09/06/2026
Natasha Patel-vs-Stanbic Bank Limited [9 June 2026] – Supreme Court Ruling on Severance Pay
By:
William Ngulube
Introduction
The Supreme Court of Zambia recently delivered its ruling in Natasha Patel-vs-Stanbic Bank Limited (SCZ/07/23/2023), a case that raised significant questions about the entitlement of dismissed employees to severance pay under the Employment Code Act, No. 3 of 2019. The matter stemmed from Patel’s dismissal from Stanbic Bank, where she had been employed on a permanent and pensionable basis. Her claim for wrongful dismissal and severance pay eventually reached the apex court after conflicting interpretations in the lower courts.
Background
Patel was dismissed following charges of dishonest conduct and causing financial loss. She sued Stanbic Bank in the High Court seeking multiple remedies, including damages for wrongful dismissal, mental anguish, accrued benefits, and severance pay.
The High Court dismissed her claims for wrongful dismissal but awarded severance pay under section 54(1)(c) of the Employment Code Act. Stanbic Bank appealed, arguing that severance pay only applies to employees under fixed-term contracts, not permanent and pensionable ones.
The Court of Appeal agreed with Stanbic Bank, holding that severance pay is limited to fixed-term contracts and that dismissed permanent employees are only entitled to accrued leave and salary up to the date of dismissal.
Motion Before the Supreme Court
Patel sought leave to appeal to the Supreme Court, arguing that:
1. The interpretation of sections 51 and 54 of the Employment Code Act raises points of law of public importance.
2. Conflicting Court of Appeal decisions necessitate clarification.
3. The matter has widespread implications for employees across Zambia.
Her counsel relied on precedents such as Bidvest Foods Zambia Limited-vs-CAA Import and Export Limited and the English case Tanfern Limited-vs-Cameron Macdonald, emphasising that the appeal had realistic prospects of success and would develop Zambian jurisprudence.
Stanbic Bank’s counsel countered that the law was already settled, particularly after the Court of Appeal’s interpretation, and that the issues raised were specific to Patel’s employment contract rather than of general public importance.
Consideration by the Court
The Supreme Court acknowledged that severance pay is indeed a matter of public importance. However, it noted that the issue had already been conclusively addressed in its recent decision in First Quantum Mining and Operations Limited-vs-Zubao Harry Juma (2026).
In that case, the Court clarified that:
1. Section 54(1)(b) and (c) applies only to fixed-term contracts.
2. Employees on permanent and pensionable contracts who are dismissed are not entitled to severance pay.
3. Such employees are limited to accrued leave and salary up to dismissal under section 51(1).
Given this precedent, the Court held that Patel’s intended appeal had “close to nil prospects of success” and did not warrant reopening a settled point of law.
Conclusion
The Supreme Court dismissed Patel’s application for leave to appeal, ruling that the matter had already been settled in Zubao Harry Juma. Each party was ordered to bear its own costs.
This ruling reinforces the distinction between fixed-term and permanent employment contracts under the Employment Code Act. It confirms that severance pay is reserved for employees on fixed-term contracts, while dismissed permanent employees are entitled only to accrued benefits and salary up to termination.
Key Takeaways
1. Employment Code Act distinguishes between fixed-term and permanent contracts regarding severance pay.
2. Permanent employees dismissed for misconduct are not entitled to severance pay.
3. Court of Appeal conflicts on severance pay have now been clarified by the Supreme Court.