[2002] KEELRC 17 (KLR)

IN THE INDUSTRIAL COURT OF KENYA

AT NAIROBI.

(Before: Charles P. Chemmuttut, J.,

A.K. Kerich & H.B.N. Gicheru, Members.)

CAUSE NOS. 50 & 119 OF 2000.

KENYA UNION OF COMMERCIAL, FOOD& ALLIED WORKERS.................Claimants.

- v -

1. SECURITY HOLDINGS LTD. )..........................................................Respondents.

2. SIMBA SECURITY LTD. )

and

KENYA GUARDS & ALLIED WORKERS UNION......................................Interested Party.

Issues in Dispute:-

(a)Cause No.50 of 2000.

“Dismissal of 28 workers” (hereinafter called the grievants), namely:-

(i) Security Holdings Ltd.

1. William Okwiri.

2. Wilson Muriithi.

3. Nathan Aduma.

4. David Somu.

5. Nzau Kiliku.

6. Opondo Birenge.

7. James Kitheka.

8. Samulya Mitau.

9. Kilonzo Ndambu.

10. John Obungu.

11. Patrick Musembi.

12. Richard Nyongesa.

13. Moses Akuno.

14. Juma Mrefu.

15. Peter Muchai.

16. David Musyoka.

17. Paul Musyoka.

(ii)Simba Security Ltd.

1. William Ongongo.

2. Joseph Ogonjo Okelo.

3. David Mulatia.

4. George Odhanji.

5. John Otieno Atieno.

6. Julius Musembi.

7. Jordan Muveva.

8. Patrick Ochieng Akula.

9. Cleophas Nyongesa.

10. Daniel Ochieng.

11. Johnson Kamau.

(b)Cause No.119 of 2000.

“Dismissal of Mr. Crispine Obura, P/No.129 and

Mr. Jeremiah Handa Omondi, P/No.1024”.

H.N. Kagondu, Deputy Secretary General, for the Claimants (hereinafter called the first Union).

M. Onyango (Mrs.), Executive Officer, F.K.E., for the Respondents (hereinafter called the Companies).

Interested Party (hereinafter called the second Union). – ex parte.

A W A R D.

The two disputes are consolidated as the issues under consideration involve the same parties and may conveniently be disposed of by a common or single award.

(a)Cause No.50 of 2000.

On 27th April 2000, the Minister for Labour referred this dispute to the Court for consideration and determination in accordance with 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); and the Minister’s reference, together with the statutory certificates from the Labour Commissioner and the Minister himself under Section 14, subsection (9)(e) and (f) of the Act, were received by the Court on 28th April 2000 and the dispute was listed for mention on 24th May 2000. On this occasion, Messrs. K.A. Luvega and Philip Koech who appeared for the first Union and the Companies respectively, were directed to submit or file their written memoranda or statements on or before 30th June and 31st July 2000 and the dispute was fixed hearing on 8th August 2000. The first Union submitted its memorandum on 17th July 2000, and the second Union submitted its rejoinder on 7th August 2000. Thereafter some adjournments were taken by the parties on the ground that there was a possibility of an amicable settlement being arrived at between them. No compromise was reached and the Companies filed their joint reply statement on 17th April 2001. The dispute was then heard on 4th September 2001 and final submissions were made on 26th September 2001.

The first Union and the Companies have had a valid recognition agreement, but have never negotiated any collective agreement to regulate the terms and conditions of service of the unionisable employees. The employees terms and conditions of service are, therefore, governed by the Protective Security Services Order, which is reviewed from time to time, the last of such review was undertaken in 1998. The 28 grievants were engaged on diverse dates between August 1974 and February 1996 as security guards at a starting salary of Kshs.3,219/= per month each, but they were all summarily dismissed from service on 28th May 1999 under Section 17(d) and (e) of the Employment Act, Cap.226, Laws of Kenya. The contents of the common letter of summary dismissal (Union Apps. I-16 and 2-10) reads in extenso as follows:-

“RE: SUMMARAY DISMISSAL

This office has been informed of your grave misconduct which you committed on 20th May 1999 at 11. 00 a.m. at Kilimanjaro Safari Club offices on Chepkerio Road.

You were instructed to wait for your salary at your offices at Security Holdings Ltd. on Enterprise road. You defied these instructions and went to the offices of Kilimanjaro Safari Clubwhere you harassed the workers of the said offices. You also barred the Group General Manager – Security companies from performing his official duties. You caused a lot of disturbances to the neighbouring offices. Your action dented our reputation as a security firm. Mr. Matete from Union collaborated with you to threaten the lives of other workers and using abusive language to your seniors. This habit cannot be tolerated by the company as this is contrary to the Employment Act, Cap.226 subsection 17(d),(e).

You are therefore dismissed from our employment with effect from to-day’s date.

Please return all uniform items plus employment ID/Card to the Branch Manager S/Holdings Ltd. before you are paid any salary if any on 11/6/99.

Yours faithfully,

For Security Holdings Ltd.

(sgd.)

Mr. Philip Koech

PERSONNEL MANAGER”.

On or about 9th October 1999, the said Personnel Manager also issued a common service certificate to each of the security guards, titled “TO WHOM IT MAY CONCERN” which reads, inter alia, as hereunder:-

“This is to certify that ………………………. was employed by thiscompany …………………….. as a security guard ……………………..

The period he was with us we found him to be a hardworkingand honest person. He left our employment due to shortageof work in our organization.

Any assistance accorded to him would be highly appreciated”.

Admittedly, the Companies had for a long time been experiencing serious cash flow problems or constraints which at times necessitated payment of salaries late. It is alleged that this was brought about by the cancellation of security contracts by two of the Companies’ biggest clients, namely, Standard Chartered Bank of Kenya Ltd. and Kenya Commercial Bank Ltd., which rendered about 120 security guards jobless. However, the Companies could not declare the employees, i.e. security guards, redundant immediately because they had not yet made any arrangements for their severance pay and other terminal benefits. The matter was discussed with the first Union and the shopstewards who presumably informed the employees of this predicament. It is alleged further that on 20th May 1999, the grievants were advised to wait for their April salaries at their respective offices; but, in defiance of the instructions, they invaded the offices of Kilimanjaro Safari Club, a company managed by the same directors, though a separate legal entity, where they harassed the employees, threatened them with physical injury and death, and detained them within the premises. Furthermore, the grievants used abusive language against the officers of the said company and caused inconvenience to all the adjacent offices. They also barred the General Manager from leaving his office and prevented him from performing his duties, including ensuring that the cash was available for the payment of their salaries. The grievants are said to have all the time perpetrated these acts of lawlessness, disobedience and violence in the company and with the incitement or instigation of the Deputy General Secretary, Mr. Samson Matete Wanjala, instead of advising them to restrain themselves so that a conducive atmosphere for discussion and possible amicable understanding could be reached. In the circumstances, the police were called to restore law and order and to protect the lives and property that had been put at risk by the unruly behaviour of the grievants, and consequently they (grievants) restrained themselves.

The first Union took up the matter with the Companies, but no settlement was reached. On 22nd July 1999, the first Union reported a formal trade dispute to the Minister for Labour in accordance with Section 4 of the Act. The Minister accepted the dispute and, pursuant to Section 7 of the Act, appointed Mr. P.N. Macharia of the Ministry of Labour Headquarters to act as the Investigator. Consequently, in his report which was released to the parties on 19th January 2000, the Minister found, inter alia, that the allegations against the grievants were far-fetched; that the grievants had been promised payment of their April salaries on 20th May 1999, but this was not done and on the following day, i.e. 21st May 1999, they congregated, after finishing their night shift, at the Companies’ Headquarters for payment of the same, i.e. salaries or wages; that the management summoned the police who found the grievants peaceful; that in fact the officer-in-charge of Industrial Area Police Station advised the employer to pay the grievants their salaries or wages and indeed offered police escort for the salaries or wages; that the management had no right or reason whatsoever to dismiss the grievants because they only went to demand their salaries or wages at their own free time and reported back on duty; that there was no law which barred an employee from demanding his dues from an employer, and that to victimize one for doing so would amount to unfair labour practice and wrongful. In the circumstances, the Minister recommended that the summary dismissal be reduced to normal termination and each of the grievants be paid terminal benefits in accordance with the Protective Security Order. In addition, each of the grievants be paid compensation for loss of employment as follows:-

(a) 1 to 3 years - 2 months salary.

(b) 3 to 6 years - 3 months salary.

(c) 6 to 10 years - 4 months salary.

(d) Over 10 years - 5 months salary.

The Minister finally appealed to both parties to accept the recommendation as a basis of settlement of the matter. The first Union accepted the recommendation, but the Companies rejected it on the grounds that the Minister failed to appreciate that they were in financial difficulties and had reasons to delay the payment of the salaries or wages; that these financial constraints were well-known to the grievants and arrangements had actually been made for payment of their salaries or wages when the riots erupted before the appointed time of such payment, and that the Minister took into account extraneous matters or factors which were never submitted to him for consideration by either party. Hence this dispute for consideration and determination.

Mr. Kagondu submitted that the grievants suffered summary dismissal of their services when they demanded payment of their belated salaries or wages, and accused the Companies of having a habit of paying salaries late, contrary to the provisions of Section 5 of the Employment Act, Cap.226, Laws of Kenya. For example, on 30th March 1998, the Union issued a strike notice to the Minister for Labour in which it raised, inter alia, late payment of salaries by certain security firms, and on 25th August and 8th September 1998, Security Holdings Ltd. was accused of delaying payment of salaries or wages to its employees for the month of July and August 1998 respectively. Mr. Kagondu, therefore, vehemently denied that the grievants harassed, threatened or used abusive language against the Management staff and/or other employees; and insisted, on the contrary, that the police found them peaceful and did not make any arrests as alleged, but advised the Companies to effect the necessary payment of their salaries or wages.

In conclusion, Mr. Kagondu, therefore, urged the Court to uphold the Minister’s finding and recommendation and also award the grievants full compensation for the loss of employment.

In its submission, the second Union supported the demand by the first Union in all material respects.

Mrs. Onyango maintained that the Companies were unable to pay salaries or wages to their employees in time due to cash flow problems; but they however, ensured that any available funds were used to pay the salaries or wages as soon as possible. Therefore, none of the grievants was owed more than the previous month’s salary. She pointed out that the Companies never intentionally breached any conditions of employment of the grievants, but kept them informed of their financial situation at all times and any delays in payment of salaries or wages were always communicated to them before hand. The grievants were eventually paid all their outstanding dues after their dismissal for misconduct, and none of them is owed any outstanding dues by the Companies. Mrs. Onyango averred further that because of the irresponsible behaviour of the grievants, the reputation of the Companies was damaged beyond repair, lost more business and have been unable to recover financially to-date. Therefore, the Companies will not be in a position to pay if the Court enters any punitive award in favour of the grievants.

Mrs. Onyango finally prayed that the demand by the Union be rejected as untenable.

It is admitted by the Companies that they had for a long time been experiencing serious cash flow problems or constraints which necessitated

late payment of salaries or wages to the grievants – e.g. the grievants’ salaries or wagesfor April 1998, which brought about their dismissal on 28th May 1998. The Companies had also previously failed to pay the grievants’ salaries until after 15th day of each month. The grievants’ salaries for the month of July 1998 was, for example, not paid until after 25th August 1998. It is also not disputed that the grievants were employed for a period exceeding one month and the mode of payment of their salaries by the Companies was contrary to the mandatory provisions of Section 5(2)(c) of the Employment Act, Cap. 226, Laws of Kenya, which states as follows:-

“5(1)……………………………………………………………………………………

(a)……………………………………………………………………………

(b)……………………………………………………………………………

(2)Subject to subsection (1), the times when wages shallbe deemed to be due shall be as follows:-

a.………………………………………………………….

b.…………………………………………………………..

c.in the case of an employee employed for aperiod exceeding one month, at the end of

each month or part thereof.

d.………………………………………………………………..

(3)…………………………………………………………………………

(4)…………………………………………………………………………

(a) …………………………………………………………………

(b) ………………………………………………………………..

(5)……………………………………………………………………….”.

According to the Union, the grievants disapproved this mode of payment of their salaries and demanded that such payments should be made at the end of each month. The demand let to their dismissal under Section 17(d) and (e) of the afore-mentioned Employment Act, which state as hereunder:-

“17. Any of the following matters may amount to gross misconductso 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) ………………………………………………………………;

(b) ………………………………………………………………;

(c) ………………………………………………………………;

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

(e) if an employee knowingly fails, or refuses, to obey alawful and proper command which it was within thescope of his duty to obey, issued by his employer or a person placed in authority over him by his employer;

(f) …………………………………………………………………………;

(g) ……………………………………………………………………….”.

So far as the insulting or abusive language is concerned, there are no particulars of the words actually uttered or used by the grievants, and clearly this allegation has no legal significance and it is rejected as bad in law.

In order to amount to misconduct, disobedience of an order must fulfil the following ingredients:-

(i)it must be lawful, and

(ii)it must be reasonable.

But the question is: can the order in the circumstances of this case be said to be lawful and reasonable? The salaries of the grievants were due for payment at the end of April 1998, but the same were not paid because of some cash flow problems allegedly experienced by the management of the Companies. The grievants were promised payment of their April salaries on 20th May 1998, but on this day no payments were made, and they assembled at the Head Office to demand the same. In my opinion, their conduct in the circumstances did not amount to disobedience as envisaged by Section 17(e) of the Employment Act in view of the fact that employees in this country are in general not economically well-off, and any delay in payment of their dues may create some reasonable grumbling by them. From the material on the record, therefore, no case of misconduct is made out.

The purported dismissal of the grievants was also null and void ab initiobecause “dismissal” connotes removal of an employee from service by way of punishment; and in addition to the loss of employment it is attended with other serious consequences to the employee, e.g. loss of terminal benefits, permanent stigma, forfeiture of notice pay, e?t?c?. Thus the essence of dismissal is removal from service of an employee by way of punishment and the consequential incidentals thereto. Fortunately in the instant case, the remarks in the service certificate issued to each grievant to the effect that “the period he was with us we found him to be a hardworking and honest person” and that “ he left our employment due to shortage of work in our organization”, did not put any stigma on the grievants to enable them receive their terminal benefits and to be employed anywhere else.

In the result, I uphold the Minister’s findings and recommendation and award in terms thereof.

(b)Cause No.119 of 2000.

The Notification of Dispute, Form ‘A’, dated 8th June 1999, together with the statutory certificates from the Labour Commissioner and the Minister for Labour, under Section 14, subsections(7) and (9)(e) and (f) of the Trade Disputes Act, Cap.234, Laws of Kenya (which is hereinafter referred to as the Act) were received by the Court on 27th October 2000, and dispute was listed for mention on 28th November 2000. On this occasion, Messrs.H.O. Nyumba and R.M. Muthanga, who appeared for the first Union and Simba Security Ltd. (hereinafter called the Company) respectively, were directed to submit or file their respective memoranda or statements on or before 5th January and 5th February 2001, and the dispute was fixed for hearing on 27th February 2001. The dispute was, however, brought forward and listed for another mention on 5th January 2001 when Messrs. K.A. Luvega and R.M. Muthanga, who appeared for the parties respectively, were directed to submit or file their respective memoranda or statements on 7th February and 7th March 2001, and the dispute was fixed for hearing on 27th March 2001. Consequently, the parties submitted or filed their memoranda or statements and the disputes were consolidated and heard as aforestated.

The dispute between the parties in respect of Mr. Jeremiah Handa Omondi, P/No.1024 was withdrawn by the Union on the ground that he could not be traced and that he was presumably no longer interested in this dispute. Accordingly, his case has become infructuous and it is hereby dismissed as withdrawn.

As regards Mr. Crispine Obure, P/No.129 (hereinafter called the grievant), it is not in dispute that he was employed by the Company on 18th February 1975 as a security guard at a monthly salary of about Kshs.280/=, and he was summarily dismissed on 24th October 1997 allegedly for serious misconduct. At the time of his dismissal, the grievant was earning Kshs.3,219/= and a housing allowance of Kshs.874/= per month.

It was alleged that on 17th October 1997 the grievant unlawfully prevented the employees from collecting their mid-month wages from the paying officer and demanded the sacking of senior management staff, namely, the General Manager, the Group Personnel Manager and the Operations Manager, and that on 7th October 1997 he had incited the employees against the management at a meeting held at Solidarity Building between the Union officials, shopstewards and employees, which was also attended by the management. It was alleged further that on 1st March 1993, the grievant had been warned for organising an unlawful strike. Hence his summary dismissal as aforestated.

The first Union took up the matter with the Company, but no compromise was reached. Consequently, the said Union reported a formal trade dispute to the Minister for Labour in accordance with Section 4 of the Act. The Minister took cognisance of the dispute and appointed Mr. J.A. Oketch of the Industrial Area Labour Office to act as the Investigator. On 14th May 1999, the Minister released his report to the parties wherein he found and recommended as follows:-

“FINDINGS.

…………………………………………………………………………………..

………………………….. that the grievant was elected a shopstewardand also the Chairman of shopstewards of Desai group of

companies. Due to his leadership position, the grievant was active in agitating and championing employees interests on matters pertaining to Industrial Relations. Due to his active role in trade union activities, the grievant was on 25th August, 1997 allegedly accused of organizing an illegal strike ……………… theallegations against the grievant was(were) not substantiated nor proved and it was evident that the workers were jointly responsible.

……………………………. the allegations which were levelled against the grievant that he had incited employees at Solidarity Building on 7th

October, 1997 were mere hearsay and no witnesses were called to adduce evidence.

On the issue of employees’ refusal to collect their mid-month advances and insistence that some senior management staff be relieved of their duties,………………….. it was unlawful for the management to have personalized the matter since the action was done jointly and no evidence was adduced implicating the grievant of any form of intimidation.

…………………………. the grievant was victimised due to his active role in trade union activities which is contrary to the Industrial Relations Charter. The summary dismissal was therefore unlawful and unjustified.

RECOMMENDATION.

……………………………………………………………………………………………………………………….. it is recommended that (the) summary dismissal be reduced to normal termination of employment and the grievant be paid terminal benefits in accordance with the parties’ Collective Bargaining Agreement.

In addition, the grievant should be paid 10 months’ salary as compensation for loss of employment’.

The Minister finally appealed to both parties to accept the recommendation as a basis of settlement of this matter. The first Union accepted the recommendation but the Company rejected it. Hence this dispute for consideration and determination.

Mr. Kagondu submitted that the grievant continuously served the Company for over twenty two (22) years with a clean or unblemished record and without either a written or verbal warning; and because of his long experience, he was elected a shopsteward on 15th February 1980 and also the Chairman of all shopstewards of Desai group of companies since 1986 until his summary dismissal as stated hereinabove. Therefore, in his dual capacity as above, the grievant had the right to speak or raise issues with the management, on behalf of the employees, concerning industrial relations. As regards the meeting held on 12th October 1997, during which the employees questioned the conduct of some senior management staff who were out to intimidate and frustrate them, Mr. Kagondu averred that the meeting was jointly convened by all the Union officials. On mid-month advances, he stated that the grievant had no right or power to stop the employees from collecting their dues as the matter rested solely between the Company (employer) and the individual employees. Mr. Kagondu, however, conceded that the Union, and not the shopsteward(s) and/or the grievant in particular, raised with the management the issues of 18% salary adjustment in accordance with the just concluded Protective Security Wages Order and the unfair deduction of Kshs.232/= from the employees’ overtime allowances for reasons unknown to them. Alluding to the allegation of incitement at a general meeting held on 7th October 1997, Mr. Kagondu submitted that the allegation was far-fetched because the nature of the incitement has neither been stated nor proved. In any case, he said, the meeting was convened by the Union, and the grievant neither recorded the minutes nor signed them. On the cancellation of orders by the Company’s clients, he argued that it was the responsibility of the Company to service them and also ensure that any problems between the management and the employees were resolved resolutely before the clients had knowledge of them.

The second Union supported these submissions by Mr. Kagondu on behalf of the first Union.

Finally, Mr. Kagondu urged the Court to find that the grievant was victimized for his trade union activities, and prayed that he be reinstated to his job, without loss of salary, privileges and other benefits.

In her brief submission, Mrs. Onyango submitted that by inciting the employees against the management and demanding the sacking of senior officers of the Company, the grievant clearly overstepped his role as a shopsteward of the Company and the Chairman of Desai group of companies, and took upon himself powers which he did not possess to the detriment of all concerned. She, therefore, urged the Court to find that the summary dismissal of the grievant for the said offences was justified. In the circumstance, Mrs. Onyango prayed that the Union’s case be rejected and the action taken against the grievant by the Company be upheld.

The Company levelled two charges against the grievant, namely, that he prevented the employees from collecting their mid-month wages or advancesand demanding the sacking of senior management staff, and that he had incited and instigated them (employees) against the management. It was also alleged that the grievant had previously organised an unlawful strike. These allegations against the grievant which led to his dismissal are serious, but no reasons have been given by the Company why he engaged in these alleged acts of misconduct. There is neither oral nor documentary evidence on the record to show that the employees did not collect their mid-month wages or advances and that the work was actually struck by them and the operations of the Company suffered impairment as a result of incitement and instigation by the grievant. The upshot of the matter is that the order by the Company dismissing the grievant from service was bad in law and without lawful authority and of no legal effect.

In the result, I award in favour of the grievant and order that he be paid his terminal benefits and ten(10) months’ compensation (App. HON.2), amounting to Kshs.141,260. 70, made up as follows:-

(1)Notice. - Kshs. 3,789. 50

(2)Service.

23yrs x Ksh. 3798. 50 x 18 = Ksh. 60,483. 80

26

(3)Leave prorata

Ksh. 5513. 50 x 24 days = Ksh. 5,089. 40

26

(4)Arrears of 18%

From 1 – May – 1997 – Oct – 1997

- Ksh. 3,798. 50

- Ksh. 3,219. 00

570. 50 x 6 months = Ksh. 3,423. 00

(5)Transport to and from place of work

Mathare – Town Ksh.40x26x12m = Ksh. 12,480. 00

Town – Industrial Area

- Ksh. 30 x 26 x 12 m = Ksh. 9,360. 00

(6)Compensation for ten months

plus House allowance.

Ksh. 4,6635. 50 x 10 months. = Ksh. 46,635. 00

Full terminal benefits Total = Ksh.141,260. 70

The two members concur with this decision.

DATED and delivered at Nairobi this 19th day of April 2002.

Charles P. Chemmuttut,

JUDGE.