[2017] KEELRC 1425 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT KISUMU

CAUSE NO. 133 OF 2013

(Before Hon. Lady Justice Maureen Onyango)

HASSAN ALI ...................................................................................CLAIMANT

-Versus-

FOMAT SUPERSTORE LIMITED ...........................................RESPONDENT

J U D G E M E N T

The Claimant filed this suit against the Respondent alleging non-payment of terminal benefits and damages for unlawful and wrongful termination.

The Claimant prays for the following remedies -

1. That the Honourable Court do find that the Respondent's termination of employment of the Claimant on grounds of redundancy was discriminatory, unlawfully un-procedural and illegal.

2. That the Honourable Court do find that the Respondent’s action of continued withholding and failing to remit and or neglect to pay the claimant his rightful terminal benefits and other unpaid allowances is unlawful and untenable.

3. That as a result the court do ORDER the Respondent to pay the Claimant all his terminal benefits and other unpaid dues computed as hereunder:-

(a) Damages for unlawful termination.

(b) 1 month salary in lieu of notice Kshs.9,496/-

(c) Salary under payment Kshs.2,895 x 12 x 9 ...........................................Kshs.312,660/-

(d) Gratuity/Benefits Kshs.21 x 9 x 9495 30 .........................................Kshs.42,720/-

(e) Accumulated leave 21 days every year for 9 years .......Kshs.86,184/-

(f) Offs at the rate of Kshs.912/- per day for

48 offs per year x 9 yrs ..................................................Kshs.393,984/-

(g) 9 Public Holidays per year for 9 years at the rate of

Kshs.912/- per day ...................................................Kshs.73,872/-

(h) House Allowance Kshs.15 x 9495 x 9 x 12 ................Kshs.153,819/-

GRAND TOTAL .....................................Kshs.1,072,741/-

(i) Interest on a and b (i-vii) above.

(j) Costs of this suit.

(k) Any other relief that this Honourable Court may deem fit to give.

The Respondent filed a Memorandum of Response admitting that it terminated the employment of the Claimant but denying that the termination was unlawful or wrongful. The Respondent further denied underpaying the Claimant or owing him any money in respect of notice, leave, house allowance, off days, public holidays or gratuity.

When the case came up for hearing the parties agreed to proceed by way of written submissions. The parties subsequently filed and exchanged written submissions.

Claimants Case

It is the Claimant's Case that he was employed by the Respondent as a store man in 2002 and worked for the Respondent until 30th September, 2010 when his employment was terminated by letter of that date. Upon receiving the termination letter he wrote an apology to the Respondent seeking reinstatement. The Respondent instead issued him with a letter of recommendation.

After termination the Claimant instructed his lawyers who wrote several demand letters to the Respondent but the Respondent through its lawyers did not agree to settle the claim. The Claimant's lawyers wrote to the District Labour Officer, Kakamega who tabulated the Claimant's terminal dues as prayed for in his claim herein.

In the written submissions filed on behalf of the Claimant it is contended that the termination of the Claimant's employment was unfair as the Respondent did not comply with the provisions of section 41 of the Employment Act. That among the grounds for termination was reporting for duty late yet no particulars of date, day, month, year and time of alleged lateness was given.

The Claimant relied on the case of FREDERICK SAUNDU AMOLO v PRINCPAL NAMANGA MIXED DAY SECONDARY SCHOOL and 2 OTHERS [2014]eKLR and the case of GABRIEL KARIUKI CHOMBA v TOP IMAGE LIMITED [2014] eKLR. In both cases the court held that failure to comply with section 41 of the Employment Act would render termination unfair.

Respondents Case

The Respondent's case is that on several occasions and more particularly on 2nd September, 2010 the Respondent observed that the Claimant who was a storekeeper did not report to Management the theft of 6 Nescafe cups from the store, even though he witnessed the theft, yet he was mandated to do so as a store-man. The Respondent avers that this was a breach of the Claimant's obligations for which the Respondent terminated his employment. The Respondent further avers that the Claimant reported for duty late and failed to perform his work on time.

It is the Respondent's case that upon receiving the letter of termination the Claimant wrote an apology wherein he acknowledged his misconduct. The Respondent states that it assisted the Claimant to settle down by giving him a letter of recommendation and paid his terminal dues in full.

In its written submissions the Respondent submits that the termination was valid, fair, lawful and justified and that the Respondent complied with rules of natural justice and statutory provisions. The Respondent submits that the Claimant fundamentally breached his obligations arising from his employment contract and that following his actions the Respondent could no longer trust the claimant to manage its store which is a very sensitive area of its business.

The Respondent relied on the case of CHIMWAGA MWAMUYE MWABONJE v NINE ONE ONE GROUP LIMITED [2016]eKLR.

Determination

I have carefully considered the pleadings and written submissions filed by the parties. There is no dispute on the facts of the case. The claimant was employed by the Respondent as a storekeeper in February, 2002 and was terminated by letter dated 30th September, 2010. The letter reads as follows -

30th September, 2010

Hassan Ali

P O Box

KAKAMEGA

Dear Sir

RE: NOTICE OF TERMINATION

We regret to inform you that your service is terminated with immediate effect, because of the following reasons:-

1. Reporting on duty late in the morning.

2. On 2nd September, 2010, 6(six) Nescafe mug cups were stolen by one of the staff, and you were fully aware of the theft, you did not report the matter to the management, we believe that you were involved. This has led to our terminating your services.

Thanking you,

Yours faithfully

D.H. PATEL

DIRECTOR

It is evident that the Claimant was terminated without a hearing. It is also evident that the first ground of dismissal does not specify when the Claimant reported to work late.

Section 45(2) of the Employment Act provides that any termination of employment that does not comply with fair procedure or is without valid reason is unfair. Fair procedure is provided for in section 41 while validity of reason is provided for in section 43. In the instant case the letter of termination speaks for itself. It does not require any explanation, and neither can it be defended.

Having failed to give the claimant a hearing at all, there was no proof of valid reason for termination and neither was there fair procedure. The termination is therefore unfair.

I find, hold and declare the termination of the Claimant's employment by the Respondent unfair.

Remedies

The Claimant prayed for salary in lieu of notice which he is entitled to under section 49(1) of the Act.

The Claimant further prayed for leave, off days, public holidays and underpayments. The Respondent submits that these are continuing injuries which under section 90 of the Act are time barred since the claimant filed suit more that 12 months after cessation thereof. The Respondent referred the court to the case of KENYA HOTELS AND ALLIED WORKERS UNION V SPORTSMAN'S ARMS HOTEL [2015] EKLR.

Section 48(1) as read with section 53(1) of the Labour Institutions Act require employers to keep records for 3 years after the date of last entry thereof with respect to minimum rates of remuneration or conditions of employment established in a wages order. Section 26 of the Employment Act further emphasises that statutory minimum terms of employment may not be varied. The section provides as follows-

Labour Institutions Act

Section 48.

(1) Notwithstanding anything contained in this Act or any other written law—

(a) the minimum rates of remuneration or conditions of employment established in a wages order constitute a term of employment of any employee to whom the wages order apply and may not be varied by agreement;

(b) if the contract of an employee to whom a wages order applies provides for the payment of less remuneration than the statutory minimum remuneration, or does not provide for the conditions of employment prescribed in a wages regulation order or provides for less favourable conditions of employment, then the remuneration and conditions of employment established by the wages order shall be inserted in the contract in substitution for those terms.

Records and notices.

Section 53.

(1) The employer of employees to whom a wages a wages order applies shall—

(a) keep such records as are necessary to show whether or not the employer is complying with the wages order; and

(b) retain the records for at least three years after the date of the last entry therein.

Employment ActSection 26. Basic minimum conditions of employment

(1) The provisions of this Part and Part VI shall constitute basic minimum terms and conditions of contract of service.

(2) Where the terms and conditions of a contract of service are regulated by any regulations, as agreed in any collective agreement or contract between the parties or enacted by any other written law, decreed by any judgment award or order of the Industrial Court are more favourable to an employee than the terms provided in this Part and Part VI, then such favourable terms and conditions of service shall apply.

It is my opinion that only overtime is a continuing wrong that may not be claimed beyond 12 months from the date of termination. Annual leave, holidays off and rest days are rights of an employee that are specifically provided for under the Employment Act that are subject to the 3 year limitation period with effect from the date of last entry into the record required to be kept under section 10 and 74 of the Employment Act.

The Claimant is therefore entitled to annual leave, off days and public holidays. He is also entitled to overtime up to a maximum of 12 months, where there is proof of the same and where the overtime is not regular or standard overtime that constitutes part of normal working hours.

On the specific claims, I find as follows-

1. Notice

One months' salary in lieu of notice Shs.10,919. 25

2. Annual leave

For 8 years - (21 x 8) Shs.61,147. 80

3. Off-Days.

The Claimant prays for 48 off days per year. In the written submissions, it is stated that no record was produced by the Respondent proving that the Claimant was given off days. However, in the affidavit filed together with the Claim and the Memorandum of Claim, it is not stated how the Claimant arrived at the figure of 48 days a year. It is not even stated how many days a week the claim ant worked. I find that the claim for off days has not been proved and dismiss the same.

4. Gratuity

The Claim for gratuity was dropped by the claimant.

5. Public Holidays

As with the prayer for off days, no evidence was adduced to prove that the claimant worked on public holidays and was never paid for the entire period he was in employment, or even that the Respondent worked on public holidays. The Claim is therefore dismissed.

6. House Allowance

The Respondent pleaded that the Claimant was paid a consolidated wage. I have for this reason based the underpayments on a consolidated wage which is inclusive of house allowance. The claim for house allowance therefore does not lie.

7. Damages for the Unfair Termination

Having found that the Claimant was unfairly dismissed, he is entitled to compensation for unfair dismissal. Having worked for 8 years and taking into account all relevant factors, I award the Claimant 10 months gross salary as compensation in the sum of Shs.109,192. 50.

8. Salary Underpayments

On the issue of salary underpayments the Claimant prayed for the difference between the minimum statutory wage of Shs.9,496 and his salary of Shs.6,600 for the entire period he was in the employment of the Respondent. This is not the correct position as the minimum wage of 9,496 was only applicable from 1st May, 2010. The Claimant stated that his first salary was shs.3,500 and was increased gradually to Shs.6,600 by the time he left employment. This is deponed in the affidavit filed together with the claim. He does not state what he was earning every year, or what the statutory minimum wage was for every such year.

The Respondent has however admitted underpayments as follows -

From 2001 - 2005 - Nil

From 2006 - 2008 - 715 x 4 x 12 = Kshs.34,320. 00

From 2009 - 2032 x 1 x 12 = Kshs.24,384. 00

From 2009 - 2010 - 2895 x 5/12 x 12 = Kshs.14,457. 00

Total Kshs.73,161. 00

Since the claimant was earning a consolidated wage as pleaded by the Respondent, the amount payable to the Claimant should be inclusive of 15% house allowance and therefore the underpayments should be as follows -

From 1/5/2004 (6104 x 15%) = 7,019. 6

From 1/5/2006 (7315 x 15%) = 8,412. 25

From 1/5/2009 (8632 x 15%) = 9,926. 80

From 1/5/2010 (9495 x 15%) = 10,919. 25

The underpayments were therefore as follows -

From 1/5/2004 (7,019. 60 - 6,600)

=Shs.419. 60 x 24 months = 10,070. 40

From 1/5/2006 (8,412. 25 - 6,600)

=Shs.1,812. 25 x 36 months = 65,241. 00

From 1/5/2009 (9,926. 80 - 6,600)

= Shs.3,326. 80 x 12 months = 39,921. 60

From 1/5/2010 (10,919. 25 - 6,600)

= Shs.4,319. 25 x 5 months = 21,596. 25

Total Shs.136,829. 25

Based on the foregoing I award the Claimant underpayments in the sum of Shs.136,829. 25.

Conclusion

In conclusion, I award the Claimant the following -

1. One months' salary in lieu of notice Shs.10,919. 25

2. Annual leave for 8 years - (21 x 8) Shs.61,147. 80

3. Off-Days - I find that the claim for off days has not been proved and dismiss the same.

4. Gratuity - The Claim for gratuity was dropped by the claimant.

5. Public Holidays - The claim is therefore dismissed.

6. House Allowance - This has been included under salary underpayments.

7. Damages for the Unfair Termination - I award the Claimant 10 months gross salary as compensation in the sum of Shs.109,192. 50.

8. Costs

The Respondent shall pay claimant's costs.

9. Interest

The decretal sum is payable within 30 days failing which interest shall accrue from date of judgement.

Dated, Signed and Delivered this 13th day of March, 2017

MAUREEN ONYANGO

JUDGE