At least 80 former employees of the Malawi Enterprise Development Fund (Medf) are demanding K20 billion in compensation after the Industrial Relations Court (IRC) ruled their dismissals were unlawful.
In a judgment delivered on June 16 2026 in Mzuzu, the IRC found that Medf, formerly the National Economic Empowerment Fund (Neef), breached labour law by failing to follow due process in terminating the workers in December 2025.
Lawyer for the claimants, Wanangwa Munkhondia, said the court is currently hearing evidence to assess damages.
“We are demanding K20 billion for the 80 applicants,” Munkhondia said in an interview on Friday. “There were 55 applicants at the commencement of the action and an additional 27 were added before judgment. One has since withdrawn.”
He said the court had so far heard evidence from five of the 80 applicants and that both parties were sorting out “housekeeping issues”, including verification of identity documents.
In his ruling, IRC Deputy Chairperson Anthony Kapaswiche awarded compensation for unfair dismissal and damages for unfair labour practices to Yamikani Vincent Jamu and 79 others who were on probation at the time.
The court dismissed Medf’s argument that probationary employees were not entitled to due process.
“The fact that an employee is on probation does not make them a lesser employee,” the judgment reads. “In cases of termination, the requirements of Section 57 of the Employment Act have to be adhered to.”
Section 57(1) requires an employer to have a valid reason connected to capacity, conduct, or operational requirements before terminating employment.
The court found that Medf failed to consult the employees prior to termination on grounds of operational requirements.
The applicants abandoned their initial prayer for reinstatement. The court set July 7 2026 for assessment of damages.
Medf lawyer Alfred Lungu said the institution intends to appeal the liability finding and described the K20 billion claims as “excessive”.
“These were all employees on probation. Some of the claims are way overboard. It was uncertain whether their employment would continue,” he said.
Medf further argued that if the terminations were illegal due to the absence of a board, then the recruitments made during the same period were also irregular.
The previous Medf board’s tenure ended on March 28 2025. The affected employees were hired between May and September 2025.
Labour law expert Mauya Msuku said the judgment centred on Medf’s failure to follow retrenchment procedures.
“Much as the applicants raised the issue of there being no board, the judgment is based on the fact that the employer did not follow procedures to justify the retrenchment,” he said.
National Advocacy Platform chairperson Benedicto Kondowe said the ruling affirms that public institutions must operate within the law.
“Restructuring decisions must be guided by the law and proper consultation. Where public officials make such decisions, there must be accountability so taxpayers do not continue bearing the cost,” he said.
Centre for Social Transparency and Accountability executive director Willy Kambwandira said the case was “a costly reminder that unlawful decisions are never free.”
“Politicians and public officials who make unlawful employment decisions should be held personally accountable where bad faith or gross negligence is established,” he said.
