[2014] KEELRC 1075 (KLR)

REPUBLIC OF KENYA

IN THE INDUSTRIAL COURT OF KENYA AT MOMBASA

(BIMA TOWERS)

CAUSE NO. 354 OF 2013

KENYA HOTELS & ALLIED WORKERS UNION CLAIMANT

V

JET BAR COTTAGE RESPONDENT

JUDGMENT

Thomas Ogelo (Grievant) was appointed on a renewal one year contract by the Jet Bar, Restaurant and Cottages with effect from 5 January 2013 as a Restaurant Manager. His monthly pay was stated as Kshs 15,000/-. He was issued with a letter of appointment which provided for the terms and conditions of employment.

On 25 October 2013 the Kenya Hotels & Allied Workers Union (Union) lodged a Memorandum of Claim in Court against Jet Bar Cottage (Respondent - though name on letter of appointment is The Jet Bar, Restaurant and Cottages) stating the issue in dispute as unfair and unlawful lockout/termination of Thomas Ogelo. This was after conciliation failed.

On 31 October 2013 the Respondent was served with Notice of Summons and Memorandum of Claim. According to the affidavit of service sworn by George Onyancha on 2 November 2013 and filed in Court on 8 November 2013, a receptionist named Caro accepted service and acknowledged the same by stamping, dating and signing a copy of the Summons (copies were filed with the affidavit of service).

On 16 December 2013 the Cause was placed before me but the Respondent was not represented. Mr. Abuta, Deputy Secretary General for the Union informed the Court that service of Summons had been effected and therefore the Court directed hearing to proceed on 3 April 2014. (Response should have been filed on or around 15 November 2013). The Union was further directed to serve the Respondent with a hearing notice.

On 3 April 2014, Mr. Abuta informed the Court that the Respondent had been served with a hearing notice. An affidavit of service sworn by George Onyancha deposed to service of a hearing notice upon the Respondent. The hearing notice had been accepted, stamped and signed by the Respondent’s Managing Director called Paul. Being satisfied with the service, the Court allowed the hearing to proceed.

The Cause will therefore be determined as unopposed because the Respondent did not file a Response or appear at the hearing.

Union’s pleadings/case

The Union pleaded that the Grievant was employed by the Respondent as a Restaurant Manager on 5 January 2013 on a one year renewable contract and that around 16 June 2013 the Grievant was terminated through phone after being locked out from work for 5 days.

Prior to termination the Respondent’s General Manager, Paul had informed the Grievant to go home and report back after 7 days, a position confirmed by the proprietor. When the Grievant returned he was not allowed in by Security guards after which the proprietor called him from Nairobi to inform him he was no longer in employment.

The termination, it was pleaded was not fair because the Grievant was not given a fair hearing or opportunity to defend himself and no reasons were given. The termination was in breach of contract.

The Union further pleaded that it reported a trade dispute to the Cabinet Secretary for Labour who appointed a Conciliator but the Respondent failed to attend conciliation meetings and thus a certificate of disagreement was issued.

On terms and conditions of employment, the Union pleaded that the Grievant worked overtime, during public holidays and did not go on annual leave. The reliefs sought were outlined in paragraph 4. 3 of the Memorandum of Claim.

The Grievant testified and he produced his appointment letter. He stated that he reported to work on 16 June 2013 and was called by the Respondent’s General Manager, Paul at end of the day and informed that he had been instructed by the Respondent’s Director that he should keep off for 7 days. No reasons were given for the suspension but he would report every day until the sixth day when he was locked out by a security guard called Sammy Juma on the instructions of the Respondent’s Director.

The Grievant further stated that he called the Director who informed him he was no longer an employee, after which he reported to the Union.

Regarding relief, the Grievant stated that he was seeking his dues and that he was not paid his wages for May 2013 and days worked in June 2013.

The Union made oral submissions at close of its case and submitted that the Grievant’s rights were violated and more particularly section 4 of the Labour Relations Act and Article 41 of the Constitution. Mr. Abuta further submitted that the Respondent had failed to prove the reasons for the termination as required by sections 43 and 45 of the Employment Act and therefore the termination was unfair and the Grievant should be awarded 12 months compensation and costs.

Evaluation

The cause of action herein is primarily one of unfair termination/wrongful dismissal and so sections 47(5), 41, 43 and 45 of the Employment Act become implicated.

Pursuant to section 47(5) of the Employment Act, the Court is satisfied that the Grievant has established that his termination was in breach of contract and unfair because no notice was issued as required by the letter of appointment.

An employer is under a statutory obligation to comply with the requirements of what is called procedural fairness before terminating the services of an employee. This is akin to natural justice in public/administrative law. On the material placed before Court, the Court finds that the Respondent did not notify the Grievant or grant him an opportunity to make representations before the decision to terminate his services was taken. The termination was procedurally unfair for non compliance with section 41 of the Employment Act.

Sections 43 and 45 of the Employment Act provide for substantive fairness before termination. The duty is placed upon employers to prove the reasons for termination and that the reasons are valid and fair reasons.

In the case under consideration, the Grievant testified that no reasons were given to him. The Respondent despite service of Notice of Summons and hearing notice opted not to participate in the proceedings.

The legal effect of the failure is that the Grievant’s case and facts have not been disputed. There are no real disputes of facts as to the termination and the only logical conclusion is that the termination was also substantively unfair.

Appropriate relief

One month pay in lieu of Notice

The Grievant’s letter of appointment provided for termination by the giving of one month notice or pay in lieu of notice. Section 35(1)(c) of the Employment Act is also to the same tenor. The Grievant would be entitled to this head of relief.

It is not in dispute the Grievant’s monthly pay was Kshs 15,000/-. He would be entitled to this.

House allowance

The Grievant sought in the Memorandum of Claim the equivalent of 5 months house allowance calculated at a rate of 15% of the monthly salary.

The Grievant did not lay any evidential or contractual basis for seeking this head of relief. The letter of appointment was silent on whether the monthly wage of Kshs 15,000/- was consolidated/inclusive of an element for housing.

The Grievant did not suggest that he was earning below the gazetted minimum wages or those agreed with the Union in a collective agreement. The Court declines to find in favour of the Grievant under this head.

Prorated leave

Under this head, the Union sought Kshs 6,000/- equivalent to leave for a period of 6 months. The Grievant was terminated in June 2013 and he would be entitled to pro rata leave for period served.

The formula used to arrive at the sum claimed was not stated in evidence. However, based on sections 10(3) and (7) and 74 of the Employment Act, the Court finds in favour of the Grievant.

Off days

No evidential foundation for this was laid and it is declined.

1 public holiday

No evidential foundation for this head of claim was laid and it is declined.

Overtime

The Union sought an unquantified amount as overtime worked for 15 extra hours per day. The Claimant did not give any evidence on the working hours and what time he used to report and leave work. With the failure to lay an evidential foundation or basis, this relief is declined.

May 2013 wages

The uncontroverted evidence by the Grievant was that he was not paid his wages for May 2013. He would be entitled to this as a matter of right.

June 2013 wages

Again the uncontroverted evidence is that the Grievant was terminated verbally on 16 June 2013. The Union pleaded he was entitled to Kshs 9,200/- though again the formula was not disclosed. He is entitled as of right to wages for these days as claimed.

12 months gross salary compensation

The equivalent of a number of months’ gross wages as compensation is one of the primary remedies where a Court reaches a conclusion of unfair termination. The remedy though is discretionary and section 49(4) of the Employment Act has set out some 13 factors and the Court is enjoined to consider any, some or all of the factors.

The Grievant was on a fixed term contract for one year. He had served for 6 or so months of the contract. He has incurred some expenses as a result of the termination. The renewal of his contract was not guaranteed or automatic. The Court also notes that the Respondent did not cooperate at all with the Conciliator appointed by the Cabinet Secretary for Labour.

Considering these, the Court is of the view that an award equivalent to the balance of the contract, that is, 6 months would be just and reasonable. The Court assesses the compensation at Kshs 90,000/-.

Conclusion and Orders

From the foregoing discussion, the Court finds and holds that the termination of the Grievant was procedurally and substantively unfair and awards him, and orders the Respondent to pay him

One month pay in lieu of Notice Kshs 15,000/-

Prorated leave Kshs 6,000/-

May 2013 wages Kshs 15,000/-

June 2013 earned wages Kshs 9,200/-

6 months gross wages compensation Kshs 90,000/-

TOTAL Kshs 135,200/-

The claims for house allowance, off days, public holidays and overtime are declined and stand dismissed.

Respondent to issue Grievant with Certificate of Service.

There is no order as to costs.

Delivered, dated and signed in open court in Mombasa on this 6th day of June 2014.

Radido Stephen

Judge

Appearances

for Union/Grievant

Mr. Abuta, Deputy Secretary General

Kenya Hotels & Allied Workers Union

Respondent did not file Response/appear at hearing