[2001] KEELRC 3 (KLR)

IN THE INDUSTRIAL COURT OF KENYA

AT NAIROBI.

(Coram: Charles P. Chemmuttut, J.,

S.M. Maithya & A.K. Kerich, Members.)

CAUSE NO.40 OF 2000.

KENYA ENGINEERING WORKERS’ UNION...............................................Claimants.

- v -

PREMIER ROLLING MILLS LTD..........................................................Respondents.

Issue in Dispute:-

“Unlawful lock-out of 46 employees” (hereinafter called the grievants), namely:-

1. Wycliffe Abujalla 5. Wycliffe Angoya

2. Thomas Ngala6. Francis Ongulu

3. Charles Owino 7. Fedelis Musyoka

4. Moses Mustafa 8. Isaack Buliba

9. Peter Wanyonyi30. Peter Amunga

10. Joseph Kariuki31. Charles Ambeni

11. Peter Mutuku32. Joseph Mamwedwa

12. Joseph Ochieng33. Peter Makholi

13. Joshua Alukwo34. Francis Ngugi

14. Peter Kkittu35. Munevi Nyakundi

15. Mark Otieno36. Albert Amuyunzu

16. Antony Muiruri37. Joseph Omuonya

17. Francis Alukwe38. Patrick Aineah

18. Stephen Ngang 39. Arnest Shikoli

19. Livingstone Khasa khala 40. John Ariga

20. Cyprian Khamari41. Longinus Oduor

21. Joseph Makumbi42. George Masalla

22. Edward Mukasa43. John Makwato

23. Alfred Kibusu44. Juma Khisa

24. Ben Mashere45. Wilfred Kamau

25. Joseph Mukhana46. Simon Wangila

26. Christopher Stanyisia

27. Aggrey Makokha

28. Zebabel Omukoto

29. Pius Mwenia

S. Mutambi, Industrial Relations Officer, for the Claimants (hereinafter called the Union).

L.W. Kariuki, Senior Executive Officer, F.K.E., for the Respondents (hereinafter called the Company).

A W A R D

This dispute was referred to the Court for consideration and determination by the Minister for Labour on 20th March 2000, in exercise of the powers vested in him by Section 8 of the Trade Disputes Act, Cap.234, Laws of Kenya (which is hereinafter referred to as the Act). The reference, together with the statutory certificates from the Minister himself and the Labour Commissioner under Section 14, subsection (9)(e) and (f) of the Act, were received by the Court on 23rd March 2000, and the dispute was listed for mention on 12th April 2000. On this occasion, Mr. Kariuki appeared for the Company but there was no appearance for the Union. In the circumstances, the case was listed for another mention on 26th April 2000 when Messrs Mutambi and Kariuki, who appeared for the parties respectively, were directed to submit or file their respective memoranda or statements on or before 31st May and 30th June 2000 and the dispute was fixed for hearing on 20th July 2000. Mr. Mutambi submitted his memorandum on 31st May 2000, but Mr. Kariuki belatedly filed a Preliminary Objection on 6th July 2000. When the dispute came up for hearing on 20th July 2000, Mr. Kariuki applied to withdraw the Preliminary Objection and requested that he be allowed to treat the same as a reply statement. Mr. Mutambi did not raise any objection to the withdrawal of the Preliminary Objection, which was granted. Consequently, Mr. Kariuki filed his reply statement on 26th July 2000, and the parties prayed that an award be made on the basis of their written submissions.

The Company are a limited liability concern and manufacturers of steel products, with their Head Office in Industrial Area, Nairobi, and a Rolling Mill factory at Kikuyu, Kiambu District of Central Province. The parties entered into a recognition agreement in 1993, but the first collective agreement between them is in dispute and pending in this Court for adjudication and determination under Cause No.54 of 1999. According to the Union, the 46 grievants were initially engaged as casual employees in 1990, and were confirmed on permanent terms of employment on 15th July 1994. However, the grievants who are affected by this dispute are 44 since 2, Nos.1 and 4, namely, Wycliffe Abujalla(Abuyaka) and Moses Mustafa, re-applied for their jobs and were re-employed without break in service. The said 44 grievants were summarily dismissed on 30th January 1995 pursuant to Section 17(a) of the Employment Act, Cap 226, Laws of Kenya, for staging an unlawful strike and absenting themselves from duty without permission (see Union Apps. I (a) & (b)). However, prior to their summary dismissal as aforestated, the parties had held several but unsuccessful meetings at the District Labour Office, Kiambu, under the chairmanship of Mr. Kasiva Munyao, District Labour Officer, to resolve the matter amicably.

On 21st January 1995, the Union reported a trade dispute to the Minister for Labour in accordance with Section 4 of the Act. The Minister accepted the dispute and appointed Mr. R.M. Muthanga of Ministry of Labour Headquarters to act as the Investigator; and in his investigation report which was released to the parties on 23rd May 1995, the Minister found in a nutshell that on 7th November 1994 the employees applied, according to the prevailing Company practice, for Christmas loans and bonuses of Kshs.5,000/= for permanent employees and Kshs.1,500/= for casual employees, but the Company approved Kshs.800/= - to Kshs.1,000/= and Kshs.400/= for the two categories of employees respectively on condition that the same would be recovered from their wages during the months of January and February 1995. Later during the month of November 1994, it became evident that the Company did not have enough material which would last throughout December 1994; and in the circumstances, the employees’ annual leave was rescheduled to commence on 13th December 1994. However, some material became available and there were orders to be met too, which necessitated the revocation or cancellation of the leave. In mid-December 1994, the employees received substantial amounts of their wages, leaving a meagre amount to cater for statutory deductions, e.g. taxes, Union dues, e.t.c, and it was understood that the balances, if any, would be paid to them on 23rd December 1994, while the approved loans and bonuses would be disbursed on 24th December 1994. On 23rd December 1994, the employees assembled at the cash office and demanded payment of the balances of their wages, loans and bonuses, but they were reminded, after a meeting between the management and the shopstewards, Messrs. Ben Mashere and Joseph Ochieng, that, in accordance with the long standing practice of the industry, the loans and bonuses would be paid the following day, i.e. 24th December 1994. It is stated that after receiving the balances of their wages on 23rd December 1994, the employees staged a work-out and sat outside the factory. The Managing Director, who was on a routine visit to the factory, found them outside the factory during working hours; and when he enquired from one of the above-named shopstewards, Mr. Mashere, with whom he had cordial relationship, whether there was any problem at the factory, he was misinformed by Mr. Mashere that there was none but only that the employees were waiting for their wages. In his report, therefore, the Minister castigated the shopsteward, Mr. Mashere, for not telling the Managing Director the truth. Consequently, the grievants absented themselves from duty and did not collect their loans and bonuses on 24th December 1994. They persisted in absenting themselves from duty on 28th, 29th, 30th and 31st December 1994, until 3rd January 1995, while other employees in the same establishment, e.g. office staff, drivers, turnboys and casuals continued to perform their duties, contrary to the claim by the grievants and the Union that the factory was to be closed on 23rd December 1994. The Minister established further that, having been on an unlawful strike since 23rd December , 1994, the grievants were requested to apologize to the management of the Company that they would not resort to such an action again, but they refused and reported the matter to their Union. On 3rd January 1995, a meeting was held between the shopstewards and a Mr. Ndong of the Union Headquarters on the one hand, and the management of the Company on the other hand, during which it was agreed that the grievants had committed an act of misconduct, but the parties disagreed on the kind of punishment or disciplinary action to be taken or meted out against them. The management of the Company insisted that the grievants must apologise for having staged an unlawful strike, but the Union maintained that they should be served with warning letters so as to avoid any future victimization of the grievants by the Company, which might arise from the letters of apology. In this scenario, the Minister squarely blamed the Union for misadvising the grievants by maintaining that they (grievants) should be given warning letters instead of writing letters of apology to the management of the Company. On 9th January 1995, the grievants, who were still on an unlawful strike, were given three(3) days notice to re-apply for their jobs, but they disobeyed the notice. However, Messrs. Wycliffe Abukaya and Moses Mustafa re-applied for their jobs and were re-employed without break of service, despite threats of death by the other grievants. As a result of these threats, Messrs Abukaya and Mustafa left the labour camp and the matter was reported to Kikuyu Police Station. On 30th January 1995, the grievants, whopersisted with the unlawful strike, were summarily dismissed under Section 17(a) of the Employment Act, Cap.226, Laws of Kenya, and Section 26 of the Act (Trade Disputes Act) for absenting themselves from duty. Finally, the Minister found that the grievants absented themselves from work without lawful cause and that the management of the Company had acted in good faith and had no malicious intentions against them, otherwise they (Company) would have removed them from their (Company’s) houses, which they (grievants) occupied until April 1995 when they were removed by a Court order. Thus, the Minister observed, the grievants lost their jobs on account of misdirection by the Union, but he “recommended, however, that the management’s action be upheld” and that the grievants should be paid their outstanding dues, if any.

Finally, the Minister appealed to the parties to accept the recommendation as a basis of settlement of the dispute. The Company accepted the recommendation, while the Union rejected it on the grounds that the Minister failed to establish the sequence of events leading to the dispute; that the employees were locked-out from 3rd to 30th January, 1995 and the Ministry of Labour failed to intervene nor were any attempts made to resolve the matter; that the Minister’s report ignored the fact that the employees were to proceed on leave from 23rd December 1994 to 3rd January 1995; that between 7th November and 23rd December 1994, no attempts were made to inform the Union on the mutual arrangement between the management and the employees; that the employees assembled outside the cashier’s office on 23rd December 1994 with the blessings of the management; that the furnace had already been dismantled for repairs and would have been ready by 3rd January 1995, and that in the circumstances, the employees were victimized for no fault of their own, but due to breakdown of communication between the apex and the base of the management structure. Hence, this dispute for adjudication and determination (see Union Apps. 2a, 2b and 3).

In his submission, Mr. Mutambi for the Union stated that it was a custom or practice in the Company that as Christmas and its accompanying festivities approached, the employees would normally apply for loans and bonuses and the Company would generally approve them. On 7th November 1994, the employees applied for such loans and bonuses to which an approval was granted and communicated to the employees, through the Works Committee, subject to the following conditions:-

(a)that the loans would range between Kshs.800/= and Kshs.1,000/= for permanent employees and Kshs. 400/= for casual workers, and the same would be recoverable from their January and February 1995 wages;

(b)that the wages for December 1994, loans and bonuses would be paid to the employees on 13th December 1994;

(c)that the employees would proceed on their annual leave on the said date, i.e. 13th December 1994, due to lack or shortage of materials and in order to pave way for the reconditioning and rebuilding of the furnace in the factory; and

(d)that the employees would resume work on 3rd January 1995.

This arrangement was acceptable to the employees.

But, he said, before the employees could proceed on leave on 13th December 1994, some materials became available and many orders were received which required to be met immediately; and in the circumstances, the management was compelled to cancel the previous arrangement and substituted it with the following arrangement:-

(a)that the employees would be paid a bulk of their December wages in advance on 13th December 1994, and the remaining balances would cater for statutory deductions;

(b)that the factory would be closed on 22nd December 1994, and;

(c)that the loans and bonuses and any wage balances due would be paid to the employees on 23rd December 1994, after which they (employees) would proceed on their annual leave until 3rd January 1995.

Some employees were, however, selected by the management to assist in dismantling the furnace from 23rd December 1994, but by noon on the same day the furnace had been dismantled. This arrangement was again communicated to the grievants through the Works Committee, and they accepted it.

Therefore, on 13th December 1994, the grievants received the bulk of their wages in advance and worked until 22nd December 1994. On 23rd December 1994, the grievants were ready to proceed on their annual leave, and by 10. 00 a.m. they had received their pay slips and had assembled outside the cashier’s office to collect their final dues. When the Managing Director, who was on a routine visit to the factory, enquired why the grievants were not working, the Factory Manager, on realising his mistake in not having informed the Managing Director of the arrangement, panicked and lied to him that the grievants were on strike. However, when the shopstewards explained to the Managing Director of the arrangement between the factory management and the grievants, the latter disapproved it and directed that the grievants should resume duties and collect their loans and bonuses on 24th December 1994. When the grievants realized that the arrangement had been cancelled, they collected their wage balances and defiantly proceeded on their annual leave.

Upon their return on 3rd January 1995, the grievants found a notice, dated 29th December 1994, pinned on the Notice Board requiring them to re-apply for their jobs and tender apologies in writing for having disobeyed the Managing Director and proceeded on annual leave. The grievants protested and, despite meetings between their shopfloor leaders and the management of the factory, the parties were unable to agree because the management maintained that the grievants staged an unlawful strike on 23rd December 1994 and did not report on duty on 24th, 28th, 29th, 30th and 31st December 1994, and that they disobeyed the lawful and express instructions or orders of the Managing Director to resume work on 23rd December 1994. On the other hand, the grievants refused to apologise or re-apply for their jobs on their return on the ground that they had proceeded on their annual leave on 23rd December 1994 as had been previously arranged with the management of the factory and blamed the management for reneging on the mutual arrangement regarding their annual leave and for failing to seek the approval of the Managing Director on the matter. However, when the Union stepped into the fray, both sides had firmly been entrenched in their respective positions, and they (Union) had no other alternative but to refer the dispute to the Minister for Labour as aforestated.

In conclusion, Mr. Mutambi submitted that the grievants did not go on strike at all as alleged by the Company; but, on the contrary, it was the Works Manager who, out of fear, misinformed and misled the Managing Director that the grievants were on strike. He asserted that the management of the factory should be held responsible for failing to seek the approval of the Managing Director regarding the arrangement before they committed themselves to the grievants. Mr. Mutambi maintained that the grievants could not be accused of having disobeyed the Managing Director on 23rd December 1994 when they were, in fact, placed in a quandary by the abrupt, unilateral and last minute changes by the management; and, in the circumstances, he denied that the grievants went on strike on 23rd, 24th, 28th, 29th, 30th and 31st December 1994 as alleged by the Company. Mr. Mutambi, therefore, urged the Court to find that this was a case of high-handedness by the Company against the grievants because the action taken against them was in bad faith, oppressive, provocative, inconsiderate, unfair, unjustified and wrongful.

Accordingly, Mr. Mutambi prayed that the grievants be paid their terminal benefits as follows:-

(i)One month’s pay in lieu of notice;

(ii)Leave allowance;

(iii)Overtime allowance;

(iv)15 days pay for each completed years of service; and

(v)12 months’ compensation for loss of employment.

In reply, Mr. Kariuki for the Company submitted that, owing to urgent orders which were to be met early in December 1994, the grievants were informed that their wages were to be paid on 23rd and the loans and bonuses were to be disbursed on 24th December 1994, but when the grievants received their wages on 23rd December 1994, at 11. 00 a.m., they downed their tools and walked out of the factory without provocation from the management. Several attempts were made by the Company and Government officials to persuade the grievants to resume their duties, but these attempts were frustrated by the Union who ill-advised them (grievants). Mr. Kariuki, therefore, vehemently denied that the Company locked-out the grievants on 23rd December 1994; and, on the contrary, maintained that the grievants went on an unlawful strike between 23rd December 1994 and 30th January 1995. This, he said, was acknowledged by the Union and the only disagreement between them (Union) and the Company was the kind of punishment which the grievants were to receive. Whereas the Company wanted the grievants to re-apply for their jobs and apologise in writing for staging and participating in an unlawful strike, the Union insisted that they should be issued with warning letters and be allowed to resume work. Mr. Kariuki made a scathing attack on the Union for misleading the Court by saying that the grievants were locked-out while they staged and participated in an unlawful strike, otherwise they (Union) would not have insisted that warning letters be issued to the grievants.

Mr. Kariuki submitted further that all the support staff, i.e. drivers, clerks, typists and office messengers, who were also members of the Union, reported to work on 23rd, 24th, 28th, 29th, 30th and 31st December 1994, except the grievants. He stated that had the grievants been locked-out as alleged by the Union, all the other unionisable employees would have walked out in sympathy of their colleagues. Furthermore, the Company had nothing to gain by locking-out their core workers (grievants) and leaving only the support staff. Mr. Kariuki stated that the Managing Director visited the factory on 23rd December 1994 and found the grievants on strike; and, after inquiry and consultation, he personally implored them to resume work immediately and also assured them that if they had any problem with the factory management he was ready to resolve it with them (grievants). The grievants did not heed his order to resume work, and were consequently dismissed on 30th January 1995, after being away on unlawful strike for one month and seven days. He pointed out that the two employees who re-applied for their jobs on 26th January 1995 were re-employed with continuity of service and benefits. Therefore, the 44 grievants who refused to re-apply for their jobs were obviously misled by, and the blame lay with, the Union.

Finally, Mr. Kariuki urged the Court to find that the grievants staged an unlawful strike and persisted in it, and that there was no lock-out at all as alleged by the Union. In the circumstances, he prayed that the demands by the Union be rejected in toto.

In this case, the grievants were summarily dismissed on 30th January 1995 for staging an unlawful strike and absenting themselves from duty without permission with effect from 23rd December 1994, under Section 17(a) of the Employment Act, Cap.226, Laws of Kenya, which states as follows:-

“17. Any of the following matters may amount to gross misconduct so as to justify the summary dismissal of an employee for lawful cause, but the enumeration of such matters shall not preclude an employer or an employee from respectively alleging or disputing whether the facts giving rise to the same, or whether any other matters not mentioned in this Section, constitute justifiable or lawful grounds for the dismissal:-

(a)if, without leave or other lawful cause, an employee absentshimself from the place proper and appointed for the performance of his work;

(b)----------------------------------------------------------------------------

(c)-----------------------------------------------------------------------------

(d)-----------------------------------------------------------------------------

(e)------------------------------------------------------------------------------

(f)------------------------------------------------------------------------------

(g)----------------------------------------------------------------------------.”

The said common letter of summary dismissal, dated 30th January 1995, states, inter alia, as follows:-

“Arising from your illegal strike on 23rd December, 1994, and thereafterabsenting yourself from duty without permission upto date, you aresummarily dismissed from the services of the Company with effect from23rd December, 1994 under Clause 17A of the Employment Act”.

The Union alleged that the management of the Company engaged in an unfair labour practice and acted in bad faith by locking out the grievants without reasonable excuse. On the other hand, the Company alleged that the grievants were summarily dismissed for launching an unlawful strike on 23rd December 1994 and consequently absenting themselves, with the tacit encouragement or support of the Union, from duty without permission through to 30th January 1995. In his report, the Minister for Labour also found that the grievants went on an illegal strike and absented themselves from duty without lawful cause; and therefore, the management of the Company had acted in good faith and without any malicious intentions against them.

Strikes and lock-outs involve periods of unemployment – one voluntary at the instance of the employees and the other forced at the hands of the employers. So far as the legal position of strikes and lock-outs are concerned, there is no dispute that in case of an illegal strike, the management may legally lock-out the employees in view of the fact that the injury and suffering caused by the strike action is very often widespread and devastating. Admittedly, the grievants proceeded on their annual leave on 23rd December 1994 against the lawful, reasonable and express order of the Managing Director; and upon their return on 3rd January 1995, they (grievants) were, as a measure of disciplinary action, required to apologise and re-apply for their jobs. Messrs. Wycliffe Abukaya and Moses Mustafa apologised and re-applied for their jobs and were re-employed without break in service. The grievants, with the encouragement or support of the Union, refused to apologise and re-apply. Hence, their summary dismissal as aforestated. Therefore, the whole bone of contention between the Union and the Company was the propriety of the quantum of punishment against the grievants. The stand taken by the Union that the grievants should have been given warning letters only and allowed to resume duties was highly unrealistic, unreasonable and amounted to an interference of purely a managerial function of the Company to properly manage their business. The facts and submissions on the record in this case show that an offence of misconduct was committed by the grievants when they proceeded on their annual leave without permission and absented themselves from work in disregard of the lawful and reasonable order of the Managing Director to resume work. Therefore, the kind of punishment for that misconduct was a matter of the Company to decide without the involvement of the Union. Thus, in my view, when a question of discipline in administration of a concern arises, it is the management alone to decide the kind of punishment for the breach of discipline, which amount to misconduct.

I am, therefore, quite clear in my mind that the Managing Director was within his right to cancel the annual leave which had been granted earlier by the factory management to the grievants; and in my considered opinion, the disobedience by the latter (grievants) of that lawful and reasonable order and absenting themselves from work from 23rd December 1994 to 30th January 1995, although they were given an opportunity to apologise and re-apply for their jobs, was willful and amounted to misconduct within the meaning of Section 17 of the Employment Act, Cap.226, Laws of Kenya. The Union have not been able to prove any extenuating circumstances in favour of the grievants, and the conditions which would justify interference or intervention by this Court do not exist in this case. In the circumstances and considering the loss of man-hours and production, I uphold the action taken by the Company against the grievants.

MEMBERS - We agree.

DATED and delivered at Nairobi this 21st day of August, 2001.

Charles P. Chemmuttut,

JUDGE.