[2019] KEELRC 2414 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT & LABOUR RELATIONS

COURT OF KENYA AT NYERI

CAUSE NO. 402 OF 2017

JUSTUS MULANDI MUNUVE ….………....………...………..1ST CLAIMANT

SHADRACK MUUNDA MUSEMBI…….....………...………..2ND CLAIMANT

THOMAS KIOLI KIMWALU …....……...…………...………..3RD CLAIMANT

MAHAMUD MOHAMED CHARI……...…………...………..4TH CLAIMANT

CLEOPHAS MUTINDA MUTHAMA..…....………...………..5TH CLAIMANT

JONAH WATHOME MUTUA .….……....…………...………..6TH CLAIMANT

RAPHAEL WAMBUA MATILU….…...……………...……….7TH CLAIMANT

FREDRICK MULANDI WAMBUA…......…………...………..8TH CLAIMANT

AMOS NG’ANG’A GITAU ……........………………...………..9TH CLAIMANT

LAWI KIPTOO TARUS ………........………………...………..10TH CLAIMANT

JACKSON KIMUYU PETER…....………………...…………..11TH CLAIMANT

STEPHEN KYALO …………….......………………...………..12TH CLAIMANT

VICTOR VAATI NDUKU……….....………………...………..13TH CLAIMANT

JOSEPH GITONGA MAINA……..………………...………..14TH CLAIMANT

JONES ODOLI TETE.……………….……………....………..15TH CLAIMANT

SHADRACK NGOLA NGAVA ..…......……………...………..16TH CLAIMANT

CHARLES KAVEVA KANUNA…....…..….………...……….17TH CLAIMANT

TITUS KILONZI KAWINZI……….....…...………...………..18TH CLAIMANT

DAVID MWANZA MUSEMBI…….........…………...………..19TH CLAIMANT

PAUL KAMAU NG’ANG’A….....…....……………...………..20TH CLAIMANT

CHRISTINE STEPHEN OKICHA…..…………………...…..21ST CLAIMANT

SOROKEY MUSDAF EDIN………..….….………...………..22ND CLAIMANT

FATUMA ABDUL KOTOLA…........………………...………..23RD CLAIMANT

FATUMA GURACHA BISIKO……....……………...………..24TH CLAIMANT

QURESHO MOHAMED ALI……....…..…………...……….. 25TH CLAIMANT

NJOLI ABDI.……………...………..………………...……….. 26TH CLAIMANT

ADAN ABDUL KOMBA……….....…………………...……….27TH CLAIMANT

JOSEPH KIOKO NZAU……...……….....…………...………..28TH CLAIMANT

SAID MOHAMMED….…...…….....………………...………..29TH CLAIMANT

NZAU KIUSYA ………….....……....………………...………..30TH CLAIMANT

SAMUEL KING’ORI ……….……..………………...………..31ST CLAIMANT

FAITH MUNYAO…….……...……………….……...………..32ND CLAIMANT

HAWA MOHAMMED ….................………………...………..33RD CLAIMANT

RODGERS MAMBO………….…………...………...………..34TH CLAIMANT

DAUDI HASSAN………………...……..…………...……….. 35TH CLAIMANT

ISIKA KIEMA…………….……….………………...……….. 36TH CLAIMANT

VERSUS

EASY PACK COMPANY LIMITED………..…....……..............RESPONDENT

JUDGMENT

1. The Claimants filed this suit against the Respondent seeking relief against the Respondent for their unlawful, wrongful and unfair termination as well as non-payment of their terminal dues. The Claimants averred that they diligently served without any disciplinary issues until 26th August 2017 when a section of them were informed at 2. 00pm after working the whole day from 7. 30am that there was no more work for them. They were directed to go to the Respondent on 28th August 2017 and collect their dues. The Claimants averred that they reported to work as directed and had to wait till 10. 00am when they were permitted into the premises. They requested to be informed what payments were to be made and were informed that only the dues for the days worked in the month of August 2017 and they thus sought to be paid their salary in lieu of notice, house allowance, payment in lieu of leave, overtime and service for the period they had worked for the Respondent but the director declined. They averred that the director intended to drive them out of the premises by use of force but they left without resistance. They thus sought the payments for the items due to them through the suit. They sought a declaration that the dismissal was unlawful, wrongful and unfair, Kshs. 747,347/- being payment in lieu of notice, Kshs. 19,141/- for underpayment, Kshs. 1,095,523. 12 as severance pay, Kshs. 2,362,639. 50 as house allowance, Kshs. 1,528,064. 65 payment in lieu of leave, Kshs. 9,210,381. 20 as compensation, costs of the suit plus interest. They also sought certificates of service.

2. The Respondent filed a defence in which it denied that the Claimants were its employees or that they were underpaid or that they had no record of indiscipline and sought that the Claimants strictly prove their averments. The Respondent averred that Gazette Notice No. 2356 dated 28th February 2017 banned the manufacture and importation of all plastic bags used in commercial and housing packaging and that the ban took effect on 28th August 2017 entirely frustrating the Respondent’s main business. The Respondent averred that if the Claimants were its employees then the payments made to them were at all times in compliance with the law. The Respondent denied dismissing the Claimants unlawfully or failing to pay them their terminal dues comprising of their full pay, leave or issuing them with certificates of service. The Respondent denied paying them anything other than a consolidated salary plus any dues for the extra hours worked. The Respondent denied the jurisdiction of the court asserting that the suit ought to have been filed in Nairobi. The Respondent urged the dismissal of the suit.

3. The 1st Claimant testified on behalf of all the Claimants having been given the authority to plead. He stated that the plastic ban related to plastic bags for domestic use and that the plastic bags used in packing medicines, garbage or bread were still produced. He stated that no notice was given to the Ministry of Labour as required by law and no house allowance was paid contrary to their expectation. He produced payslips and the NSSF statements as evidence of their employment and underpayment. In cross-examination he testified that he had worked in the manufacture of plastics and was operating a machine that produced both the domestic and industrial packaging including those for Mini Bakers. He testified that the production staff sued and he was not aware if the security staff sued. He stated that in their NSSF statements there some gaps. He admitted that the payslips bore the overtime paid each month. He stated that there was no need to close shop as there was capacity to continue production of the non-banned plastic. In re-exam he stated that he did not need a certificate to differentiate between the single use plastic for domestic use and the packaging used for industrial packaging.

4. The Respondent called Abdukadir Mohamud Said who testified that he was the general manager of the Respondent at the time. He stated that the Respondent used to make the soft bags used by mama mboga and that the Respondent did not make the packaging used for bread or cartons. He denied knowing the Claimants no. 21 Christine and 32 Faith Munyao. He stated that the Claimants 1-19, 26, 28, 36 were machine operators while no. 22-25 and 33 were cleaners while no. 4, 20, 27, 29-31, 34 and 35 were general labourers. He stated that the Claimants were notified of the closure of the company due to the ban. In cross-exam he testified that the salary was consolidated. He admitted that the Respondent had not produced evidence that the Respondent did not manufacture the other forms of plastic as alleged by the Claimants. He agreed that the staff were notified but the labour office was not. He denied that Christine Okicha and Faith Munyao were the Respondent’s employees.

5. The parties were to file submissions and the Claimants submitted that the Respondent’s witness was not candid as the payslips for the 2 staff that he denied were produced in evidence clearly demonstrating the 2 were employees of the Respondent. It was submitted that whereas it was the duty of the employee to register with NSSF, it was the duty of the employer to ensure remittances were made after deduction of NSSF dues. The Claimants submitted that it was not the absence of an NSSF statement that confirmed employment but the employment records maintained by the employer. The Claimants submitted that the Respondent had failed to show the records kept under Section 74(1) of the Employment Act to show who its employees were if it wished to controvert the Claimants allegations. The Claimants relied on the case of Meshack Kiio Ikulume vPrime Fuels Kenya Limited [2013] eKLRand the case of Joseph Omollo vBoard of Management Kisumu Boys High Schoolwhich cited with approval the case of Lawi Wekesa Wasike vMattan Contractors Limited [2016] eKLR on the issue of employee records. The case of Josephine M. Akinyi vFarhiyo Mohamed [2016] eKLRwas cited for the proposition that where the employer fails to produce the contract of employment the employee’s averment must be given more weight. The Claimants relied on the case of Kenya Union of Domestic, Hotel and Educational Institutions, Hotels &Allied Workers Union vMuthaiga Golf Club [2012] eKLRon the matter of the verifying affidavit which was stated by the Respondent to be defective. The Claimants submitted that the dismissal amounted to a redundancy which the Respondent did not effect legally. The Claimants submitted that on the authority of Halisbury’s Laws of England, Volume 16 – 4th Editionat page 434, the term ‘redundancy’ is defined. The Claimants submitted that the Respondent did not adhere to the mandatory legal provisions for doing so and refused to pay their statutory entitlements. The Claimants submitted that only two categories of plastics were banned by the Gazette Notice and that the Respondent’s business was therefore not entirely shut down by dint of the notice since there was other business it could engage in. The Claimants relied on the case of Tsakiroglou &Co. Ltd vNoblee &Thorl G.m.b.H [1961] 2 All ER 179where the court held that there was no frustration of contract in that case where shipping of groundnuts via the Suez Canal was rendered impossible but the groundnuts could be shipped via the Cape of Good Hope, a much longer route. They relied also on the case of Davis Contractors, Ltd v Fareham Urban District Council [1955] 1 All ER 275 on the issues regarding the banning of the two categories of plastic bags. The Claimants submitted that by employing the Claimants Christine Stephen Okicha in June 2017 and Sorokey Musdaf Edin in March 2017 the Respondent was estopped from alleging the contracts were frustrated as it had contemplated hiring even when it was aware of the ban. The Claimants submitted that they were not notified of the intention to shut down. The They cited the cases of Kenya Airways Limited vKenya Aviation &Allied Workers Union &3 Others [2014] eKLR,Gladys Agayo vSomak Travel Limited [2015] eKLR,Timothy Mabeta Kambuni vBedson East Africa Limited [2013] eKLRand Kevin Ziro Pole vElsek &Elsek Limited [2015] eKLRon the law on redundancy. Regarding the records to be kept by the employer, the Claimants cited the case of Lawi Wekesa Wasike vMattan Contractors Limited [2016] eKLRand submitted that the Respondent did not produce any records to controvert the averments and evidence of the Claimants regarding their employment. The Claimants relied on the case of Chandler vWebster [1904] KB 493for the proposition that they were entitled to the benefits accruing to them from the employment and that the law having taken effect the loss would lie where it fell and that the event would only affect the obligations falling due after the supervening event. The Claimants thus urged the grant of the prayers sought.

6. The Respondent on its part submitted that the undisputed facts were that the Respondent engaged in the manufacture of plastics which were banned by the Government. The Respondent submitted that after the ban the Kenya Association of Manufacturers instituted a Petition seeking orders to quash the Gazette Notice and stay its implementation and that the ban took effect on 28th August 2017 after the High Court dismissed the application for conservatory orders. The Respondent submitted that the ban took effect immediately and frustrated all of its operations. The Respondent submitted that the employees had the right to lodge a suit relating to their employment but submitted that the dismissal was fair. The Respondent submitted that the Claimants did not prove that the Respondent had the capacity to produce any of the exempted classes of plastic bags such as those for industrial use. The Respondent argued that a party is bound by their pleadings and that the case of Daniel Otieno Migore vSouth Nyanza Sugar Co. Ltd {2018] eKLRbolstered their argument. It submitted that the attempt by the Claimants to shift the burden of proof upon the Respondent was therefore not tenable. The case of Independent Electoral and Boundaries Commission &Another vStephen Mutinda Mule &3 Others [2014] eKLRciting with approval the Supreme Court of Nigeria in the case of Adetoun Oladeji (NIG) vNigeria Breweries PLC SC 91/2002on the issue of parties being bound by their pleadings. The Respondent submitted that the closure of the Respondent was inevitable following the ban and that it had no other way of sustaining the contracts or save its business due to loss of substratum by reason of illegality. The Respondent submitted that the issue of redundancy did not arise as the law contemplates it as occurring as a result of internal organizational processes none of which were the circumstances for termination in the case before the court. The Respondent submitted that the case related to frustration of contract and cited the case of Kenya Airways Limited vSatwant Singh Flora [2013] eKLRwhere the Court of Appeal dealt with the issue of frustration of contract and quoted Halisbury’s Laws of England 3rd Edition volume 8 pages 185 (ii) Para 320 on the doctrine of frustration. The Respondent also cited the case of Joshua Nyagol Onyango &4 Others vRelief &Missions Logistics Limited [2017] eKLRon the doctrine of frustration. In that case there was a frustration of the contract at the airport between the Respondent (the employer) and KAA. The Respondent submitted that the Claimants were therefore not entitled to the prayers sought in the claim.

7. The Claimants were all employees of the Respondent as the exhibits demonstrate. Despite denial of the two staff who the Respondent’s witness Mr. Said said were not their employees, these two were employees and nothing to the contrary can be the truth. The contracts of all the Claimants were indeed frustrated by the Gazette Notice banning the use of single use plastics. Halisbury’s Laws of England 3rd Edition volume 8para 320 on the Doctrine of Frustration makes provision as follows:-

“….the doctrine of frustration operates to excuse further performance where – (1) it appears from the nature of the contract and the surrounding circumstances that the parties have contracted on basis that some fundamental thing or state of things will continue to exist, or that some particular person will continue to be available, or that some future event which forms the foundation of the contract will take place, and (2) before breach, performance becomes impossible, or only possible in a very different way to that contemplated, without default of either party, and owing to a fundamental change of circumstances beyond the control and original contemplation of the parties. The mere fact that a contract has been rendered more onerous does not of itself give rise to frustration. The doctrine has been variously stated to depend on implied condition, disappearance of the foundation of the contract, and the intervention of the law…. The application of the doctrine of frustration does not depend on the intention of the parties, or of their opinions or even knowledge, as to the event which has brought about the frustration, but upon its occurrence in such circumstances as to show it to be inconsistent with the further prosecution of the adventure”

8. That however, did not absolve the Respondent from its obligations under the contracts. The Claimants were entitled to notice and payment of the terminal dues being leave earned, overtime worked, days worked in August 2017, the payment of housing which is a basic right in the employment sphere per Section 31 of the Employment Act. The Claimants were members of NSSF and were not entitled to the payment of severance pay. They are also not entitled to compensation as the Respondent was not responsible for the supervening event that led to the termination. The Claimants will also have costs of the suit. The tabulation for each Claimant is as per the attachment contained in the decision. The Claimants will also have the certificate of service per Section 51 of the Employment Act.

No. Name Employ Salary Notice Underpay Housing Leave Total

1 Justus Mulandi Munuve Dec-14 28,904 28,904 NIL 86,400 67,702 211,910

2 Shadrack Muunda Musembi Nov-16 23,437 23,437 NIL 22,500 15,774. 85 85,148. 85

3 Thomas Kioli Kimwalu Nov-15 27,298 27,298 NIL 66,300 40,422. 09 161,318. 09

4 Mahamud Mohamed Chari Sep-16 15,000 15,000 NIL 29,250 12,115. 38 71,365. 38

5 Cleophas Mutinda Muthama Nov-15 30,510 30,510 NIL 28,500 45,412. 96 134,932. 96

6 Jonah Wathome Mutua Feb-16 30,510 30,510 NIL 47,250 39,310. 91 147,580. 91

7 Raphael Wambua Matilu Jun-15 27,298 27,298 NIL 66,300 47,771. 36 168,667. 36

8 Fredrick Mulandi Wambua Aug-13 32,207 32,207 NIL 151,200 104,053. 38 319,667. 38

9 Amos Ng’ang’a Gitau Aug-13 25,490 25,490 NIL 158,400 82,352. 31 291,732. 31

10 Lawi Kiptoo Tarus Aug-14 24,356 24,356 NIL 91,800 59,016. 46 199,528. 46

11 Jackson Kimuyu Peter Nov-16 24,086 24,086 NIL 22,500 19,471. 48 90,143. 48

12 Stephen Kyalo Sep-14 18,625 18,625 NIL 70,200 45,129. 81 152,579. 81

13 Victor Vaati Nduku May-16 18,231 18,231 NIL 27,000 18,406. 30 81,868. 30

14 Joseph Gitonga Maina Aug-13 27,298 27,298 NIL 122,400 87,230 264,226

15 Jones Odoli Tete Aug-13 20,678 20,678 NIL 122,400 66,805. 85 230,561. 85

16 Shadrack Ngola Ngava Mar-16 19,269 19,269 NIL 30,600 19,277. 72 88,415. 72

17 Charles Kaveva Kanuna Mar-14 41,750 41,750 NIL 159,900 115,214 358,614. 00

18 Titus Kilonzi Kawinzi Aug-13 23,353 23,353 NIL 117,360 75,448. 15 239,514. 15

19 David Mwanza Musembi Jan-16 22,139 22,139 NIL 42,750 29,802. 50 116,830. 50

20 Paul Kamau Ng’ang’a Apr-15 14,000 14,000 NIL 58,800 23,476. 88 110,276. 88

21 Christine Stephen Okicha June-17 14,760 14,760 NIL 5,366. 88 2,980. 38 37,867. 26

22 Sorokey Musdaf Edin Mar-17 10,000 11,926. 40 4,785. 40 10,733. 76 4,013. 71 41,459. 27

23 Fatuma Abkul Kotola Jan-16 10,000 11,926. 40 4,785. 40 35,779. 20 16,054. 85 78,545. 85

24 Fatuma Gurancha Bisiko Aug-14 19,269 19,269 NIL 64,800 46,690 150,028. 00

25 Quresho Mohamed Ali Sep-13 16,000 16,000 NIL 115,200 51,692. 31 198,892. 31

26 Njoli Abdi Aug-13 27,346 27,346 NIL 129,600 88,348. 62 211,910. 00

27 Adan Abdub Komba Aug-14 22,634 22,634 NIL 86,400 54,843. 92 85,148. 85

28 Joseph Kioko Nzau Jul-15 19,269 19,269 NIL 45,000 47,987. 52 161,318. 09

29 Said Mohamed Apr-16 12,000 12,000 NIL 28,800 12,923. 10 71,365. 38

30 Nzau Kiusya Jul-16 19,269 19,269 NIL 25,200 16,860. 38 134,932. 96

31 Samuel King’ori Oct-16 12,000 12,000 NIL 18,000 8,076. 92 147,580. 91

32 Faith Munyao Mar-17 10,000 10,000 4,785. 40 10,733. 76 4,031. 69 168,667. 36

33 Hawa Mohammed Nov-16 10,000 10,000 4,785 17,889. 60 7,724. 65 319,667. 38

34 Rodgers Mambo Feb-16 21,269 21,269 NIL 57,426. 40 25,768. 21 291,732. 31

35 Daudi Hassan May-15 14,000 14,000 NIL 81,900 36,750 199,528. 46

36 Isika Kiema Aug-13 27,586 27,586 NIL 108,000 89,124 90,143. 48

It is so ordered.

Dated and delivered at Nyeri this 29th day of January 2019

Nzioki wa Makau

JUDGE

I certify that this is a true

copy of the original

DEPUTY REGISTRAR