Mihowe v Malawi Housing Corporation (3687 of 2000) (3687 of 2000) [2004] MWHC 52 (31 August 2004);

CIVIL CAUSE NO. 3687 OF 2000


         O. J. MAHOWE................................................................PLAINTIFF

- and -

         MALAWI HOUSING CORPORATION ......................DEFENDANT

                  Mr Mwantisi of Counsel for the plaintiff.
                  Mr Nkuna of Counsel for the defendant
S. P. Moyo - 0fficial Interpreter.
                  Mrs Katemana – Court Reporter


Chimasula Phiri J,

         The plaintiff's claim is for a declaration that the defendant's allegation of deceit is an unfair and unsafe labour practice and a breach of the plaintiff's constitutional right. The plaintiff further claims damages for wrongful dismissal and loss of legitimate income expectations. The plaintiff also claims costs of this action.

         By a Statement of Claim dated 24th November 2000 the plaintiff pleaded as follows:-

1.       The plaintiff was at all material times an employee of the defendant in the post of Acting Engineering Manager.

2.       In or about July, 1999 th plaintiff bought motor vehicle registered number 3 SC 65 during a staff auction sale of scrap vehicles at the defendant's head office.

3.       At all material times the organisation of the said auction sale was under the charge of the Deputy General Manager. The Deputy General Manager had by circular addressed to all members of staff dated 24th June 1999 advised that the sale of vehicles at the Head Office in Blantyre was going to take place on 2nd July 1999 and attached to the circular the schedule of all the scrap vehicles describing the make, type, age, condition, location and remarking on the state of the engine and other special features.

4.       All members of staff interested in bidding for the vehicles and those who were to conduct the auction sale had occasion to view the listed vehicles before the date of the auction.

5.       Wrongfully and in breach of the plaintiff's constitutional rights and also in breach of the plaintiff's contract of employment with the defendant, the defendant wrongfully dismissed and/or wrongfully terminated the plaintiff's employment on grounds of unfounded allegations of deceit, and non-disclosure of information during the said auction sale, and also on grounds of an unsustainable allegation that he had attempted to smuggle the ceased engine for motor vehicle 3 SC 65 and the plaintiff has suffered damage and loss of legitimate income expectations.


a)       Loss of salary up to normal retirement date (K17,102.80 per month).

b)       Professional allowance up to normal retirement date (K6,000.00 per month).

c)       Loss of housing allowance up to normal retirement date (K18,400.00 per month).

d)       Loss of use of company car up to normal retirement date.
e)       Loss of expected pension and/or gratuity.

6.       The plaintiff has served the defendant corporation for not less than 28 years.

The defendant pleaded back through a Defence dated 12th December 2000 as follows:

1.       Paragraph 1 of the statement of claim is admitted.

Paragraph 2 of the statement of claim is denied.

The defendant admits paragraph 3 of the statement of claim. The advice contained in the circular was based on the information passed on to the Deputy General Manager in an advisory capacity as Engineering Services Manager.

The defendant admits paragraph 4 of the statement of claim. The plaintiff had already, fraudulently, and with a deceitful intent removed an engine from the said vehicle.

The plaintiff bid for the vehicle without the engine and bought the same. He subsequently collected the vehicle but was intercepted by the defendant because he had fraudulently collected it with an engine which was not sold to him with the vehicle.

The plaintiff was told about the allegations and accorded an opportunity to defend himself and subsequently had his contract of employment terminated for the offences of deceit and attempted theft of a motor vehicle engine.

The plaintiff's contract of employment was lawfully and constitutionally terminated and paragraph 5 of the statement of claim is denied entirely.

Save as expressly admitted herein the defendant denies each allegation in the statement of claim as if each was separately set out and traversed seriatim.

In addition, the defendant prays that the claims be dismissed with costs.


         The issues for the court's determination in this matter are as follows:-

Whether the defendant was in breach of the plaintiff's constitutional right to fair and safe labour practices?

Whether the defendant discharged the burden of providing the plaintiff with a substantial and valid reason for the plaintiff's dismissal from employment?

Whether the defendant's act dismissing the plaintiff from employment is justified on the facts of the case?

Whether the defendant's act dismissing the plaintiff from employment was reasonable and in accordance with the substantial merits of the case?

Whether on the facts of the case the defendant fully complied with the rules of natural justice?

If the answer to any of the issues above be in the negative what damages are recoverable by the plaintiff from the defendant?


         The plaintiff called two witnesses to prove the claim. Owen January Mahowe testified that he resides at Likuni in Lilongwe and currently works for Chapita Consulting Engineers as an Engineer/technician.

         He was employed by the defendant on July 17, 1972 as an engineer/technician.

         He worked for the defendant for not less than 28 years. At the time of termination of his employment, he was Acting Engineering Services Manager of the defendant.

         During his 28 years of service with the defendant he did not commit any act of employment misconduct warranting disciplinary action.

         The circumstances leading to the termination of his employment were as follows: In March 1999, the management of the defendant decided to dispose of all scrap motor vehicles.

         The classification of the scrap motor vehicles to be disposed was carried out by the Senior Mechanical Engineer, Mr J. B. Chilemba. The classification was under the charge of the Deputy General Manager, Mr V. Robo.

         By a circular dated June 24, 1999, the management of the defendant advertised that there was going to be a sale of scrap vehicles by auction. A photocopy of the said circular is attached.

         Attached to the circular was a schedule of scrap vehicles to be sold at the auction specifying the scrap vehicles description, age, condition, and remarks etc. One of the vehicles listed on the schedule was a Hino Water Bowser registration number 3 SC 65. The remarks on the schedule was that the vehicle had a ceased engine. A copy of the schedule is attached.

         The plaintiff attended the auction on July 2, 1999. He won a bid at the auction over motor vehicle registration number 3 SC 65 which was classified in the schedule as a Hino Water Bowser with a ceased engine. The blue book of the vehicle was handed over to the plaintiff.

In March 2000 he instructed Mr Chipeta, a motor vehicle mechanic to tow the vehicle out of the defendant's yard. During that period the plaintiff was away in Lilongwe on duty. The vehicle was however intercepted at the gate by the defendant's security guards.

On April 14, 2000 the plaintiff received a letter suspending him from the defendant's employment without pay. The letter of suspension alleged that he had attempted to smuggle a motor vehicle engine from the defendant's yard. A copy of the letter of suspension is attached.

On April 20, 2000 he was called before a panel of defendant's management to defend himself against the allegations made against him. He explained to members of the panel that the vehicle in issue was listed in the schedule as having a ceased engine. And that the said engine was the one that was being taken out of the yard together with the vehicle.

The plaintiff received a letter from management of the defendant on April 20, 2000, requesting him to show cause why a disciplinary action was not to be taken against him. A copy of the said letter reads as follows:-

Dear Mr Mahowe


You will recall that on 20th April 2000 you appeared before a panel specifically appointed to investigate allegations that you had attempted to convert for your personal use a Hino Engine belonging to the Corporation. For purposes of record, I should mention that the panel comprised the Deputy General Manager, the Assistant General Manager, the Financial Controller, the Corporate Secretary, the Human Resources Manager and the Security Services Manager.

The panel has concluded that you had indeed attempted to convert for your personal use a Hino engine formerly a part of motor vehicle number 3 SC 65. It is therefore the panel's intention to recommend disciplinary action against you.

In arriving at its conclusion, the panel has been influenced by the following findings:-

1.       On the date that MHC was auctioning vehicles in July 1999, the vehicle s SC 65 was clearly offered to bidders without an engine. Your bid was lucky at K10,000 and the same was subsequently enhanced to K20,000 to match the reserve price.

2.       The vehicle has been lying within MHC yard for 9 months until 21 March 2000 when you decided to move it. After being queried by Security Department, you have voluntarily given up the engine and have instead willingly collected the vehicle at the same price but without an engine.

3.       You have been an Acting Engineering Services manager from June 1999 to the present. The mechanical section falls under your headship.

4.       The Board's approval for sale of 3 SC 65 clearly describes it as a scrap vehicle.

The panel intends to submit its report with recommendations on 28th April 2000.

The purpose of this letter is to request you to show cause within 7 days from the date of this letter why the panel should not recommend disciplinary action.

P. J. Chitosi

         On April 26, 2000 the plaintiff wrote a letter addressed to the Human Resources Manager of the defendant explaining that the motor vehicle in issue was listed as having a ceased engine and that there were other vehicles which were also listed as having a ceased engine and the owners collected the vehicles together with the ceased engines. A copy of the said letter reads as follows:-

         Dear Sir,
         I refer to the above mentioned matter and to your letter Ref No MP178 dated 20th April 2000 by which you asked me to show cause why recommendation for disciplinary action against me should not be made and I write to show the same.

The finding that the subject vehicle was clearly offered to bidders without an engine is erroneous. What was offered to bidders was a vehicle with a ceased engine. It is because it included an engine albeit ceased one, that it was called a vehicle. If the Corporation wanted to offer for sale just an chassis and wood, they should have specified so. In that case they would not be selling a "motor vehicle" . To vindicate my understanding, after I paid for the subject vehicle, I was given a blue book recording the chassis and engine numbers. These are the core parts of a motor vehicle. Further it is not only 3 SC 65 that was sold with engine and other parts separate from the hood and chassis. The vehicle in similar conditions were 3 SC 109, 3 SC 118 and 3 SC 43.

It is not true that I voluntarily gave up the engine upon being queried. In fact when the vehicle was being towed out of the corporation's premises I was not personally present. But when I got a phone call that someone was querying the engine, I gave instructions that it is was possible they could leave the engine behind which I would collect after clearing the queries. In no way did I say that I would get the hood and chassis at the same price I was going the vehicle. In fact I have not waived my contractual rights. The word "scrap" does not mean hood and chassis of motor vehicle without an engine. It describes the condition of the vehicle. In fact when you talk about the scrap value of a vehicle you talk of the value of everything on the vehicle in its damaged or dilapidated state inclusive of it damaged and ceased or knocked engine.

I trust the above clearly shows that there is no good reason why disciplinary action should be recommended against me.

Yours faithfully,
O. J. Mahowe

         His services with the defendant were terminated on July 19, 2000. The reason given for the termination of his employment was that he did not disclose to the auctioneers and the other bidders that motor vehicle registration number 3 SC 65 had an engine. The reason for the termination of his employment was thus different from the reason given suspending him from employment. A copy of the letter of termination reads as follows:
Dear Mr Mahowe,


I am writing with reference to our letter reference MP/78 dated 14 April 2000 suspending you from duties for attempting to smuggle a motor vehicle engine.

Management has carefully considered the report that has been submitted by the investigating panel which you met on 20 April 2000 together with your written defence dated 26 April 2000. Management is convinced and has concluded that the way you won the bid over motor vehicle registration number 3 SC 65 was surrounded by deceit. You did not disclose to the auctioneers nor to other bidders that the hoods which were being auctioned for vehicle registration 3 SC 65 which you bought and that for 3 SC 43 which was bought by Mr Chipeta your subordinate had engines which had been removed and kept elsewhere. As head of Engineering Department you could have disclosed the information.

Consequently, it is clear that the vehicles were sold without engines and attempting to take the engine for 3 SC 65 the way you did was tantamount to attempted smuggling.

Management views this as misconduct and has therefore decided to terminate your services with the Corporation with effect from 14 April 2000 the date of your suspension.

You will be paid three months salary in lieu of notice plus pay in lieu of any outstanding leave days as at 14 April 2000. Arrangements are being made to withdraw you from the pension scheme. All monies owed by you to the Corporation will be recovered from your terminal benefits and pension benefits. If you have overdrawn your leave the overdrawn days will be recovered from your benefits.

The vehicle has been re-valued by the Regional Road Traffic Officer(South) taking into account that it has an engine. The valuation price if K80,000.00 (Eighty thousand kwacha) only. Our records show that you have not yet paid any deposit even towards the original purchase price. We would therefore be grateful if you could let us know within ten days from the date of this letter how you intend to pay the K80,000.00. A copy of the Regional Road Traffic Officer (South)'s valuation is enclosed for your perusal and retention.

By copy of this letter, the Financial Controller and the Human Resources Manager are requested to take not of the contents of this letter and act accordingly.

Yours sincerely,

V. A. Robo

The letter of dismissal further stated that the motor vehicle had been re-valued and that its valuation price was K80,000.00. However, copy of the revaluation report referred to a completely different vehicle altogether, motor registration number 3 SC 43.

The reason given for termination of plaintiff's employment is being challenged because:





























































































































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where applicable, have regard to current norms of
public international law and comparable foreign case law.

         The defendant has contended that the Employment Act 2000 which became law on 14th May 2000 is not applicable. I agree. However, the provisions of Section 211(2) made the termination of Employment Convention – Article 4 to apply to Malawi. Under this Article 4 of the Convention, the employment of an employee shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirements of the undertaking. This provision of the convention is what became to be Section 57 of the Employment Act 2000.

The employment of an employee shall not be terminated by an employer unless there is a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirements of the undertaking.

The employment of an employee shall not be terminated for reasons connected with his capacity or conduct before the employee is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide the opportunity.

Article 4 of Termination of Employment Convention was part of our law in Malawi before the coming in of the Employment Act. In Kalinda vs Limbe Leaf Tobacco Limited (civil cause number 542 of 1995 (unreported)) Mwaungulu J said:

"In the absence of laws, Statutes or regulations, therefore, courts decisions make provisions of the Termination of Employment Convention effective. This court is therefore conjoined to incorporate Article 4 of the Termination of Employment Convention enjoining the employers not to terminate the employment of an employee unless there is a valid reason for such termination connected with the capacity or conduct of the employee or based on the operational requirements of the undertaking................."

         In establishing whether the reason given for dismissing the employee was a substantial and valid reason, the court looks into several factors. The factors include
inter alia the gravity of the conduct given as a reason for dismissal and the duration of the employment of the employee. In Granger Nkhwazi vs Commercial Bank of Malawi civil cause number 233 of 1999, the position was put thus by the court:

"where the employer explicitly or tacitly terminates for misconduct, the employer's election to terminate according to the contract or to afford the employee procedural and substantive fairness under the contract must depend on principle and the circumstances of the case. The principle must be one leaning towards affording the employee procedural and substantive fairness. The employer can then say to all and sundry that she has done the right and fair thing. The circumstances are difficult to circumscribe. They will reflect the gravity of the conduct, the nature of information between the parties and the duration of the employment. The list is not exhaustive".

The rule was further extended in Kalinda vs Limbe Tobacco Limited thus:

         "Requiring reasons, because of the right to natural justice, becomes, as this court pointed out in
Nkwazi vs Commercial Bank, stringent where, on the facts the employer as here and in the Nkwazi case terminated under the contract and accuses the employee of misconduct. Where the employee committed misconduct terminating employment under the contract is a favour. Where the employee protests the misconduct either because the employer overlooked fairness procedures or, where followed, truth was mulcted; the potency of the rule about termination according to terms is muted indeed............."


         Sometimes the employer can terminate the employment of an employee due to a single act of misconduct. In such a scenario the issue will involve around whether the servant's breach of contract was repudiatory. Whether it was sufficiently serious to justify dismissal. That depends on the circumstances. See:
Laws – vs London Chronicle (Indicator Newspapers) Ltd [1959] 2 ALLER 285. Wilson vs Racher [1974] ICR 8. And if not justified the dismissal is wrongful. In Clouston & Co. Ltd vs Corry [1906] AC 122, Lord James of Hereford delivering judgment of the privy Council said:

"Now the sufficiency of the justification depended upon the extent of misconduct. There is no fixed rule of law defining the degree of misconduct which will justify dismissal. Of course there may be misconduct in a servant which will not justify the determination of the contract of service by one of the parties to it against the will of the other. On the other hand, misconduct inconsistent with the fulfilment of the express or implied conditions of service will justify dismissal...................It is clear and sound law that to justify dismissal for one act of disobedience or misconduct it has to be of a grave and serious nature".

         The court usually examines the reason given for termination of employment and the act of misconduct and try to find out if the termination is justified. If the reason is not supported by the evidence the court may conclude that there was no justification for the plaintiff's dismissal. This was the case in
Mvula vs Norse International Ltd 15 MLR 331, at p.336 to 337 per Makuta CJ:

"In the instant case, plaintiff was dismissed because of misconduct. The first particular of misconduct is that he used the defendant's transport without permission. Throughout the trial there was no evidence which was adduced to substantiate this allegation. No vehicle was mentioned. Not even the slight allusion to misuse of a vehicle was made. This allegation is therefore without substance............in view of the foregoing, I am of the opinion that, on the balance of probabilities, there was no justification for the plaintiff's dismissal. The dismissal was wrongful".

         The court in determining whether the reason for dismissal is justified may examine if the plaintiff was the one who was in charge of the transaction alleged to be the reason for his dismissal. In Nkwazi vs Commercial Bank of Malawi Limited the court said:

"..............Moreover, the reason is not reasonable in the circumstances. The evidence shows nothing to associate the fraud with the plaintiff. The plaintiff was a data capture clerk.

He was responsible for ledgers where the forged cheque transaction occurred. Somebody else handled the crucial aspect of the particular transaction............The employer, could at common law have raised and proved another reason at the trial. The employer had not, in my judgment raised any here".

         It is for the employer to show the reason for dismissal. If there is more than one reason he must show the principal reason for the dismissal. The reason must be a substantial reason of a kind such as to justify the dismissal and it is for the court to determine whether the employee has acted reasonably in dismissing for the reason which is determined in accordance with equity and the substantial merits of the case. Smith vs Hayle Town Council [1978] 1LR 996.

         The employer needs to show a reason for dismissal, and the reason must be a substantial one. This test "is designed to deter employers from dismissing employees for some trivial or unworthy reason".
Gilham v Kent County Council (No 2) (1985) 1LR 233 per Griffiths L.J.

What needs to be established is the factual basis for the dismissal. The legal classification usually follows quite easily. If the factual basis cannot be explained then there is a real problem. Carlin vs St Cuthbert's Co-operative Association Ltd [1974] 1RLR 188.

         Although sometimes an employee has been given a right of hearing questions might arise whether the hearing was sufficient in light of allegations made and also the length of length of the employee's career with the employer. The employer is thus under an obligation to abide with the principles of natural justice matching the allegation levelled against the employee. In
Kalinda vs Limbe Leaf Tobacco Malawi Limited Mwaungulu J put, the rule thus:

The question Counsel poses entails considering the effect of the common law rule that an employer need not give reasons when terminating employment under contractual terms on an employee's right to fair labour practice under Section 31 no problems arise from the innocuous part of the rule, namely, where the parties are ad idem. The problem arises where the employer's termination masquerades an unfairness which only a right to natural justice can disgorge..........".

The learned judge then continued to analyse the facts of the case vis- -vis the right of hearing as follows:

"On the facts of the case, it is clear to my mind that the letter terminating the employment gave a reason for terminating the terms of contract. It is clear, however, from the letter preceding the termination and the events before this that Mr Kalinda, who the evidence shows to have had a long and illustrations career with the employer company was suspended because of an allegation that he stole cement from the company on the premises of Limbe Leaf Tobacco Limited. In my judgment, given the nature of the allegation, Mr Kalinda's long and illustrious service with the company and the threat to Mr Kalinda's livelihood and reputation then more should have happened.................What I understand Mr Kalinda to be complaining about is that he was not given an opportunity to answer the allegations,............and consequential as these have been shown to be, made against him. The unfairness therefore is in that procedurally Mr Kalinda was not given an opportunity to answer adequately to these serious allegations. The original understanding of the concept of natural justice is based on public law and understanding that the procedural fairness required should be as close as possible to the juridical process. It is clear that rigidity need not be in cases of the nature this court is dealing with suffice to say that the extent to which the right to natural justice has been achieved in a particular case will depend on the nature of the allegation, the evidence in support and other surrounding circumstances. Obviously, more is required for serious allegations which affect the reputation and livelihood of an employee. The question in this matter is whether as the employee contends Limbe Leaf Tobacco Limited did abide with principles of natural justice matching the allegation against Mr Kalinda".

The court then concluded that Limbe Leaf Tobacco Limited did not accord Mr Kalinda a right to be heard matching the allegations made against and the consequent decision to dismiss him.


1.       Whether the defendant was in breach of the plaintiff's constitutional right to fair and safe labour practices?

         My short answer is – Yes. The two witnesses for the defendant did not seem to have a right and proper meaning of the remarks "engine ceased". Naturally it is an engineering jargon meaning dead engine and not without engine. It should have been the duty of Mr Longwe to ask where the engine was but because he did not himself understand the terminology, he did not bother to ask about the whereabouts of the ceased engine since it was not mounted on the vehicle.

2.       Whether the defendant discharged the burden of providing the plaintiff with a substantial and valid reason for the plaintiff's dismissal from employment?

Again on the evidence, the defendant failed to do so. It is clear from the evidence of the plaintiff and his witness that the plaintiff was not involved in the classification of the scraps and fixing values. He was not involved in the auction preparatory committee. He is being unfairly accused simply because he was in the Engineering Department. The burden is on the defendant to prove that the plaintiff abused his position and that he cheated. The ill feelings and suspicions which the defendant had on the transaction with Mr Chipeta were transferred to the plaintiff.

Whether the defendant's act dismissing the plaintiff from employment is justified on the case?

         The defendant has failed to justify dismissal.

Whether the defendant's act dismissing the plaintiff from employment was reasonable and in accordance with the substantial merits of the case?

         The defendant acted unreasonably particularly to their long serving member of staff having a clean record for 28 years. Even, if it were correct that there was deceit on his part, which is not the case here, the recommendations of panel were more reasonable than the management decision to dismiss the plaintiff. The decision of management lacked merit and finds no support in the evidence.

5.       Whether on the facts of the case the defendant fully complied with the rules of natural justice?

         These rules are wide encompassing so that justice must not only be done but be seen to have been done. Although the plaintiff did not have problems with the panel that interviewed him, bias can be detected from the composition of management team which made the decision to dismiss the plaintiff because some of the very same members who investigated the matter were in the decision making body. Management was not totally independent of the investigations body so as to avoid appearance of bias and prejudice.


This court is convinced that the defendant as a public body should not have rushed into making a harsh decision without proper observation of principles of natural justice. Further, constitutional provisions ought to have been observed and particularly where an International Labour Convention clearly provided for a duty on the defendant to be reasonable before dismissing an employee. I hereby declare that the defendant's act of dismissing the plaintiff on unfounded allegation of deceit or mere suspicion that the plaintiff was deceitful is an unfair labour practice and a breach of the plaintiff's constitutional right.


Since the plaintiff landed into a better paying job than his employment at MHC, the court can only order nominal damages. However, without undermining the humiliation and suffering which the plaintiff underwent particularly to his reputation and also considering the length of service he honestly and with dedication gave to the defendant, a small sum of K150,000.00 would be sufficient award. The defendant is also condemned in costs of this action.

PRONOUNCED in open court at Blantyre this 31st day of August 2004.

Chimasula Phiri