Cassation File No.: 238246
Date: Megabit 27, 2015 E.C.
Judges:
Abeba Embialle
Birhanu Amenew
Bewket Belay
Qenea Qitata
Nuredin Kedir
Applicant: Wegagen Bank Share Company
Respondent: Ato Mengistu Kassa Hailu
Having been consolidated and examined with File No. 240987, the following judgment is rendered.
JUDGMENT
This file is brought before this bench based on a petition filed by the parties alleging a fundamental error of law in the decision rendered by the Federal High Court. The High Court amended the judgment of the Federal First Instance Court, which had ruled that the dismissal measure taken by the Applicant was unlawful and ordered the Respondent to be reinstated to his previous workplace prior to the transfer.
Briefly, the background of the case shows that in the lower court, the Respondent was the Plaintiff, and the Applicant was the Defendant. In a statement of claim dated 11/08/2014 E.C., the Respondent alleged that he had been employed by the Applicant organization since Ginbot 13, 2001 E.C., earning a monthly salary of Birr 10,155 (Ten Thousand One Hundred Fifty-Five). While discharging his duties, he was transferred to work in Dessie city effective Megabit 1, 2014 E.C. He claimed that while he was submitting his reasons for his inability to transfer and work in Dessie, his contract of employment was unlawfully terminated on the grounds of absence from work. Consequently, he prayed the court to order his reinstatement, or, in the event reinstatement is not granted, to order the payment of all compensation and dues associated with unlawful dismissal, along with the issuance of a certificate of work experience.
The record shows that the Applicant, in its statement of defense dated 08/09/2014 E.C., argued that after the Respondent was transferred from the Birana Branch to the Dessie Branch and instructed to report and commence work, he failed to report to the Dessie Branch starting from Megabit 02, 2014 E.C., and was absent from work without permission for five consecutive working days. Although he was notified to report to the branch with sufficient evidence justifying his absence, he failed to provide such evidence. Furthermore, pursuant to Article 6.2 of the employment contract, the Bank has the right to transfer and assign employees to any of its branches. Therefore, the Applicant argued that the Respondent’s claim is unfounded and unsupported by evidence, and should be dismissed. The Applicant further argued that: should it be determined that the termination of the employment contract was not lawful, the Respondent should not be reinstated due to circumstances that have eroded the high level of trust that must exist between the parties; since the Respondent was dismissed for an act that warrants termination without notice, his claim for compensation should be rejected; the claim for delayed payment is inappropriate; the Respondent’s accrued annual leave is 37 days, not 43 days, and annual leave exceeding two years cannot be commuted to cash; the severance pay requested by the Respondent should not be paid as he was lawfully dismissed; and the Respondent owes the Applicant organization a debt of Birr 283,477.74 (Two Hundred Eighty-Three Thousand Four Hundred Seventy-Seven and 74/100). Thus, even if there is any payment due to the Respondent due to the termination of the contract, it shall be subject to set-off pursuant to the loan agreement, leaving nothing payable to the Respondent. Consequently, the Applicant prayed for the dismissal of the claim.
The Federal First Instance Court, having heard and weighed the arguments and evidence of both parties, noted that the Respondent’s wife had died during childbirth along with their infant, and the Respondent had reported alleged medical malpractice to the Addis Ababa Police, which is currently under criminal investigation. Because of his wife’s death, he is raising motherless children, and since the transfer was made during the regular school year, the Respondent’s children would be forced to interrupt their education. Therefore, the court reasoned that merely because the Applicant has the administrative right to transfer employees, transferring the Respondent from Addis Ababa to the Dessie branch without taking these objective realities into consideration is inappropriate. The court ruled that dismissing the Respondent on the grounds of failing to report and being absent for five consecutive days—while he was submitting his objections upon receiving the transfer letter and under circumstances where it was impossible for him to travel from Addis Ababa and report to the Dessie branch in a single day—constitutes unlawful dismissal. Accordingly, the court ordered the Applicant to pay the Respondent six months’ salary amounting to Birr 60,930 (Sixty Thousand Nine Hundred Thirty), reinstate him to his workplace at the Addis Ababa Birana Branch, and pay Birr 1,500 (One Thousand Five Hundred) for costs and expenses. Aggrieved by this decision, the Applicant filed an appeal to the Federal High Court. The appellate court, after hearing the arguments of both parties, upheld the ruling that the dismissal was unlawful, but amended the lower court’s decision by stating that the ruling regarding the transfer was given *extra petita* (granting relief not requested). The Applicant filed this cassation petition to have this decision reversed.
The contents of the Applicant’s cassation petition, in brief, are as follows: Regarding the situation between the Applicant and the Respondent, the Respondent was notified well in advance to report and commence work at the Applicant’s Dessie branch starting from Megabit 02, 2014 E.C., and had sufficient time to travel to the transferred branch and start work. The transfer letter was issued on Megabit 01, 2014 E.C., a summons was made on Megabit 27, 2014 E.C. (after 25 days), and the employment contract was terminated via a letter dated Miyazya 05, 2014 E.C. Despite this, the lower court’s decision, based on Cassation File No. 125004, is irrelevant to the dispute. If the Respondent had a grievance regarding the transfer, he should have reported to the assigned branch and submitted his grievance while working; his absence from work was unjustified. Therefore, the lower court’s decision declaring the dismissal unlawful is inappropriate. In this regard, the Cassation Bench has provided binding legal interpretations in File No. 38189 and File No. 37778. Furthermore, considering that the Respondent worked in the security guard field at the Applicant’s institution, the decision ordering his reinstatement is inappropriate and contradicts the binding legal interpretation given by the Cassation Bench in File No. 37454. Finally, without taking into consideration that the Applicant has the right, both by law and by contract, to transfer and assign employees, the lower court concluded that the employee’s transfer was linked to his reporting of a crime, thereby deeming the transfer unlawful and the subsequent dismissal illegal. The Applicant argues that this decision is inappropriate, contains a fundamental error of law, and ought to be corrected.
Here is the English translation of the legal text, maintaining formal legal terminology, objective tone, and the structural integrity of the original document:
Upon examination of the Applicant’s petition by the Cassation Inquiry Bench, the Respondent was ordered to submit a reply. The file was admitted to the Cassation Hearing Bench to examine the legal propriety of ordering the Respondent’s reinstatement to work—even if the termination of employment were deemed unlawful—given the Applicant’s assertion that the Respondent is a security guard who performs his duties armed with a weapon, and that there exists a dispute between the Applicant and the Respondent.
In the reply submitted, the Respondent stated that the underlying cause of the dispute in the lower court occurred on 16/03/2014 E.C. while he was performing his duties at the Applicant Bank. A customer named Mr. Zelalem Eshetu attempted to withdraw money using a forged identification card. The Bank’s manager, Mr. Fasil Dereje, summoned the Respondent and instructed him to verify the ID and take the necessary actions. Accordingly, the Respondent immediately notified the Kera area police station, initiating an investigation which confirmed the ID was indeed forged, leading to the suspect’s arrest. The Respondent argued that this demonstrates he performed his duties properly and duly discharged the responsibilities entrusted to him by the Bank. Consequently, the First Instance Court, after thoroughly examining the case, correctly ruled that the Respondent’s improper transfer and subsequent termination of employment were unlawful, noting that the Respondent deserved a reward for protecting public and state interests beyond his regular duties. The Appellate Court’s affirmation of this decision is legally sound.
The Respondent further argued that the Bank’s Head of the Security and Protection Department transferred him from the Beklo Bet Branch to the Birana Vehicle Security post on 24/06/2014 E.C. The justification given was that the Respondent had a conflict with a customer, prompting the customer to threaten to withdraw all his funds, and questioning why the Respondent had reported the customer. After being forced to take a five-day leave and completing the handover of property, the Respondent reported for duty at the Birana Vehicle Security post, only to be informed via a letter that he had been transferred to the Dessie Branch effective Megabit 01, 2014 E.C. Objecting to this transfer, the Respondent submitted a grievance to the Bank’s Human Resources Department on 02/07/2014 E.C. However, he was told that the Bank has the prerogative to transfer employees. Subsequently, on 12/07/2014 E.C., he escalated his grievance to the Vice President of the Bank. While awaiting a response, he was notified on 27/07/2014 E.C. to report to the Dessie Branch within five working days, failing which disciplinary action would be taken.
The Respondent submitted another petition to the President of the Bank requesting the revocation of the transfer, citing personal social circumstances. He explained his inability to relocate to Dessie due to security concerns and the need to closely follow up on a legal case regarding his wife’s death caused by alleged medical malpractice, supporting his claim with cooperation letters from the Addis Ababa Health Bureau and the Police. While awaiting a response, he was issued a termination letter on 05/08/2014 E.C. The Respondent argued that this dismissal was unlawful and prayed for the affirmation of the lower court’s decision. The Respondent further contended that the Applicant failed to properly notify him of the decision made on Megabit 27, 2014 E.C. regarding his transfer outside Addis Ababa. Given the distance of the new location and the prevailing security instability in the area, he was not afforded adequate time to make necessary preparations by Miyazya 05, 2014 E.C. Furthermore, the Applicant was fully aware that the police required the Respondent’s presence for an ongoing investigation. Therefore, the Applicant’s assertion that the 25 days between Megabit and Miyazya 05, 2014 E.C. constituted sufficient preparation time is contrary to both law and good conscience, and the Applicant’s petition should be dismissed.
The Respondent asserted that he had not committed any act that would disrupt industrial peace with the Bank’s management or employees. He emphasized that he had dedicated his youth and a long period of his career to the Bank, acknowledging the Bank as his benefactor for supporting his economic progression from a low starting salary to his current status through salary increments and loan facilitations. Crucially, he argued that his job description does not entail carrying a firearm. The issue of whether or not he was armed was raised in the lower court, but no ruling was rendered on this specific point. The Respondent clarified that his actual duties involved assisting customers across two different branches, soliciting clients, refueling generators during power outages, accompanying managers to replenish off-site ATM machines, and acting as a messenger in the absence of designated dispatchers. He stated that the armed guarding of the Bank is outsourced to third-party security agencies. The Respondent’s involvement in security matters was strictly limited to notifying the agency supervisors to provide replacements if their guards were absent from their posts. Therefore, contrary to the Applicant’s claim, he is not an armed security guard, and thus the Applicant’s petition should be rejected. The Applicant submitted a rejoinder, reinforcing its Cassation petition.
On his part, the Respondent filed a separate petition under File No. 240987, requesting the rectification of the Federal High Court’s ruling. The High Court had ruled that the issue of the transfer was not formally pled as a cause of action (claim for relief). The Respondent argued that this ruling failed to consider the substance of his pleadings. Upon reviewing this petition, the Cassation Inquiry Bench admitted the case to examine the legal propriety of the Appellate Court’s reversal of the lower court’s decision—specifically, the Appellate Court’s conclusion that the transfer was an unpled claim, despite the Respondent having contested the validity of the transfer in his original statement of claim. Consequently, the Applicant was ordered to submit a reply. In a reply submitted on 30/06/2015 E.C., the Applicant’s counsel argued that the Respondent had not explicitly and specifically prayed for relief regarding the transfer. Citing the Civil Procedure Code and binding Cassation decisions, the counsel contended that a court cannot grant relief on a matter that has not been formally pled. The Respondent subsequently filed a rejoinder, reinforcing his petition.
The background of the case and the summary of the arguments of both parties are as presented above. We have examined the case file in light of the contested judgment and the relevant legal provisions. Upon our examination, the Applicant’s petition in the present file seeks to overturn the lower court’s ruling which declared the termination of employment unlawful. Conversely, the Respondent’s petition under Cassation File No. 240987 seeks to rectify the portion of the Appellate Court’s decision which held that relief regarding the transfer was not formally pled. Given that the Cassation petitions filed by both parties arise from the same judgment and involve the same litigants, the Bank submitted a motion on Yekatit 28, 2015 E.C. requesting the consolidation of the files. Recognizing that consolidation would facilitate the efficient rendering of a judgment, this Bench has ordered the joinder of the cases pursuant to Article 11 of the Civil Procedure Code.
Having examined the arguments presented in both files, the Court has framed the following issues for determination:
1. The legal propriety of the ruling that the Applicant’s termination of the contract of employment was unlawful;
2. Assuming the termination was unlawful, the legal propriety of ordering the Respondent’s reinstatement, thereby overriding the Applicant’s argument against such reinstatement;
3. Whether a fundamental error of law was committed in the Appellate Court’s decision which held that the Respondent had not formally pled for relief regarding the transfer.
Here is the English translation of the legal text, maintaining the formal legal terminology, structure, and objective tone appropriate for a court judgment.
*
The first issue concerns the circumstances and legality of the termination of the employment contract.
It is stipulated under Article 23 of the Labor Proclamation No. 1156/2019 that an employment contract legally established between an employer and an employee may be terminated by the initiation of the employer or the employee, or in accordance with the provisions of the law, or by a collective agreement, or by the mutual agreement of the contracting parties. The detailed provisions of the law indicate that when the employer or the employee intends to terminate the employment contract for one of these reasons or any other reason, it is mandatory to fulfill the preconditions or follow the procedures set forth by the law. Depending on the circumstances, these are conditions under which an employment contract may be terminated with or without prior notice. (See the provisions of Articles 27, 28, 31, and 32 of the Proclamation). From the framing and detailed content of this law, it can be understood that the legal manner and effect of the termination of an employment contract vary depending on the contract, the nature of the work, and the reason for termination. Any termination of an employment contract executed outside of these parameters is deemed unlawful, and its legal effect, depending on the circumstances, entails either reinstatement to work or the payment of compensation and other related dues, as can be understood from the provisions of Articles 42 and 43 of the Proclamation.
In the present case, the Applicant strongly argues that the termination of the contract was lawful pursuant to Article 27(1)(b) of the Labor Proclamation No. 1156/2019, because the Respondent, after being instructed to report and commence work at the Dessie branch to which he was transferred, failed to appear at the location and start work. The Respondent did not deny failing to appear at the assigned location to commence work. The Respondent, on his part, argued that he encountered a compelling social problem beyond his control, and that he had submitted evidence explaining the problem so that the Applicant would take it into consideration, review the transfer decision, and make adjustments. He contended that it was inappropriate to dismiss him for being absent from the workplace when his problem was well known. We have noted that the lower court, which examined the material facts, concluded that the Applicant’s dismissal of the Respondent for being absent from work for five consecutive days without taking the circumstances into consideration was unlawful. The court verified that the Respondent’s wife and child had passed away in the hospital due to childbirth complications, and because he had reported the matter to the police and was following up on the case, he could not travel back and forth to Dessie to litigate, in addition to the fact that he was raising motherless children who were attending school. As we have observed, it is an established administrative right of the employer to transfer and assign an employee, and if the employee has a grievance regarding the transfer, he must file a complaint following the proper procedures while continuing to work. However, if the employee rejects the transfer and fails to appear at work, it is undisputed that the employer can take legal measures in accordance with the law. In this regard, decisions rendered by the Cassation Bench in various files demonstrate this principle. (See Cassation File Nos. 38189 and 37778, published in Volume 8). On the other hand, the Cassation Bench has also ruled that before an employer takes action against an employee who fails to appear and commence work at the transferred location, the employer must examine the objective circumstances of the case. (See Cassation File No. 125004, published in Volume 20). From this, it can be understood that while transferring an employee is the right of the employer, it is equally necessary to consider the burden the transfer imposes on the employee. Therefore, this indicates that the appropriateness of administrative measures taken following a transfer must be determined by weighing the objective circumstances of the case. In this case, although it is undisputed that the Respondent stayed away for more than five consecutive working days without appearing at the transferred Dessie branch to commence work, the lower court verified that the Respondent proved he had sufficient cause. Thus, no ground was found to conclude that the lower court committed a fundamental error of law in determining that the Applicant’s termination of the contract without considering these circumstances was unlawful.
The next issue to be examined is whether the decision to reinstate the Respondent, following the determination that the dismissal was unlawful, is appropriate.
If the employment contract termination measure taken by the employer is deemed unlawful, the legal effect, depending on the circumstances, is either to reinstate the employee or to dismiss the employee with the payment of compensation and other related dues, as can be understood from the provisions of Article 43 of the Proclamation. Specifically, it is stipulated that if it is believed that reinstating the employee would cause serious difficulties due to the nature of the work, the employee may be dismissed with compensation even if he desires to be reinstated. It is recognized that the primary objective of this provision is to ensure industrial peace. In the present case, it can be understood from the arguments of both parties that a disagreement had arisen between the Respondent and the Applicant, as evidenced by the fact that the Respondent was transferred to two different locations within a short period, and the Respondent’s argument that the transfer was made because he had whistleblown on a fraudulent act committed by a customer of the bank serves as a sufficient indicator. Furthermore, considering that the Respondent works in the security sector—a position that requires a high degree of caution and trust—reinstating him while knowing that a disagreement exists is inappropriate. In this regard, as this Cassation Bench has indicated in decisions rendered in similar disputes, particularly in relation to security work, the employee should be dismissed with compensation by taking into account the damage that the lack of trust between the two parties could cause given the nature of the work. (See Cassation File No. 37454, published in Volume 8). From this perspective, since the Respondent was in the security sector, the nature of the work requires a high level of trust between the employer and the employee in order to protect the security and safety of the Applicant organization’s property. In this case, as can be understood from the detailed arguments of both parties mentioned above, in order to prevent the damage that would result if the relationship continued in a situation where trust has been lost, a decision should have been made to dismiss him with compensation. We have found that the lower courts’ decision to reinstate him to work, on the premise that the cause for the termination of the contract was not a disciplinary issue, contains a fundamental error of law that contradicts the nature of the work, the resulting lack of trust, the objective of the law, and the binding decisions of the Cassation Bench.
The third issue concerns the appropriateness of the Appellate Court’s decision, which ruled that no judicial relief was requested in the lower court regarding the transfer.
As we understand from the litigation, the record shows that the Appellate Court reversed the Federal First Instance Court’s decision—which had ordered the Respondent to return from the transferred Dessie branch to the Addis Ababa Head Office Birana branch on the grounds that the transfer was inappropriate—by stating that no judicial relief was requested on this matter. The Respondent’s petition in this regard is to correct the Appellate Court’s error in stating that no relief was requested, without considering that the argument was indeed presented in the lower court. However, examining and deciding on the argument presented in this regard would only be necessary to determine the outcome of where the Respondent should return to work—whether to his previous position before the transfer or to the transferred Dessie branch—if he were to be reinstated. But in this case, as stated in the second issue, since the conclusion was reached that the Respondent should not be reinstated to work, we did not find it necessary to examine and decide on the issue concerning the transfer.
Finally, the issue that requires resolution is determining the type and amount of payment to be made following the decision that the Respondent should not be reinstated to work. As stated in the second issue above, although the manner in which the contract was terminated was deemed unlawful, this Bench has decided that the outcome is not the reinstatement of the Respondent, but rather his dismissal with the payment of compensation. Therefore, the type and amount of payment due to the Respondent must be determined in detail. In this regard, the record shows that the Respondent submitted a detailed request to the lower court for compensation and other payments in the event he is not reinstated, and the Applicant also presented its counter-argument. However, in light of the arguments of both parties, an issue was not framed on this matter, nor was it investigated with evidence and decided upon by the lower court, if deemed necessary. Because the matter involves a dispute over material facts, and in order to preserve the right to appeal, we have found it appropriate to remand the case to the lower court for investigation and decision. Accordingly, we have rendered the following judgment.
DECISION
1. The judgment rendered by the Federal High Court on 20/03/2015 E.C. [November 29, 2022] under File No. 294096, which amended the lower court’s decision, is hereby amended, and the following is decided.
2. The part of the lower courts’ decision ruling that the manner of termination of the employment contract was unlawful is upheld.
3. The part of the lower courts’ decision ordering the reinstatement of the Respondent to work is reversed.
4. Pursuant to Article 343(1) of the Civil Procedure Code, the case is remanded to the Federal First Instance Court to hear the arguments of both parties regarding the compensation and other payments due to the Respondent and to render an appropriate decision. Let it be written.
5. The stay of execution (injunction order) granted in this file on 07/04/2015 E.C. [December 16, 2022] is hereby lifted. Let it be written.
6. We have ordered that both parties shall bear their respective costs and expenses incurred due to the litigation in this Court.
We order that a copy of the decision rendered in this file be attached to File No. 240987. The file is closed and shall be returned.