Cassation File No. 245760

Cassation File No. 245760

Tikimt 01, 2016 E.C.

                 Judges:

                    Birhanu Amenew

                    Reta Tolosa

                    Bewket Belay

                    Kenea Kitata

                    Nuredin Kedir

   Applicant – Vision Fund Microfinance S.C. – Mr. Tadele Itefa – Appeared

   Respondent – Mr. Yohannes Dinagde – Did not appear

The file has been examined and the following judgment is rendered.

Judgment

The case concerns a labor dispute, and the litigation commenced at the Nekemte City District Court, where at that level the Applicant was the Defendant and the Respondent was the Plaintiff. The origin and content of the dispute are briefly as follows.

The Respondent, in a statement of claim dated 07-06-2015 E.C., detailed that he had been legally employed and working at the Applicant’s organization since 15-06-2003 E.C., and while working as the Manager of the Lalo Asabi branch of the Applicant’s organization since 23-03-2008 E.C., the Applicant dismissed him from work without any reason. After detailing this, he requested a judicial ruling that the dismissal be declared unlawful, and that he be reinstated to his work, along with the payment of four months’ unpaid salary amounting to Birr 153,042, as well as costs and damages incurred due to the suit.

The Applicant, on its part, appeared and gave a statement of defense stating that the Applicant organization’s branch office is located in West Wollega Zone, Lalo Asabi Woreda, and because the work of this branch office was not functioning due to the security problem that existed/exists in the area, the employees of the branch were transferred to work in another branch. Accordingly, the Respondent was transferred to the Yirgachefe branch in the Southern Region. However, the Respondent objected to the transfer, filed a lawsuit against the Applicant in court, and obtained a decision to be returned to his former Lalo Asabi branch. Nevertheless, as mentioned above, due to the lack of work at the branch related to security, and because it was found impossible to continue paying the Respondent’s salary without him doing any work, the Respondent was dismissed with a 3-month notice period salary paid to him. The Applicant argued that this dismissal was legal, not unlawful; that the Respondent’s monthly salary was Birr 20,786.60 (Twenty thousand seven hundred eighty-six and 60/100), not the amount stated in the claim; and even if the dismissal is deemed unlawful, since the Applicant and the Respondent have been in litigation for a long time over trivial and non-trivial matters, their relationship has severely deteriorated and the trust that should exist between them has been completely depleted. Therefore, instead of reinstating the Respondent to work, he should be dismissed with the payment of compensation in lieu thereof.

The Nekemte City District Court, to which the case was presented, after hearing the arguments and evidence of both parties, examined the case and weighed the evidence. It decided that the Applicant dismissed the Respondent without following the legal procedure stipulated in the Labor Proclamation, and thus the dismissal is unlawful in this regard. Regarding the outcome, it ordered the Applicant to pay the unpaid salary of Birr 95,664.36 (Ninety-five thousand six hundred sixty-four and 36/100) and to reinstate the Respondent to his former position.

Aggrieved by this decision, the Applicant lodged an appeal to the East Wollega Zone High Court. After hearing the arguments of both parties, the court affirmed the decision, stating that the lower court’s decision had no error. Similarly, the Applicant submitted a petition to the Oromia Regional State Supreme Court Cassation Bench, which rejected it, stating that the petition does not warrant a hearing by the Cassation Bench. The Applicant has filed this cassation petition to oppose and alter this decision.

The content of the Applicant’s cassation petition is briefly: It was an error to bypass the preliminary objection raised by the Applicant at the lower court that the Respondent is a managerial employee and thus the case is not covered by the Labor Proclamation. Prior to the dismissal, the Applicant had transferred the Respondent to another location, but the Respondent opposed the transfer, sued the Applicant, and obtained a decision to return to his former workplace (Lalo Asabi branch). Although he was returned to the location based on the decision, due to the lack of work at this branch, we proved that the Respondent sat at home for 16 months without any work and was paid a salary for free. Because of this, despite being repeatedly asked to transfer to a place where there is work, he was unwilling. Consequently, our final dismissal of him with notice was a procedure that followed the law. The lower courts’ conclusion that the dismissal was unlawful and the decision they rendered contain a fundamental error of law. Furthermore, even if this is overlooked, a loss of trust and deterioration of the relationship has occurred between the Applicant and the Respondent. Especially since the Respondent’s job share and responsibility is in the finance sector, which requires high trust, and listing similar reasons, the Applicant argued that instead of reinstating the Respondent, he should be dismissed with compensation. The lower courts’ bypassing of this argument and the decision rendered contain a fundamental error of law and should be corrected.

The Applicant’s petition was examined by the Cassation Inquiry Bench, which ordered the file to be brought before the Cassation Hearing Bench to investigate the appropriateness of ordering the Respondent’s reinstatement to work, given the claims that the Applicant dismissed the Respondent because the branch where the Respondent worked had stopped operations due to security problems; that although he was transferred elsewhere for this reason, the transfer was deemed inappropriate; that it was beyond capacity to keep paying him a salary while he sat without working; and that there is no relationship between them that enables them to work together. The Respondent was ordered to submit a reply.

The Respondent submitted a written reply dated Ginbot 14, 2015 E.C., the content of which is briefly: My job responsibilities were detailed in a document written on 16/11/2008 E.C., and as stated under Article 2 (10) of Proclamation No. 1156/2011, I cannot execute the transfer, suspension, dismissal, and assignment of employees. The lower court investigated and verified this through documentary evidence and lawfully rejected the objection that the Respondent is a managerial employee. Thus, the Applicant’s grievance point in this regard is unacceptable. Regarding the grievance that the workplace where the Respondent worked had stopped operations due to security problems, it was properly proven by evidence at the lower court at the factual level that the branch had not stopped working, and rather, the Applicant was having my work done by an individual named Mr. Kejela Tamiru by delegation. Therefore, the grievance is unacceptable. While the dispute concerns dismissal from work, the Applicant’s grievance and argument raising the issue of the transfer prior to the dismissal out of context is irrelevant to the case, and moreover, since this is a new argument presented at this level, it has no legal backing. I did not sit for 16 months being paid a salary without work; also, the grievance that the Respondent was not working for 16 months is an argument that was not presented or raised in the lower court, so the grievance lacks both evidentiary and procedural law support and is unacceptable. Since it was proven in the lower court that we had a good relationship working together with the Applicant since 2003 E.C. and that I am a strong worker, the Applicant’s grievance citing a lack of good working relationship between us and requesting that the Respondent be dismissed with compensation is likewise inappropriate. He requested that the lower court’s decision be fully upheld and decided in his favor with costs and damages. The Applicant submitted a rejoinder strengthening its cassation petition.

The arguments of both parties briefly resemble what is described above, and we, on our part, have examined these arguments of the parties in conjunction with the issue framed when the cassation petition was admitted to the Cassation Bench, the decision that is the basis for the cassation petition, and the provisions of the law relevant to the case, in the following manner.

As we have examined the file, the respondent’s claim and argument is that the dismissal is illegal, while the applicant on its part argues that because the applicant’s branch office where the respondent worked ceased operations due to security problems in the area, the applicant transferred the respondent to another location. Even though the respondent opposed the transfer, filed a lawsuit, and was reinstated to his workplace by canceling the transfer through a court decision, the applicant argues that since the branch office’s work stopped due to the stated reason and there was no work to be done, dismissing the respondent by paying the notice period wage is legal and cannot be considered illegal.

Fundamentally, when a situation occurs that directly and permanently stops the work the employee is engaged in, partially or fully, it is a sufficient reason to terminate the contract of employment with notice, as stipulated under Article 28(3)(a) of the Labour Proclamation. However, returning to the case at hand, the copy of the lower court’s decision indicates that, at the factual level, it was refined and proven by evidence that the work of the Lalo Asabi branch office where the respondent worked did not permanently stop due to security problems as the applicant claimed in its cassation petition, but rather the work continued. The copy of the lower court’s decision proves by evidence that neither the overall work of the branch nor specifically the branch managerial work to which the respondent was assigned permanently stopped due to the alleged security disturbance in the area, but rather the work continued, and for instance, the applicant replaced and assigned an employee named Tamiru Qejela to work by delegation in the respondent’s workplace. Therefore, in a situation where it is not proven by evidence at the factual level that the specific work the respondent was engaged in or the overall work of the branch permanently stopped partially or fully in accordance with the requirements of the aforementioned law, the applicant’s dismissal of the respondent outside of this condition merely by giving prior notice or paying the notice period wage is not based on and does not consider the requirements and content of the provision of Article 28(3)(a) of the Labour Proclamation. Furthermore, the argument raised by the applicant in its cassation petition regarding the transfer has no relation/relevance to the dismissal dispute handled in this file and should not be presented in the current dispute file. Thus, the conclusion reached by the lower courts that the dismissal is generally illegal, and the part of the decision they gave in this regard, is proper and does not contain any fundamental error of law that warrants criticism; for this reason, we have not accepted the complaint and argument presented by the applicant in this regard.

On the other hand, the applicant also argued in the alternative that even if the dismissal is considered illegal, reinstating the respondent to his work could cause serious problems in the workplace, and thus the respondent should be dismissed with compensation paid in lieu. However, it is understood that the lower court rejected this alternative argument on the ground that the applicant did not prove with arguments and evidence that reinstating the respondent to his work would cause harm to the work.

Nevertheless, as can be understood from the overall litigation process presented, it is clearly visible that the two parties have entered into continuous and uninterrupted disagreements and disputes—sometimes regarding transfers, other times regarding salary increments and the like—and have stayed in litigation even in court. Not only this, but when looking at the respondent’s job share and level of responsibility, it requires high trust, and when considered together with the special nature of the financial work the applicant is engaged in, it clearly indicates that the employment relationship cannot continue in a healthy manner that maintains industrial peace, and this would cause serious problems at work.

In such a case, even if the employee wants to return to work, the court can decide that he be dismissed with compensation, as stipulated in Article 43(3) of the Labour Proclamation. Accordingly, while the lower courts should have decided that the respondent be dismissed with the payment of compensation, severance pay, and related payments in accordance with the law, the part of their decision ordering that he be reinstated to work with the payment of unpaid back wages failed to consider and take into account the purpose, content, and spirit of the provision of Article 43(3) of the Proclamation mentioned above. Therefore, since a fundamental error of law was committed in the decision from this perspective, it has been decided as follows stating that this should be corrected.

Decision

1. The judgments and orders given by the lower regional courts at each level regarding this case have been modified in accordance with Article 348(1) of the Civil Procedure Code.

2. The part of the decision given by the lower courts stating that the dismissal is illegal is affirmed.

3. The part of the decision given by the lower courts ordering that the respondent be reinstated to work with the payment of 4 months’ back wages amounting to Birr 95,664.36 (Ninety-five thousand six hundred sixty-four Birr and thirty-six cents) is fully reversed. Instead, it is decided that the respondent shall be dismissed with the payment of compensation. Accordingly, based on the respondent’s monthly salary amount of Birr 23,916.09 (Twenty-three thousand nine hundred sixteen Birr and nine cents) which was proven by evidence and accepted in the lower court, it is decided that a 6-month compensation payment of Birr 143,496.54 (One hundred forty-three thousand four hundred ninety-six Birr and fifty-four cents); a severance pay for 12 years, nine months, and fifteen days of service amounting to Birr 117,919.31 (One hundred seventeen thousand nine hundred nineteen Birr and thirty-one cents); as well as a 3-month notice period wage payment of Birr 71,748.27 (Seventy-one thousand seven hundred forty-eight Birr and twenty-seven cents) as admitted and argued by the applicant itself in the lower court, shall be paid to the respondent, provided that the applicant has not already paid this to the respondent, which shall be determined during the execution phase.

4. The remaining parts of the lower court’s decision are not affected by this decision.

5. The parties shall bear their own costs and expenses for this Cassation hearing.

6. The execution injunction order given in this file is lifted; let the lifting be communicated to the lower court.

The file is closed and shall be returned to the registry.

There are illegible signatures of five judges.