High Court dismisses former NCZ workers’ breach of contract case with costs


LUSAKA High Court judge Betty Mung’omba has dismissed with costs for lack of merit a case where six former Nitrogen Chemicals of Zambia employees sued the company for breach of contract.

Mulonda Kumayando, Thompson Shamano, Nicholas Siamasandu, Lawrence Mwangala, Bruce Mumbati and Jailos Shaba sued Nitrogen Chemicals of Zambia (NCZ), claiming damages for breach of contract, namely clause 4.3 of the collective agreement entered into between the National Union of Commercial and Industrial Workers and NCZ which expressly provided for payment of terminal benefits on the last day of employment.

The plaintiffs, who were represented by lawyer Moses Chitambala, also claimed interest on the sums found due, costs and any other reliefs the court might deem fit.

In their statement of claim, the plaintiffs had stated that they were all former employees of NCZ and were retired on various dates but between February 9 and 11, 2009 following their attainment of the age of 55.


They had stated that on July 31, 2009, the National Union of Commercial and Industrial Workers, to which all of them were members, and NCZ entered into a collective agreement which enumerated, inter alia, the time of payment of terminal benefits in case of termination of the contract of employment.

They had also submitted that contrary to their collective agreement, NCZ failed to pay each of them their terminal benefits in full on the date of exit and instead paid them in instalments over a period of more than two years.

The plaintiffs argued that the failure by NCZ to settle their terminal benefits in full on the last date of employment, constituted a breach of contract, as a result of which each of them suffered damage.

But NCZ, through its lawyer Sunday Nkonde, had submitted in defence that it did not breach the collective agreement and that the plaintiffs did not suffer any damage.
NCZ had further submitted that the plaintiffs were paid instalments due to the liquidity problems that affected the fertiliser company.

In her judgment, judge Mung’omba said it was not in dispute that the plaintiffs were not paid their full benefits on the date of exit in accordance with the clause 4.3 of the collective agreement.

She also found that the plaintiffs were paid 25 per cent of upkeep allowance of their last drawn basic salary up until their benefits were paid in accordance with clause seven of the collective agreement, adding that the payment ceased immediately the benefits were paid.

“I find that the defendant did not breach the collective agreement. The failure by the defendant to pay the plaintiffs on the last working day meant that they were obliged to the 25 per cent of the upkeep allowance pending full settlement of the benefits which they did and as such they mitigated any loss the plaintiffs would suffered as a consequence of the delay in payment of the terminal benefits. Had the defendant not paid the 25 per cent of the upkeep allowance, the defendant would have at that point been deemed to be in breach of the collective agreement and liable to payment of damages for the breach,” judge Mung’omba said.

The judge said to hold that NCZ breached the agreement and order damages would amount to unjust enrichment.

“I accordingly dismiss the plaintiff’s case for being bereft of merit. I award costs to the defendants to be taxed in default of agreement. Leave to appeal is granted,” said judge Mung’omba.

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