By Teddy Musonda and Isaac Njovu
March 12th, 2024
It
is common in Zambia that most employers at one time or another delay paying
their employees their wages/salary. There have been several cases of reference
where employees would go for days, weeks and months without being paid their
wages/salaries. To that effect, this article will critically analyse the law in
relation to the delay of payment of wages/salaries by an employer.
The
issue of pay is central to every employment relationship as there is an express
or implied term in every contract of employment that the employer will pay
their employee a salary in return for the service rendered by the employee. The
Employment Code Act No. 3 of 2019 (The Employment Code Act) is the
primary piece of legislation that governs the relationship between employers
and employees. The Employment Code Act, under Section 66 (2)
provides that;
The
wages of an employee shall fall due and be paid at regular intervals not being
later than the fifth day following the date on which they fall due under
subsection (1)
From
the above provision, the Employment Code Act makes it mandatory for
wages/salaries to be paid at intervals, not later than the fifth day following
the date on which they fall due. This means every employer in Zambia can only
delay the payment of wages/salary for five days, at most, from the day they
fall due in the case of monthly contracts under S.66(1)(a) of the Employment
Code Act.
The
case of Nitrogen Chemicals of Zambia Ltd v. Boyd Chomba Mutambo, Peggy
Chikolela, Darius SCZ No. 44 of 2016, is a decision that brings out an
eye-catching principle in relation to the delay of payment of salaries by an
employer.
The
brief facts of this case are that Boyd Chomba Mutambo, Peggy Chikolela and
Darius Musolo (The Respondents) were employed by Nitrogen Chemicals of
Zambia Ltd (The Appellant) on various dates and in different positions.
Nitrogen Chemicals of Zambia Ltd started experiencing liquidity problems in
1996 resulting in delays in the payment of wages/salaries of their employees.
This problem worsened around 2004 and according to the respondents, they would
go for 2 to 4 months or even 6 months without salaries. Sometimes they had to
stage demonstrations for them to get their pay. Clause 16.1 of the Collective
Agreement and clause 13.2 of the Conditions of Service for Non-represented
employees provided that salaries would be paid on the 23rd of every month or
earlier if there was a weekend or public holiday.
As
a consequence of the foregoing, the respondents resorted to resigning and
claimed constructive dismissal. The respondents raised several issues to
support their claim for constructive dismissal, however, the central focus of
this article is the issue of time of payment of wages/salaries, which as
earlier stated in the facts, the respondent said they would go for 2 to 4
months or even 6 months without salaries. This was one if not the major reason
for their resignation.
In
reversing the decision of the High Court, the Supreme Court stated that,
“In our view, a deliberate refusal
to pay would amount to a fundamental breach but delay in paying would
not usually be a fundamental breach. The appellant is right that the
fundamental breach must be judged on the circumstances of each case. The
actions and intentions of the parties must be considered.”
The
Supreme Court further went on to state that the situation was more about the
lateness of pay rather than its total absence or deliberate refusal to pay or
reduction in pay and that the respondents did not act promptly and in response
to a breach of the obligation to pay salaries on agreed dates.
It must be understood that this case was dealt
with before the enactment of the Employment Code Act. However, the holding by
the Supreme Court in the Boyd Chomba case invites several criticisms. To start with,
in Melise Lubanda & 72 Others v Pierson Mwale (Sued in His capacity as
Secretary – Roan United Football Club) and Zambia Consolidated Copper Mines
Limited SCZ Appeal No. 84 of 2011, the Supreme Court held that:
An
“Employer”, is a person or organisation (Corporate or Incorporated), that pays
salaries or wages to workers in return for their services rendered. A
relationship of employment must have been created formally or informally “which
obliges the employer to pay wages and meet all other conditions attendant to
that relation (Authors’ Emphasis)”.
This
means that the employer is mandated to pay the employees in accordance with the
provisions of the contract of employment. Failure to pay employees by an employer
in accordance with the payment period set out in the contract or prescribed by
law amounts to a breach, this was confirmed
in Charles Mushitu (Sued in his capacity as Secretary General of Zambia Red
Cross Society Zambia) v. Christabel M. Kaumba Appeal No. 122/2015, where
the Supreme Court further stated that the primary duty of an employer is to pay
an employee their wages for services rendered.
To
contextualize the foregoing, the underpinning point is that the Employment
Code Act demands that an employer must pay their employee their
wages/salaries on the day it is due. But taking into consideration the economic
situation in Zambia, the Employment Code Act allows the employer to delay
paying their employees their wages/salaries within 5 (five) days after the due
date. This essentially means that it is lawful for an employer to delay the
payment of an employee's wages/salary for only 5 (five) days after the due
date. However, it follows that any delay that exceeds 5 (five) days after the
due date will and must be unlawful regardless of the circumstance.
The Supreme Court in the Boyd Chomba case also
stated that “the respondents did not act promptly in response to a breach of
the obligation to pay salaries on agreed dates,” this statement only
invites enormous criticism. To rely on the position as espoused in the case of Attorney
General v Nachizi Phiri and 10 Others (2009) SCZ 68. An employee is
naturally vulnerable and the weak party in the employment relationship. Hence, most
employees have the fear of confronting their employers on the issue as they
feel this might ruin their relationship with their employer. This therefore in
most cases, precludes them from protesting or ‘acting promptly’ so as to
address the delay in their payment of wages/salary.
As
of today, the authors submit that the decision in the Boyd Chomba case
seems to be bad law though it was delivered by the Supreme Court and it is
rendered inapplicable by virtue of the subsequent enactment of Employment Code
Act Section 66. As earlier stated, the Employment Code Act makes it mandatory
for wages to be paid at intervals, not later than the fifth day following the
date on which they fall due.
In
summation, the Employment Code Act provides an employer with leeway to delay
payment of an employee’s wages/salary within 5 (5) days after the due date as
agreed in the contract of employment. However, it automatically becomes
unlawful when an employer does not pay their employee their wages/salary after
5 (five) days after the date on which the payments were agreed to be paid.
THIS IS ARTICLE IS BROUGHT TO YOU BY:
LEGAL
AID INITIATIVE
(Bringing the Law to Your Comfort)
ABOUT THE AUTHORS:
Teddy Musonda is a third-year law student at the University of Zambia. He is
also the current Chief Executive Officer of Legal Aid Initiative.
Isaac Njovu is a fourth-year law student at the University of Zambia. He Writes
in his own capacity.