[2024] KEELRC 13396 (KLR)

Nyane v Western Steel Mills Ltd & another (Employment and Labour Relations Cause 156 of 2017) [2024] KEELRC 13396 (KLR) (11 December 2024) (Judgment)

Neutral citation: [2024] KEELRC 13396 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Eldoret

Employment and Labour Relations Cause 156 of 2017

MA Onyango, J

December 11, 2024

Between

Richard Derick Nyane

Claimant

and

Western Steel Mills Ltd

1st Respondent

Jokali Handling Services Ltd

2nd Respondent

Judgment

1. Vide his Memorandum of Claim dated 5th August 2016 and filed in Court on 5th December 2016, the Claimant avers that he was unfairly terminated from employment by the Respondents and was not paid his terminal benefits.

2. The Claimant states that the 2nd Respondent was the employing agency of the 1st Respondent and that he was employed by the Respondents sometimes in April 2015 as a general worker on permanent basis terms.

3. It is the Claimant’s case that on being employed as a general worker, he was assigned duties on the pressing machine where he served the Respondents with dedication and commitment only to be summarily dismissed from employment sometimes in April 2016.

4. The Claimant particularized the terminal dues and damages owed to him by the Respondents as follows: -a.Unpaid house allowance for the year 2015and 2016 Kshs 37,800b.Annual leave dues for 2015 Kshs 18,900c.Annual leave dues for 2016 Kshs 18,900d.Service benefits Kshs 7,875e.One month salary in lieu of notice Kshs 18,900f.12 months compensation for unfairtermination Kshs 226,800g.Unpaid public holidays Kshs 69,300h.Unpaid days off Kshs 6,300i.Overtime dues Kshs 106,310j.NSSF remittance Kshs 1,300k.NHIF remittance Kshs 3,120l.Loss of future earnings Kshs 3,628,800Total Kshs. 4,144. 305. 88

5. According to the Claimant, the termination of his employment by the Respondents was unlawful, un-procedural, irregular, unfair and in total violation of section 45(2) of the Employment Act. He sought for the following reliefs:i.A declaration that the summary dismissal of the Claimant from his permanent employment, by the Respondents was malicious, unlawful, unfair, unprocedurally and a fundamentally violated the Rights of the Claimant;ii.A declaration that the Claimant was entitled to House allowance.iii.A declaration that the Claimant is entitled to one-month salary in lieu of annual leave.iv.A declaration that the Claimant is entitled to National Social Security Fund deductions for the 11 months worked.v.A declaration that the Claimant is entitled to National Hospital Insurance Fund (NHIF), for the 11 months worked.vi.A declaration that the Claimant is entitled to his dues, compensation, damages, and benefits as a result of wrongful dismissal from the employment as calculated herein.vii.A maximum compensation of 12 monthsviii.Damages and Terminal Dues as per the calculations under paragraph 13. ix.Loss of Earning of salary for a period of 16 years that the Claimant would have worked until the statutory retirement age of 60 years.x.A Certificate of Service as per section 51 of the Employment Act;xi.Costs and Interests of this suit from the date of filing until its full determination.xii.The claim be allowed in entirety.

6. The 1st Respondent in its Response to Statement of Claim dated 2nd June 2023 and filed in court on 27th June 2023 denies having employed the Claimant as alleged in the Statement of Claim. It averred that since there exists no employment relationship between it and the Claimant, it could not have violated the specific provisions of the Employment Act cited by the Claimant.

7. The 2nd Respondent did not participate in these proceedings.

Claimant’s Case 8. The Claimant testified on 11th October 2023 as CW1 and reiterated the averments he made in his Statement of Claim. He however clarified that he was employed in April 2015 and was summarily dismissed from employment in April 2016 without any lawful reason.

9. CW1 told the court that during the course of his employment, he worked for 12 hours a day and was not paid overtime; that he never proceeded on leave; was not paid a house allowance and that the Respondents despite deducting NSSF dues, did not remit the same in April and May 2015 and in April 2016.

10. CW1 testified that he was not issued with an employment contract until in 2016 when he signed an employment contract but was not given a copy. He maintained that he was employed by the 1st Respondent and supervised by a Mr Victor. He also mentioned that a Mr. Barasa was the Human Resource Officer. That Victor and Barasa were employees of the 1st Respondent. He urged this Court his allow Claim as prayed.

11. On cross examination CW1 stated that he went to look for work at the 1st Respondent’s company and later signed an employment contract with the 1st Respondent’s representatives. He told the court that he was paid by the 2nd Respondent.

12. During re-examination, the Claimant stated that when he was employed, he worked with the 2nd Respondent and later, he worked under the 1st Respondent. It was his evidence that the company was originally known as Jokali and that it changed its name to Western Steel Mills.

Respondent’s Case 13. The 1st Respondent called its Human Resource Officer, Michael Njuguna who testified as RW1. He adopted his witness statement recorded on 27th June 2023 and relied on the documents filed by the 1st Respondent as his evidence in chief.

14. RW1 told the court that the 2nd Respondent is an independent contractor who was engaged to provide manpower to the 1st Respondent and that the responsibility of engaging employees rested on the 2nd Respondent who in this case employed the Claimant and paid him his salaries including remitting the NHIF and NSSF deductions to the relevant statutory bodies.

15. Upon being cross examined by counsel Nabasange, RW1 maintained that the 2nd Respondent is not the 1st Respondent’s agent, but is an independent contractor who employs its employees directly. He explained that the 1st Respondent has a contract with the 2nd Respondent to provide the 1st Respondent with labour and that the 2nd Respondent is an independent body with power to employ and terminate the services of its employees.

16. It was the 1st Respondent’s case that from its records, the Claimant was never its employee. RW1 however admitted that Mr. Barasa was an employee of the 1st Respondent at some point.

The submissions 17. The Claimant’s submissions were filed on 20th November 2023. In those submissions, the Claimant maintained that the 1st Respondent was liable for the unfair termination of the Claimant for reasons that the 1st Respondent’s witness, on cross examination, admitted that one Barasa was its employee and the Claimant had in his testimony averred that he worked under Mr. Barasa. On this basis, the Claimant submitted that although the 2nd Respondent deployed the manpower, that manpower was under the control and management and for the benefit of the 1st Respondent. In support of this position, the Claimant cited the case of David Njuguna Ngotho v Family Bank Limited & Another (2018) eKLR and Karanja v Phoenix of EA Assuarance Co Limited (1991) eKLR.

18. It is the Claimant’s submission that the 2nd Respondent employed the Claimant on behalf of the 1st Respondent hence both the 1st and 2nd Respondents are to be held liable jointly and severally for the unfair dismissal of the Claimant.

19. The 1st Respondent on its part filed its submissions on 10th November 2023 and maintained that it never employed the Claimant. It contended that the Claimant in his testimony before the court acknowledged that he was employed by the 2nd Respondent but was assigned duties in the 1st Respondent’s premises. The 1st Respondent submitted that the 2nd Respondent, an independent contractor, was contracted by the 1st Respondent to provide hiring services and that the relationship was like any other relationship in a contract for service.

20. The 1st Respondent submitted that under the contract for service, the 2nd Respondent would provide required manpower to the 1st Respondent depending on the workforce required and it would in turn remunerate the 2nd Respondent.

21. According to the 1st Respondent, the 2nd Respondent being the employer, was in charge of remunerating its employees by paying their salaries and making the necessary deductions which action is proof that at no pointy did the employees switch to be the 1st Respondent’s despite working in the 1st Respondent’s premises.

22. The 1st Respondent submitted that the Claimant has failed to sufficiently prove that he was employed by the 1st Respondent. In this regard, it is the 1st Respondent’s submission that the Claimant can only get recourse from the 2nd Respondent if he was indeed unlawfully terminated.

23. The 1st Respondent urged the court to strike out the Claimant’s claim with costs to it.

Determination 24. Upon considering the pleadings herein, the evidence of the respective parties, the submissions and the authorities cited, I find that the issues for determination are: -i.Whether the Claimant was an employee of the 1st or 2nd Respondentii.Whether the 1st Respondent is liable for the unfair dismissal of the Claimant from employmentiii.Whether the reliefs sought should issue

25. The Claimant pleads that he was employed by the 1st and 2nd Respondents jointly. The 1st Respondent has vehemently denied that it had an employment relationship with the Claimant. According to the 1st Respondent, the Claimant was employed by the 2nd Respondent to work in the 1st Respondent’s premises but was remunerated by the 2nd Respondent.

26. The Claimant on his part maintained that during the course of his employment, he worked under direct supervision of the 1st Respondent’s agents and as such the 1st Respondent is liable for the actions of the 2nd Respondent in terminating his employment unlawfully.

27. It is trite that employment claims must be premised on an employment relationship capable of enforcement.

28. An employee is defined by Section 2 of the Employment Act, 2007 as:“a person employed for wages or a salary and includes an apprentice and indentured learner”.

29. An employer is defined as “any person, public body, firm, corporation or company who or which has entered into a contract of service to employ any individual”

30. A contract of service is defined as:“an agreement, whether oral or in writing, and whether expressed or implied, to employ or serve as an employee for a period of time, and includes a contract of

31. From the evidence on record, the 1st Respondent contracted the 2nd Respondent to provide manpower to the 1st Respondent and the 1st Respondent would in turn remunerate the 2nd Respondent.

32. Although the Claimant avers that he was working under the direct supervision of the 1st Respondent, no evidence was tendered in court in support of this position. I therefore find that the 2nd Respondent was the employer of the Claimant.

33. The 1st Respondent’s witness informed the court that it is the 2nd Respondent who employed the Claimant and the one that terminated the Claimant’s employment.

34. The 2nd Respondent having been properly served and having failed to respond to the Claim, judgment is hereby entered for the Claimant against the 2nd Respondent as particularized below:a.Unpaid house allowanceThis is not payable as the Claimant was paid a daily wage which is inclusive of house allowanceb.Annual leaveThe Claimant is awarded pay in lieu of leave at 21 days per year for 2 years (525x21x2) Kshs. 22,050c.Service payThe Claimant is awarded service pay at 15 days per year for 2 years (525x15x2) Kshs. 15,750d.Pay in lieu of noticeThe Claimant is awarded (525x30) Kshs. 15,750 under this heade.CompensationThe Claimant having worked for 2 years and taking into account all the relevant factors under section 49(4) of the Employment Act, 1 award the Claimant 4 months salary as compensation in the sum of Kshs. 63,000f.Public holidays 11 days per yearI award the Claimant (11x2x525 at double rate of pay) Kshs. 23,100g.Unpaid days offThe Claimant is awarded Kshs. 6,300 as prayed.h.OvertimeThe Claimant is awarded Kshs. 106,310i.NSSFThe Claimant having claimed service pay is not entitled to NSSFj.NHIFThe Claimant did not prove that NHIF was deducted from his salary and not remitted to NHIF.k.Loss of future earningsThe Claimant is not entitled to pay for future earnings as this is not provided for in the Employment Act

35. The 2nd Respondent shall meet costs due to the Claimant.

DATED, SIGNED AND DELIVERED VIRTUALLY ON THIS 11TH DAY OF DECEMBER 2024MAUREEN ONYANGOJUDGE