GUEST ARTICLE: Promise to Renew Contract Invalid – Court
By Dickson Jere
A lady CEO of the company whispered to the Director of Human Resource and Administration that her contract of employment will be renewed when it comes to an end. The Vice Board chairman also ‘whispered’ to her that she will not only get a new contract but promoted because of her good appraisal and hard work. Therefore, she was expectant of getting another contract based on these assurances from the top bosses. Prior, her contract was renewed six times since she joined the company in 2004.
However, three months before the end of her contract, she received the notice that she will not be reemployed.
Disturbed with the news, she sued the company in the High Court on the grounds that there was “legitimate expectation” that she will be given a new contract based on conversations with her seniors. She added that her performance was excellent based on the annual appraisals. She, therefore, demanded for compensation for unlawful, unfair and wrongful non renewal of the contract.
The High Court dismissed her claims. Dissatisfied, she appealed to the Court of Appeal where a panel of three judges relooked at her case.
Was she promised the renewal?
“…a legitimate expectation of renewal can only arise where an employee is given assurances that his contract would be renewed, or the employer conducts itself in such a manner that leads an employee to be believe his contract will be renewed,” the Judges said.
“We must add here that the representation, assurance or confirmation made by the employer to the employee must be clear and unambiguous,” the Judges said.
Having set out the principles of “legitimate expectation”, the Court went ahead and analysed the facts of this case in which the said assurances came from her seniors.
“There is no evidence that the Board made any assurance to the Appellant that it would renew the contract,” the Judges said, adding that the individuals who spoke to her were not acting on behalf of the Board.
The Court further observed that as Director of Human Resources, the employee should have known that her contract can only be renewed by the Board of Directors.
“The circumstances of this case are that the fixed term contract in issue did not create a legitimate expectation of renewal and no representation or promise that the contract would be renewed was ever made by the Respondent through its Board,” the Judges said.
The Judges noted that the said contract did not even contain a renewal clause and each contract was treated differently and separately.
“Therefore, even if the Appellant’s performance was excellent or satisfactory, there was no obligation on the part of the Respondent to renew the contract,” the Judges added.
“Having made a finding that there was no legitimate expectation, it follows that the non-renewal of the fixed term contract was not wrongful, unfair and unlawful,” they concluded .
Case citation- Zimba v CFB Medical Centre Limited – Appeal No. 270/2022.
Interesting jurisprudence. The court still maintained that the principle of “legitimate expectation” is good law in Zambia but in this case it did not apply. I am not sure whether the Vice Board chairman cannot be said to represent the views the Board….it is a moot question!