[2018] KEELRC 1372 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT OF KENYA AT NAIROBI

CAUSE NO. 1103 OF 2017

AMOS NANDWA AMAYI.....................................................................................1ST CLAIMANT

BENARD NJACI NJOROGE...............................................................................2ND CLAIMANT

CHARITON MANGOKA SILLAH.....................................................................3RD CLAIMANT

DANIEL KANGETHE KIARII............................................................................4TH CLAIMANT

DANIEL MBURU MUNDIA.................................................................................5TH CLAIMANT

FRANCIS THEURI MUNDIA..............................................................................6TH CLAIMANT

FREDRICK OKUMU NDIMBA...........................................................................7TH CLAIMANT

JAMES KIVUVA WAMBUA................................................................................8TH CLAIMANT

JOHN KURIA MWANGI......................................................................................9TH CLAIMANT

JOHN MAINA KABOGO...................................................................................10TH CLAIMANT

MBOGO KINYANJUI.........................................................................................11TH CLAIMANT

MARKO LUNYAMA KENDI.............................................................................12TH CLAIMANT

MWANZIA KITHOME........................................................................................13TH CLAIMANT

PARTRICK NDUNGU KAGWA.........................................................................14TH CLAIMANT

RAPHAEL MWANIA MASWILI........................................................................15TH CLAIMANT

SAMWEL MWANIKI KITHOME......................................................................16TH CLAIMANT

SAUL FUMBO MICHENDE................................................................................17TH CLAIMANT

NICHOLAS WAMBUA MWANZA......................................................................18TH CLAIMANT

JOHN THEURI FRANCIS....................................................................................19TH CLAIMANT

JOSEPH NJIRU MUNDIA....................................................................................20TH CLAIMANT

PETER KARANJA KURIA...................................................................................21ST CLAIMANT

ALEX MUTHOKA.................................................................................................22ND CLAIMANT

MALICHA GABRA KARAYU.............................................................................23RD CLAIMANT

ROB BORU GUYO................................................................................................24TH CLAIMANT

DERA DUBA WARE..............................................................................................25TH CLAIMANT

JACOB KARURU MWANGI................................................................................26TH CLAIMANT

STEPHEN NGOME NDURYA..............................................................................27TH CLAIMANT

MICHAEL MWINA................................................................................................28TH CLAIMANT

NAFTALI OGALLO MIYUMO............................................................................29TH CLAIMANT

ISAAC OMWANA MARIEBA...............................................................................30TH CLAIMANT

MWAKOYO NZOMBO MKAMBA.......................................................................31ST CLAIMANT

MILTON MUSALIA AGEVI..................................................................................32ND CLAIMANT

TSUMA MADZO MAZERA...................................................................................33RD CLAIMANT

DAN ONYANGO......................................................................................................34TH CLAIMANT

NURALI AMIRALI GULAMHUSEIN..................................................................35TH CLAIMANT

FEREDHOSH SHEZAZ DIN..................................................................................36TH CLAIMANT

- VERSUS -

COMMERCIAL TRANSPORTERS LIMITED (IN LIQUIDATION).............1ST RESPONDENT

THE OFFICIAL RECEIVER OF THE REPUBLIC OF KENYA....................2ND RESPONDENT

(Before Hon. Justice Byram Ongaya on Friday 27th July, 2018)

JUDGMENT

The 1st to 35th claimants filed the statement of claim on 15. 06. 2017 through Kimathi Wanjohi Muli& Company Advocates. They filed the amended statement of claim on 05. 10. 2017. The 36th claimant filed her statement of claim on 23. 10. 2017 through Solonka & Company Advocates. She filed her amended statement of claim dated 19. 10. 2017. The claimants pray for terminal dues on account of termination upon redundancy and compensation for unfair termination under section 49 of the Employment Act, 2007 being 12 months’ gross salaries as at the time of redundancy. They also pray for costs of the suit and interest.

The 1st to 35th claimants are members of the Transport Workers Union Kenya which had concluded a binding agreement with the 1st respondent and incorporated in claimant’s contracts of service by operation of the provisions of the Labour Relations Act, 2007. The 1st to 35th claimants pray for:

a. An order preserving the assets of the 1st respondent for purposes of liquidation and paying the claimants’ terminal dues.

b. A declaration that the 1st respondent’s action of terminating the claimants’ employment was unlawful.

c. Payment of 12 months’ salaries in compensation amounting to Kshs. 33, 555, 703. 00.

d. An order for exemplary damages due to each claimant for unlawful and unfair termination of employment and breach of their constitutional, contractual and statutory rights.

e. Each claimant be issued with a certificate of service per section 51 of the Act.

f. The 1st respondent to pay costs of the suit.

g. Interest on terminal dues at Court rates.

h. That the honourable Court to issue such orders and give directions as it may be fit and just to meet the ends of justice.

The 35 claimants claim redundancy dues and terminal benefits as per provisions of the collective agreement.

The 36th claimant served in the management as a secretary to the Managing Director. She was not a member of the union and she prayed for:

a. That her termination from employment was unfair, wrongful, and unlawful.

b. Compensation for unfair, wrongful and unlawful termination as the Court may deem fit.

c. One month salary in lieu of notice.

d. Unpaid allowances amounting to Kshs.5, 478, 825. 52.

e. Salary increment from April 2006 to May 2017 amounting to Kshs. 1, 133, 701. 49.

f. Service pay amounting to Kshs.5, 195, 232. 00.

g. Costs of the suit.

h. Interest on b, c, d, e, f, and g at Court rates.

i. Any other or further relief as the Honourable Court deems fit to grant.

The 2nd respondent filed the statement of defence on 23. 10. 2017 through Judy W. Mugo, Senior State Counsel. The 2nd respondent prayed that the suit against it be dismissed with costs and interest thereof.

The 1st respondent filed on 19. 01. 2018 the response to the 1st to 35th amended statement of claim through CFL Advocates. The respondent prayed that the suit be dismissed with costs. The 1st respondent also filed a response to the 36th claimant’s amended memorandum of claim and prayed that the suit be dismissed with costs.

The 1st issue for determination is whether the claimants’ employment was terminated on account of redundancy.

The Court has considered the evidence. It is clear that on 12. 05. 2017 the claimants for the first time learnt of a publication in the Daily Nation of 08. 05. 2017 and Kenya gazette No. 4490 of 12. 05. 2017 that their employer, the 1st respondent had passed a special resolution to voluntarily wind-up without prior consultation or notice to the claimants or their trade union. On 12. 05. 2017 the claimants’ union wrote to the 1st respondent protesting lack of information prior to the 1st respondent’s publication of the special winding resolution to voluntarily wind-up. On 15. 05. 2017 the 1st respondent wrote to the trade union giving notice that it would cease operations in one month’s time and a meeting would be held at the 1st respondent’s premises on 19. 05. 2017 to discuss terminal dues for union members. At the meeting of 19. 05. 2017 parties failed to agree and the employees were evicted from the premises and then locked out. The Court returns that the 1st respondent clearly desired to bring its operations to an end. Instead of invoking the provisions of the collective agreement and the section 40 of the Employment Act, 2007 on redundancy, the 1st respondent decided to act in contravention of the law and contract. The Court finds that the 1st to 35th claimants’ contracts of service were terminated on account of redundancy and in contravention of the statutory and contractual provisions as provided for in the collective agreement. It was unfair termination. In the letter dated 15. 05. 2017, the 1st respondent confirmed that the claimants would be paid terminal dues as would be agreed upon. The Court finds that the payable dues had already been agreed upon between the parties under the collective agreement and the 1st to 35th claimants are entitled accordingly in accordance with the agreement. It is clear that the 1st respondent did not serve the area labour officer, the union or the 36th claimant a one month notice on the extent and reasons for redundancy as envisaged in section 40 of the Act. The 36th claimant’s contract of service was equally terminated on account of redundancy on 19. 05. 2017.

The 2nd issue for determination is whether the claimants are entitled to the remedies as prayed for. The Court makes findings as follows:

a. The Court has found that the termination was unfair. The claimants had served for a long period of time and they were terminated abruptly without preparation. The Court has considered the aggravating factor that the respondent failed to amicably discuss and compute the claimants’ dues at the meeting of 19. 05. 2017 and thereafter. The claimants had served for a long time. The 1st to 36th claimants are each awarded 6 months’ gross pay for compensation under section 49 of the Employment Act in view of the unfair termination.

b. The Court returns that each claimant is entitled to redundancy pay being one month pay in lieu of the termination notice, all outstanding salaries, severance pay per the formula in the collective agreement, pay in lieu of all outstanding annual leave days, and a certificate of service. Under section 40 of the Act, no employee should be disadvantaged for being or not being a member of the trade union in event of redundancy and the Court returns that the 36th claimant’s final redundancy dues will be calculated using the same formula as that applicable to the 1st to 35th claimants.

c. As the 1st respondent does not object to paying final dues, the Court returns that the claimants are entitled to the order preserving the assets of the 1st respondent for purposes of liquidation and paying the claimants’ terminal dues.

d. The Court returns that Part 8 of the Employment Act, 2007 on insolvency of an employer did not apply to the present case and it was never invoked by the claimants.

e. As submitted for the 1st respondent, exemplary damages are not available because the remedies based on contract and statutory compensation will meet ends of justice in this case.

f. As submitted for the respondent, the special damages as prayed for the 36th claimant were not strictly proved and the same will fail for want of evidence and justification. Thus the claims for unpaid allowances, salary increment, and underpayment will fail.

g. The claimants are entitled to certificate of service.

h. As the claimants have succeeded in the case, the 1st respondent will pay their respective costs of the suit.

In conclusion judgment is hereby entered for the 1st to 36th claimants against the respondent for:

1. The termination of the claimants’ respective contracts of service amounted to unfair and unlawful termination on account of redundancy.

2. The claimants to each compute the amounts due as awarded in this judgment less any amounts already paid and to serve the respondents in 7 days with a view of recording the quantum particulars of which will constitute part of the final decree as a schedule thereto.

3. The case shall be mentioned on a convenient date for recording the quantum for purposes of order (b) above.

4. The claimants’ be paid the decretal sum by 01. 11. 2018 failing interest to be payable thereon from the date of this judgment till full payment.

5. Pending the satisfaction of the decree herein, an ordered is hereby directed at the respondents by themselves or their respective agents preserving the assets of the 1st respondent for purposes of liquidation and paying the claimants’ terminal dues.

6. The 1st respondent to deliver a certificate of service for each claimant by 01. 09. 2018 per section 51 of the Act.

7. The 1st respondent to pay the claimants’ costs of the suit.

Signed, datedanddeliveredin court atNairobithisFriday 27th July, 2018.

BYRAM ONGAYA

JUDGE