[2015] KEELRC 268 (KLR)

REPUBLIC OF KENYA

EMPLOYMENT&LABOUR RELATIONS COURT

AT NAIROBI

CAUSE NO. 1200 OF 2013

NEBERT BERNARD MURIUKI……..............................CLAIMANT

VERSUS

MULTIMEDIA UNIVERSITY OF KENYA….….........RESPONDENT

JUDGMENT

The Claimant filed suit on 30th July 2013. In his statement of claim, he averred that he was employed by the Respondent the successor of the defunct Kenya College of Communications Technology (KCCT). He averred that he was employed in October 1981 by the defunct Kenya Posts & Telecommunications Corporation and after successful interview was appointed Deputy Director Academic Affairs in KCCT which was a subsidiary of Kenya Posts & Telecommunications Corporation and after its disbandment, Telkom Kenya Limited. In July 2007 the ownership of KCCT changed from Telkom Kenya to Communications Commission of Kenya (CCK). The Claimant averred that he was on permanent and pensionable terms and when the Respondent succeeded KCCT he was discriminated against as his terms were inferior to those of the Director and Deputy Directors whose pay was reviewed upwards. He averred that the discrimination was contrary to the Constitution of Kenya and Section 5(5) of the Employment Act which guarantees equal pay for equal work done. He averred that he was interviewed by the Respondent and offered the position of Chief Lecturer of Practice in Digital Communications which was a junior position and after accepting the letter of offer raised concerns over the apparent demotion and attendant reduction in wages. The Claimant averred that the Respondent failed, refused and/or neglected to pay the proper salary between July 2007 and September 2010 resulting in underpayment by Kshs. 14,044,800/-. He averred that the Respondent instead of addressing the concerns raised unilaterally terminated his services on the pretext that he had declined the appointment by his letter of 30th June 2010. The Claimant averred that he was subjected to untold harassment, humiliation, denial of access and inhuman ejection from the premises and inspite of letters seeking redress there was no response from the Respondent. He averred that the termination of his services was unprocedural, unfair, unjust, discriminatory and unlawful and sought damages equivalent to 12 months salary, underpayment of gratuity, unrefunded pension contributions for July and August 2007, salary for the period 3rd September 2010 to 15th September 2010, interest and costs of the suit. He averred that he reported the matter to the Nairobi Provincial Labour Officer who responded that the Claimant should seek legal redress.

The Respondent filed a Memorandum of Defence on 23rd August 2013. The Respondent averred that it employed the Claimant on 8th January 2009 as the Acting Deputy Principal in charge of Research and Consultancy and later on 24th June 2009 was appointed Acting Deputy Principal in charge of Research and Innovation as well as in charge Academic affairs. The terms and conditions of service remained the same. The Respondent averred that it was a stranger to the averments that the Claimant received various promotions while working at Kenya Posts and Telecommunications Corporation. The Respondent averred that the Claimant was never employed on permanent and pensionable terms either as alleged or at all. The Respondent denied discriminating against the Claimant when the terms of service for top management staff comprising the Director and Deputy Directors were reviewed in July 2007. The Respondent averred that it did not violate the Constitution of Kenya Article 27(2) and Section 5(5) of the Employment Act 2007 as alleged by the Claimant. The Respondent averred that the Claimant’s appointment letter was clear as to the terms and condition of his appointment and as such it would be erroneous for the Claimant to base his appointment on other employee’s contracts of employment. The Respondent averred that the Claimant applied for the position and attended the interview without coercion or duress and was at liberty to accept or decline the offer. The Respondent averred that the Claimant was paid all his salary and terminal dues and denied that the employment was unilaterally terminated. The Respondent averred that the Claimant declined the offer of employment. The Respondent averred that the Respondent acted in accordance with the law, justice and equity in dealing with the Claimant and urged for the dismissal of the suit with costs to the Respondent.

The Respondent filed a Supplementary Memorandum of Response on 16th march 2015 pursuant to leave granted on 4th February 2015. The supplementary memorandum of response was to the effect that Telkom Kenya Limited is a public telecommunications service provider and is wholly owned by the Government of Kenya while the Communications Commission of Kenya is a regulatory body established to regulate the telecommunications, radio communications and postal services in Kenya. The Respondent averred that the Kenya College of Communications & Technology (KCCT) was a company incorporated under the Companies Act as a subsidiary of Telkom Kenya Limited and was an institute of higher learning in telecommunication engineering, human resource management, postal and courier services. After a consultancy was done there was recommendation for Telkom Kenya to divest from KCCT and in lieu of purchase price a set-off against licence fees owed by Telkom to CCK, the KCCT was transferred via a Business Transfer Agreement on 27th June 2007. The Respondent averred that the employees of Telkom Kenya Limited were transferred and were under the control and general direction of the KCCT Board and that the Claimant was therefore under a different set of terms of employment and not the same contract by CCK. The Respondent averred that KCCT was to remain as an independent separate legal entity with its own articles of association and board and that only the oversight authority was transferred from Telkom Kenya Limited to CCK. The Respondent averred that when KCCT was elevated to Multimedia University College, the employees were to be evaluated based on their own qualifications and be placed on positions that they qualified for and that the Claimant was evaluated for the position of chief lecturer and that the Claimant declined the position. The Respondent averred that the Claimant opted to take the retrenchment package and that the Respondent did not terminate his services as alleged.

The Claimant testified on 29th May 2014, and stated that he was currently farming back home in Mbeere. He testified that he was employed by the Respondent who was his erstwhile employer and that he had been employed by its predecessor through competitive interview in July 1992 as Deputy Principal and that the title was later changed to Deputy Director. The Claimant testified that while working with KCCT a subsidiary of Kenya Posts & Telecommunications Corporation, KPTC was restructured into 3 entities. Telkom Kenya Limited, Postal Corporation of Kenya and CCK. The college was vested in Telkom Kenya in 1999 and when Telkom Kenya was restructured in 2006, the college KCCT was transferred to CCK and before the transfer a consultant was employed to restructure the college. The consultant recommended that the top management of the college which consisted of a Director and 2 Deputy Directors – Finance & Administration and Academic Affairs be restructured to have 4 deputy directors to include Deputy Director Finance & Administration, Deputy Director Academic Affairs, Deputy Director Business Process & Outsourcing and Deputy Director Marketing & Student Affairs. He testified that the report was adopted and when the college was transferred in July 2007, 2 directors were in post – the Claimant holding position of Deputy Director Academic Affairs and the Director as the Deputy Director Finance & Administration had resigned prior to the transfer. He testified that he served in the position and the other vacant positions were advertised and his understanding was that he met the requirement for the position and that is why it was not advertised. He held a Masters Degree in Digital Communication ever since he was employed by KCCT in 1992. He testified that the terms of his appointment in KCCT were permanent and pensionable. He stated that he had not been offered the new salary which was to go along with the new structure. He testified that his basic salary was Kshs. 87,440/- way below the new salary structure basic pay. He raised the pay issue with management and was told to wait for the college board to be appointed as the college board ceased when the College was transferred to CCK. He drafted a paper for consideration of management when the Board was finally appointed in 2008. He never received feedback and his service was under frustrating environment as he had served for 15 years as deputy director academic affairs and new staff were given very superior terms while his terms remained inferior. In November 2008 when KCCT became a university college the Board of KCCT ceased before he had received any response to his request. The University Council which took over also did not respond to his request and in the year 2010 the University Council began recruiting new staff. He testified that his job was advertised and he applied but was not called for the interview. He was interviewed for a different position of Chief Lecturer of Practice in Digital Communication and appointed to the position through letter dated 23rd June 2010. He testified that the letter was unsigned. He raised the issue of reduced earnings by letter dated 30th June 2010 but he never received a written response but a verbal one that the University Council would look into the issue. He testified that his total earnings were reduced by 75,611/-. While processing the July payroll on 29th July 2010 he found out that he had been retrenched and a retrenchment package included in the payroll. He testified that this was done without his knowledge and communication. He was told to pass the payroll and wait for official communication. He was given a letter of termination dated 18th August 2010 on 30th August 2010. He had written letters to which there had been no response. He felt harassed and discriminated against. He stated that he had been terminated without any good reason. He testified that when he reported to work on 15th September he was informed the security were looking for him and when he was in class preparing to teach the security came and threw him and three other colleagues out. They all complained of harassment and the other two directors namely John Kariuki and Wambui Kimuiru continued serving up to the end of their contract but he was not allowed. He felt discriminated against harassed. He made demands which were not responded to and he went to the Labour Office and was advised to seek legal redress. He thus sought payment of his rightful salary from 2007 till termination being the difference between the pay of Kshs. 87,000/- and the Kshs. 369,600/- for the corresponding position, refund of pension/gratuity at rate of 31%, damages for unlawful termination a maximum of 12 months, payment for the period up to 15th September 2010 when he was locked out, interest and costs of the suit. He testified that he had worked until 52 years and had not received any warning letter or even a verbal warning, was a good worker and had worked under severe conditions.

In cross examination by Mr. Anam, he testified that he was discriminated against by the University. He stated that he had a Masters in Digital Communications Systems but stated he had not produced that degree as part of evidence. He testified that he was not calling the other directors appointed by the University as witnesses and that he had shown their appointment letters to show the new structure. He stated that his position was not interviewed as he was in post. He confirmed that he accepted the terms of his appointment as Chief Lecturer of Practice in Digital Communications Scale 13. He appreciated that he accepted the letter but stated that he had been earning a higher salary than the one in his letter of offer. He testified that the letter of termination stated that his last day of service was 2nd September 2010. He stated that when he raised the issue of concern on the unprocedural termination he was told to wait and abide communication from University Council and that he was to continue teaching and thus was not trespassing. He referred to the letter of protest signed by the three deputy directors and testified that the two were allowed to continue serving the balance of their terms while he was not. He testified that the document showing this was with the Respondent. He stated that his payslip showed Kshs. 87,440/- and that if it had shown 369,000/- he would not be in Court. He testified that when the consultants finalized their report and gave a new structure he knew he would be on a new salary. He stated that he had read the report by Osano & Associates. He had not produced the document. He stated that the Board paper was not supposed to be signed by him as that is how board papers are done. He testified that he was appointed as Acting Deputy Principal (Research & Consultancy) and that the terms were to remain until approval by Government. He stated that the letter of termination was issued when he was still discharging duties of deputy principal. He testified that the letter of 23rd June records his exemplary performance and the University did not see the need to interview him.

In re-examination by Mrs. Mbabu, he testified that he had children in University and after being given the new salary he could not just resign as impact would not be on him alone but his family. He testified that he never got any letter that questioned his performance.

After a few attempts at defence hearing, the Respondent called Mr. Joseph Waweru Nderitu on 29th September 2014. He testified that he was working for the Respondent as Finance Officer from its inception. He stated that he had worked for KCCT the predecessor to the Respondent. He testified that he knew the Claimant who was the Deputy Principal Academic Affairs and at the Respondent the Claimant took the position briefly. He stated that he took up the position provisionally and that all the positions were advertised. He testified that the Claimant’s position was advertised among others and the Claimant did not apply for the position. He stated that after the interview was done the signatories changed and that in the interim before the others took over the Claimant used to sign cheques. He testified that the Claimant did apply for the position of Chief Lecturer of Practice and that is where the Claimant could fit in, that is where he had qualified. He stated that deputy principal required more than the Claimant had. He testified that he was not sure the Claimant got the position of Chief Lecturer of Practice and thought that the Claimant was given the position and declined. He testified that the Claimant was a permanent and pensionable employee and the claim he had was for contract employees. He stated that the Claimant had sought sums not due to him and that what was paid to the Claimant was what the Claimant was entitled to. He testified that the Claimant was not unfairly terminated or unlawfully terminated.

He was cross examined by Mrs. Mbabu and testified that he had worked for the Respondent since 2010 when it was established. He stated that he was in Finance as head of Finance at KCCT and the functions were the same. He stated that he joined KCCT in 1993 and that he and the Claimant were colleagues in KCCT where the Claimant was deputy principal. He testified that he and the Claimant were not retrenched in 2007. He stated the Claimant’s position was advertised in 2010 and that the advert must be there. He confirmed that he had not come with any documentation. He stated that the Claimant was not qualified and that the position required persons who were professors then. He testified that one had to have a doctorate and that Professor Njoroge and Professor Shitanda filled the position of Deputy Principal Academic Affairs and Research & Extension sometime in 2010 after interviews. He stated that they qualified that the Claimant was edged out. He could not tell the date of appointment. He testified that the Claimant was a deputy director in KCCT and was a deputy director before the others came. He stated that other directors were engaged on contract in 2008 – Mr. Muiru, Mr. Kariuki and Wambui Kamuiru. He testified that these three were on the same level as the Claimant but engaged on different terms. The Claimant’s terms were permanent and pensionable. He testified these other directors were engaged from outside KCCT and were on contracts. He stated the Claimant was not placed on contract. He confirmed that the other positions were advertised and the Claimant’s position was not advertised. He could not vouch as to why the Claimant was not replaced. He confirmed that there was no person in post in the other 3 positions. He stated that the titles were different and the duties different and weights of service were different. He testified that the starting salary was 201,000/- to a maximum of Kshs. 369,000/- a month. He stated maybe the Board then did not want to change the Claimant’s terms though he could not vouch for the Board. He could not say the Claimant was discriminated against and that there was an option to opt out if he felt discriminated against. He confirmed the Claimant had served for 15 years and felt he was not competent to state why the terms were different. He testified that the pension scheme after 2007 was different and that up to 2007 there was contribution to Telkom Pension Scheme and up to 2010 everyone was contributing and the Respondent was yet to come up with one and all the monies deducted from employees was put in an account awaiting the University scheme. He testified that the Claimant took the option in 2010 and was paid off. He stated that he did not know if the Claimant got a notice or not. He was referred to the letter of appointment to position of Chief Lecturer of Practice and noted that expect for the Claimant acknowledging it, it had not been signed by the University. He testified that the Claimant wrote a letter complaining over the salary and that the letter did not decline the appointment. He stated that the Claimant confirmed acceptance of the position of Chief Lecturer of Practice and the Claimant’s appointment as deputy principal would end on appointment of the deputy principal academic affairs and upon assumption of duty. He testified that the services were terminated effective September 2010 and that the Claimant was paid dues upto 31st July 2010. He testified that according to the documents the Claimant continued working and was paid a salary. He could not confirm the Claimant worked till 15th September 2010. He could not confirm that the Claimant continued to teach and was not aware if the other directors continued working after their terminations.

In re-examination by Mr. Anyoka, he testified that the letter from Claimant is not stamped ‘received’. He stated that all the services of the directors were terminated and that he had processed all the terminal dues for the directors. He testified that the letter of appointment was to be by 1st July 2010 and the letter of acceptance was received on 26th August 2010. He testified that the Claimant did not take up appointment in the Respondent and that he retained the terms of KCCT and that there was no discrimination on the Claimant.

The next witness called was Caleb Agwa Oboch the Acting Registrar Administration of the Respondent. He testified on 4th February 2015 23rd March 2015 and 18th June 2015. He stated that he was engaged at inception of the University to date. He testified that before that he was an employee of KCCT the predecessor of the Respondent from 1992 till November 2008 when KCCT was elevated to University College. He testified that KCCT was elevated to a Multimedia University a constituent college of the Jomo Kenyatta University of Agriculture & Technology (JKUAT). He testified that the staff at the time were appointed in acting capacity to the University but there was no change in terms since they were not in substantive positions. He stated that in conversion from KCCT to University the process took one year and the University Council was in place in 2009. He testified that KCCT was a subsidiary of Telkom Kenya before elevation to University and in 2007, KCCT was transferred to CCK in a debt swap to pay for frequencies. He testified that the business transfer agreement indicated that the staff working for KCCT remained under KCCT board. He testified that when KCCT was converted to a constituent college of JKUAT, this was done under Legal Notice No. 155 Kenya Gazette Supplement 83 Legislative Supplement no. 56 dated 26th November 2008. He stated that the Claimant was staff prior to commencement of the order and that the Claimant was to be appraised alongside other staff. He testified that the Claimant was deputy director academic affairs and after appraisal was redesignated by letter of appointment as chief lecturer of practice and that the Claimant declined that position. He testified that the pension scheme for KCCT was suspended as KCCT was not registered as a sponsor and the pension contributions from KCCT were to be held in a holding account until such time that KCCT had established its own pension scheme. He testified that the Claimant was one of the signatories to the account and the severance package was signed by the Claimant and he was one of the beneficiaries. He stated that Mr. Mwilu was appointed under contract as deputy director finance & administration on a 3 year contract by the Board of CCK while the Claimant was on permanent and pensionable terms by Telkom (K) Board. He stated that the Claimant was not entitled to entry point at Kshs. 369,600/-. He testified that the salary schedule for Claimant per letter of appointment by Telkom Kenya was not similar in terms to the appointment by Board of CCK. He stated that if the Claimant was entitled to the new scales his entry point would have been 201,000/- a month. He testified that the Claimant was terminated vide letter dated 18th August 2010 and that the Claimant continued to report on duty because his services as signatory to the account were still required. He could not tell whether the Claimant was paid for the extra services.

In cross-examination by Mrs. Mbabu, he testified that KCCT was established in 1992 and was later registered as a limited liability company and was a subsidiary of Kenya Posts & Telecommunications Corporation and in 1999, KP&TC was split into 3 – Telkom Kenya, Postal Corporation of Kenya and the Regulatory Authority which later became Communications Commission of Kenya (CCK). He testified that the Claimant was appointed upon competitive recruitment, as deputy principal academic affairs and this was later changed from principal to director. He testified that the letter he could see was from KCCT and the Claimant was paid a salary by KCCT. He stated that KCCT had a Board and this was dissolved when KCCT was taken over by CCK. He testified that the business transfer agreement was signed sometime in 2007. He stated that the consultancy report recommended that the top positions be advertised and recruitment be done competitively. He testified that the Claimant’s position was not advertised. He stated that pension was deducted and deposited in a holding account after the disengagement of KCCT from Telkom Kenya in 2007. He testified that a pension scheme was finally established and at the time, the Claimant had already left. He stated that the Claimant opted to take a retrenchment package and that the Respondent did not terminate his services. He was referred to a document in the Claimant’s bundle and confirmed that there was internal communication on the Claimant’s retrenchment and the document was not from the Claimant. He referred to the letter of appointment as Chief Lecturer of Practice and confirmed that the Claimant wrote on 30th June 2010 and even referred to a meeting on 29th June 2010 which was before the deadline. He was not aware of any response to the Claimant’s concerns on the dropping of salary. He testified that the Claimant was paid the retrenchment package and that accepting appointment after receiving the package was incompatible. He was asked about the retrenchment package and the termination letter and testified that the action taken by the Respondent was very proper.

In re-examination by Mr. Anyoka he testified that the retrenchment was according to the terms of the retrenchment guidelines. He testified that the termination of the Claimant was as per the letter of termination. He stated that the computation of gratuity did not have space for any signatures. He testified that the letter of retrenchment was a standard letter issued as an administrative requirement to staff relieved if duties after restructuring.

Parties filed submissions on 29th June 2015 – Claimant and 30th July 2015 – Respondent. The Claimant submitted that he was discriminated against which was contrary to Section 5 of the Employment Act and Article 27(3) of the Constitution of Kenya which guards against discrimination. The Claimant submitted that even if the other directors were on contract the salaries would be equitable and that the only difference would be in terminal dues where those on contract would get gratuity at 31% while the permanent and pensionable get monthly pension. The Claimant submitted that he was discriminated against and that the Respondent had not discharged its burden to prove non-discrimination. The Claimant submitted that he was terminated and not retrenched and that due process was not followed. The Claimant submitted that Section 35 of the Employment Act is trite on termination while Section 41 forbid the Respondent from terminating the employment of the Claimant before explaining or communicating to him the reasons for which it was considering the termination and giving him an opportunity to be heard before the termination. The Claimant submitted that the reason for the termination was not valid. The Claimant submitted that he was entitled to pay for the period up to 15th September 2010 as he continued working until he was ejected by security guards and not allowed back in the Respondent’s premises. He submitted that the pension contribution of Kshs. 13,116/- was refundable to him. The Claimant submitted that he was entitled to gratuity at 31% of Kshs. 369,600/- for the period September 2007. The Claimant relied on the case of David Wanjau Muhoro v Ol Pejeta Ranching Ltd [2014] eKLR.

The Respondent submitted that the issues for determination were whether the Claimant was unfairly terminated, whether the Claimant faced discrimination and whether the Claimant is entitled to the remedies he sought in the claim. The Respondent submitted that in order to ascertain whether there was unfair termination, we need to look at the events that took place prior to the alleged termination. The Respondent set out the history of the Respondent from its days as a part of KP&TC to its tenure under Telkom Kenya, CCK and subsequently as a constituent college of JKUAT. The Respondent submitted that Section 16 (1) of Legal Notice No. 155 of Kenya Gazette Supplement provides that staff of KCCT existing prior to the commencement of the order including those on secondment were eligible for employment by the University college subject to appraisal by the Council in accordance with statutes. The Respondent submitted that the Claimant was evaluated and given the position of Chief Lecturer of Practice and the Claimant declined and opted for the retirement package. The Respondent submitted that the restructure was permitted and relied on the case of Kenya Airways Corporation v Tobias Oganya Auma & 5 Others [2007] eKLRwhere the Court held that it was not the role of any tribunal to prevent an employer from restructuring or adopting modern technology so long as it observes all relevant regulations. The Respondent submitted that it followed all the laid down procedures. The Respondent submitted that Section 5(4)(b) of the Employment Act provides that it is not discrimination to distinguish, exclude or prefer any person on the basis of an inherent requirement of a job and that the appraisal the Claimant underwent cannot qualify as discrimination. The Respondent submitted that Section 10(5) of the Employment Act provides that where any matter stipulated in the particulars of employment changed the employer shall in consultation with the employee revise the contract to effect the change and notify the employee of the change. The Respondent submitted that once the restructuring took place the Claimant was invited for an interview so that he could be offered a position that he qualified for but the Claimant declined the position. The Respondent submitted that the Claimant was on a different set of terms by KCCT board and thus his pay was different from that of the others who were employed on contract by CCK. The Respondent relied on the case of Fredrick Ouma v Spectre International Ltd [2013] eKLRand Miguna Miguna v Attorney General [2012] eKLRwhere Wasilwa J. held that salaries of officers serving in the same capacity change due to seniority in rank and experience. The Respondent submitted that on the issue of equality, the Claimant had to establish that there was a distinction between him and others and that the Claimant was denied an equal protection or benefit of the law. It does not necessarily mean that different treatment or inequality will per se amount to discrimination and violation of Article 27. The Respondent relied on John Harun Mwau v Independent Electoral Boundaries Commission & Another [2013] eKLR. The Respondent submitted that the pension contributions were not retained by the Respondent and thus the claim for refund did not lie with the Respondent. The Respondent submitted that the Claimant was not entitled to the claims sought and therefore the suit should be dismissed with costs.

The Claimant was terminated by dint of a letter dated 18th August 2010. The letter terminated the Claimant’s services effective 2nd September 2010. The termination was stated to be pursuant to the elevation of KCCT to University College. A generous package was paid to the Claimant and his grouse is the manner of termination as well as discrimination in employment. The Claimant’s case was that eh was terminated without notice and without being afforded an opportunity to defend himself. His termination from the evidence adduced was not the normal termination but emanated from the take over of the college under statute. The Claimant was retained on the permanent and pensionable terms while the other employees were retained on contracts. The Claimant did not indicate during his testimony whether he draws a monthly pension from the former employer as he was on permanent and pensionable terms before his services were terminated. While it seems unfair, the payment at different scales was justified on basis that the employers were different and the Claimant was not employed by CCK which seemed generous as an employer. The Claimant therefore was not able to prove discrimination in treatment. It is unfortunate that he did not connect the former employer and his status as one who was paid less than his colleagues on contract. The Claimant did not bring in the former employer against whom demands for refund of contribution could be made. In the Court’s mind, the Claimant was retained by the Respondent for purposes of resolving the issues of payments between July 2010 and September 2010. No proof of payment was exhibited by the Respondent and its witnesses could not categorically prove that the payments were made. In the premises the only payment the Claimant may receive is the payment for salary due in August and September 2010. The Court would peg the salary at the amount the Claimant was receiving which is Kshs. 96,184 basic plus House allowance of Kshs, 51,600/-.

In the final analysis I enter judgment for the Claimant

Kshs 295,568/-

Certificate of service

Each party to bear their own costs.

Orders accordingly.

Dated and delivered at Nairobi this 22ndday of October 2015

Nzioki wa Makau

Judge