3.
Severance allowance of one month for each year of service up to the date of this judgment.”
The appellant was still dissatisfied with the decision of the lower court and appealed further to this court. The appeal was, once
again, unsuccessful. It was totally dismissed.
The matter was subsequently brought before Assistant Registrar Kishindo to calculate
the sums of money payable by the appellant to the respondent in terms of the Order made by Chinangwa, J. The learned Assistant Registrar
construed the terms salary and pay in the context of the Employment Act and came to the conclusion that the respondent’s salary or pay constituted his basic salary and all the allowances and benefits payable to him by the appellant, ( emphasis supplied). He calculated the total amount due and payable to the respondent in terms
of the learned judge’s Order as amounting to K9,893,960.80. Stunned by the amount they were required to pay and dissatisfied with the approach taken by the Assistant Registrar in determining
what constitutes salary or pay, the appellant appealed against the decision of the learned Assistant Registrar. But, once again,
the appeal, in the Court below, was unsuccessful. Still discontented the appellant brings the present appeal to this Court against
the decision of Twea, J., in the court below.
In determining the amount payable to the respondent in terms of the Order of Chinangwa,
J., it became necessary to construe the terms wages and pay. The learned judge had awarded 3 months pay for each year of service as compensation in terms of section 63-(4) of the Employment Act. An Order made in terms of section 63 – (6) when an employer refuses to comply with a re-instatement order requires payment of 12 weeks wages. Then the 1st schedule to the Employment Act concerning severance allowances talks about wages. Therefore, there was need to construe the words
pay and wages.
The position taken by the appellant is that the terms pay and wages may be used interchangeably,
but may not be equated with the term remuneration. It is the appellant’s argument that from the definition of remuneration and wages contained in the Employment Act, it is clear
that remuneration includes wages, salaries and benefits such as allowances and other benefits while the term wage is narrower and excludes allowances and other benefits. According to the appellant wages would essentially comprise the basic salary
or basic wage only. The appellant is however prepared to accept that the terms wages, salary and pay mean essentially one and the
same thing. The respondent on the other hand contends that the respondent’s wages or salary or pay included the basic salary and all the allowances and benefits whether in cash or kind which he regularly received from his employers.
The learned Assistant Registrar and the learned judge, in the court below, were called
upon to determine the meaning of wages or pay. They had to decide upon the meaning of these terms bearing in mind also the facts of the case before them. However, the appellant
added a third term, namely remuneration and called upon the learned judge in the court below and this court to also construe its meaning for the purpose of, probably, restricting
the meaning of the terms wages or pay. The appellant submitted repeatedly that since remuneration is defined as including wages, salary plus allowances and other benefits,
it would follow that the term remuneration is broader than wages or salary and that the latter words would not include within their
definition allowances or other benefits. The approach suggested by the appellant places much emphasis on a comparison between the
word remuneration on the one hand and wages and salary on the other. It places less emphasis or importance on the actual words used. We think that the approach preferred by the appellant
is erroneous as it ignores the importance of the words actually used by the drafter of the statute and we take the position that
that approach is likely to lead to an erroneous result.
The meaning of the words wages or salary or pay is not as easy as a simple comparison between the words remuneration and wages or salary would seem to suggest. There are some case authorities which tend to shed some light on the terms in issue.
In the case of Bayley v. Bailey [1922] 2 KB 227, the respondent an army officer was in receipt of £292 per annum as regimental pay. He was also entitled to 5s per day as command pay. When it was contended, that the command pay was a mere allowance and therefore not calculable as the salary or pay of the respondent,
Mc Cardie, J., stated –
“I find myself unable to agree. It is true that command pay is only receivable by an officer in command. It is equally true that command
pay is given because of the added social and other responsibilities falling on the officer in command…….In my opinion
command pay is distinct in substance and fact from mere allowances. It is pay in the true sense. It is a definite remuneration for
discharging the duties of a definite rank.”
In our view, this command pay could as well have been called command allowance and still qualify to be included in the definition
of the term pay. It must also be noted here that Mc Cardie, J., uses the term remuneration to mean payment or compensation, clearly suggesting the interchangeability of the terms remuneration, pay or salary. It is probably academic to urge for a clear demarcation in the meaning of these terms.
In the Canadian case of Pay Less Gas Co. (1972) Limited v. Director of Employment Standards 1991 Can L11 1922 (BC S.C.) Mr. Justice Hood stated –
“However, there are numerous decisions of arbitrators in labour cases, wherein the specific provisions of collective agreements were
interpreted in their context and terms such as earnings, gross earnings and total wages have been interpreted as including vacation
pay.”
The learned Judge continued to state –
“In my opinion, the words “total wages for the year” included vacation pay paid to the employee during that year. I am
satisfied that vacation pay falls within the definition of “wages” contained in both s – ss (a) and (b). Like salaries
and commission it constitutes compensation paid or payable by an employer to an employee for services or labour.”
It would seem that case law and in particular statutory law have no difficulty in regarding vacation pay or what is called in our jurisdiction holiday grant or leave pay as wages. This is clearly a payment which is made to an employee when he is not actually working; it is a payment made to an employee
who is taking a rest from work. It can be said that it is a payment which is so unrelated to the actual work done or actual service
rendered as allowance for night guard, security alarm system and water. Therefore, allowances and certain benefits may be included
in the definition of wages or salary.
In also another Canadian case George, Re (In Bankruptcy), 2002 SK QB 99 (Can L11), quoting Cruickshank J., it is observed that –
“Wages do not necessarily relate to work actually performed and may reflect on certain circumstances and under certain legislation,
other remuneration or employee benefit.”
That, clearly, explains why items such as vacation pay and command pay would be regarded as pay or the equivalent of wages. Again
the above observation shows the overlap in the meaning of the terms wages and remuneration. Then the same case accepts the definition of the term wages as –
“that which is payable by an employer to an employee. It arises from a contract of service.”
The allowances relating to night guard, security alarm system, water, electricity and telephone were payable by the appellant as employer
to the respondent their employee; the payments arose from a contract of service. We would observe that case authorities from England
and Canada, being Commonwealth countries, have strong persuasive effect upon this Court.
The view held by Twea, J., in the court below was that the terms wages, salary, pay and remuneration are normally used interchangeably. We agree. The definitions of the relevant terms strongly support that view. Again, we have already
noted that case authorities strongly lean towards the view that the meaning of these terms overlap and they may be used interchangeably.
The Shorter Oxford English Dictionary defines the word pay as money paid for labour or service. The term includes wages, salary and hire. The same dictionary defines the term salary as a fixed payment made periodically to a person as compensation for regular work. It is also defined as –
“Remuneration for services rendered, fee, honorarium, reward, recompense.”
Again the same dictionary defines the word remunerate as –
“To reward a person, to pay a person for services rendered or for work done.”
Remuneration is defined as -
“Reward, recompense, payment, pay.”
Then wage is defined as –
“a payment to a person for service rendered.”
It would seem that the appellant would have no difficulty with the view that the words, wages, salary and pay mean more or less the
same thing. From the definitions contained in the Shorter Oxford English Dictionary it can be seen that the word salary is defined as remuneration for services rendered; then the word remuneration is defined as payment or pay. A close examination of the definitions of the relevant terms would support the view taken by the learned Twea, J., in the court
below, that ordinarily the terms remuneration,
