Court News

20 ex-BP employees win Supreme Court ruling

By CHINTU MALAMBO
THE Supreme Court has directed Puma Energy to pay 20 former BP Zambia PLC employees, damages for breach of contract after their employer sold its shares to Puma Energy.
The damages will be assessed by the Deputy Registrar.
The 20 employees had been employed by BP Zambia for different periods up until April 1, 2011 when BP’s shares were sold and they became employees of Puma.
In this matter BP and Puma Energy appealed the High Court judgement to the Supreme Court for finding that they breached both the sale and purchase agreements and the employees’ contracts of employment.
Kennie Muhanga and 19 others sued BP Zambia PLC and Puma Energy demanding for payment of their terminal benefits and share entitlement following the termination of their contracts of employment by BP and Puma.
They sought a declaration that BP Zambia PLC and Puma Energy on April 6, 2011 repudiated and breached the contract of employment by unilaterally canceling the share-match scheme which varied the terms and conditions of the contracts of employment, thereby terminating the workers contracts.
Puma and BP said that employees who participated in the share-match scheme had no shares or interest in Puma but had shares in BP and the shares in Puma were sold by BP Africa Limited, which was the majority shareholder.
Puma and BP maintained that there had been no unilateral changes to the employees’ contracts of employment nor had there been any breach of the terms and conditions of any of the contracts as alleged.
The oil companies said the share-match scheme was a non guaranteed benefit in terms of the employees contract of employment and was premised on the employer remaining part of the BP group which BP Zambia PLC left on April 1, 2011.
In her judgement High Court Judge Getrude Chawatama concluded that the share-match scheme was operated at BP Zambia PLC which decided to make it a term of the contract of employment.
She found that there was no evidence before her to prove that Puma procured the sale of shares by fraud, dishonesty or trickery.
Judge Chawatama however concluded that the oil companies were in breach of both the sale and purchase agreement and the contracts of employment therefore, the employees were entitled to damages.
BP and Puma appealed the High Court judgement to the Supreme Court arguing that the lower court erred in law and fact when it held that they breached both the sale and purchase agreements and the employees’ contracts of employment.

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