Payment of Subsistence Allowance Clearance

One of an employee's rights upon termination under the laws of Tanzania is the payment of repatriation costs to the place of recruitment. The law provides expressly that where an employee's contract of employment is terminated at a place other than where the employee was recruited, the employer shall transport the employee and his personal effects to the place of recruitment. The law provides further that in the event of failure by the employer to repatriate the employee upon termination of the employment, the employer shall be liable to pay daily subsistence expenses during the period between the date of termination of the employment and the date of transporting the employee and his family to the place of recruitment.¹

This position of the law has, in many cases, been interpreted to the disadvantage of employers. Recently the High Court of Tanzania Labour Division at Dar es Salaam in Labour Revision No. 438 of 2022 between NCBA Bank Tanzania Limited v. Annah Lupemba, gave an interpretation of the law regarding the duty of the employer in repatriating the employee upon cessation of the employment contract. In its profound reasoning, the High Court examined the applicability of this statutory obligation of repatriating an employee and held that where there is a requirement for the employee to comply with exit procedures, then the employee has to do so and failure to comply with such procedures may entitle the employer not to repatriate the employee until such clearance is completed. The High Court was of the reasoned view that payment of the subsistence allowance between the termination date and the date of repatriation, as provided by the law, should not be applied in isolation of the terms of the employment contract, employer's policies, and the employee's conduct. In this particular matter, an employer was ordered by the Commission for Mediation and Arbitration (CMA) to pay an employee subsistence allowance to the tune of TZS. 118 million despite the clear proof that the employee refused to perform clearance and return the employer's properties when her employment was terminated.

The High Court in quashing the CMA award logically reasoned that an employee who under the terms of the contract was required to perform clearance and to hand over the employer's properties upon termination, must adhere to the terms of the contract and failure to do so is a breach of the terms of the contract and hence the employer shall not be under any obligation to pay subsistence allowance during the period between termination to the time when the employee complies with the terms of the employment contract. Further, an employee who is notified by the employer to perform clearance and return the employer's properties but who refuses to comply, is disobedient and should not be entitled to subsistence allowance because they have caused the delay in their repatriation.

1.  Section 43 (1) of The Employment and Labour Relations Act Cap 366 R.E of 2019.