[2024] KEELRC 733 (KLR)

Muiruri v ANMG Limited & another (Cause E045 of 2023) [2024] KEELRC 733 (KLR) (5 April 2024) (Judgment)

Neutral citation: [2024] KEELRC 733 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E045 of 2023

SC Rutto, J

April 5, 2024

Between

Andrew Ngotho Muiruri

Claimant

and

ANMG Limited

1st Respondent

Crystal Recruitment Limited

2nd Respondent

Judgment

1. Through a Memorandum of Claim filed on 26th January 2023, the Claimant avers that through a fixed-term employment contract dated 2nd August 2021, the 2nd Respondent seconded him to work at the 1st Respondent’s Nairobi office as the SEO Project Director for a period of 24 months effective 16th August 2021.

2. The Claimant further avers that his remuneration was a consolidated monthly gross salary of Kshs 323,000. 00. He was also entitled to a further Kshs 77,000. 00 per month paid out as stock at €6 per share over the 24 months’ period.

3. He further states that following a 12 months successful stint, he issued a 30 days termination notice of his engagement with the 1st Respondent on 26th August 2022, commencing on 30th August 2022. The notice took effect on 30th September 2022.

4. It is the Claimant’s case that at the time his notice period commenced, the 1st Respondent owed him salary arrears from July to September 2022. Further, the 1st Respondent owed him Kshs 1,001,000. 00 being company stock for the period of employment.

5. That further, pursuant to Paragraph 15 of the employment contract, the 2nd Respondent made an undertaking to him that upon the termination of the contract, it would cause the 1st Respondent to settle any outstanding remuneration for services performed prior to the effective date of termination.

6. The Claimant further avers that through a demand letter dated 19th October 2022, he sought for the payment of Kshs 1,605,945. 00 being the aggregate of the outstanding salary arrears and company stock.

7. That whilst the 1st Respondent has acknowledged that it owes him the outstanding arrears, it has failed to settle the same in full or give a commitment on when the arrears will be settled in full. Instead, the 1st Respondent has opted to settle the arrears as and when it feels like, to his detriment.

8. In regards to the Company Stock, the 1st Respondent issued him with a Share Certificate for 1,435 shares at €6 each, without a commitment as to when the shares will be liquidated.

9. It is on account of the foregoing that the Claimant prays for Judgment severally and jointly against the Respondents for:a.A declaration that the withholding of his salary is unlawful and in violation of his right to fair labour practices.b.The immediate settlement of the outstanding salary arrears of Kshs 421,072. 00. c.The immediate liquidation and settlement of €8,610 being the company stock owed to him.d.Interest on (a) and (b) at court rates from 30th September 2022 until payment in full.e.Costs.

10. The Respondents did not enter appearance despite being served with the Summons and Statement of Claim. In this regard, the Claimant filed an Affidavit of Service sworn by one Charles Njaow on 22nd November 2023.

11. Subsequently, the matter was set down for formal proof hearing on 23rd November 2023, during which the Claimant testified in support of his case.

12. During the hearing, the Claimant sought to rely on his witness statement to constitute his evidence in chief. He further produced the list and bundle of documents filed alongside the Memorandum of Claim as his exhibits before Court.

13. The Claimant told the Court that he did not have any dispute with regards to the contract of employment save for payment of his salary arrears.

Submissions 14. The Claimant submitted that failure by the 1st Respondent to release his salary is a breach of his employment contract and an affront to his right to fair labour practices. In support of his submissions, the Claimant sought to rely on the case of Naftali Mogaka Nyaboga v Kisii Cunty Government & another (2022) eKLR.

Analysis and Determination 15. Arising from the Claim before me, the evidence on record and the Claimant’s submissions, it is apparent that the singular issue for determination is whether the Claimant is entitled to the reliefs sought.

16. Evidently, the Claimant’s claim against the Respondents is for payment of his outstanding salary and liquidation of his share of stock.

17. In support of his claim, the Claimant exhibited a copy of his employment contract which provides at clause 4 that his monthly gross salary was Kshs 323,000. 00 and Kshs 77,000. 00 as stock.

18. The Claimant further exhibited a copy of an email dated 13th December 2022 from one Mr. James Cannon Boyce of the 1st Respondent company in which he stated in part:“According to our records, your client is owedJuly 81,495August 200,000September 200,000for a total of 481,945 KES.”

19. Fundamentally, the 1st Respondent admitted owing the Claimant the sum of Kshs 481,945. 00 in salary arrears. According to the Claimant, the 1st Respondent had partly settled the salary arrears as follows:a.Kshs. 92,131. 65 settled on 2nd November 2022;b.Kshs. 24,302. 00 settled on 15th December 2022; andc.Kshs. 36,558. 00 settled on 18th January 2023.

20. It is the Claimant’s case that the 1st Respondent still owes the sum of Kshs 421,072. 00 in salary arrears. As stated herein, the Respondents did not file a Defence nor participate in the hearing. Therefore, the Claimant’s claim was not controverted.

21. It has further not been denied that the Claimant rendered his services to the 1st Respondent during the period in question.

22. Section 17(1) of the Employment Act, requires an employer to pay the entire amount of wages earned by or payable to an employee in respect of work done by the employee in pursuance of a contract of service. As a matter of fact, this is a cardinal rule in any employment relationship.

23. In this case, the 1st Respondent has not proffered any justification for withholding the Claimant’s salary noting that it did not defend the claim.

24. To this end, the 1st Respondent breached the contract of employment and a mandatory statutory provision when it failed to pay the Claimant salary for the services rendered.

25. In light of the foregoing, the Court returns that the Claimant is entitled to a sum of Kshs 421,072. 00 being unpaid salary.

26. With regards to the claim for liquidation and settlement of stock, the Claimant exhibited a copy of a share certificate indicating that he holds 1435 ordinary shares of €6 each in the 1st Respondent company. Again, the 1st Respondent did not proffer any evidence to prove that the Claimant’s claim was settled as appropriate. As such, the Court returns that the Claimant is entitled to be paid the sum of €8,610 being his share of stock in the 1st Respondent company.

27. As I pen off, I find it imperative to address the 2nd Respondent’s liability with regards to the claim herein. It is notable that clause 15 of the contract of employment, provides that the 2nd Respondent who is identified as a contractor, was to ensure that the Claimant was paid remuneration for services satisfactorily performed upon termination of the contract. As such, the 2nd Respondent is equally liable in this case.

Orders 28. In the final analysis, Judgment is entered in favour of the Claimant against the Respondents jointly and severally as follows:a.The Claimant is awarded the sum of Kshs 421,072. 00 being outstanding salary arrears;b.The Claimant is entitled to liquidation and settlement of €8,610 being his share of stock in the 1st Respondent company.c.Interest shall apply on the amount in (a) and (b) at court rates from the date of filing the suit until payment in full.d.The Claimant shall have the costs of the suit.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 5TH APRIL DAY OF APRIL 2024. ………………………………STELLA RUTTOJUDGEIn the presence of:For the Claimant Mr. MungaiFor the Respondents No appearanceCourt Assistant Millicent KibetORDERIn view of the declaration of measures restricting court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open court. In permitting this course, this court had been guided by Article 159(2)(d) of the Constitution which requires the court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this court the duty of the court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes.STELLA RUTTOJUDGE