[2024] KEELRC 13488 (KLR)

Kuria & 13 others v Kartasi Industry Limited (Cause E531 of 2022) [2024] KEELRC 13488 (KLR) (19 December 2024) (Judgment)

Neutral citation: [2024] KEELRC 13488 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E531 of 2022

B Ongaya, J

December 19, 2024

Between

John Muthandi Kuria

1st Claimant

Thomas Mutwiwa Musyoka

2nd Claimant

Kyalo Munyao

3rd Claimant

John Gitonga Githae

4th Claimant

Andrew Amunze Inyangala

5th Claimant

Mochache Omboga Denilson

6th Claimant

David Kariuki Wanjiru

7th Claimant

Mildred Nyanje Ojwang

8th Claimant

Cosmas Wambua Katuma

9th Claimant

Irene Ndunge Katua

10th Claimant

Daniel Kinyua Kigano

11th Claimant

Maxim Nyamai Mutua

12th Claimant

Nelius Wairimu Kimani

13th Claimant

Fredrick Mark Machini

14th Claimant

and

Kartasi Industry Limited

Respondent

Judgment

1. The claimant filed the amended memorandum of claim dated 08. 05. 2023 through Owino Bukachi & Company Advocates. He prayed for judgment against the respondent for:a.An order prohibiting the respondent from selling its assets to a third party.b.An order for reinstatement.c.A declaration that the termination of the claimants by the respondent was unfair, unprocedural and unlawful.d.A declaration that the respondent underpaid the claimants.e.An order that the respondent does forthwith:-a.Issue the claimants with a certificate of service as required by the law.b.Special damages calculated at Kshs. 9,611,854. 03. c.General damages.d.Exemplary damages.e.Interests at court rate.f.Costs of the suit.g.Any other relief the Honourable Court may deem fit to grant.

2. The claimants’ case was as follows:a.The claimants were employees of the respondent at various times holding different positions as drivers, general workers, cooks, junior clerks, and printing machine operators.b.The respondent and KAPRIPUPA (hereinafter “the union”) signed a Collective Bargaining Agreement (CBA) of 2019-2020 that provided for terms of their employment.c.They served the respondent under one-year renewal contracts without receiving any warning letters. However, in January 2020, the respondent forced them to sign a six-months contract that the respondent terminated three (3) months earlier before its expiry.d.In early March 2020, at the end of their shift, the respondent’s HR called each of them to her office separately at different times and advised them to go on leave. Some of them were forced to sign a leave form and went home with the hope that the respondent would take them back at the expiry of the leave term. Thereafter at the end of March 2020, they made several calls to the HR requesting to be taken back but their calls were ignored.e.On 29. 04. 2020, the respondent called or sent a text message to some of them stating that salaries for the month would be delayed due to unavoidable circumstances, and that they should keep safe at home. The respondent called or sent another text to some of the claimants on 30. 04. 2020 stating that Covid-19 pandemic had slowed its business and they were not to resume work until they got communication from the respondent.f.Sometime in May 2020, the respondent created a group known as ILUVKARTASI and added all its employees except the claimants on leave, who were therefore never updated or informed of the measures it had taken to solve their problem. The respondent sent to the said group a text message on 06. 05. 2020 stating it had held three (3) inconclusive meetings with the union to deliberate on how to effect salary pay-cuts and that it would keep everybody informed.g.The respondent sent another text message on 13. 05. 2020 stating it was unable to make salary payments due to a financial crisis and that the union was to revert after getting directions from Kenya Association of Manufacturers (KAM). In the said message, the respondent stated it would be enforcing salary pay-cuts against the claimants’ gross salary at 25% and in effect, neither waited for the union to revert nor was there an agreement to implement such measures.h.On 20. 05. 2020, the respondent informed some of the claimants by a text message that it would not renew their contracts of service due to decline in its business. The said notice of termination was neither intended for the claimants nor was sufficient as per clause 15(a) of the 2019-2021 CBA, which provides for two (2) calendar months’ notice or payment of two (2) months’ salary in lieu.i.On 28. 05. 2020, the respondent communicated via a text message to some of the employees sent home on leave to report to the HR for purposes of signing a new contract by 02. 06. 2020. This was discriminatory against the claimants as they were not called to report to work and were still on forced leave.j.On 29. 05. 2020, the respondent, via the ILUVKARTASI group, sent a text message to its employees still in service asserting it had had an inconclusive meeting with the union on 18. 05. 2020. It stated that it would go on to close the May 2020 payroll by enforcing the 25% pay-cut on salaries, contrary to the rules and procedures of redundancy stipulated in law. On 03. 06. 2020, the respondent went ahead to enforce the said salary pay-cut on all employees including the claimants, without informing and updating them on the progress of the meeting with the union.k.Sometime in June 2020, the respondent via the ILUVKARTASI group, sent a text message to those in active service informing them that a meeting held on 10. 06. 2020 with the union was conclusive and they had agreed to implement the salary pay-cut at 25%. This was clear indication that the respondent had proceeded to deduct their salary in May 2020 without reaching an agreement with the union.l.On 11. 01. 2021, the union wrote to the respondent demanding that it recalls them back and pay their dues in full but it neglected and refused to comply. The claimants also wrote a message via WhatsApp to the respondent on 30. 07. 2021 demanding payment of their dues but it again failed and ignored the message.m.The respondent then terminated the claimants’ services without consultation, notice and explanation and contrary to the provisions of the 2019-2020 CBA on notice pay, issuance of a written termination letter, redundancy, severance pay, and salary increment of 8% in both 2019 and 2020. Further, they have never cleared with the respondent and/or returned their uniforms and tools of trade. The same constitute the claims in the instant suit.n.On 10. 05. 2022, the claimants came across a notice issued by the respondent stating that it is redundant and it had decided to exit the industry by selling all of its movable assets to an external party. When they sought the union’s advice on the issue, they were informed that the union was still trying to strike a deal with the respondent but the union never reverted.o.On 17. 05. 2022, the claimants came across a conciliation dated 22. 03. 2022 in which the conciliator ordered the respondent to pay their dues in accordance with the 2019-2021 CBA but the respondent refused to comply. The union refused to intervene and asserted that as they had ceased being members, they were not covered under the 2021-2022 CBA.p.The decision to dismiss and terminate the employment services of the claimants was discriminatory, irregular, malicious, made in bad faith and unjustifiable, and thus a clear breach of the contract. In addition, the respondent refused to accord them a hearing based on redundancy procedures.

3. The respondent’s reply to statement of claim dated 20. 11. 2023 was filed through CM Advocates LLP. The respondent’s case was as follows:i.The Court has no jurisdiction to determine this matter as none of the claimants earned more than Kshs. 80,000/= per month.ii.Following COVID-19 at the beginning of 2020, it heeded the government’s call to mind employees’ welfare and thus requested its employees to stay home to avoid possible infection and unintended exposure. It thereafter underwent dire cash flow issues and started engaging the claimants’ union to negotiate a manageable pay regime.iii.Employees may have, on their own, created WhatsApp groups in which the employer would share information when it was convenient and necessary, and which groups were not necessarily the company's channels. The ILUVKARTASI bulk SMS went out to all employees, contrary to the allegations that some did not receive text notifications.iv.The claimants were contractual employees whose terms ended and redundancy was therefore not applicable to them as their contracts lapsed by effluxion of time. They were further paid contractual salaries without any complaints by the union during their employment period. Consequently, the claimants were not entitled to any severance pay and there was no underpayment at all.v.The employees agreed to the pay-cut for their May 2020 salaries through their union in a meeting held on 10. 06. 2020. vi.Since the company ceased operating the plant and sold its assets, prayers (a) and (b) are overtaken.

4. The claimants then filed their reply to respondents’ response to claim dated 30. 01. 2024 praying that the respondent’s reply to the amended statement of claim dated 20. 11. 2023 be dismissed with costs and judgment entered in favour of the claimants as prayed in the amended statement of claim.

5. The parties gave their evidence before Court and filed their respective submissions. The Court has as well considered the testimonies and the pleadings. The Court returns as follows.

6. First, as urged and submitted for the respondent prayers (a) on restraining the respondent from selling its assets to 3rd parties and prayer (b) on reinstatement have indeed been overtaken as the respondent has confirmed that it had already sold the entity or enterprise.

7. Second, as urged and submitted for the respondent, the claimants were engaged on term contract as confirmed by their own pleadings and evidence on record. The Court finds that while it was during COVID-19 situation, they did not separate on any other ground but that their contracts lapsed by effluxion of time. Accordingly, they are not entitled to the redundancy payments as alleged and per the CBA. The claims will collapse.

8. Third, the evidence was that the union, which represented the claimants and by an agreement with the respondent on 10. 06. 2020, agreed to salary cuts for the claimants’ salaries for May 2020. The claim that the pay cuts were unjustified or not consented to will fail. The claimants’ witness (CW) John Githae Gitonga testified confirming that all claimants were members of the union and the union represented the claimants in event of grievances or disputes with the respondent. He also confirmed that the union negotiated the pay cuts in view of the COVID-19 situation and the agreed salary was paid. He also testified that with the pay cuts, they equally did not work on full time basis but upon prepared schedules. He also confirmed that the claimants worked on renewable contracts and his had been renewed over 16 years.

9. The claimants are entitled to a certificate of service per section 51(1) of the Employment Act, 2007. Looking at margins of success each party to bear own costs of the suit.In conclusion the suit is determined with orders the respondent to deliver claimants’ respective certificates of service by 01. 02. 2025 and each party to bear own costs of the suit.

SIGNED, DATED AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS THURSDAY 19THDECEMBER 2024. BYRAM ONGAYAPRINCIPAL JUDGE