Termination of employment continues to generate more disputes before the Commission for Mediation and Arbitration (CMA) than any other category of labour complaint in Tanzania. The overwhelming majority of awards against employers turn not on whether there was a genuine reason to dismiss, but on how the dismissal was carried out. Getting the reason right but the process wrong is still an unfair termination.
The Two Limbs of a Fair Dismissal
Under section 37 of the Employment and Labour Relations Act, Cap. 366 (ELRA), a dismissal is fair only where the employer proves both a valid reason and a fair procedure. The Employment and Labour Relations (Code of Good Practice) Rules, 2007 (GN No. 42 of 2007) set out what each limb requires. Employers frequently satisfy the first and fall down on the second.
Valid reasons fall into three recognised categories: misconduct, incapacity (poor performance or ill health), and the employer’s operational requirements (retrenchment). Each category carries its own procedure, and using the wrong procedure for the reason relied upon is a recurring error.
Substantive Fairness: A Genuine, Documented Reason
The burden of proving the reason rests squarely on the employer. In misconduct cases this means contemporaneous evidence - not recollection after the event. Warning letters, incident reports, attendance records and signed acknowledgements are what tip an arbitration in the employer’s favour. Where an employer relies on a final written warning, the CMA will expect to see that the earlier warnings were validly issued and still current.
- Misconduct must ordinarily be serious enough to justify dismissal, or must follow progressive discipline for repeated lesser offences.
- Poor performance requires evidence that the employee was told the standard expected, given a fair opportunity to improve, and offered support or training.
- Operational requirements demand genuine economic, technological or structural grounds, supported by consultation.
Procedural Fairness: The Hearing Cannot Be Skipped
The single most common reason employers lose is the absence of a fair hearing before dismissal. Rule 13 of the Code requires that the employee be told of the allegations in a language they understand, be given a reasonable opportunity to prepare, be allowed to state their case and call witnesses, and be permitted the assistance of a fellow employee or trade union representative. The chairperson of the hearing should not be the complainant.
A hearing conducted after the decision to dismiss has already been taken is treated as no hearing at all. Equally, dismissing an employee summarily by letter, however serious the misconduct, will almost always be found procedurally unfair.
Retrenchment: Consultation Is Mandatory
Where the reason is operational, section 38 of ELRA imposes a consultation process before any termination. The employer must give written notice disclosing the reasons, the number of employees affected and the proposed selection criteria, and must consult in good faith on measures to avoid or minimise the retrenchment. Skipping consultation, or presenting it as a formality after the decision is final, converts a lawful retrenchment into an unfair dismissal.
Remedies and Their Cost
Where a termination is found unfair, the CMA may order reinstatement, re-engagement or compensation of not less than twelve months’ remuneration. Compensation of this magnitude, together with any accrued terminal benefits, makes a defective dismissal an expensive mistake. The cost of getting the process right at the outset is trivial by comparison.
Practical Steps for Employers
- Classify the reason correctly before choosing a procedure.
- Document misconduct and performance concerns as they arise, not retrospectively.
- Hold a genuine hearing before any decision is taken, and keep minutes.
- Follow the section 38 consultation process for any retrenchment.
- Take advice before dismissing a senior employee or where the facts are contested.
Fair process is not a bureaucratic obstacle; it is the employer’s best defence. A well-run disciplinary process, properly recorded, is what turns a contested dismissal into a defensible one.
For general information only - this material does not constitute legal advice.
Mathias Mhina is a Senior Associate Lawyer specialising in dispute resolution, with a strong focus on commercial litigation. He advises clients across banking, finance and financial-services regulation, including…
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