Are Pension Benefits the Same as Terminal Benefits? The Case of Lubunda Ngala and Jackson Chulu V the Anti-Corruption Commission (2018) ZMSC 416

this article discusses the disparate between pension benefits and terminal benefits. Thereafter, it discusses the Lubunda Ngala case in depth

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By Chimwemwe Ziwa

26th, March, 2024


In employment law, an employer and employee share a symbiotic relationship, that is, they benefit from each other. While an employee benefits an employer by working for him or her, an employee benefits from the employer through favourable conditions of employment, which among them are the basic salary and aftermath benefits when a contract of employment ends, an employee is legally entitled to terminal benefits. It is from this background that this article discusses the disparate between pension benefits and terminal benefits. It briefly outlines what pension benefits are. It highlights, also in brief, terminal benefits. Thereafter, it discusses the Lubunda Ngala case in depth and lastly a conclusion is given.


A pension is simply a fund into which amounts are paid regularly during an individual's period payment are made to support the person's retirement from work.[1] Therefore, pension benefits are benefits which an employee is entitled to when he or she retires from work. Retirement as envisaged in a Supreme Court of African Life Financial Services Zambia Limited (t/a Saturnia Regna Pension Trust Fund) v Kelvin Funga,[2] refers to leaving employment once an employee reaches a specified age or tour of services. As can be seen, pensions are only entitled to an employee when he or she retires from work. 


Terminal benefits are additional benefits a person gets when leaving employment and they are provided in individual contracts of employment or collective agreements. Terminal benefits, or otherwise termination benefits are given to an employee when a contract of employment ends and may include benefits among others accrued benefits, redundancy package and gratuity.[3] In National Milling Co. Ltd v Grace Simataa and Others,[4] the court held that when a person is leaving employment, the arrangements for terminal benefits such as pension, redundancy and gratuity and the like are the most important and payments must be prompt.

Therefore, the mode of exist from employment is what determines the terminal benefits which an employee will be entitled to. This was also re-echoed by Musonda JS while delivering the judgment of the majority in Care International Zambia v Misheck Tembo,[5]  when he asserted that the mode of exist of an employee determines the kind of relief they will be entitled to. It is crucial to therefore note that the terminal benefits an employee will be entitled to, is dependent on the way their contract of employment ends.


This case was a referral to the Constitutional Court by the High Court for interpretation of Articles 189(2) and 266 of the Constitution. This referral was made pursuant to the provisions of Article 128 (2) of the Constitution, which mandates other courts to refer any questions relating to the Constitution to the Constitutional Court subject to Article 28 which gives the High Court exclusive Jurisdiction to hear matters relating to the Bill of Rights.

In this case, the two applicants were former employees of the Anti-Corruption Commission (hereinafter designated as ' the commission'), contracted on permanent and pensionable terms and conditions of employment. Within two years of taking up employment, they resigned with the commission. Thereafter, they demanded payment of their terminal benefits- accrued leave days, uniform settling in allowances and payment of their salaries, in areas from every month since their last day in the respondent’s employment.

Owing to the want of paying the applicants their terminal benefits, the applicants asserted that the commission was obliged to keep them on payroll until they did so. They therefore sought a declaration that the commission's failure to maintain them on its payroll pending final settlement of their terminal benefits was an infringement of their constitutional rights enshrined in the constitution.

The Constitutional Court was called upon to answer the questions, among others as to;

1. Whether or not in light of Article 266, terminal benefits accrued while an employee's contract of employment falls within the ambit of the definition of a pension benefit?

2. Whether or not in light of Article 189(2) a person who has not been paid his or her terminal benefits should be retained in payroll until his or her terminal benefits are paid?

The Constitutional Court in a resounding judgment delivered by Chibomba PS, as she then was, held that not all terminal benefits that arise from the termination or end of the contract of employment are the same as pension benefits. In short, strictly speaking, pension benefits for purposes of the constitution are those that arise when an employee retires. Thus, what is anticipated with a pension is that it becomes effective on retirement, in some cases due to age or other circumstances and not certainly resignation as was with the applicants in this case (emphasis given).

The Court concluded that the type of terminal benefits claimed by the applicants, namely, leave pay, uniform settling and uniform allowances did not fall within the ambit of a pension hence could not invoke the provisions of Article 189 to be maintained on payroll.

The substratum from the case is that, while a pension benefit can 'loosely' be considered to be a terminal benefits it is not every terminal benefits that has qualities of a pension. A pension benefit is only available for employees whose contract of employment end by means of retirement.


The article has with great pains attempted to address and clarified the misconception behind terminal and pension benefits. This article does not however, settle the raged debate on terminal benefits and the Constitutional requirements to maintain employees on the payroll until pension benefits are paid. This is because the Constitutional Court did not address itself as to whether a person who decides to leave employment several years before early retirement or retirement is entitled to remain on payroll until they receive their benefits. Until such clarity is brought to light, the debate rages on.



Constitution of Zambia (Amendment) Act No.2 of 2016, Chapter 1 of the Laws of Zambia.


4] National Milling Co. Ltd v Grace Simataa and Others(2000) ZR 91 (SC)

[2] African Life Financial Services Zambia Limited (t/a Saturnia Regna Pension Trust Fund) v Kelvin Funga (2005) SCZ No. 112

 [5] Care International Zambia v Misheck Tembo(2018) ZMSC 378


[3] Chungu C, and Beele E, LABOUR LAW IN ZAMBIA An Introduction (2nd ed, Juta and Company 2020)  92

[1] Chungu C, and Beele E, LABOUR LAW IN ZAMBIA An Introduction (2nd ed, Juta and Company 2020)  92

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About the Author

Chimwemwe Ziwa is a third year student at the University of Zambia and he is the current Chief Operating Officer at Legal Aid Initiative.

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