Post Details

HODI HOTEL EX-EMPLOYEES LOSE 1.35BN/- COMPENSATION CLAIM

Published By:faustine.kapama

By FAUSTINE KAPAMA-Judiciary

ABOUT 129 former employees of Hodi Hotel Management Co. Ltd have lost their claims of over 1.35bn/- compensation they were demanding for being retrenched due to Covid-19 outbreak in 2021.

This followed the decision of the High Court’s Labour Division at Arusha to dismiss in its entirety their application for revision they lodged to challenge the award issued by the Commission for Mediation and Arbitration (CMA).

“I find no merit of this application and I proceed dismissing it entirely. The CMA's award is confirmed. As this application arises from a labour dispute, I make no order as to costs. Ordered accordingly,” Judge Mohamed Gwae ruled.

During hearing of the application, the counsel for the ex-employees, the applicants, had contended that there were errors material to the merits of the matter before the Commission, which had ordered the Hodi Hotel, the respondent, to pay 87,876,142.67/- instead of the claimed 1, 352,098,043/-.

They stated that arbitrator failed to properly analyze the overall evidence adduced before him in finding that the retrenchment was both substantive and procedural fair despite the overwhelming evidence adduced by the applicants' side demonstrating violations by the respondent.

In disposing of the two grounds of complaints, the judge ruled that the respondent had valid reason for retrenchment, that is, global Pandemic Disease (COVID-19) which plainly led to total or partial international closure of businesses and lockdown of peoples' movements.

Hence, he said, the applicants' termination was seen to have pertained with operational requirements which was the real reason and not a pretext for terminating the involved employee as was correctly stressed in the case of Moshi University College of Corporative and Business Studies (MUCCOS).

“As earlier explained, I do not see any reason to be curtailed by the first ground (of complaint) since it is clear that there was valid reason for applicants' termination. The same is thus dismissed,” Judge Gwae ruled.

According to him, considering the documentary evidence and testimony of some witnesses, he was of the view that, there was sufficient notice, consultation followed by meetings between the employer and employees and meaningful consensus was reached by the parties.

 “What the respondent did is nothing but substantive compliance with requirement of law, the required compliance which does not need to be in every procedural aspect or to be ascertained in a checklist fashion, it suffices to look at substantive compliance of the requirement provided by the law,” he said.

The judge was of the firm view that the applicants were substantively involved in the retrenchment exercise and given the fact that, there was valid and real reason of doing so. More so, he said, the applicants were accordingly paid their terminal dues except the arrears due to admitted miscalculations.

Facts show that the applicants filed a dispute against the respondent on unfair termination based on operational requirements, in other words, retrenchment of applicants' employment.

The applicants who were employed in different times and places of work and who were rendering services to the respondent in various positions were retrenched on June 14, 2021.

Main area of the applicants' complaint was that they were unlawfully retrenched since the respondent did not comply with the provisions of section 38 of the Employment and Labour Relations Act (Act).

The applicants' claims were in six (6) categories namely; twelve months' salary compensation, one-month salary in lieu of notice, severance pay, annual leave, payment for public holidays and salary arrears. All claims made a claim sum of 1, 352,098,043/-.

On the other hand, it was the respondent's assertion that, the applicants were retrenched due to the valid reason, that is, out-break of pandemic decease, COVID-19 pronounced nationally in March 2020.

It was contended that the respondent who deals with hotel industry, providing services, such as accommodations, conference facilities and beverages was tremendously and significantly affected by the lockdown that prevailed on that period.

Consequently, the respondent could not be financially able to pay her employees as used to be prior the pandemic outbreak since it lacked regular customers. Therefore, drastic drop of the respondent's income earnings.

It was at that point in time the respondent was forced to carry out the retrenchment process. The employees decided to take the matter to the CMA. Through its award procured on November 19, 2021, the CMA dismissed the applicants' prayer for compensation.

However, it awarded the applicants a total sum of 87,876,142.67/- being an amount accruing from admitted miscalculations by the respondent in respect of the applicants' respective terminal packages. Aggrieved by the impugned award, the applicants subsequently filed the application in question to the High Court. 

Comments (0)

Leave a Comment