the payment of salary for the
July, 2017 and repatriation expenses. No other terminal benefits were paid
allegedly because the process stalled due to disagreement between the parties
on the quantum thereof.
However, on August 7, 2017, the DIB issued a letter
to each appellant indicating a sum of money it was prepared to pay as severance
and accrued leave pay as the final tranche of accrued terminal benefits.
The employees were unhappy and decided institute an
unfair termination claim in the Commission for Mediation and Arbitration (CMA),
seeking payment of a total of 60,387,486,562.32 as terminal benefits.
Apart from asserting that the termination violated
the mandatory retrenchment procedure provided under section 38 of the
Employment Labour Relations Act, the employees claimed that the DIB and FBME
Bank Limited did not pay any terminal benefits.
Hakuna maoni:
Chapisha Maoni