SCHOOL OF BUSINESS AND ECONOMIC SCIENCES

DEPARTMENT OF ECONOMICS AND LAW

MODULE TITLE : INDUSTRIAL RELATIONS LAW

MODULE CODE : ECL-IRL-121

SUBMITTED TO : MR MUMBA

SUBMITTED BY : BLESSINGS MAHOKOLA (LLB/23/SS/015)

ASSIGNMENT TITLE : DOES THE EMPOLYMENT ACT FAVOUR EMPLOYEES

MORE THAN EMPLOYERS? A CRITICAL ANALYSIS
DUE DATE : 14/02/25
INTRODUCTION

The Employment Act (Chapter 55:01) of Malawi establishes the legal framework and legal
standards governing employer-employee relationships. It establishes minimum labour
standards, the worker's rights, employer obligations and procedures for dispute resolution.
The Constitution is the Supreme law of the land as provided in Section 5 of the Constitution
of the Republic of Malawi. It is the main source of labour laws in the country as Section 31 of
the Constitution of the Republic of Malawi provides for the right to fair and safe labour
practices.1 This right is one of the fundamental human rights enshrined in the 1994
Constitution of the Republic of Malawi. In the case of Liquidator, Import and Export (MW)
Limited v Kankwangwa and others2, the court adopted the reasoning of the Constitutional
Court of South Africa on interpretation of fair and safe labour practices, where fairness is
required towards both the employer and employee and not just one party. Critics have argued
that the Act provides stronger protection for employees than for employers, making it
difficult for enterprises to operate freely while there have been others who have argued that
the Act simply ensures fairness and aligns with international labour standards while Clement
Ng'ong'ola3 is his paper noted that the Act occurred He "under a constitutional arrangement
that does not properly secure the right to work, and in an economic environment in which
jobs are scarce and employment is at a premium.", this allows for employers to "ignore some
of the requirements of the revised laws", implying that while the Act aims to favour
employees, practical economic conditions may undermine it's effectiveness. This paper
critically analyses the Employment Act by examining its provision to determine whether it
indeed favours employees more than employers. The discussion is supplemented by case law,
legal commentaries, and comparative analysis with labour laws in other jurisdictions.

The Employment Act is designed to protect workers' rights while ensuring industrial
harmony. Part II of the Act establishes key principles:

Firstly, prohibition of unlawful labour including forced labour or tenancy labour in Section 4
where no employee can be compelled to work under coercion, aligning with ILO Convention
No.29 (1930) and section 27(3) of the 1994 Constitution of the Republic of Malawi, which
prohibits against forced labour on any person.
1
1994 Constitution of the Republic of Malawi, s.31(1)
2
Liquidator, Import and Export (MW) Limited v Kankwangwa & Ors. (Civil Appeal 52 of
2003) [2003] MWHC 92 (21 December 2003
3
Ng’ong’ola,C. (2002), Recent Labour Law Reforms in Malawi: A Review. Journal of
African Law, 46(2), 167-196.
Secondly, prohibition of Anti-discrimination acts or policies in Section 5 where Employers
cannot discriminate based on race, sex, language, religion, or political opinion, consistent
with ILO Convention No. 111 (1958). For instance, in Kaunda v Tukumbo Girls Secondary
School4 where the applicant was dismissed due to her husband's resignation where both were
working for the respondent. The IRC held that the effect of the respondent's decision was to
prevent married women from seeking and sustaining employment in their own right.

Thirdly is equal pay for work of equal value5 where employees performing work of equal
value must receive equal remuneration as provided in Section 31(3) of the 1994 Constitution
of Malawi. In Davie Thomu Muhondo v Polyplast Ltd6, stated that inequality in pay might
and do arise due skill, experience, training and long service and the law does not suggest that
there should be equal pay just because one is in same or similar position with another
employee.

Lastly, another fundamental principle which is not expressly provided for in the Act is
prohibition of child labour, Section 23(4) of the 1994 Constitution of Malawi protects
children from child labour while Section 21 of the Employment Act prohibits employment of
persons under the age of 14.

Section 7 provides robust remedies for employees whose fundamental rights are violated.
These include reinstatement, restoration of benefits, and compensation. The availability of
such remedies ensures that employees have meaningful recourse when their rights are
infringed. In Banda v Dimon (Mw) Ltd7, stated that “Section 31 of the Constitution of 1994
provides that every person shall have the right to fair and safe labour practices and to fair
remuneration and shall be entitled to fair and equal remuneration for work of equal value
without distinction or discrimination of any kind, in particular on the basis of race. The court
held that the defendant forced the plaintiff out of his job due to race and the issue of equal
pay for work of equal value was determined. This shows that the Courts will enforce the law
where the fundamental rights of an employee have been infringed.

These principles align with ILO Convention No. 111 on Discrimination (Employment and
Occupation), which Malawi has ratified. These provisions protect employees from
4
Kaunda v Tukumbo Girls Secondary School [2008] MLLR 446
5
Employment Act, s.6(1)
6
Davie Thomu Muhondo v Polyplast Ltd (Civil Cause 3626 of 2001) [2005] MWHC

7
Banda v Dimon (Mw) Ltd [2008] MLLR 338
exploitation, they also impose compliance obligations on employers, requiring them to
maintain transparent hiring and remuneration practices.

Section 12 prohibits employers from victimizing employees who exercise their rights under
Part III. This provision also clearly shows that the EA favours the employee, since the
provision ensures that communicating freely with a labour officer and they can report
violations without fear of retaliation, further empowering the employees.

While Section 13(2) reads "A labour officer shall treat as absolutely confidential the source of
any complaint bringing to his notice a contravention of this Act" from this statement, Labour
officers are required to treat complaints as confidential, protecting employees from potential
backlash. This provision encourages employees to come forward with grievances, knowing
that their identities will be protected. This administrative framework of the Act is designed to
ensure compliance and protect employees, often at the expense of employers' autonomy.

Section 27 requires employers to provide employees with a written statement of employment

particulars, including details such as remuneration, working hours, nature of the work to be
performed, normal hours of work, any provision for the termination of the contract other than
those provided by this Act and any disciplinary rule applicable to the employee. This
provision ensures transparency and clarity in the employment relationship, empowering
employees to understand their rights and obligations.

Section 29 requires employers to provide notice of termination, with the length of notice
depending on the employee's length of service. This provision provides employees with a
degree of job security, ensuring that they are not dismissed without warning.

Section 35(1) mandates an employer to pay the employee a severance allowance to be

calculated in accordance with Part I of the First Schedule. Severance calculations include
basic salary, housing allowances, and transport benefits. Although this is important because it
is a way to compensate employees for their years of service and help them maintain financial
security after leaving their job. In Japan International Corporation Agency v Jere8 , the court
stated that “Section 35(1) in effect compels employers to recognize the commitment and the
valuable contribution which employees make to the work they do. Clearly the provision
protects employees from being told to go with one month's pay after working for an employer
for a considerable number of years. In the spirit of section 31(1) of the Constitution, section
35(1) of the EA is meant to protect employees who have long served their masters and puts a
8
Japan International Corporation Agency v Jere [2008] MLLR 152
stop to exploitation.” But in a situation where the contracts are being terminated due to
redundancy or retrenchment, or due to economic difficulties, this increases financial burdens
on the employers when they are already struggling. In contrast countries like the United
States of America follow an 'employment-at-will system, where severance allowance is not
mandated unless contractually agreed.9 This comparison highlights the employee-centric
nature of Malawi's Employment Act as it guarantees compensation that is not universally
mandated elsewhere.

The working hours framework under Section 36 further limits employer flexibility capping
normal hours at 48 hours per week. Section 44 mandates annual leave of 15 to 18 days, for
instance in Masina v Kabula Food Products Ltd10, the court found and held that the
applicant's claim that he was entitled to leave days in any given year is indeed a requirement
under the law while Section 47 grants female employees 8 weeks of fully paid maternity
leave entirely funded by the employer since they will still be fully paid. For instance, in
Jumbo v Banja La Mtsogolo11, the court held that the dismissal of the plaintiff was unfair and
unlawful after the plaintiff upon falling pregnant; she sought maternity leave but was denied
by the respondent and subsequently dismissed. This section also favours the employee, as in
such circumstances, the employee faces absence of workforce while also fully paying for the
absence. This differs from South Africa where government backed schemes share maternity
costs with employers.12 In addition, Section 47 does not provide for a period of how long one
has to work before they are entitled to a maternity leave which would create problems in
certain circumstances to the employer. These provisions highlight how the Act, while
ensuring worker well-being, creates financial and logistical burdens for the employer.

Section 54 grants the Minister of labour authority to set minimum wages, ensuring employees
receive fair remuneration while Section 55 criminalises wage payments below the minimum,
imposing fines and imprisonment for non-compliance. One would argue that while these
provisions safeguard employees against exploitation, they increase operational costs
especially for small enterprises.

9
Finkin, M. (2015). Comparative Labor Law: Research Handbooks in Comparative Law
series. University of Illinois.
10
Masina v Kabula Food Products Ltd IRC matter no. 31 of 2002
11
Jumbo v Banja La Mtsogolo [2008] MLLR 409
12
JV de Plessis & Fouche, MA. A Practical Guide to Labour Law. 9th edition. Butterworth
Publishers Ltd,
Section 57 requires employers to justify dismissals as the "employment of an employee shall
not be terminated by an employer unless there is a valid reason for such termination
connected with the capacity or conduct of the employee or based on the operational
requirements of the undertaking" .and provide employees with an opportunity to defend
themselves as provided for in subsection 2 where "The employment of an employee shall not
be terminated for reasons connected with his capacity or conduct before the employee is
provided an opportunity to defend himself against the allegations made, unless the employer
cannot reasonably be expected to provide the opportunity." This provision ensures that
employees are not dismissed arbitrarily or unfairly. In subsection 3, a number of reasons are
not valid reasons for dismissal or for the imposition of disciplinary action. In Mlangali v Nico
Holdings Ltd13, the applicant who was working as a driver suffered from cancer which
prevented him from driving. The respondent dismissed him without a hearing or an
examination whether the applicant could be assigned to other duties. The Court held that the
dismissal was unfair as the respondent did not act with justice and equity, on the facts. This
provision ensures that employees are not dismissed arbitrarily or unfairly further showing that
the EA favours employees.

The dispute resolution framework under the Employment Act further complicates the
employer-employee dynamic. Section 3 establishes the Industrial Relations Court (IRC) as
the primary body for resolving labour disputes. Section 63 provides robust remedies for
employees who are unfairly dismissed, subsection 1 provides that "If the Court finds that an
employee’s complaint of unfair dismissal is well founded, it shall award the employee"
several remedies including reinstatement, re-engagement, and compensation. These remedies
ensure that employees have meaningful recourse when their rights are violated. For instance,
in Stanbic Bank ltd v Mtukula14, where the appellant employed the respondent as a bank
manager. On 8th September 2003 while he was working as a branch manager at the
appellant’s Lilongwe branch, the appellant terminated the respondent’s employment under
circumstances which led the Court to hold that such termination was unfair. The Supreme
court ordered that the respondent shall receive K8,984,171.51 as compensation and also made
an order for reinstatement. It was also found that the Industrial Relations Court made an
award of reinstatement or re-engagement as one of the remedies and the award was not
complied with by the employer, the employee therefore was entitled to a special award as per
subsection 6 which was also granted and was among the K8,984,171.51. Section 63 allows
13
Mlangali v Nico Holdings Ltd IRC Matter No. IRC PR 290 of 2010
14
Stanbic Bank ltd v Mtukula M.S.C.A. CIVIL APPEAL NO. 34 OF 2006
for reinstatement orders potentially forcing employers to retain workers they no longer trust.
Unlike other jurisdictions, for instance the United Kingdom where reinstatements are rare. 15
Clearly showing that Malawi's law strongly prioritise job security. Section 56 also restricts
disciplinary actions preventing employers from imposing fines or deductions as penalties.
Employers must adhere to formal disciplinary processes even in cases of gross misconduct or
risk lawsuits for wrongful dismissal.

In Section 57, the Act lists non-valid reasons for dismissal, including political opinion, being
a union member and filing legal complaints. These provisions strongly uphold freedom of
expression for the employees but also limit employer discretion in how they manage their
workplace.

CONCLUSION

From a comparative standpoint, the EA aligns more withe European labour laws which
emphasize job security rather than American labour laws where termination is easier. In
conclusion, the EA of Malawi is structure to favour employees more than employers by
providing strong protection against unfair dismissal, poor working conditions, severance
allowance, gratuity and more. However, employers still retain contractual discretion,
summary dismissal rights, and operational decision-making powers to mention a few. That
said, the legal, financial, and administrative burdens it imposes on businesses make it lean
more toward employees than employers. In order to strike a fairer balance, future labour
reforms should consider reducing employer liabilities in severance pay, providing
government-backed maternity benefits, and streamlining dispute resolution mechanisms to
enhance both worker security and business growth.

BIBLIOGRAPHY

Mlangali v Nico Holdings Ltd IRC Matter No. IRC PR 290 of 2010

Stanbic Bank ltd v Mtukula M.S.C.A. CIVIL APPEAL NO. 34 OF 2006

Finkin, M. (2015). Comparative Labor Law: Research Handbooks in Comparative Law

series. University of Illinois.

Masina v Kabula Food Products Ltd IRC matter no. 31 of 2002

Jumbo v Banja La Mtsogolo [2008] MLLR 40

Marinescu, I. (2008). Job Security Legislation and Job Duration: Evidence From the UK.
15

Harris School of Public Policy Studies, University of Chicago, Working Papers.

JV de Plessis & Fouche, MA. A Practical Guide to Labour Law. 9th edition. Butterworth
Publishers Ltd

Japan International Corporation Agency v Jere [2008] MLLR 152

Kaunda v Tukumbo Girls Secondary School [2008] MLLR 446

Employment Act

Davie Thomu Muhondo v Polyplast Ltd (Civil Cause 3626 of 2001) [2005] MWHC

Banda v Dimon (Mw) Ltd [2008] MLLR 338

Constitution of the Republic of Malawi, 1994

Liquidator, Import and Export (MW) Limited v Kankwangwa & Ors. (Civil Appeal 52 of
2003) [2003] MWHC 92 (21 December 2003)

Ng’ong’ola,C. (2002), Recent Labour Law Reforms in Malawi: A Review. Journal of African
Law, 46(2), 167-196