Q&A – 11 May 2020

Coronavirus and retrenchment procedure

We are a travel agent in Tanzania and faced with zero business. No one is travelling because of the Coronavirus and I cannot afford to retain a large number of people. What is the retrenchment procedure and retrenchment package under the labour laws of Tanzania?
ET, Dar

Retrenchment is one of the reasons for termination of employment by the employer. For it to be valid and fair, the reason and the procedure should follow the law. An employer can retrench employees for economic needs such as the need to scale down or close the operation due to business failure caused by whatever reason including the Coronavirus; technological change that has made the employees redundant or the need to restructure the business. Unfairness of either the reason or the procedure or both vitiates the validity of the retrenchment. For retrenchment to be fair, the employer has to do the following: (i) issue a notice of intention to retrenchment to the employee or his trade union if the employee is unionised staff and (ii) issue a notice of consultation meetings and hold the consultation meetings with the employee or the trade union for unionised staff.

The notice of consultation meetings which is the key notice must contain (a) a brief reason for the intended retrenchment; (b) any measures taken by employer to avoid or minimise the intended retrenchment; (c) the selection criteria for the employees to be retrenchment the usual selection criteria being first in last out (d) timing of the retrenchment ie why retrenchment is being done now (e) severance pay for the retrenchment and (f) any additional retrenchment package.

Additional retrenchment package includes notice pay, transport to the place of recruitment, any remuneration for work done before the termination; payment of any annual leave pay due to an employee for leave that the employee has not taken and any annual leave pay accrued during any incomplete leave cycle. Notice pay is calculated on the remuneration paid to the employee monthly including allowance.

If the employees to be retrenchment are both unionised and non-unionised staff, the employer will have to conduct two different consultation meetings with the trade union for unionised staff and with non-unionised staff. In case of disagreement between employees or the trade union and the employer, either party to the negotiation is free to refer the dispute to the Commission for Mediation and Arbitration and should mediation fail, the dispute can be referred to the High Court, Labour Division for decision.

Secret marriage and honeymoon

I do not want any person to attend our wedding as I want to keep it a secret. How can I go about this? Can my wife dictate having a honeymoon in addition to choosing a location? I am really struggling with funding but I also want to get married to this woman who has big expectations from me. Guide me please.
KT, Dar

The Law of Marriage Act, 1971 states that, any member of the public may attend a marriage in civil form so far as the accommodation in the office of the district registrar may reasonably permit. Further to that, any person who is a follower of the religion according to the rites of which a marriage is contracted may attend that marriage. Also, any member of the community to which the parties or either of them belong may attend a marriage contracted in Islamic form or according to rites recognised by customary law.

From the above, no marriage can be contracted in secrecy under Tanzanian law. The best you can hope for is that, no one shows up during the proceedings of the marriage either at the Registrar’s office or at the public place of worship, wherever you choose to get married.

As for a honeymoon, we have checked our statutes and this word does not appear anywhere. It is surely not a condition subsequent to marriage. Our research reveals that honeymoon is the traditional holiday taken by newlyweds to celebrate their marriage in intimacy and seclusion. Today, honeymoons are often celebrated in destinations considered exotic and/or romantic, but with the coronavirus pandemic very few destinations are open.

Hence it is entirely your choice if you want to go on a honeymoon or not. The law does not force you to but perhaps your wife will have such an expectation. It is the expectation of your wife that you have to manage, which is not a legal question. We wish you good luck.

Liability of directors

As a non-executive director can I be held responsible for the actions of the company. What can I do to protect myself?
FF, Moshi

Directors have a fiduciary duty towards the company and its shareholders. Additionally, it is untrue that the directors can walk scot free from the conduct of the company, even if in a non-executive position.

Infact even under the Companies Act, Income Tax Act, VAT Act, Tax Administration Act, National Security Act, Anti Money Laundering Act, to mention a few, directors can not only be held personally liable for the actions or inactions of a company but may also be imprisoned if they do not exercise reasonable diligence in their duties.

We recommend that you only be a director of companies with proper governance in place and get a director’s liability insurance which however will not cover you for any criminal actions although your legal fees may be covered.