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Award for Damages in cases of Wrongful Dismissal

Employers and their human resource departments would be interested in knowing that the Court of Appeal recently passed a decision in which it awarded 42 months as damages for wrongful dismissal. This was held in the case of David Banda v Attorney General Appeal no. 233 of 2020 (the “David Banda Case”).  Wrongful dismissal is defined as dismissal in breach of a relevant term of a contract of employment or disciplinary policy. It is important for employers to ensure that they have a valid reason for dismissing an employee because they run the risk of an employee successfully claiming for damages for wrongful dismissal. In the case of Alert Mupila V Yu Wei Comp/IRCLK/222/2021the court repeated the position of the law that the normal measure of damages for unfair, unlawful or wrongful dismissal is the applicable contractual length of notice or notional realistic notice where the contract is silent. However, this measure may be departed from where:

a. the termination was inflicted in a traumatic fashion which caused undue stress or mental suffering;

b. where the employee proves he is deserving of more; or

c. where the conduct of the employer was so serious as it warrants higher award of damages.

In the David Banda Case, the court departed from the general rule that damages for wrongful dismissal are limited to the notice period or notional notice period. The facts of the David Banda Case were that the complainant commenced an action for wrongful dismissal against the respondent in the Industrial Relations Division of the High Court (“IRD”) claiming for damages for wrongful dismissal, salary arrears from date of dismissal, accrued benefits up to date of Judgment, accrued leave days, costs and any other relief. The IRD awarded the complainant 36 months salary as damages, however, he was dissatisfied with the quantum of damages and proceeded to appeal to the Court of Appeal. The complainant was employed by the respondent for nine years and was dismissed from employment on 4 December 2008 and had not been in employment since his dismissal. The complainant was charged for an offence that was not provided for under the respondent’s disciplinary policy and procedure. The Court of Appeal adopted the factors considered by the IRD in awarding the complainant 36 months salaries as damages for wrongful dismissal. In particular, the IRD took in account the fact that the complainant had not been able to find employment since the date of dismissal and the fact that the respondent breached its disciplinary code and procedure. The Court of Appeal went on to further increase the award of damages to 42 months.

The Court of Appeal stated that the dismissal was unjust and must have caused the complainant mental distress. It further took into account the harsh socio-economic situation of the country and the high rate of unemployment. It will be interesting to see whether an appeal will be made to the Supreme Court on the decision of the Court of Appeal and what the outcome will be.

A key take home from the Case is that employers should therefore, ensure that an employee is dismissed in accordance with the disciplinary policy and procedure, the contract of employment and the law. It should be noted that the Employment Code Act no.3 of 2019 requires employers to have policies including a disciplinary and grievance procedure, performance management policy and HIV and AIDs policy amongst others. Employers that do not have these in place are encouraged to do so.