The Court of Appeal has dismissed an application by the Public Enterprises Evaluation and Privatization Agency (PEEPA) to overturn the Industrial Court’s decision interdicting the company from deducting salary increments from employees.
Delivering the unanimous judgement last week Justice Ian Kirby ordered that PEEPA is “interdicted from deducting salary increments extended to all five applicants from March/April 2019 by its former CEO, or making any adverse charges to those increments.”
The five employees approached the Industrial Court in December 2019 following PEEPA Board of Directors’ decision to overturn their salary increment, and deduct from their salaries the difference following then CEO Obakeng Moumakwa’s decision to grant them performance based increments in March, April 2019.
The parastatal argued that Moumakwa acted outside of his powers in granting the increment.
Acting CEO Ishmael Joseph said the parastatal had engaged the services of a private forensic investigator to investigate Moumakwa’s conduct in relation to the salary increments and other matters the findings of which he said resulted in the subsequent dismissal of Moumakwa.
PEEPA argued that the employees were aware of the breach by the former CEO and/or ought to have been aware of the breach and as such they could not seek to enforce the increments against their employer, and rely on the ‘Tarquand Rule’ (Indoor management Rule). Francistown Industrial Court had ruled in favor of the five employees interdicting PEEPA from deducting salary increments extended to all five from March/April 2019 by its former CEO. In November 2019, PEEPA embarked on a consultation exercise with the employees individually to inform them of the results of the findings of the forensic investigations regarding the Moumakwa’s conduct in giving increments and redeployments.
Following the consultations and having considered representations made by the employees the company proceeded to reverse Moumakwa’s decisions, issuing letters to the employees in that regard.
“The former CEO required the approval of the Board in order to bind PEEPA with salary increments. He had no powers to make increments without the approval of the Board nor was the power to make the increments delegated to him,” PEEPA argued.
The CoA found that there was no reason at all for the employees to believe that their raises were unlawful, or to refuse to accept the raise.
“Each beneficiary received a letter individually from the CEO in which he informed them that, having reviewed their performances, he had decided to show his gratitude and appreciation by awarding them a salary increment. Each accepted the raise, and it was duly paid for seven months. Their original letters of appointment were also exhibited, and these were under the hand of the CEO.”
Justice Kirby said the increment letters represented a change for their benefit in their contracts or employment and even if they were not properly authorized, clause 2.2 of the Conditions of Service would operate in their favor.
It provides that: “If there is any inconsistency between these Conditions of Employment and any terms agreed upon in writing in the Appointment Letter or Contract of Employment, the terms agreed upon in the Appointment Letter or Contract of Employment shall take precedence.” The employees had argued that they had no reason to believe that given his position, the former CEO could not properly and lawfully extend the increment that was granted.
“We do not sit in Board meetings and are not privy to the discussions and resolutions made until they are communicated to us by the Chief Executive Officer,” they said.
Justices Kirby, Leatile Dambe, and Isaac Lesetedi also interdicted PEEPA from revoking the elevation of one of the employees to the higher Band 4A, or making any adverse changes to the elevation.
PEEPA were ordered to pay with immediate effect the salary package difference that it deducted from the employees’ salaries since November 2019. “The Respondents’ costs of this appeal on the ordinary scale are to be borne by the Appelant,” Court ordered. The employees were represented by attorneys Mboki Chilisa and Shathani Somolekae of Collins and Chilisa Consultants while Ada Mgadla and Simon Bathusi of Armstrongs Attorneys represented PEEPA.