[2015] KEELRC 334 (KLR)

REPUBLIC OF KENYA

EMPLOYMENT AND LABOUR RELATIONS COURT ATNAIROBI

CAUSE NO. 2118 OF 2012

KENYA CHEMICAL & ALLIED WORKERS UNION…..................CLAIMANT

VERSUS

BOTANICAL EXTRACTS (EPZ) LIMITED ………….…........RESPONDENT

JUDGMENT

The Claimant is a trade union registered in Kenya to represent interests of workers engaged in Chemical and Allied Industries as covered in its Constitution registered with the Registrar of Trade Unions. The Claimant has members who are employees of the Respondent, the Respondent which produces artemisimin combination therapies (ACTS) used in treatment of malaria.

The Claimant does not have a recognition agreement with the Respondent. The signing thereof was stopped by an order of the High Court pursuant to a petition by the Respondent after this court ordered it to sign the recognition agreement. The case is pending under High Court Misc. Application No. 283 of 2010.

This dispute concerns the dismissal of Hilary Waithaka, the grievant, who was an employee of the Respondent from 10th April 2007 to 11th July 2011. The Claimant alleges the dismissal was wrongful while the Respondent avers that it complied with due procedure and had valid reason to dismiss the grievant.

The Claimant filed this suit on behalf of the grievant by its Memorandum of Claim in which it is seeking the following orders:

1. That, this Honourable Court finds that, the Respondent acted unfairly, unlawfully and wrongly and order reinstatement of the grievant back to his employment without loss of benefit and privileges, salaries and other benefits for the period he has been out of employment.

2. That, incase this Honourable Court at its discretion finds reinstatement not possible, that the Court considers giving the grievant full benefits, entitlement and maximum compensation as is required by the law within Court’s power, bearing in mind that, the Respondent has no Collective Bargaining Agreement concluded between it and the Claimant.

3. That, costs be provided for in favour of the Claimants.

In the Memorandum of Defence filed on behalf of the Respondent, it denies that the grievant was wrongfully dismissed or terminated and prays that the claim be dismissed.

The case came up for hearing on 11th June 2013 when Mr. Jackson Mueke appearing for the Claimant made his opening submissions. Mr. Njiru who was appearing for the Respondent sought adjournment to call one defence witness. The case was adjourned to 25th July 2013 when it was again adjourned.

When parties appeared before me on 9th December 2014 Mr. Mueke who was appearing for the Claimant and Ms. Akinyi who appeared for the Respondent both informed the court that they do not wish to call any witnesses and will rely on pleadings and submissions on record.

Claimant’s case

The Claimant submitted that this dispute arose on 11th July 2011 when the Respondent unlawfully and wrongfully summarily dismissed the Grievant from employment.

The Grievant was employed on 10th April 2007 as Assistant Operator in Production Department. His salary was Kshs.10,000/= a month. He was dismissed on 11th July 2011.

The ground for dismissal is that on 22nd June 2011 there was spillage of an industrial chemical in the area around the Grievant’s work station. His Head of Department who was on a routine check noticed the spillage and asked the Grievant together with three other colleagues to recover the chemical from the drainage, which they did successfully. The Head of Department then causally mentioned to the Grievant that he will be required to write a report on the chemical spillage. The Grievant was not asked for the report until 6th July 2011 when he was called by the Personnel Officer and informed that his Head of Department had complained that he had refused to write a report on the spillage.

The Grievant in response explained to the Personnel Officer that he had not been told by his Head of Department when to write the report and he was not sure of what he was to write about since the spillage was not near his work station. Nevertheless he wrote the report on the same day and handed it to the Production Manager who was the Head of Department.

The follwing day on 7th July 2011 the Grievant received a show cause letter requiring him to show cause within 24 hours why disciplinary action should not be taken against him for failure to obey a lawful command by his Manager to write a report on the incident which he refused to obey. The Grievant responded to the show cause letter the same day. On 11th July 2011 the Grievant received a letter of dismissal. The letter reads as follows:

July 11, 2011

Hillary Waithaka

C/O Botanical Extracts EPZ Ltd

Dear Hillary,

RE: TERMINATION OF EMPLOYMENT CONTRACT

On 22-6-2011 you were told by Production Manager to explain in writing about hexane spillage which had occurred on your area of operation while you were on duty; however you failed to obey him. Your reasons that you were not told the duration when called by Personnel Officer has been taken into consideration.

According to Labour Act 2007 Section 44(4)(e) it is an offence for an employee knowingly fails or refuses to obey a lawful and proper command which it was within the scope of his duty to obey issued by his employer or a person placed in authority over him by his employer.

After considering your written explanations, it has been concluded you knowingly failed to obey an order from your manager. The management has therefore decided to summarily dismiss you for gross misconduct.

Your terminal dues will be paid as below after completion of your clearance.

Days worked in month of July 2011.

Pro-rata leave.

Yours,

Signed

Joseph Kiara

Personnel Officer

For and on behalf of:

Botanical Extracts EPZ Ltd.

The Grievant reported the dismissal to the Claimant union who sought a meeting with the Respondent to discuss the matter. A meeting was held on 8th August 2011. At the meeting it was agreed that the Claimant would write a formal appeal for reinstatement of the Grievant. The letter was written on 15th August 2011 but the Respondent did not reply or act on it.

The Claimant sent a reminder on 12th September 2011 which was again not acted upon by the Respondent prompting the Claimant to report a formal dispute to the Minister for Labour & Human Resource Development as provided under Section 62(1) of the Labour Relations Act by letter dated 17th October 2011. The Minister appointed a Conciliator who heard the parties and prepared his report.

In the report dated 18th April 2012 the conciliator made the following findings and recommendations:

Findings

(a) Investigations established that the parties do not have a recognition agreement though the same is being pursued in a different case. Never-the-less the union is the most appropriate one to represent unionisable employees’ industrial interest.

(b) Investigations established that the parties are in agreement that there was a spillage and that the Grievant was not to blame for the same. The Grievants’ dismissal was solely due to the fact that he allegedly knew about the spillage but did not report on the same. It is not disputed that the Grievant did write a report to the head of department on 6th and to the personnel officer on 7th June 2011.

(c) The question to determine at this point is whether the alleged failure deserved the punishment meted to the Grievant. Any punishment must be commensurate with the offence or crime committed. In the instant case the disciplinary action was excessive in all material facts.

(d) The Grievant had been asked to explain what he knew of the spillage and he did so and thereafter he was dismissed. Section 45(2)(c) of the Employment Act provides that the termination of employment must be in accordance with due process. This is not the case in the instant case thus rendering the termination to be wrongful.

Recommendations

(a) After careful consideration of both parties submissions coupled with the above findings, I recommend that the dismissal be reduced to normal termination with full benefits in accordance with the law. In addition I recommend that the Grievant be paid an equivalent of ten (10) months wages based on the gross wage of the employee as at the time of dismissal as compensation for suffering wrongful termination.

(b) Finally both parties are requested to accept the above recommendation as a basis of settling this dispute.

The Claimant accepted the report and calculated the terminal benefits according to the report and forwarded to the Respondent to pay but the Respondent rejected the report prompting the Conciliator to issue a Certificate of disagreement to refer the matter to this court.

Respondent’s case

The Respondent gave notice of Preliminary Objection on grounds that there is no recognition agreement between the Claimant and the Respondent. On a without prejudice basis the Respondent submitted that the Grievant did not have a clean record as he had been issued with a show cause letter on 2nd March 2009 for failing to report for work on 27th February 2009.

Regarding the dismissal of the Grievant the Respondent submitted that there was a spillage of Hexane, a solvent chemical, in the Grievant’s area of operation while he was in charge of operations. His Manager verbally requested him to write a report on the incident but he refused.

According to the Respondent’s operating procedures all spillage of Hexane exceeding 5 litres are documented by the operator for the purpose of keeping track of solvent losses and investigating process faults.

The Grievant’s Manager reported to the Human Resource Manager on 7th July 2011 that he had requested the Grievant to write a report on the spillage but the Grievant declined to do so. That he reminded the Grievant on 6th July 2011 but the Grievant again declined. According to the Manager 230 litres of hexane was recovered while approximately 50 litres was lost.

The Personnel Officer wrote a show cause letter to the Grievant which the Grievant responded to on 7th July 2011 stating that no disciplinary action should be taken against him as he was not given a specific time to write a report on the 22nd June 2011.

As a result of the Grievant’s deliberate disobedience and casual response to such a serious matter the Respondent decided to dismiss him and issued him with a letter of dismissal on 11th July 2011.

The Respondent submitted that the Grievant was given an opportunity to defend himself through the show cause letter and he was dismissed in accordance with Section 44(4) of the Employment Act which provides at subsection 44(4) (c) that it is gross misconduct for which an employee may be summarily dismissed if the employee:

“(c) willfully neglects to perform any work which it was his duty to perform, or if he carelessly and improperly performs any work which from its nature it was his duty, under his contract, to have performed carefully and properly;

(d) uses abusive or insulting language, or behaves in a manner insulting, to his employer or to a person placed in authority over him by his employer;

(e) knowingly fails, or refuses, to obey a lawful and proper command which it was within the scope of his duty to obey, issued by his employer or a person placed in authority over him by his employer;

The Respondent submitted that the Grievant’s conduct fell under these provisions as he failed to obey a lawful command thus neglecting to perform his work. He also behaved in a manner insulting to his manager by verbally engaging him when the manager reminded him to write the report.

The Respondent submitted that it was dissatisfied with the Conciliator’s report as the report was clearly lopsided and represents a pedestrian approach to the issues in question and the relevant law and procedures applicable in the circumstances. It therefore rejected the findings and recommendations. The Respondent prayed that the suit be dismissed with costs.

Issues

The issues arising for determination are whether the claimant has no locus standi to lodge a claim against the Respondent on behalf of the Grievant, whether the dismissal of the Grievant was lawful and whether the claimant is entitled to the prayers sought.

Locus Standi

The Respondent submitted that the Claimant has no locus standi to represent the Grievant as there is no recognition agreement between the Claimant and the Respondent. In response thereto the Claimant submitted that the Respondent was ordered to sign recognition agreement with the Claimant within 30 days by this court in its award in cause No. 390(N) of 2009 which was delivered on 8th April 2010. The Respondent filed an application for review of the award which was dismissed by a ruling delivered on 20th July 2010.

The Respondent then filed High Court Misc. Application No. 283 of 2010 seeking Judicial Review of the Court Award. The application is still pending determination.

The Claimant further submitted that the Respondent accepted the Claimant’s right to represent the Grievant when it held meetings with the Claimant and also attended conciliation meetings with the Claimant without raising the issue of Locus standi.

The claimant relied on this Court’s Award in Cause No. 1482 of 2010 Kenya Union of Commercial, Food and Allied Workers v Diani One Stop Supermarket where the Court stated as follows:

“A party who is represented either by a trade union or a law firm ……………..there was nothing on record to show that the Claimant has no capacity to bring the claim. The Claimant is a registered trade union. It is allowed by its constitutive law to file claims on behalf of its members. The Respondent did not disapprove membership. The Labour Institutions Act 2007, and the Industrial Court Act 2011 both recognize the right of the Union to present claims on behalf of its members. Article 48 of the Constitution of Kenya 2010 guarantees the right of all persons in accessing justice. The Grievants were unionisable employees in the commercial sector. The Claimant did not need to have a recognition agreement with the Respondent, to have the locus standi. “Recognition” relates to the right of the union to represent its members in collective bargaining, not the right of representation in a dispute settlement forum”.

The Claimant also relied on this court’s decision in Cause No. 391 of 2010 Kenya Hotels and Allied Workers Union v The Big Five Brewers Limitedwhere in a similar dispute the court held as follows:

“A Preliminary Objection is one which is purely based on law and which does not require any facts to support it .… Even if, I was to prefer to deal with the issue of Recognition Agreement, I would still not agree with the Preliminary Objection because the dispute is not about a collective bargaining agreement”.

Section 4 of the Labour Relations Act guarantees an employee’s right to freedom of Association as does Article 41(1)(c) of the Constitution which guarantees every employee’s right to form, join or participate in the activities of a trade union.

Section 54 (1) of Labour Relations Act provides that an employer shall recognize a trade union for purposes of collective bargaining if the trade union represents the simple majority of unionisable employees.

The Respondent does not deny that the grievant is a member of the Claimant union. It only contends that there is no recognition agreement.

As stated in Cause No. 1482 of 2010 referred to above, the Claimant did not need to have a recognition agreement to have locus standi. The only requirement for purposes of representation is membership. Recognition is for purposes of collective bargaining, not representation. The Claimant therefore had locus standi to represent the grievant as his membership to the Claimant has not been contested.

Again as pointed out by the Claimant, the Respondent did not contest its locus standi during the pre-court proceedings and therefore by conduct, accepted the locus standi of the Claimant to represent the grievant.

Was the termination of the grievant’s employment lawful?

Section 41 of the Employment Act provides for proper procedure for termination or dismissal as follows:

(1). Subject to section 42 (1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall beentitled to have another employee or a shop floor union representative of his choice present during this explanation.

(2) Notwithstanding any other provision of this Part, an employer shall, before terminating the employment of an employee or summarily dismissing an employee under section 44 (3) or (4) hear and consider any representations which the employee may on the grounds of misconduct or poor performance, and the person, if any, chosen by the employee within subsection (1) make.

Section 43 provides for proof of reason for termination or dismissal by the employer while Section 45 provides for fair termination or dismissal.

In this case it is not in dispute that apart from the notice to show cause which is an inquiry into a case of misconduct, there was no hearing conducted. The grievant was never subjected to any disciplinary process as provided in Section 41. He was not given a hearing, he was not informed of his right of representation by his trade union or colleague, he was never given an opportunity to defend himself against the allegations against him beyond the inquiry stage. For these reasons the grievant was unfairly terminated.

Having been unfairly terminated the grievant is entitled to notice, salary for days worked and any leave due but not taken. He is also entitled to compensation.

The Claimant tabulated the Grievant’s entitlements based on the recommendations of the conciliator to reduce the dismissal to normal termination. The entitlements are:

1. Payment in lieu of notice = 1 month = Kshs.10,000

2. Days worked and not paid (10)

= 10. 000 x 8/195=410. 25 x 10 = Kshs.4102. 60

3. Pro-rata leave = 3 x 1. 75 x 410. 25 = Kshs.2153. 80

4. Severance/service pay = Kshs.24,615. 00

5. Compensation = 10,000 x 10 months = Kshs.100,000

Gross total claims due and owing = Kshs.140,871. 40

6. Plus over time hours worked and not paid

The Claimant sought reinstatement. Having already accepted the recommendations of the conciliator to reduce the dismissal to normal termination, it would be unconscionable to change its mind especially so as the grievant also accepted the same. In any event reinstatement is not available to the Grievant as it is more than 3 years since he was dismissed from employment.

On compensation, I adopt the 10 months that was awarded by the Conciliator as none of the parties has raised any reasons why I should not do so.

Conclusion

In conclusion I declare the dismissal of the Grievant unfair and award him the following:

1. One months salary in lieu of notice = Kshs.10,000

2. Days worked and not paid = Kshs.4102. 60

3. Pro-rata leave = Kshs.2153. 80

4. Compensation = Kshs.100,000

There is no evidence that the Grievant was not a member of NSSF or that he is entitled to service pay. The prayer for service pay is therefore rejected.

The Respondent will pay Claimant’s costs for the suit in the sum of Kshs.60,000/=. The decretal sum shall attract interest at court rates.

Dated this day of 2015

HON. LADY JUSTICE MAUREEN ONYANGO

JUDGE

Delivered in Nairobi this 29th day of October 2015

HON. LADY JUSTICE HELLEN WASILWA

JUDGE

In the presence of:

……………………………for Claimant

…………………………... for Respondent