By Dickson Jere
Following the flipflop position on the issue of gratuity and severance pay for dismissed workers as well as permanent and pensionable employees, the full bench of the Court of Appeal has changed its position again! This time around, the Court has said once dismissed, a permanent and pensionable employee is not entitled to such gratuity!
It took thirteen Court of Appeal Judges to sit and clarify this legal conundrum. It was a full bench!
“We, therefore, wish to put the record straight through this judgment and correct the contradiction that has emerged on the applicability or otherwise of employees who have been dismissed and those terminated while serving on permanent and pensionable contract of employment,” the Court stated.
The Judges observed that there has been a lot of confusion regarding section 54 of the Employment Code Act concerning the payment of gratuities as severance pay.
“The said section has generated considerable debate on two fronts namely; whether a dismissed employee is entitled to gratuity in form of severance pay and whether the section applies to an employee who served on a permanent and pensionable contract of employment,” the Judges observed.
The Court of Appeal went ahead and looked at various cases in which it determined and concluded that “we hereby depart from our decision….in so far as it holds that employees engaged on a permanent basis are entitled to a severance package…” the Judges said.
“For avoidance of doubt, employees dismissed from employment for disciplinary reasons and those terminated otherwise from permanent and pensionable contracts of employment are not entitled to severance pay,” the Judges stated in the latest Judgment.
The Court stated that when an employee has his or her contract of employment terminated, he does not qualify to get severance pay in accordance with the law.
“With regard to a dismissed employee, we simply wish to reaffirm our position that…an employee who has been dismissed from a fixed contract or a permanent and pensionable contract of employment does not qualify for severance pay,” the Judges said.
In earlier cases, the same Court had ruled that the severance pay was available to the dismissed employees including those on permanent and pensionable contracts of employment.
Case citation – Kingfred Phiri v Life Master Limited – Appeal No 24 of 2023 bad judgement delivered last week on 10th December, 2024.
This Judgment settles the position on gratuity and it is important for Human Resources practitioners as well as Employment Lawyers to take heed of the current and clarified legal position on the matter.
