[2024] KEELRC 13431 (KLR)

Oigo v Profica Projects Limited (Kenya (Cause E365 of 2022) [2024] KEELRC 13431 (KLR) (16 December 2024) (Judgment)

Neutral citation: [2024] KEELRC 13431 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E365 of 2022

BOM Manani, J

December 16, 2024

Between

Kenneth Barnaba Oigo

Claimant

and

Profica Projects Limited (Kenya

Respondent

Judgment

1. The dispute between the parties revolves around the legitimacy of the Respondent’s decision to terminate the Claimant’s contract of service. According to the Claimant, the decision was without justification. On the other hand, the Respondent contends that the contract between the parties was terminated because of the Claimant’s dereliction of duty.

Claimant’s Case 2. According to the Claimant, the Respondent hired his services as an Alternate Director on 27th November 2017. He contends that the parties executed a contract to that effect on 29th November 2017.

3. The Claimant contends that the Respondent subsequently promoted him to the position of Regional Director as from 1st July 2019. He says that the promotion was communicated through the Respondent’s letter dated 19th August 2019. He further contends that as a result of the promotion, his salary was raised from the initial Ksh. 1,100,000. 00 to Ksh. 1,182,500. 00.

4. The Claimant avers that he served the Respondent with dedication and diligence until his services were terminated sometime in September 2021. It is his case that the decision to terminate his contract was unjustified.

5. The Claimant contends that during the currency of the contract, the Respondent rendered the work environment unconducive thus negatively impacting on his performance. For instance, he accuses the Respondent of having reduced the workforce that was reporting directly to him under the guise of the Covid 19 pandemic thereby leaving him with heavy workload which compromised his output. He also accuses the Respondent of having added him extra responsibilities without granting him corresponding authority to execute the new mandates thus impeding his performance.

6. The Claimant also accuses the Respondent of having subjected him to constant harassment about alleged failure to meet his targets. He contends that this was notwithstanding the fact that his inability to meet the set targets was caused by factors that were beyond his control.

7. The Claimant contends that before his contract was terminated, the Respondent subjected him to a flawed disciplinary hearing. He contends that the Respondent failed to take into account his defense whilst making its decision to terminate his contract.

8. It is his case that the Respondent’s allegations about his poor performance were not substantiated. He contends that the Respondent did not conduct any performance evaluation on him prior to making the impugned decision.

9. The Claimant further contends that soon after his contract was terminated, the Respondent attempted to force him to tender a resignation from employment in a bid to sanitize the irregular process. He contends that the Respondent’s intention was to paint the picture that he had voluntarily quit employment.

10. The Claimant avers that the Respondent did not pay him his exit dues after his contract was terminated. He contends that the Respondent owes him: accrued leave dues; unpaid house allowance; service pay; and pay in lieu of notice to terminate the contract. As such, he prays that the court orders the Respondent to pay him these benefits together with the other reliefs specified in the Statement of Claim.

Respondent’s Case 11. In a detailed response which appears to have gone beyond the issues that were raised in the Statement of Claim, the Respondent admits that the parties had an employment relationship as pleaded by the Claimant. However, it contends that the Claimant did not perform his tasks as was required of him under the contract.

12. The Respondent accuses the Claimant of having failed to discharge his duties with respect to a MasterCard project which the Respondent was undertaking on behalf of its client. It contends that the Claimant failed to exercise proper oversight over the project resulting in its mismanagement. The Respondent accuses the Claimant of having mismanaged, inter alia: the handling of fixtures for the project; the handing over of the project; delivery of furniture for the project; and the process of updating the client on the project.

13. The Respondent contends that in a bid to mitigate the challenges which the project had encountered, it convened a series of meetings with the Claimant in order to determine how he could be assisted to deliver on it. It avers that issues relating to the Claimant’s poor management of the project were discussed during the meetings. It further contends that the Claimant acknowledged his shortcomings in managing the project and committed to address the areas of weakness.

14. The Respondent contends that other matters relating to the Claimant’s docket were also considered in the meetings. This included his general management of the Respondent’s East Africa region in his capacity as its Regional Director.

15. The Respondent avers that the Claimant was unable to present project proposals for the region which could generate cash flow that was required by the Respondent’s business at the time. According to the Respondent, this failure by the Claimant constituted a breach of his principal responsibility which required him to establish strategic partnerships and business development plans for the region.

16. The Respondent contends that despite all efforts to assist the Claimant to improve on the management of his docket, he did not do so. Instead, he continued to underperform generally and in respect of the MasterCard project. As a result, it (the Respondent) was forced to issue him with a notification inquiry dated 16th August 2021.

17. The Respondent avers that the Claimant was: notified of the accusations against him; invited to attend a disciplinary hearing scheduled for 25th August 2021 in the company of a representative; and informed of his right to have an interpreter and to call witnesses during the hearing.

18. The Respondent avers that it held the disciplinary hearing on 25th August 2021 and 1st September 2021 during which the Claimant was granted the opportunity to be heard. Thereafter, it rendered a decision summarily terminating his contract of employment.

19. The Respondent avers that it notified the Claimant of the decision to terminate his employment on 15th September 2021. Through the same communication, it notified him of the right to appeal the decision. However, he expressed his desire not to appeal the decision.

20. The Respondent avers that on 29th September 2021, it forwarded to the Claimant a copy of the letter of termination of the contract between the parties. It contends that it also forwarded to the Claimant his Certificate of Service.

21. The Respondent contends that the parties entered into post termination discussions regarding the Claimant’s terminal dues wherein the amount payable to him was agreed upon. Consequently, the Claimant signed the letter of termination.

22. The Respondent avers that the process of terminating the contract between the parties was undertaken in accordance with the applicable law. It denies that there was violation of the Employment Act and the Constitution as asserted by the Claimant.

Issues for Determination 23. After evaluating the pleadings and evidence on record, the following issues arise for determination:-a.Whether the contract of service between the parties was unfairly terminated.b.Whether the Claimant is entitled to the reliefs that he seeks through these proceedings.

Analysis 24. The evidence on record suggests that the Claimant’s contract was terminated, inter alia, on account of his unsatisfactory performance. The inquiry notification appearing at page 32 of the Respondent’s trial bundle shows that the Respondent accused the Claimant of gross dereliction of duty with regard to the MasterCard project that he had been overseeing. The Respondent averred that the Claimant’s handling of the project had resulted in financial loss and loss of business. It further averred that the Claimant had exhibited incapacity to manage the project profitably. The Respondent contended that the Claimant’s conduct had led to a breakdown of trust between them.

25. In his written statement of defense appearing at page 33 of the Respondent’s trial bundle, the Claimant denied the accusations against him. He blamed the fiasco in managing the business to the failure by the Respondent to give him authority to execute his mandate. He contended that he was not fully involved in the process of negotiating the project. And neither was he granted full authority to make decisions in respect of it. As a consequence, he allegedly suffered the various limitations that he has highlighted in the defense.

26. The Claimant also averred that he lacked sufficient human resource to run the project. It was his case that despite his heavy workload, the Respondent had taken a decision to cut on staff working under him in response to the effects of the Covid 19 pandemic. According to him, this negatively impacted on the proper implementation of the project.

27. The record shows that the Respondent subjected the Claimant to a hearing in respect of the charges which were leveled against him. The Claimant was asked whether he had expressed the challenges that he had highlighted in his defense to his line manager. In response, he stated that he had not.

28. As the regional manager for the Respondent, the Claimant was expected to be in charge of the Respondent’s regional programmes, including the MasterCard project. He was expected to oversee the proper implementation of these programmes. As such, it was his responsibility to notify the Respondent of any challenges which he encountered in the process.

29. The Claimant readily admits that he did not inform his line manager that he had difficulties in delivering on the project for want of sufficient authority to make certain decisions in respect of it. He also admits that he did not raise his concerns with regard to the human resource element that was undertaking the project design.

30. Evidently, the Claimant’s failure to raise these concerns with his supervisor amounted to dereliction of duty on his part. It was the Claimant’s responsibility to raise these concerns with his line manager in order for the latter to put in place remedial measure so that the project is implemented flawlessly. In the premises and having regard to this evidence, I arrive at the conclusion that the Respondent had genuine grounds to entertain the belief that the Claimant was guilty of dereliction of duty.

31. Under section 44 (4) (c) of the Employment Act, willful or reckless failure by an employee to attentively perform duties that have been assigned to him by the employer is an act of gross misconduct which entitles the employer to summarily terminate the employee’s services. As such, I find that the Respondent had a substantive reason to justify its decision to summarily terminate the Claimant’s contract.

32. The evidence on record shows that the Respondent issued the Claimant with an inquiry notification which served as a notice to show cause. The instrument informed the Claimant, in sufficient detail, of the charges against him. The record shows that the Claimant filed a written response to the charges.

33. The notification further invited the Claimant for a disciplinary hearing on 25th August 2021. In the invite, the Claimant was informed of his right to attend the session in the company of a representative, his witnesses and an interpreter, if he desired.

34. The evidence on record further shows that the disciplinary hearing was conducted on 25th August 2021 and 1st September 2021. During the session, the Claimant was allowed to present his evidence and to cross examine the Respondent’s witnesses.

35. The evidence shows that after the hearing, the Respondent rendered its decision summarily terminating the Claimant’s employment. The record shows that the decision was transmitted to the Claimant vide the Respondent’s email of 15th September 2021.

36. Through the same email, the Respondent notified the Claimant of the right to appeal. In his response dated 16th September 2021, the Claimant expressed his desire not to pursue an appeal.

37. The foregoing demonstrates that the Respondent adhered to the procedural strictures under section 41 of the Employment Act whilst processing the Claimant’s release from employment. As such, I find that the decision to terminate the Claimant’s employment was procedurally fair.

38. Having regard to the foregoing, I am satisfied that the Respondent satisfied both the substantive and procedural requirements in terminating the contract between the parties. As such, I find that the process was lawfully executed.

39. Finally, I note from the evidence on record that the Claimant signed the letter terminating his contract of service in the presence of a witness. This action had profound ramifications on his quest to recover house allowance; leave commutation; and notice pay.

40. Clause 2 of the aforesaid letter reads as follows:-‘’The full and final settlement of the payment of the sums referred to in clause 1. 3 of this agreement by the employer to the employee shall be in full and final settlement of all and any claims which the employee may have against the employer, successors, assigns, directors and or employees arising out of the contract of employment and termination thereof, whether in terms of any contract, deficit or in terms of any law or otherwise. The employer also agrees to waive any claims of any nature against the employee as set out above.’’

41. By this clause, the parties committed to abandon any further claims in respect of the contract of employment or the dismissal process once the Claimant was paid salary for September 2021 and leave computation as worked out by the Respondent in terms of clause 1. 3 of the letter.

42. At page 68 of the Respondent’s trial bundle is a schedule of the computation of the Claimant’s September 2021 salary and accrued leave days’ commutation. At page 69 of the same bundle is evidence of remittance of the payments. Importantly, the Claimant does not deny receipt of this amount.

43. The implication of the foregoing is that once the Claimant received the above payments, he waived his right to pursue further claims of whatever kind connected to the contract of employment between him and the Respondent in terms of clause 2 of the letter of termination dated 28th September 2021. Consequently, the court is not entitled to entertain the claims for house allowance, notice pay and leave commutation unless the waiver clause aforesaid has been set aside on account of fraud, undue influence, mistake, misrepresentation or coercion (Ronald Kipngeno Bii v Unliver Tea Kenya Limited [2022] eKLR).

44. As the record shows, the Claimant has not assailed the waiver clause on the basis of any of the foregoing elements. As such, the clause remains in place with the consequence that he is foreclosed from pursuing any further claims arising from the employment relation.

Determination 45. The upshot is that the court arrives at the conclusion that the Claimant’s suit against the Respondent is without merit.

46. Consequently, the action is dismissed with costs to the Respondent.

DATED, SIGNED AND DELIVERED ON THE 16TH DAY OF DECEMBER, 2024B. O. M. MANANIJUDGEIn the presence of:…………. for the Claimant………………for the Respondent