[2016] KEELRC 1090 (KLR)

REPUBLIC OF KENYA

EMPLOYMENT & LABOUR RELATIONS COURT OF KENYA

AT KERICHO

CAUSE NO.240 OF 2015

(BEFORE D. K. N. MARETE)

JOHN WAFULA SIMIYU.......………..........................CLAIMANT

VERSUS

THE STAR PUBLICATIONS LIMITED.....................RESPONDENT

JUDGEMENT

This matter was originated by way of a Memorandum of Claim dated 2nd September, 2015. The issues in dispute are therein cited as;

Whether the claimant was unlawfully, unprocedurally and unfairly terminated from employment by the respondent;

Whether the claimant is entitled to compensation for unlawful, unprocedural and unfair termination from employment as prayed for in this memorandum of claim.

Whether the claimant is entitled to an award of certificate of service pursuant to Section 51 of the Employment Act.

Whether the claimant is entitled to an award of compensation for breach of contract and

Who should pay costs of the suit;

The respondent vide a Memorandum of Response dated 14th December, 2015 denies the claim and prays that the same be dismissed with costs.

The claimant's case is that at all material times to this cause, he was employed by the respondent as an advertising executive with effect from 1st September, 2009. He worked dilligently, competently and honestly and was thereon promoted to the work of Deputy Regional Manager from 1st July, 2014 with a monthly salary of Kshs. 60,000. 00 at the time of termination of employment.

It is the claimant's further case that he served the respondent with loyalty, dilligence, full dedication and commitment until the 13th February, 2015 when he was unlawfully, unfairly and unprocedurally terminated with no payments of terminal benefits. This was principally on allegations of poor performance. The claimant submits that the particulars of the alleged poor performance were not supplied and or explained to him. Again, he was not accorded an opportunity to defend himself before termination. He strongly denies the allegations of poor performance and he maintains that he has always discharged his duties diligently and competently.

The claimant further avers and submits that the termination was unprocedural and contrary to the Employment Act as follows;

7. The claimant violated Section 41 (1) of the Employment Act, 2007. The same provides that when an employer intends to terminate the employment of an employee from among other reasons misconduct, poor performance etc it must explain to the employee in a language the employee understands the reasons for intended dismissal and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation. The claimant contends that the respondent violated this provision of the law.

8. Section 44 (4) of the Employment Act lists matters which amount to gross misconducts and which entites the employer to summarily dismiss an employee; however the same provides that an employee should be given an opportunity to dispute the truthfulness of the accusations leveled against him. The claimant submits that the respondent did not give him a chance to dispute the correctness of the accusations before terminating his services

9. Section 45 (20 of the Employment Act 2007 provides that an unfair termination occurs when the employer fails to proof that:

a. The reason for termination is valid

b. The reason for the termination is a fair reason (s)

c. The employment was terminated in accordance with fair procedure.

It is the claimant's case that the termination of employment by the respondent was unfair as it violated the requirements of the above section of the Employment Act.

This is further supported by the claimant's averments as follows;

11. The claimant avers that the termination was illegal, unjustified, unprocedural, unfair and/or lawful on the following grounds:-

a. The respondent terminated the claimant's employment without following the procedure laid down in the Employment Act specifically the procedure laid out in Section 41 and 45 of the Employment Act.

b. The Respondent did not give the claimant termination notice as required under Section 35 (1) (b) (c) and 36 of the Employment Act.

c. The Respondent terminated the claimant's employment without proving that the reason for the termination was valid under section 43 and 45 of the Employment Act.

d. The respondent failed to pay the claimant his 12 months wages for loss of employment as provided under section 15 (c) of the labour institution Act and Section 49 (c) of the Employment Act.

e. The respondent did not pay the claimant was lawful dues contrary to Section 28 (1) of the Employment Act. The claimant was not paid leave for five years.

f. The claimant was not given a chance to defend himself before termination of employment by the respondent.

g. The respondent declined to pay the claimant his lawful entitlements towit: - public holidays, commission and house allowance as per the Employment Act and terms of service.

h. The claimant was not given an opportunity to be heard in his defense against allegations leveled against him before he was terminated contrary to the fair labour practices as per the constitutions and the Employment Act.

I. The respondent failed/neglected to give the claimant a certificate of service as required under section 51 of the Employment Act.

12. The claimant avers that the respondent offends his basic rights and specifically Article 41 and 77 of the Constitution that calls for fair labour and administrative action to all citizenry a basic and non-negotiable human rights on grounds that:-

i. The respondent's working environment was not reasonable as the claimant was subjected to witchunt, ill motive and was a victim of scapegoat.

ii. The claimant was never issued with notices to show cause and an opportunity to dispute the same.

Iii. The claimant was unfairly, unprocedurally and unlawfully terminated without a valid reason.

13. The claimant further aver that the termination was unfair because the respondent did not act in accordance with justice/equity and it failed to prove that the reason for termination was valid thus violated Section 45 (2) of the Employment Act.

14. The claimant submits that the conduct of the respondent is demeaning, punitive and contravenes constitutional safeguard on worker's right to earn a living and the same should not be encourgaged in a civilized nation.

He claims as follows;

One month pay in lieu of notice Kshs. 60,000/-

Unpaid leave dues for 5 years 6 months

a) Basic salary x 5

60,000 x 5 years

b) Leave pro-rate for 6 months

At half the basic salary Kshs. 30,000/-

Unpaid house allowanceAt a 15% of the basic salary for 5 yrs 6 months15% of 60,000 x 66 months Kshs. 594,000/-

Unpaid commissionAs at 20th June, 2014 at 12% of Kshs. 907,200 Kshs. 108,864/-

Unpaid public holidaysWorked at 8 days per year for 5 years 6 months 8 x 5 = 40 days/5 days45 days x60,000/30x 2 Kshs. 180,000/-

Unpaid rest days at 4 days per month for 5 years4 days x 66 months264 days x 60,000/30 x2 Kshs.1,056,000/-

12 months gross pay as compensation for unfair termination of employmentKshs. 60,000 basic salary + 9000 = 69000 x 12 Kshs.828,000/

In the penultimate he prays for;

A declaration that the claimant was unlawfully, unprocedurally and unfairly terminated from employment;

The sum of Kshs. 3,156,864/- as set out at paragraph 10 above.

Cost of this suit and interests at court rates from time of filing the suit until payment in full;

A certificate of service as per section 51 of the Employment Act and

Any other further and better relief the Honourable Court may deem just and fit to grant.

The respondent in response and denial of the claim denies that the claimant served with loyalty, diligence and with full dedication and commitment until 13th February, 2015. The respondent also denies that it unlawfully, unfairly and unprocedurally terminated and refused to pay the Claimant's terminal benefits. It is the respondent's further case that the claimant's services were terminated lawfully.

The respondent's further case that in accordance with its Employee Handbook, the claimant was placed on a Performance Improvement Plan with effect from 21st October, 2014 due to his failure to meet his sale targets. This required him to satisfy certain performance deliverables and that should he fail to be within acceptable standards by 2nd January, 2015, his employment would be terminated. He was subsequently invited for a performance appraisal where his failure at performance was discussed prior to the decision of termination of employment. She therefore denies any wrong doing or contravention of the Employment Act as claimed.

The respondent in further defence avers as follows;

14. In further response to paragraph 10 of the Memorandum of Claim, the Respondent avers as follows;

i. The Claimant was paid one month salary in lieu of notice;

ii. The Claimant applied for and obtained leave in the year 2014. furthermore, the claimant was required to proceed on leave when it fell due and any leave not taken by 30th June each year would automatically be forfeited. The Claimant's failure to proceed on leave is entirely attributable to him;

iii. The respondent avers that the claimant's salary was inclusive of house allowance. In any event, the respondent denies the rate of house allowance claimed;

iv. The respondent denies that the claimant is entitled to the commission, which in any event was never claimed. The respondent puts the claimant to strict proof thereof;

v. The respondent denies that the claimant is entitled to unpaid public holidays. The claimant is put to strict proof thereof.

vi. The respondent denies that the claimant is entitled to unpaid rest days. The claimant is put to strict proof thereof;

vii. The respondent denies that the claimant is entitled to compensation for unfair termination. The Claimant is put to strict proof thereof.

The issues for determination in the circumstances therefore are;

Whether the termination of the employment of the claimant by the respondent was wrongful, unfair and unlawful?

Whether the claimant is entitled to the relief sought?

Who should bear the costs of the suit?

The 1st issue for determination is whether the termination of the employment of the claimant by the respondent was wrongful, unfair and unlawful. The parties hold opposing views on this. The claimant in his written submissions reiterates his case and submits that the particulars of the alleged poor performance were not supplied and or explained to the claimant and neither was the claimant accorded an opportunity to defend himself and or dispute the allegations of poor performance before terminating the claimant from employment.

The claimant further submits that the evidence of the defence witnesses was in support of his case as follows;

Mr. Chege, the respondent's witness 1. Testified inter alia that he did not agree with the termination of the claimant and that the same was unfair, that the claimant was only assisgned two sales executives instead of six and that one of the two was a new recruit who had not undertaken any form of training and/or induction from the respondent as such the claimant had not been accorded sufficient facilities to perform his duties. That the claimant had not been indicated. That the appraisal was partially done as the midterm appraisal was not done and that the same should have been done. That the performance improvement plan was not an end in itself. That the claimant was not heard and that the claimant was not issued with a show cause letter in order to dispute the allegations of poor performance. That the claimant was a high performer based on his earlier records.

The 2nd defense witness reiterated the evidence of the first defense witness. She stated inter alia that she was the human resource manager of the respondent and did not understand or new the number of sales executives that worked under the claimant. When she was asked on cross examination whether she knew the number of sales executives that worked under the claimant she answered “I don't know, how am I supposed to know.” That the ultimate authority to terminate an employee lies with the Chief Executive who must approve any termination in line with paragraphs 15. 2 of the Employees Hand Book. That she terminated the claimant. Did not have the authority in court to prove that she had the authority of the respondent's chief executive to terminate the claimant. That the law governing termination of the respondent's employees is the laws of Kenya and more specifically the Employment Act, 2007. That the claimant was not indicted in his new roles and the claimant's letter of appointment did not have a proper job description in line with paragraphs1. 11 of the Employee Hand Book.

He further sought to rely on the authority of Samson Owili Vs. Kenya Ports Authority industrial cause number 131 of 2012; (2012) LLR 293 (ICK) (28 June, 2013) court held

“A disciplinary procedure in the employer's disciplinary handbook cannot surpass the express provisions of the Employment Act, 2007. Sections 3,7 and 8 of the Employment Act provide that all employment contracts in Kenya shall comply with the Employment Act, 2007. It follows that any employment contract made in contravention of the Act is invalid and cannot be allowed to take away any statutory right or obligation.

This is buttressed by S. 45 of the Employment Act, 2007 as follows;

45. (1) No employee shall terminate the employment of an employee unfairly.

(2) A termination of employment by an employer is unfair if the employer fails to prove-

that the reason for the termination is valid;

that the reason for the termination is a fair reason-

related to the employees conduct, capacity or compatibility; or

based on the operational requirements of the employer; and

(c) that the employment was terminated in accordance with fair procedure.

Further the claimant sought to rely on the authority of Everline Kagendo V Statpack Industries Limited Industrial Cause Number 2081 of 2011 (24 April 2013) court held;

Appraisals on performance do not constitute a hearing about poor performance under Section 41 of the Employment Act, 2007; the Appraisal forms could only be evidence at the disciplinary hearing. The warning system does not free the employer from the obligation to hear the employee under section 41 of the Employment Act, 2007, before termination of his contract.

Letters of warning, even if validly issued, do not constitute a hearing under section 41 of the Employment Act 2007; they too can only be useful to the employer as evidence at the disciplinary hearing. The warning system does not free the employer from the obligation to hear the employee under section 41 of the Employment Act 2007; before termination of his contract.

The employer may have had many day to day meetings with the claimant where they may have even discussed persistently his performance with the employer. However, the said meetings must conform to the minimum statutory disciplinary procedure created by the Employment Act 2007.

Again in the authority of Agnes Yahuma Digo v PJ Petroleum Equipment Limited Industrial Cause Number 2049 of 2011 (21 February 2013) Court held that:-

The proper procedure once poor performance of an employee is noted is to point out the shortcomings to the employee and give the employee an opportunity to improve a reasonable length of time.

An employer who fails to manage the performance of their staff, lacks moral authority to tell the staff that they have underperformed.

He further sought to rely on the authority of Jane Samba Mukala v Ol Tukai Lodge Limited Industrial cause number 823 of 2010; (2010) LLR 255 (ICK) (September, 2013)where the honourable court held that:-

Where poor performance is shown to be reason for termination, the employer is placed at a high level of proof as outlined in section 8 of the Employment Act, 2007. The employer must show that in arriving at the decision of noting the poor performance of an employee, they had put in place an employment policy or practice on how to measure good performance as against poor performance.

It is imperative on the part of the employer to show what measures were in place to enable them assess the performance of each employee and further, what measures they have taken to address poor performance once the policy or evaluation system has been put in place. It will not suffice to just stay that one has been terminated for poor performance as the effort leading to this decision must be established.

Beyond having such an evaluation measure, and before termination on the ground of poor performance, an employee must be called and explanation on their poor performance shared where they would in essence be allowed to defend themselves or given an opportunity to address their weaknesses.

In the event a decision is made to terminate an employee on the reasons for poor performance, the employee must be called again and in the presence of an employee of their choice, the reasons for termination shared with the employee.

The respondent in defence written submissions enlists the following as issues for determination;

Whether the respondent’s employee handbook applied to thecontract of employment and the consequences for the claim.

Whether the termination of employment was substantively justified and procedurally proper.

Whether the claim is sustainable by the claimant having signed a discharge of liability against the respondent.

Whether the claimant is entitled to the remedies sought.

She answers all in the affirmative and therefore settles on a case of lawful termination of employment.

I am inclined to pursue the case of a claimant and come out with a case of wrongful, unfair and unlawful employment. This is because from the onset and at the hearing of the matter two things come out very clearly. The first one is that at all times the claimant was never afforded the requisite facilities and personnel to facilitate an acquisition of his performance targets as agreed. Secondly, he was not afforded appropriate disciplinary process as is required by the law in the termination of his employment. I agree with his submissions that performance monitoring proceedings are not indeed disciplinary proceedings and should not be an excuse for the same. I therefore find for a case of wrongful, unfair and unlawful termination of employment of the claimant by the respondent and hold as such. And this answers the 1st issue for determination.

The 2nd issue for determination is whether the claimant is entitled to the relief sought. He is.

I am therefore inclined to allow the claim and order relief and declare as follows;

A declaration be and is hereby made that the termination of the employment of the claimant by the respondent was wrongful, unprocedural, unfair and unlawful.

One month’ salary in lieu of notice Kshs. 60,000. 00

Ten months salary as compensation for unlawful termination of employment

Kshs. 600,000. 00

TOTAL Kshs. 660,000. 00

That the respondent be and is hereby ordered to issue a certificate of service to the claimant within thirty (30) days.

That the costs of this claim shall be borne by the respondent.

Delivered, dated and signed this 17th day of June 2016.

D.K.Njagi Marete

JUDGE

Appearances

Mr. Kirwa instructed by Mwakio Kirwa & Company Advocates for the claimant.

Mr. Mwangi instructed by Mohammed & Muigai Advocates for the respondent.