[2024] KEELRC 1775 (KLR)

Corrugated Sheets Limited v Oganyo (Appeal E036 of 2023) [2024] KEELRC 1775 (KLR) (4 July 2024) (Judgment)

Neutral citation: [2024] KEELRC 1775 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Mombasa

Appeal E036 of 2023

AK Nzei, J

July 4, 2024

Between

Corrugated Sheets Limited

Appellant

and

Victor Mundia Oganyo

Respondent

(Being an Appeal from the Judgment of the Chief Magistrate’s Court – Mombasa Hon. D. O. Mbeja – PM delivered on 30th March 2023 in CM - ELR Case No. 222/2021)

Judgment

1. The Appellant herein was the Respondent (Defendant) in Mombasa Chief Magistrate’s Court Employment Case No. 222 of 2021 whereby it had been sued by the Respondent vide a memorandum of claim dated 7/4/2021 and filed in the aforesaid Court on 14/4/2021. The Respondent had sought the following reliefs:-a.Leave allowance for the period January 2009 to September 2020 (11 years) 21/30x14,820x11 years …..kshs. 114,114. b.Service pay (15/30 days x14,820x11……….kshs. 81,510c.House allowance for the period ………kshs. 293,436. d.Compensation for unlawful termination (12x14,820)…..kshs. 177,840e.Certificate of service.f.Cost of the suit and interest.

2. The Respondent had pleaded:-a.that he was employed by the Appellant as a Mill Helper continuously and uninterruptedly from 4/1/2009 upto 30/9/2020, earning an initial and terminal monthly salary of kshs. 14,820. b.that on 30/9/2020, the Respondent reported to work as usual but was terminated without any termination letter being issued.c.that the Respondent’s termination was wrongful, unlawful, abrupt and in total contravention of the relevant labour laws.d.that the reasons cited for the termination were not plausible to warrant termination, and that the Respondent was not afforded an opportunity to defend himself in a fair and transparent forum against the charges leveled against him.e.that attempts by the Respondent to engage the Appellant were in vain.f.that the Appellant’s actions offend Sections 40,49 and 50 of the Employment Act 2007 and ILO Convention No. 158 on termination of employment.g.that the Appellant’s refusal to pay the Respondent’s terminal dues violates Section 18(4) and (5) of the Employment Act.

3. Documents filed alongside the Respondent’s memorandum of claim included the Respondent’s written witness statement dated 7/4/2021 and an evenly dated list of documents listing 4 documents. The listed documents were a demand letter dated 15/3/2021, an email dated 26/3/2021, a copy of the Respondent’s identification card and an ex-gratia gratuity computation dated 29/9/2020.

4. The Appellant entered appearance on 29/4/2021 and on 17/5/2021 filed a statement of Response, denying the Respondent’s claim and objecting to the claims on leave, service, house allowance and any claim that was more than 3 years preceding the date of filing the Respondent’s suit. The Appellant further pleaded:-a.that the Respondent was engaged on 4/1/2009 as a daily wage earner/worker in the position of a Mill Helper, and was earning a daily wage of kshs. 494 at the time of termination.b.that the Respondent was paid 1 week pay in lieu of notice before his services were terminated, amount which the Respondent duly acknowledged receipt of. That the Respondent was paid all his dues and he signed a voucher (Petty Cash Voucher) to confirm that fact.c.that being a daily worker, the Respondent’s claim for 12 months’ (salary) as compensation is extortionist.d.that a daily employee’s notice is for a day as provided under Section 35(1) of the Employment Act 2007. e.that the Respondent was paid leave on each completed month depending on availability of work and whenever his services were needed for such a long period of time as to amount to a month. That by virtue of being a daily wage worker whose wages were payable monthly, the Respondent was not entitled to any further leave allowance as alleged.f.that the Appellant was effecting NSSF deductions, and was therefore shielded from paying service.g.that as per the Regulations of Wages (General) (Amendment) Order 2018, daily wages are inclusive of house allowance.h.that the Respondent was not entitled to compensation as his termination was in accordance with the Employment Act.i.that the Respondent acknowledged the payment made to him by the Respondent as the full and final settlement of all his dues and confirmed that he would have no claims against the Appellant.

5. Documents filed by the Appellant alongside the statement of Response included a written witness statement of Zipporah Onyango dated 10/5/2021 and an evenly dated list of documents listing 6 documents. The listed documents were the Respondent’s pay Roll number in his ex-gratia payslip and tax computation, a copy of the Respondent’s Certificate of Service, a copy of a payment voucher, a copy of a petty cash voucher dated 29/9/2020 and cheque payment, and a copy of the Regulation of Wages (General) (Amendment) Order 2018.

6. On 24/5/2021, the Appellant filed a further list of documents dated 21/5/2021, listing 5 documents. The listed documents were copies of the Appellant’s daily wage employees (first shift) for September 2019, November 2019, February 2020 and August 2020. Also listed was the Respondent’s NSSF statement of account for the period 1/1/2014 to 30/9/2020.

7. At the trial, the Respondent (being the claimant in the primary suit) adopted his filed witness statement which basically replicates the statement of claim as his testimony, and produced in evidence the documents referred to in paragraph 3 of this judgment. He testified that he was engaged by the Appellant from 4/1/2009 and worked upto 2020, for 11 years. That he was never given any contract, had never been absent from duty, had never been paid house allowance, and that he never proceeded on leave. That his termination was unlawful.

8. Cross-examined, the Respondent testified:-a.that he did not understand English.b.that he was employed by the Appellant, that he did not sign any contract, and that he was being paid on monthly basis.c.that he had never been paid on daily basis.d.that he had been harassed to sign (for) the certificate of service and to take his money.e.that he never used to sign for the money.f.that signatures on the Appellant’s further list of documents said to be his were not his.g.that he was not entitled to one day notice, and that he was paid kshs. 14,820 as notice pay; and was paid kshs. 81,000 as gratuity. That he was not told the purpose of the money at the time of payment, but was told to sign and then received his money.h.that he did not sign the voucher stating that he did not have further claims against the Appellant/directors; andi.that he worked continuously.j.that he was not paid house allowance, but NSSF deductions were paid.k.that he was not given an opportunity to contest the payment made to him upon termination.

9. The Appellant called one witness, Zipporah Onyango (RW-1), who adopted her filed witness statement, which basically replicates the Appellant’s statement of Response, as her testimony. She also produced in evidence the Respondent’s documents listed on the lists of documents dated 10/5/2021 and 21/5/2021 respectively. She further testified that the Respondent was being paid kshs. 494 per day, and only worked when his services were required; and was paid all his terminal dues. That the Respondent personally signed for his terminal dues and no issues of forgery arose. That the Respondent was paid in accordance with Wage Order 2018 whereby wages are inclusive of house allowance.

10. Cross -examined and re-examined, RW-1 testified:-a.that the Respondent was engaged on 4/1/2009 and was not issued with a letter of appointment as attendance records, which had not been produced in Court, were available.b.that the Appellant was to pay NSSF, but there was no remittance prior to 2014. c.that the Respondent was paid kshs. 14,820 as notice pay.d.that she had the number of years that the Respondent had worked, about 11 years, but she did not have the number of days that he had not worked.e.that she did not have any document to prove that the Respondent went on leave.f.that the Respondent was told not to come to work, and was not given a termination letter.g.that the Respondent was paid gratuity.

11. The trial Court delivered its judgment on 30/3/3023, making a finding that the Respondent was terminated without sufficient cause, was not given a valid reason for the termination and was not afforded a hearing before termination. The trial Court further found that the Respondent was terminated without notice or payment in lieu thereof, as stipulated by Section 35 of the Employment Act 2007, and that the procedure set out in Section 41 of the said Act was not adhered to; hence the termination was wrongful and unfair.

12. The trial Court further made a finding that the Respondent had not been paid his terminal dues, and that he was entitled to the reliefs sought in his memorandum of claim, save for the claim for service pay, and allowed the Respondent’s claim at kshs. 585,390, costs of the suit and interest from the date of filing suit.

13. Aggrieved by the said judgment, the Appellant preferred the present appeal and set forth the following grounds of appeal:-a.that the learned magistrate misdirected himself on the evidence and the relevant law on the matter before him and consequently arrived at a wrong decision by entering judgment in favour of the Respodnent against the Appellant.b.that the learned magistrate erred in law and fact, and misdirected himself when he found that the Respondent was unfairly and unlawfully terminated by the Appellant.c.that the learned magistrate erred in law and in fact by failing to consider the evidence tendered before it by the Appellant, failed to take into account the Appellant’s submissions in opposition of the Respondent’s claims and awarded a total sum of kshs. 585,390/ on grounds of unlawful termination.d.that the learned magistrate erred in law and in fact in relying on the Respondent’s oral evidence and ignoring the Appellant’s evidence to reach his decision, thereby making a wrong finding.e.that the learned magistrate misapprehended the law and facts placed before him and failed to consider the Appellant’s submissions and evidence that the Respondent was not continuously employed by the Appellant from 04/10/2009 to 30/09/2020, but was engaged intermittently on the basis of availability of work.f.that the learned magistrate erred in law and in fact by holding that the Respondent was entitled to costs of the suit.g.that the learned magistrate erred in law and in fact by failing to consider that the Respondent was a daily wage earner, hence not entitled to a separate pay of house allowance as per the Regulations of Wages (General) (Amendment) Order 2018. h.that the learned magistrate erred in law and in fact by allowing the claims for service pay, leave, house allowance in favour of the Respondent.i.that the learned magistrate erred in law and in fact by failing to consider the Appellant’s evidence and submissions showing that the Respondent already received a certificate of Service by awarding him another certificate of service.j.that the judgment of the Honourable Court dated 15th February 2023 and delivered on 30th March 2023 was erroneous in law and fact and a gross miscarriage of justice and judicial precedents, particularly finding that the Respondent was entitled to a net sum of kshs. 585,390 payable by the Appellant.

14. The Appellant sought the following reliefs on appeal:-a.that the appeal be allowed.b.that the judgment and all consequential orders in favour of the Respondent be set aside.c.that the Appellant be awarded costs of the appeal and those in the Magistrate’s Court.

15. This is a first appeal, and the evidence presented by both parties in the trial Court is before this Court for fresh-evaluation by this Court as it determines the appeal. This Court, however, takes cognizance of the fact that it never saw or heard the witnesses first hand. In my view, issues that fall for determination are:-a.whether the Respondent’s employment status was that of a daily worker/wage earner employed by the Appellant on need basis.b.whether termination of the Respondent’s employment by the Appellant was unfair.c.whether the Respondent is entitled to the reliefs sought in the trial Court.d.whether signing by the Respondent of a petty cash voucher acknowledging payment of gratuity pay of kshs. 81,510 and notice pay of ksh. 14,820 and confirming that he would not make any claims against the Appellant or its directors took away his right to sue the Respondent.

16. On the first issue, it was a common ground that the Respondent was employed/engaged by the Appellant as a Mill Helper on 4/1/2009, and worked until September 2020, for a period of about 11 years. The Respondent pleaded and testified that he worked continuously for those years, and never even took annual leave during the entire period of employment. While on one hand confirming in evidence that the Respondent worked for the Appellant from 4/1/2009 upto September 2020, for about 11 years, the Appellant (RW-1) at the same time stated that the Respondent was a daily worker and that his services were terminable at the end of each day. RW-1 could not, however, demonstrate to the trial Court the days on which the Respondent did not work during the said lengthy employment period. She even testified and demonstrated that the Respondent was paid kshs. 14,820 in lieu of notice and service gratuity upon termination of his employment. The Employment Act contains specific provisions on the category of employees to whom notice pay and service payment is payable.

17. Section 35(1) (c) provides as follows:-“(1)A contract of service not being a contract to perform specific work, without reference to time or to undertake a journey shall, if made to be performed in Kenya, be deemed to be:-(a)…………..(b)………(c)where the contract is to pay wages or salary periodically at intervals of or exceeding one month, a contract terminable by either party at the end of the period of twenty-eight days next following the giving on notice in writing.”

18. On the other hand, Section 35(5) of the Employment Act provides as follows:-“(6)An employee whose contract of service has been terminated under Subsection (1) (c) shall be entitled to service pay for every year worked, the terms of which shall be fixed.”

19. In view of the evidence on record and the foregoing provisions of the statute, I find and hold that the Respondent was not a daily worker/daily wage earner employed by the Appellant on need basis, but was an employee employed by the Appellant for an indefinite period of time, and worked continuously from 4/1/2009, as testified by both parties, upto September 2020 when his employment was terminated by the Appellant.

20. On the second issue, and based on the evidence on record, the Respondent’s employment was terminated by the Appellant abruptly and without notice. Failure by the Appellant to issue a termination notice to the Respondent contravened Section 35(1) (c) of the Employment Act 2007, and rendered the termination unfair. The Appellant did not controvert/rebut the Respondent’s pleading and evidence that he reported to work as usual on 30/9/2020 but was terminated and no termination letter was given to him. The fact of payment of a month’s salary (kshs. 14,820) to the Respondent in lieu of notice did not attone for the unfairness visited on the Respondent by the Appellant.

21. Further, the Appellant did not demonstrate, or even allude, to having had any valid reason to terminate the Respondent’s employment. Section 45(2)(a) of the Employment Act 2007 provides that:-“(2)A termination of employment by an employer is unfair if the employer fails to prove:-(a)that the reason for the termination is valid;(b)………(c)………………”

22. I find and hold that termination of the Respondent’s employment by the Appellant was unfair, and therefore uphold the trial Court’s finding in that regard.

23. On the third issue, and having made a finding that termination of the Respondent’s employment was unfair, I uphold the award of the equivalent of twelve (12) months’ salary awarded to the Respondent by the trial Court. That is kshs. 14,820x12 = kshs. 177,840. I have taken into account the number of years that the Respondent had worked for the Appellant, the manner and the circumstances in which the Respondent’s employment was terminated, and the fact that the Respondent did not in anyway contribute to the termination.

24. On the claim for kshs. 114,114 being leave pay, the Respondent testified that he did not take (annual) leave during the entire period of employment. The Appellant did not controvert this position, only stating that the Respondent was not entitled to annual leave as he was a daily worker/daily wage earner. I have already found in this judgment that the Respondent was not a daily worker/daily wage earner. He was entitled to annual leave pursuant to Section 28(1) of the Employment Act, or to payment in lieu thereof. The Appellant did not demonstrate that the Respondent either took annual leave or was paid in lieu thereof. Section 74(g) of the Employment Act obligates an employer to keep records on his employees’ annual leave, days taken and days due. The trial Court awarded the Respondent the claimed sum of kshs. 114,114, and I uphold the award. The Appellant is not shown to have disputed the computation of the said sum.

25. On the claim for house allowance, the Appellant did not demonstrate that the Respondent’s monthly salary of kshs. 14,820 included house allowance. No contract and no payslips of the Respondent were produced in evidence by the Appellant. Section 10(7) of the Employment Act provides as follows:-“If in any legal proceedings an employer fails to produce a written contract or the written particulars prescribed in Subsection (1), the burden of proving or disproving an alleged term of employment stipulated in the contract shall be on the employer.”

26. The Respondent had claimed kshs. 293,436 being unpaid house allowance for 11 years. The trial Court awarded the Respondent the said amount. I have noted that the Respondent did not complete the 11th year in employment as his employment is shown to have been terminated on 30/9/2020. He thus worked for ten (10) years and nine (9) months. I set aside the award of kshs. 293, 436 made by the trial Court, and substitute it with an award of kshs. 286,767 being unpaid house allowance for ten (10) years and nine (9) months.

27. It is to be noted that the claim for unpaid house allowance was in the nature of a continuing injury as envisaged in Section 90 of the Employment Act. The Respondent’s suit in the trial Court is shown to have been filed within twelve months from the date of cessation of the said injury, being the date of termination of the Respondent’s employment (30/9/2020).

28. The claim for service pay was properly declined by the trial Court as both parties testified that the Respondent was paid both service pay and notice pay upon termination of this employment.

29. The trial Court did not fall into any error in awarding costs of the Primary suit to the Respondent as costs always follow the event, and are in the discretion of the Court to either award or not to award.

30. On the fourth issue, the Appellant produced in evidence a petty cash voucher drawn by the Appellant and dated 1/10/2020, and containing the following clause:-“I Victor Mundia Onyango, holder of ID No. 29976995 acknowledge receiving cheque No. 473083 for kshs. Eighty six thousand, six hundred and ninety seven only. I do confirm that I have no further claims against Corrugated Sheets Ltd or its Directors.”

31. In his evidence in Court, the Respondent testified, under cross-examination, that he did not understand English. He further testified that he was harassed to sign and to take his money. The Appellant did not controvert the Respondent’s assertion that he did not/does not understand English language, in which both the aforesaid voucher and the certificate of service shown to have been issued to the Respondent on the aforesaid date (1/10/2020) are written. No evidence was presented by the Appellant to the effect that the contents of the said two documents were explained to the Respondent in a language that he understood, before he was required to sign the voucher and/or to sign for the certificate of service.

32. An employee must always be made to understand the contents of any document that he signs with or in favour of his employer. At the trial, the Respondent is shown to have been unsure of whether or not he signed the said voucher. The contents of the certificate of service issued on the date of the said voucher are completely at variance with both the facts of the case and the evidence presented at trial.

33. The Respondent’s testimony in the trial Court that he does not understand English language is reinforced by the fact that the Respondent is shown to have been sworn in Kiswahili language before giving his evidence.

34. Although a discharge (voucher) such as that alleged to have been signed by the Respondent would ordinarily amount to a complete and separate contract, a valid allegation by one of the signing parties that he or she did not understand the contents of the document, the language in which the document is written or was harassed or forced/coerced into signing the document would automatically vitiate that contract/discharge. And particularly so if parties to the discharge are an employer and employee. I find and hold that the discharge (Voucher) dated 1/10/2020 and alleged to have been signed by the Respondent did not take away his right to sue the Respondent as he later did.

35. The Appellant referred the Court to several decided cases, among them the case of TRinity Prime Investment Limited -vs- Lion ofKenya Insurance Company Limited[2015] eKLR where the Court of Appeal stated as follows:-“The execution of a Discharge Voucher, we agree with the learned judge, constituted a complete contract.Even if payment by it was less than the total loss sum, the Appellant accepted it because he wanted payment quickly and execution of the Voucher was free of misrepresentation, fraud or other. The Appellant was thus fully discharged.”

36. The facts of the foregoing case are distinguished from those in the appeal herein because in the instant case, the Respondent is shown in the evidence on record to have signed a document written in a language that he did not understand, and whose contents are not shown to have been explained to him. He told the trial Court that he signed after being “harassed and told to sign and to take his money.” This was a clear case of misrepresentation; in my view. Alleged harassment of an employee by an employer may fall in the category of coercion.

37. The appeal herein succeeds to the extend stated in this judgment, and for avoidance of doubt, judgment is hereby entered for the Respondent against the Appellant as follows:-a.Compensation for unfair termination of employment………..kshs. 177,840b.Unpaid leave…………………………….kshs. 114,114. c.Unpaid house allowance…………...kshs. 286,767Total kshs. 578,721

38. The awarded sum shall be subject to statutory deductions pursuant to Section 49(2) of the Employment Act.

39. The Respondent is awarded interest on the awarded sum at Court rates, to be calculated from the date of the trial Court’s judgment.

40. The Appellant shall issue the Respondent with a proper Certificate of Service pursuant to Section 51(1) of the Employment Act 2007.

41. Each party shall bear its own costs of the appeal.

42. The Respondent is awarded costs of proceedings in the Court below

DATED, SIGNED AND DELIVERED AT MOMBASA THIS 4TH JULY 2024AGNES KITIKU NZEIJUDGEOrderThis Judgment has been delivered via Microsoft Teams Online Platform. A signed copy will be availed to each party upon payment of the applicable Court fees.AGNES KITIKU NZEIJUDGEAppearance:…………………….Appellant……………………Respondent