[2014] KEELRC 463 (KLR)

REPUBLIC OF KENYA

IN THE INDUSTRIAL COURT AT NAIROBI

CAUSE NUMBER 1073 OF 2012

BETWEEN

ABRAHAM GUMBA ………………………………... CLAIMANT

VERSUS

KENYA MEDICAL SUPPLIES AUTHORITY...RESPONDENT

Rika J

CC. Mr. Kidemi

Mr. Anthony Maruti instructed by Messrs Simba & Simba Advocates for the Claimant

Mrs. Hellen Khayesi instructed by Hayanga & Company Advocates for the Respondent

________________________________________________________________

ISSUE IN DISPUTE: UNFAIR AND UNLAWFUL TERMINATION

AWARD

1. Abraham Gumba filed his Statement of Claim on 22st June 2012. The Respondent filed its Statement of Response on 31st July 2012 and a Supplementary List of Documents on 25th March 2013.

2. Gumba testified on 27th March 2013, and 6th June 2013 when he rested his case. The Respondent testified through its ICT Manager Samuel Kung'u Wataku on 29th July 2013 and 23rd September 2013; its Human Resources and Administration Manager Enos Namasaka on 23rd September 2013; and its Human Resources and Administration Officer Agnetta Mutuku on 5th December 2013, when oral testimonies closed.

3. The Advocates for the respective Parties subsequently filed their Closing Arguments, which they underscored before the Court on 18th February 2014. The Court advised Award would be read on notice.

4. The Claimant's position is that the Respondent is a State Corporation. On 27th June 2011, the Respondent appointed the Claimant in writing, as an Information Technology Officer. The Claimant signed the agreement on 5th July 2011.

5. He was to work for 1 year, effective from 1st July 2011, lapsing 30th June 2012, at a monthly basic salary of Kshs. 70,342 and house rent allowance of Kshs. 30,000. On 1st September 2011, the Respondent wrote to the Claimant terminating his contract of employment with effect from the same date. He was given the reason for termination to comprise poor work performance; insubordination; and interference with the Respondent's ICT System.

6. There was no notice or warning prior the termination. No offences had been brought to the attention of the Claimant by the Respondent before termination. Termination breached the internal disciplinary procedures of the Respondent, rules of natural justice and the Employment Act 2007. Termination was unfair for want of valid reasons and fair procedure. The Claimant was denied his Certificate of Service. He seeks the following Orders-:

Termination be declared unlawful.

A declaration that the reasons stated in the letter of termination do not constitute proper ground for termination.

The Respondent to withdraw the letter of termination and issue the Claimant a letter clearing him of any wrongdoing.

The Respondent to pay the Claimant the sum of Kshs. 1,003, 420 being the salary for the remainder of the contract period from 1st September 2011 to 30th June 2012 [10 months].

The Respondent to pay to the Claimant compensation the equivalent of 12 months' salary for unfair termination at Kshs. 1,204,104.

The Claimant is paid damages for wrongful termination.

Interest on the monetary orders from the date of the filing of the Claim.

Costs of the Claim; and any other order the Court may find it fit to award.

7. Gumba testified there was no other contract outside the one he signed on 5th July 2011. For a period of about 5 years prior to the appointment, Gumba was working for a Consortium where the Respondent KEMSA, was a Member. The Consortium worked from the Respondent's premises. He had been engaged by GTZ, one of the Members of the Consortium. KEMSA had observed the Claimant at work, under the Consortium, for the 5 years.

8. He did not complete 1 year on being taken in by KEMSA after the Consortium ended. The contract had grounds for dismissal. None was stated in the letter of termination. He was not placed on probation on joining KEMSA. He did not know why. He was not interviewed before employment on 5th July 2011. He had never been shown the Human Resource Policies and Procedures Manual of the Respondent before he came to Court for the hearing. The Manual was not directly mentioned in his letter of appointment.

9. The Manual referred to induction. The Claimant did not receive any induction. Clause 1. 2 placed the responsibility on the Employee to read the Manual. This was not brought to his attention. The IT Manager Mr. Wataku was the Claimant's Senior; he did not take the Claimant through the Manual. Clause 7 refers to different classes of Employees. Gumba was a contract Employee, and according to the Manual, he would be entitled to work for 2 or 3 years; he was contracted for only 1 year.

10. He had worked for 2 months before termination. His letter of termination came from the Director of Finance rather than from the Human Resource Office. He had not been appraised, or been given a warning for poor performance. No warning or details of insubordination were given to him. No details of interference with the KEMSA ICT System were supplied to him. There was no Internal Memo from the Respondent which was brought to the Claimant's attention. The termination letter was delivered to the Claimant through a Motorbike Cyclist. Gumba was not issued the Certificate of Service.

11. The Respondent alleged in its letter responding to the Claimant's letter of demand before filing of the Claim, that certain parts of the Manual had been violated by the Claimant. He stated that the Manual was not part of his contract of employment. He was accused for being a non-performer; he had worked and proved his mettle for 5 years. He had been asked to acquaint himself with software. No specific accusation was made against him. It was not true that he was caught up in a conflict of interest with respect to the software. Franz Frederichs owned the Prolog Software, which he offered to sell to KEMSA. Only the Licensee was authorized to use the product. No conflict of interest was attributed to the Claimant over the Software.

12. Cross-examined, Gumba stated he has a Bachelor of Science Degree, in Information Sciences. He was not employed by the Consortium prior to joining KEMSA; he worked as a Consultant. A Consultant is not on the payroll of the Organization. The Consortium had a number of Organizations. He worked for Owen Technologies.

13. He was offered employment at the end of the Consortium by KEMSA, which he accepted. He physically moved to KEMSA premises. He was familiar with the operations of the Respondent and was not interviewed. There were other Employees who came from the Consortium to KEMSA. There were some things the Claimant was required to learn, on joining KEMSA, as captured in the e-mail of Senior Systems Developer Laban Okune to the Claimant, which was copied to the Claimant's Supervisor Samuel Wataku, dated 19th July 2011. He was to learn the various features of Adempiere ERP, this being the system on which the KEMSA ERP system was built. He was required to familiarize himself with Java and all the other technologies listed to him by Okune.

14. Okune asked the Claimant for an update on his learning, in an e-mail dated 2nd August 2011. The Claimant said he saw Okune and updated him in person; it was incorrect to say he defied instructions, and did not update Okune. He did not fail to do the tutorials, although he did not have a record showing he took the tutorials.

15. He retained the administrative password for the system. It was untrue to say he denied Employees data from the system. He agreed he was called for a meeting in Mr. Wataku's Office, attended by the Human Resources Officer, where Wataku alleged the Claimant was unwilling to use his knowledge of IT. The Claimant did not know why Wataku made the assertion. The Claimant said he was willing to use his knowledge, but what he was being asked to do was unethical. It was not true that the Claimant insisted he would only work with the old system as opposed to Adempiere.

16. Gumba agreed he is a Director of Owen Technologies. One could say the Claimant was an agent of Franz Frederichs. Gumba worked with Frederichs while at the Consortium. KEMSA was aware of the Claimant's position with relation to Frederichs and Owen Technologies at the time it employed the Claimant. GTZ had written to the Claimant on 6th September 2010, stating Pprolog was the intellectual property of Frederichs, and if KEMSA wished to use the database, KEMSA would have to negotiate terms of use with Frederichs, represented by Owen Technologies. Gumba represented Frederichs in Nairobi, but denied that he had any commercial interest in this representation. KEMSA intended to use Pprolog and transit to Adempiere in the long term, or use the two together.

17. The Claimant's contract with KEMSA had a clause on conflict of interest. Samuel Wataku wrote a Memo on 30th August 2011, alleging the Claimant had denied KEMSA Employees data, resulting in loss of man hours. He recommended the Claimant be disengaged from KEMSA. The Claimant did not know why Wataku wrote this Memo. The employment letter had a termination clause. The Claimant accepted notice pay. He saw no reason not to. He accepted the notice pay, not the termination.

18. The Human Resources Manual of the Respondent was incorporated in the Claimant's contract of employment. He was a Contract Employee, under a contract of 1 year. He signed the contract and agreed to its terms and conditions. Clause 8. 9 of the Manual, forbid Employees from involvement in transactions which would lead to conflict of interest. Gumba testified his association with Owen Technologies did not create a conflict of interest.

19. Probation was for 6 months. The Respondent alleged the Claimant had not completed probation on termination. The Claimant did not respond to this allegation. The meeting in Wataku's Office related to the Claimant's performance. The letter of termination mentioned that the Claimant was insubordinate. He denied being insubordinate, and denied that he refused to learn Adempiere. He did not place himself in a position of conflict of interest, or sabotage the operations of his Employer.

20. Redirected, the Claimant stated termination letter gave 3 specific grounds in justification. He had not received any letter previously relating to his performance, insubordination, or interference with KEMSA. No acts of interference with the System were shown. Termination was not justified. The Memo from Wataku said the Claimant be disengaged; it did not say that a decision be made based on conflict of interest. There was nothing in the Memo on the Claimant's poor performance of his duties. He was not told which system he had sabotaged. He would have to be acquainted with the system to sabotage it. Failure to do the tutorials was not given as the reason for termination. The e-mail of 6th September 2010 from GTZ, on ownership of Pprolog, predated the Claimant's employment with KEMSA. Clause 9 of the letter of employment regulated discipline; the Claimant was dismissed on the day he received the letter. The Manual did not support the mode of termination. The Claimant urges the Court to allow the Claim.

21. The Respondent's position is that it employed the Claimant effective from 1st July 2011 to 30th June 2012. His contract was terminated lawfully and on justifiable grounds. He failed to appraise himself with Adempiere ERP System. He failed to follow the instructions of his Supervisor on the System. He was involved in conflict of interest over his association with Owen Technologies and ownership of Pprolog. He sabotaged the Respondent's Computer System, refusing to restore the Respondent's back-up System to facilitate transfer of data, saying he could only do this with the instructions of Frederichs. He merited summary dismissal; he was instead paid 1 month salary in lieu of notice. He was granted every opportunity to defend himself. The decision against him was in the interest of the Respondent, a Statutory Corporation. He was paid the correct terminal dues, which he accepted.

22. Wataku testified he started working for KEMSA in 2011, and was familiar with the Claimant. The Claimant reported to him. The Claimant came to the Respondent from a Consortium which had come to an end. A Task Force recommended KEMSA absorbs staff from the Consortium. It was also agreed that data would be passed onto the Partners. Wataku did not know which particular Partner the Claimant worked for within the Consortium. 5 other Employees joined from the Consortium. All were given contracts of 1 year by KEMSA. They were not subjected to entry interviews.

23. The Claimant was instructed by Laban, Senior Systems Administrator that he needed to be inducted in the use of Adempiere ERP System, which the KEMSA System was based. He did not submit himself to the induction. The other Partners were availed data. It was important data, which guided KEMSA in procurement of HIV/Aids drugs. The Claimant had the password while working for the Consortium, which he refused to release to KEMSA, inhibiting access to data and procurement of drugs. Gumba was the only one with the password.

24. He had an improper relationship with Franz Frederichs, who formerly headed the Consortium. The position of Frederichs was that KEMSA should buy Pprolog, and Owen Technologies, owned by the Claimant, would maintain this System. There was conflict of interest. Employees were prohibited from doing business with the Organization. Gumba insisted that KEMSA pays for Pprolog as proposed by Frederichs.

25. Wataku wrote Memo to Enos Namasaka, the Human Resources Manager, recommending the Claimant be disengaged from the Organization. Gumba did not ever release the password to KEMSA. KEMSA was compelled to reconstruct the data manually. The Claimant was paid 1 month salary in lieu of notice. The Claimant's contract was terminated. He was paid 1 month salary in lieu of notice. The letter of termination was delivered to him by the Human Resource Officer, not by a Motorbike Cyclist. The letter was signed by the Director Finance and Administration, who acted for the CEO in the latter's absence. The reason for termination was constant misconduct and failure to abide by the rules. He failed to release data, and performed his role poorly. He was insubordinate, refused to appraise himself with the Adempiere System, and interfered with the ICT System. He did not successfully complete probation, which was a requirement under the Human Resources Manual. Termination was merited. There was no malice.

26. Wataku testified upon cross-examination that the Claimant's terms and conditions of employment were defined in the contract given to the Claimant. The contract alluded to Procedures and Regulations. He worked for the Consortium before he joined KEMSA. KEMSA would not have employed the Claimant if he was not qualified. He would not tell if KEMSA was satisfied with the Claimant's qualifications and skills. At the time of recruitment, KEMSA was satisfied. Gumba worked for the Consortium from 2005.

27. The Claimant refused to release information to the Respondent. There was nothing in writing to show he refused to do so. This was a critical ground in justifying termination. The letter of termination was not specific. Wataku held several meetings with the Claimant before termination. The Witness was not aware, that a warning must be given in writing. The letter of termination did not mention conflict of interest as a ground for termination.

28. Every Partner in the Consortium except KEMSA, was availed the data. It was possible for KEMSA to get the data from these other former Partners. Gumba held the password, without which, KEMSA was handicapped in procuring drugs. Wataku was aware of a dispute between KEMSA and Frederichs over the intellectual ownership of Pprolog. The dispute is pending at another platform. KEMSA did not know that the information belonged to Frederichs. KEMSA reconstructed the information manually.

29. His performance was wanting. Wataku however, did not conduct an appraisal of the Claimant's performance. Wataku held a meeting with the Claimant on 29th August 2011, and fired him on 1st September 2011. Wataku did not know that the Human Resources Manual required the Claimant to be notified of the accusations against him, before the meeting. The contract given to the Claimant did not have a clause on probation. The Claimant wrote to the Respondent a demand letter before action; the reply did not mention conflict of interest, or withholding of information on the part of the Claimant.

30. Redirected, Wataku testified that he conducted induction at the ICT section. He informed the Inductees about the existence of the Human Resource Manual; it was upon the individual Inductee to search for the Manual and read it. The Consortium wound up in June 2011. Only Gumba had the password. Conflict of interest was not captured directly but, was part of the reasons for termination.

31. Enos Namasaka told the Court he has worked for KEMSA for 13 years. The Claimant worked for 2 months for KEMSA, from July to September 2011. He previously worked for Global Fund, part of a Consortium to which KEMSA was a Partner. He was taken in by KEMSA at the end of the Consortium, following the recommendation of a Task Force. He was inducted. His contract referred to Regulations and Procedures, which included the Human Resources Manual. Employees were aware about the existence of the Manual. Clause 1. 2 of the Manual made it the responsibility of the Employees to read and understand the Manual. Clause 9. 11 provided that Employees would undergo 6 months of probation. The Claimant had not completed probation by the time of termination. Probation was also mentioned in the letter of termination, under the termination clause. The Claimant was given specific charges, and given an opportunity to defend himself. Termination was lawful.

32. Namasaka testified on cross-examination that he did not personally induct the Claimant. He was not certain, about the details of the Claimant's induction, because he was not present when it was done. Namasaka came to know about the reasons for termination- withholding of the password and conflict of interest. Paragraph 4 of the Statement of Response gave the ground for termination; it did not mention withholding of the password and conflict of interest. These grounds were not stated in the letter of termination. Namasaka conceded the Respondent was inconsistent, in the substantive justification of its termination decision. The allegation of poor performance, was not given substantiation, through performance appraisal. It was not clear when poor performance occurred. The nature of insubordination, between July and September 2011, was not revealed. Namasaka was told by the Human Resource Officer that the Claimant had switched off the Respondent's System, and refused to give certain password. The Human Resources Manual was available online. The Claimant was not directed to the relevant web-link to access the Manual. Ordinarily, he would have been expected to receive, acknowledge receipt and sign the Manual. There was nothing to show either Wataku or Laban availed the Manual to the Claimant. Namasaka was aware there was an ownership dispute over Pprolog between KEMSA and Frederichs. An offence against an Employee must be stated in writing; the Witness conceded there was no specific offence made out to the Claimant in this mode. Redirected, Namasaka stated the Claimant was, to the best of his knowledge, inducted. The correct procedure was followed.

33. Agneta Mutuku served under Namasaka as the Human Resources Officer. She has worked for KEMSA for 7 years and knew the Claimant. Wataku approached Mutuku and told her the Claimant was not following the instructions of his Superiors. He declined to transfer software used by the Consortium to KEMSA. He retained the password. He was rude and could not work. He was not ready to learn what was taking place at KEMSA. Mutuku informed the Claimant that insubordination would lead to dismissal. He had divided loyalty, holding that the software belonged to a Consortium Partner. According to Public Service Regulations, the information created under the Consortium belonged to the Government. The Claimant held that the information belonged to Frederichs. Mutuku held a meeting with the Claimant. He was adamant saying KEMSA could do as it wished. His contract was terminated. Mutuku personally handed over the letter of termination to him. The reasons for the decision were given in the letter. Poor performance and non-performance meant the same thing. He sabotaged KEMSA, while holding himself out as an Employee of KEMSA. He was still on probation at the time of termination. His contract was terminated, while the Respondent would have been entitled to summarily dismiss him.

34. She told the Court on cross-examination that the Claimant was on probation. He was paid 2 extra weeks' salary as notice pay. Regular Employees, who were not on probation, would be entitled to 1 month salary in lieu of notice. The Claimant was paid 1 month salary in lieu of notice. This did not imply that he was not considered to be on probation. There was no notice calling the Claimant for a disciplinary hearing. He was called on the phone by Mutuku and advised on the purpose of the meeting. There was no record of the disciplinary proceedings. The Employment Act allowed for oral warning under Section 44 [4] [a]. Mutuku conceded she is not an expert in Employment Law. She would be surprised to learn that Namasaka conceded termination was flawed. She would agree, if the Act did not allow for oral warnings, that procedure was flouted. The Claimant was given oral warning, and within minutes of the warning, had his contract terminated. She did not author the letter of termination, and could not say why the reasons for termination were not specified. She was not aware of the dispute between KEMSA and Frederichs on the Pprolog. She was sure the information belonged to the Government. The offences leading to the termination were in the e-mails written to him before the decision was made. The e-mails constituted performance appraisal. Appraisal could not be done on the Employee while on probation. The decision to terminate was made on the date of termination. She testified further prompted by her Advocate, that the Claimant was inducted on employment. There was a Human Resource Manual availed on induction. 4 of the 5 Employees taken by KEMSA from the Consortium still work for KEMSA. Termination was fair and justified. The Respondent prays for dismissal of the Claim.

The Court Finds and Awards-:

35. The Claimant was initially employed in 2005, by one of the Partners engaged in a Consortium with KEMSA. The Consortium wound up, and on recommendation of a Task Force, some of the Employees working for other Partners were taken in by the Respondent. 5 Employees, among them the Claimant, joined KEMSA. The Claimant was employed as an IT Officer SA5, at a basic monthly salary of Kshs. 70,342 and house rent allowance of Kshs. 30,000. The contract was for 1 year, running from 1st July 2011 to 30th June 2012. He did not complete the 1 year; in fact he worked for only 2 months. On 1st September 2011, the Respondent terminated his contract of employment. 3 reasons were given for the decision: One, poor work performance despite several warnings; Two, insubordination entailing disrespect, refusal to follow orders given to him by authority; and Three, wrongful interference with KEMSA ICT Systems. He was paid 1 month salary in lieu of notice.

36. Several questions are raised by this dispute, the first which is, whether the Claimant was at the time of termination on probation? If he was, then there would be no need to go into further inquiry of the other issues, because Section 42 [1] of the Employment Act 2007 does not place any obligation on the Employer to give an Employee on probation, any formal charges or hear the Employee in his defence, as contemplated under Section 41, before termination.

37. If he was not on probation, the Court must attempt to answer the traditional questions relating to termination of employment, to wit: whether termination was based on valid reason or reasons; whether the decision was arrived at fairly; and whether the Claimant is entitled to the remedies sought in the Claim.

38. The contract of employment commencing 1st July 2011, does not explicitly provide for probation. It only mentions probation under Clause 10, in the context of termination. It states: ‘'termination of employment during the probation period will be subject to two weeks' notice by either side.''

39. Under Clause 11, the Claimant was informed: ‘' you will be subject to all KEMSA regulations and procedures that are now in force, or which may be introduced from time to time. In addition, KEMSA reserves the right to review or change these terms and conditions of employment at its own discretion.''

40. Clause 9. 11 of the Human Resources Policies and Procedures Manual provides: ‘' the probation period for all staff will be six months.''The Claimant's position is that the Manual was not part of his contract of employment. It was not brought to his attention on employment. He was not aware of its existence, and was not told he was serving probation at the beginning of his employment.

41. The Respondent states the Manual was part of the terms and conditions of employment of the Claimant. He was inducted, and his attention drawn to the presence of the Manual. He was aware he was subject to probation of 6 months, and had not completed probation at the time of termination. He would not be entitled to claim under the law of unfair termination, as he was serving on probation.

42. The Parties' intention was not to place the Claimant on probation after he crossed over from the Consortium to KEMSA. The letter of employment did not explicitly give any probationary period. The Claimant had served for 5 years with the Consortium, in the same IT position, as that which was offered to him by KEMSA. The Court observed in Industrial Court Cause Number 1979 of 2012 between Carole Nyambura Thiga v. Oxfam [2013] e-KLR that probation is served by the new Employee to provide job adjustment opportunity for both the new Employee and the Employer, to determine whether to continue with the employment relationship. Probation is not for Old Dogs. Human Resources and Procedures Manuals are not on their own contracts of employment.

43. In the Industrial Court Cause No. 746 [N] of 2009 between Kenya Union of Journalists v. the Standard Group Limitedthis Court concluded that Human Resources Policies and Procedures Manuals represent quotidian aspects of human resource management; they do not ordinarily change the contract of employment, but expound workplace policies; and do not automatically become incorporated to the contract of employment.

44. To become accepted as binding terms and conditions of the employment contract, the contract must have a Clause adopting the contents of the Human Resources Policies and Procedures Manuals. The Claimant's contract did this under Clause 11. Cause No. 746 [N] of 2009also concluded that the Manual must be shown to have been received by the Employee and signed by the Employee, in order to bind him as part of his regular contract. The Manual does not become part of the Employee's contract simply by being posted on the notice board or dispersed online, as allegedly done by the Respondent. Whereas the Employers who author workplace Manuals should always be held accountable for the standards established in the Manuals, the Employees cannot be held accountable, unless they have consented to be bound, by signing their full acceptance of the standards set in the Manuals. The nature of workplace Manuals in general, is not to define the individual terms and conditions of service. They may be authored because the law requires they are authored, such under Section 6 of the Employment Act which requires Employers state their policies on sexual harassment; they may be authored by Employers to self-publicize; and are useful in guiding everyday interactions amongst Employers, their Employees and the Consumers of their goods and services. They are useful in enabling Employees, Consumers, the Public and the Authorities in holding Employers accountable on such issues as Fair Labour Practices, Protection of the Environment, Corruption and Human Rights.

45. The Respondent did not show that the Claimant was availed the Human Resources Policies and Procedure Manual on employment; and that he received and signed this Manual, for it to be considered much more than a mere quotidian aspect of the employment relationship. It was wrong for the Respondent to expect the Claimant to go out looking for the Manual. It is the obligation of the Employer to avail to the Employee all documents that may be relevant in regulating the employment relationship, including the Human Resources Policies and Procedures Manuals.

46. Probation is given to new Employees, to enable them learn the operations of their Employers, and to enable the Employer assess whether the Employee fits the job requirements. It is a period of learning each other. The Claimant was not a new Employee. KEMSA was not a new Employer to the Claimant, in the strict sense. The Claimant was working in a Consortium where KEMSA was a Partner. He worked in the IT section. He had worked for 5 years. He was not even interviewed for the job; he was just taken in. The Consortium operated within the premises of KEMSA. After termination he was paid a full month's salary in lieu of notice. Clause 10 of the contract allowed either Party to terminate the contract by giving of 1 month notice, or payment of 1 month salary in lieu of such notice. It specifically gave notice period for termination while on probation to be a period of 2 weeks. There was no provision for payment of notice pay, in event of termination while on probation, and certainly there was nothing in the contract to warrant payment of a full month's salary as notice in event termination took place during probation. The documents underlying the employment relationship, and the history of this relationship, lead the Court to conclude that the Claimant was in a continuous, regular, employment relationship with KEMSA; he was not on probation at the time of termination.

Substantive Justification

47. Section 43 and 45 of the Employment Act 2007 require the Employer to demonstrate valid reason or reasons in justifying termination. The letter of termination stated 3 grounds in justifying termination: poor work performance despite several warnings; insubordination; and wrongful interference with KEMSA ICT System.

48. Poor work performance is an allegation that should be supported by evidence of specific performance targets, appraisal of the performance, with specific results. The Claimant had worked directly for 2 months, for the Respondent. There were no targets set for him in those 2 months which he was shown to have been appraised on, and failed to meet. It was alarming to hear Mutuku say that the e-mails exchanged between the Claimant and Laban constituted performance appraisal. The Court has not found any evidence or material on record to conclude that the Claimant performed his work poorly.

49. There was no record of several warnings given by the Respondent to the Claimant, between July and September 2011. The evidence of Mutuku was that the Claimant was given oral warning on the date of termination, and termination letter issued within minutes of the oral warning. It was not possible that the Claimant was guilty of poor work performance despite several warnings.

50. It was not made clear to the Court what the Claimant did, to constitute the offence of wrongful interference with the KEMSA ICT System. His Supervisor Wataku testified that the Claimant failed to learn the use of the Respondent's System. It would take some effort for an Employee to interfere with an ICT System he was not familiar with. The Court agrees with the evidence of Gumba that for him to sabotage the KEMSA ICT System, he would have to be familiar with it.

51. Insubordination was defined by the Mississippi Supreme Court in the case of Sims v. the Board of Trustees Holly Springs Municipal Separate District School, 414 SO. 2d 431 [Miss. 1982],as ‘' a constant or continuing intentional refusal to obey direct or implied order reasonable in nature, and given by and with proper authority.'' Insubordination may also occur where the Employee engages his Manager or Supervisor in an un-appropriate verbal confrontation.

52. Under the Employment Act 2007, both forms of insubordination are captured under Section 44 [4] [d] and [e]. The first form described in Simsis defined in Section 44[4] [e] to arise where ‘'an Employee knowingly fails, or refuses to obey lawful and proper command which it was within the scope of his duty to obey, issued by his Employer or a person placed in authority over him by the Employer.'' Verbal insubordination is described in our law under Section 44 [4] [d] to occur where ‘' an Employee uses abusive or insulting language, or behaves in a manner insulting to his Employer or to a Person placed in authority over him by his Employer.''

53. The Respondent did not give particulars of insubordination in the letter of termination. The Claimant was said to have exhibited disrespect; the letter does not say against whom this conduct was directed. He was alleged to have refused to follow orders given to him by authority. It is not revealed which these orders were, or who or what was the authority. On the face of it, the letter of termination does not disclose verbal or non-verbal insubordination.

54. To find out if the Claimant was insubordinate, the Court must look outside the letter of termination, to the evidence of the various Witnesses and the documents relating to the charge of insubordination.

55. The only suggestion that the Claimant engaged in verbal insubordination was a statement made by Mutuku in her main evidence to the effect that when the Claimant was asked to release the Prolog database to KEMSA, he insisted it belonged to Frederichs, and KEMSA could do as it wished. This was after Mutuku allegedly warned the Claimant he could have his contract terminated, if he persisted in his refusal to surrender the password to KEMSA. The Court does not think that weighed against the dispute over the ownership of Pprolog, this position by the Claimant could amount to insubordinate behaviour or insulting language to the Employer, or to a person placed in authority over him. The Claimant explained he was ready to use his skill and knowledge, but what he was being asked to do by the Respondent was unethical. His position that the Respondent could do as it wished, was not rude or insulting in the circumstances, just a normal answer from an Employee who was being pushed against the wall by an Employer, to assist the Employer in circumventing a fundamental issue relating to intellectual property right.

56. There similarly were no facts, relating to use or transfer of data from the Consortium to KEMSA, which would justify a finding of failure or refusal on the part of the Claimant, to obey lawful and proper command of the Employer or of a person placed in authority over him.

57. Firstly, the Court was told that all the other Partners in the former Consortium had the data. Why the Respondent did not have it, and why it was pressing its newly and strategically acquired Employee to use his knowledge, is explained in the Respondent's annexure 7. This was an e-mail written on 6th September 2010 to the Claimant by Project Manager Alessandro Argiolas, who represented GTZ in the Consortium. Notably, the communication was exhibited by the Respondent, which would suggest to the Court that although addressed to the Claimant, the Respondent as an Institution was privy to the contents. This was in September 2010, about 10 months before the Consortium wound up.

58. The e-mail explained that Pprolog was the intellectual property of Mr. Franz Frederichs, and had only been made available to the Consortium, as a strategic input of GTZ. Its use was restricted to the duration of the project. If any of the Partners wished to use Pprolog after the close of the project, they were obliged to negotiate terms of licensing with Franz Frederichs, represented by Owen Technologies.

59. If the other former Partners had access to Pprolog after the project ended, it could only mean they had done what KEMSA was trying to avoid: they negotiated terms of continued use of Pprolog. KEMSA opted to employ Gumba, and use him to breach intellectual property law. It was perhaps a position founded on KEMSA's lack of understanding of intellectual property law, considering the evidence of Mutuku that the information belonged to the Government.

60. Even as the Respondent was pressing the Claimant to engage in circumventing the law, it was at the same time engaging Frederichs to access Pprolog, as seen in the letter of its CEO Dr. Munyu to Frederichs dated 1st August 2011. The owner of Pprolog wrote to the CEO on 4th August 2011, giving a minimum figure of 68,000 US Dollars, as the financial offer for use of Pprolog. These offers and counteroffers went simultaneously with the ‘progressive disciplinary process' of the Claimant.

61. The Court thinks that from this evidence, it can be concluded that the Employer's order to the Employee, to use his knowledge, surrender the password, and assist in the hacking into the Pprolog System, so as to enable the State Company discharge it obligation of procuring drugs, was not reasonable, proper or lawful order. The Claimant's defiance of such an order would not under Sims,and Section 44 [4] [d] and [e], of the Employment Act 2007, result in insubordination.

62. The allegation that the Claimant refused to familiarize himself with Adempiere and Java when asked to do so by Senior Systems Administrator was peripheral to the instructions revolving around Pprolog. The requirement that he does this came at the same time the Respondent was cajoling him to surrender what he knew about Pprolog. The Respondent explained rather unconvincingly that it intended to use both Pprolog and Adempiere in the long term. In the view of the Court the rushed instructions to the Claimant to familiarize with Adempiere were not genuinely given; it was a coded message to the Claimant, to either release the password, and facilitate transfer of data illegally or, the Respondent would embrace Adempiere, and do away with him.

63. The allegation that the Claimant was engaged in conflict of interest was made by the Respondent in afterthought. The Respondent had the information during the currency of the Consortium, that Pprolog was owned by Franz Frederichs. It was known to the Respondent that Frederichs was represented in Nairobi by Owen Technologies. On 1st August 2011, the CEO wrote to Frederichs that : ‘' use of Owen Technologies or the services of Abraham [Claimant] who is now an Employee of KEMSA may result in conflict of interest in the spirit of corporate governance. The Country's procurement rules are very strict on this.''

64. The Respondent therefore seems to have known who Owen Technologies was, even before recruiting the Claimant. It was known to the Respondent that Owen Technologies represented the owner of Pprolog in Nairobi. There was nothing for the Claimant to disclose on being taken in by KEMSA, as KEMSA knew about him and Owen Technologies. Conflict of interest occurs where an Employee is in a position to influence, be influenced, or appear to be influenced due to a personal or pecuniary private interest in the workplace.

65. In the case of Gumba and KEMSA, the Employer knew about the association the Employee had with the Pprolog and Owen Technologies, before, during and after employing him. The Respondent seems to have offered the Claimant employment, to secure access to Pprolog by whatever means. The Claimant, it is to be noted was in an IT position at the Consortium, where Pprolog was in use as the strategic input of GTZ. He had acquired knowledge, which perhaps the owner, felt would best serve the continued use of Pprolog after the Consortium. He would continue to be bound to keep the confidentiality of the Partner to whom he was directly responsible under the Consortium, even after the end of the Consortium. The Respondent had not in any event acquired the right to legally use Pprolog at the time it employed the Claimant, and conflict of interest, as shown by the letter of the CEO dated 1st August 2011, was more of an apprehension than real, and would not result in a valid ground for termination of employment.

66. The Respondent did not advance conflict of interest in the letter of termination as a ground for termination. There was no letter of caution or direction from the Respondent to the Claimant, during the 2 months of employment, with respect to conflict of interest. When an Employee is faced with a conflict of interest at the workplace, the first recourse is to seek the advice of the Employer. In Gumba's case, whenever he engaged with the Respondent on the subject, he was met with an order- use your knowledge!In other words, the Respondent was commanding the Claimant to give it the key to Pprolog. The assertion made outside the termination letter, that the Claimant was involved in conflict of interest, was not a valid ground for termination. In all the Court has not found any material to conclude there was substantive justification in the Respondent's decision against the Claimant. The Court agrees with the Claimant entirely, that termination was as a result of the Claimant's refusal to involve in a mischief. In terms of proof of validity of reasons, termination was unfair.

Procedural Fairness

67. It was the evidence of Mutuku that she called the Claimant on the phone for a disciplinary hearing. There were no charges. There was no letter asking the Claimant to show cause why he should not be dismissed. An oral warning issued the same date the Claimant's contract was terminated. These were unalloyed violations of the procedural guarantees given to Employees in cases of termination of employment, under Section 41 and 45 of the Employment Act 2007. The minimum statutory termination procedural standards, are that the Employee must be explained to, the specific charges for which the Employer contemplates termination, in a language understood by the Employee. There is no record that this was done prior to termination. The Employee must be allowed the company of a Co-Employee or Shop Floor Trade Union Representative. Gumba was not shown to have been accompanied by anyone to the alleged disciplinary meeting. There was no recording of the meeting. The accusations and the reasons for termination as seen elsewhere were jumbled. After 5 years of working with, and for KEMSA, the Claimant deserved a less cavalier procedural dispensation. Procedure was flawed, and termination on this second count, unfair.

Remedies

68. There are several prayers for declarative orders. The Court has found termination was unfair, and grants an order declaring termination was unfair.The Claimant seeks a declaration that reasons and grounds for termination did not constitute proper grounds for termination. This is an order that need not be issued, as it serves no useful purpose, in the executory part of the Award. The Court has no reason to translate all its findings into executory orders. There is equally no justification in ordering the Claimant to withdraw the letter of termination and issue the Claimant a letter clearing him of any wrongdoing. The Employer was within its mandate to issue the letter of termination. The fact that the wrong decision was made does not place any legal obligation on the Respondent, to issue another letter correcting its decision. The redress of the injury occasioned to the Claimant must be confined to the range of remedies available to the Claimant. This must be confined to what the remedial law under Section 49 of the Employment Act 2007, and Section 12 the Industrial Court Act 2011 which came into force a day before Gumba's employment termination, allow. The proposed letters would not be in the interest of justice, and may cause confusion as to whether the Court has reinstated the Employee or not. If an Employee wishes to be reinstated, he or she must unequivocally make such a prayer. It obscures the remedies if the Court is to grant an order calling on the Respondent to write another letter withdrawing the one of termination. At the same time, Employers must be allowed to continue making decisions at the employment places. Letters of employment and termination, are all part of the employment record, and an expression of the managerial prerogative. There is no good reason why the Court should go out of its way ordering the Employer to write the proposed letter. These declaratory orders serve no executory purpose; the concerns they are directed to address have been addressed obiter dictum;and are therefore declined.

69. The Claimant makes 3 prayers for money. One, he wishes to be paid Kshs. 1,003,420, being the monthly salaries for the remaining 10 months of his contract. Two, he prays for 12 months' salary in compensation for unfair termination at Kshs. 1,204,104. Three, he seeks general damages for unlawful termination. Relying on the Judgment of Hon. Justice Ongaya in Industrial Court Cause Number 953 of 2011 between Patrick Njuguna Kariuki v. Del Monte Kenya Limited the Claimant urges the Court to grant general damages on top of statutory compensation and anticipatory salaries. He prays the Court to consider the ‘injury the Claimant has suffered and purge the malicious and outrageous conduct' of the Respondent by a grant of Kshs. 3,000. 000. In the case above, the Court granted the Employee Kshs. 5,000. 000 damages in exemplary damages.

70. The employment relationship is not a commercial relationship, but a special relationship, which must be insulated from the greed associated with the profit-making motives, inherent in commercial contracts. This has been the historical justification of capping compensatory damages since the era of the Trade Disputes Act Cap 234 the Laws of Kenya, to a maximum of 12 months' salary.

71. The Industrial Court traditionally functioned in the manner of the English Employment Tribunal, and in addition to capped compensatory awards, or as alternative to such awards, could order for the reinstatement or re-engagement of the Employee. The Civil Courts on the other hand had no capping on the amount of damages they could award for breach of the contract of employment, but were conversely deprived of the power of reinstatement or re-engagement. The rationale for capping was explained in the House of Lords cases of Eastwood & Another v. Magnox Electric PLC; McCabe v. Cornwall County Council & Others [2004] UKHL 35,where the Court stated:

‘' in fixing these limits on the amount of compensatory awards, Parliament expressed its view on how the interests of the Employers and the Employees, and the socio-economic interests of the country as a whole, can best be balanced in cases of unfair termination. It is not for the Courts to extend further a common law implied term, when this could depart significantly from the balance set by legislature. To treat the legislature as creating the floor, and not the ceiling, would do just that….it would be inconsistent with the purpose Parliament sought to achieve by imposing compensatory awards payable in respect of unfair dismissal.''

72. This Court is of the view that in general, judicial restraint must be exercised in exceeding the capping of 12 months' salary, in compensating Employees for the wrongful acts of their Employers. The proliferation of monetary damages above the equivalent of 12 months' salary will only disturb the equilibrium intended to be achieved by Parliament, in placing the capping. The Industrial Court [Procedure] Rules 2010 expressly state that the Court should not award exemplary or punitive costs in employment cases, and this Court would like to believe this is intention even in the area of damages.

73. This is not to say that the Court cannot grant damages beyond the 12 months' capping for instance where the employment wrong cuts across Constitutional, Contractual and Statutory violations of the Employee's rights under the various regimes. Rather than grant different sums under the different regimes, the Court could make one coalesced award of damages, which may exceed the statutory capping, without being overly above that capping.

74. In the Industrial Court Cause Number 1227 of 2011 between G.M.V v Bank of Africa Kenya Limited [2013] e-KLR,this Court observed that in certain cases such as where termination is on account of an Employee's pregnancy, the attendant discrimination, occasions Constitutional, Contractual and Statutory violations that cannot adequately be addressed under the capped remedial provisions of the Employment Act and the Industrial Court Act. This is why the law has given the Court latitude in considering damages beyond 12 months' salary. The Industrial Court, particularly after its Constitutional repositioning, has been called upon to shift its mind from a linear approach in considering grant of remedies, and move to a polycentric approach, noting that labour rights now fall under the broader regime of socio-economic rights. It is a jurisdiction that should nonetheless, be exercised with caution, considering the legislative rationale for capping, and the alternative or additional remedies of reinstatement and re-engagement which have always been in the exclusive domain of the Industrial Court.

75. The upshot of this is that the Court is not inclined to consider grant of general damages, in addition to considering anticipatory salaries and 12 months' salary as suitable remedies.

76. A grant of salaries for 10 months, for a period during which the Claimant rendered no work to the Respondent, would result in unjust enrichment of the Claimant. The Court would not be placing in his hands fair remuneration, for fair work. Remuneration and rewards to Employees at the workplace are intended to be commensurate with their performance and contribution. The Claimant left employment on 1st September 2011. He did not make any contribution after this date for whichever reason. His recourse is in compensation for the economic injury, which the Court allows at 10 months' salary, computed at Kshs. 1,003,420. In all, the Court Orders:-

[a] It is declared termination of the Claimant's contract was unfair;

[b] The Respondent shall pay to the Claimant 10 months' salary in compensation at Kshs. 1,003,420, within 30 days of the delivery of this Award; and

[c] No order on the costs and interest.

Dated and signed at Nairobi this 23rd day of May 2014

James Rika

Judge

Delivered and signed at Nairobi this 26th day of May 2014

Nzioki Wa Makau

Judge