ZamPost in K2.7 million debt lawsuit for failure to remit money deducted from employees

Zambia Postal Services Corporation (ZamPost) is facing a K2.7 million debt lawsuit for its failure to remit money deducted from the employees to a Lusaka based micro-lending company.

The lawsuit, filed Tuesday in the Lusaka High Court said that ZamPost owes Rainbow capital Limited, K2,767,563, inclusive of interest from salary advances and loans advanced to the employees.

According to a written agreement signed in 2022, Rainbow Capital would provide salary advances and loans to the ZamPost’s eligible employees.

In the same agreement , Zampost was obligated to deduct from the employee’s payroll on a monthly basis, the salary advances and loans repayments due to the plaintiff and remit the same to Rainbow Capital in a timely manner until full and final payment of the credit facilities.

“That the defendant has been deducting the monthly repayments from its employees in accordance with the agreement and despite this, the defendant has contrary to the agreement not been remitting the said deductions/repayments to the Plaintiff,” the plaintiff said.

Rainbow Capital stated that it had already suffered loss following the breach of the agreement not to remit the said deductions and repayments to the plaintiff.

It further said it would suffer more financial loss due to ZamPost circular to its employees, notifying them that there shall be no deductions done on their payroll on behalf of the plaintiff effect March 31, 2024, a conduct contrary to the agreement.

“Plaintiff laments at trial of this suit that it has tried to resolve this matter out of court and engaged the defendant on several occasions but the said defendant has continued neglected or refused to pay the demanded amount despite having deducted from the employees and due for payment to the plaintiff in total disregard of the agreement,” submitted Rainbow Capital.

The micro lending company is seeking K2,767,563 being the due and outstanding payment from March 2023 to the date of this writ.

Rainbow Capital further wants ZamPost to pay damages for breach of contract, and that the Court should issue a restraining order against ZamPost to stop it or its agents from enforcing circular no.03/2024 which circular is in total breach of the agreement of February 2022 entered between the parties.

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