[2024] KEELRC 1722 (KLR)

Ojijah v Trees for the Future INC (Cause E010 of 2023) [2024] KEELRC 1722 (KLR) (4 July 2024) (Judgment)

Neutral citation: [2024] KEELRC 1722 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Kisumu

Cause E010 of 2023

CN Baari, J

July 4, 2024

Between

Elijah.O. Ojijah

Claimant

and

Trees for the Future INC

Respondent

Judgment

Introduction 1. The Claimant filed this suit against Trees for the Future Inc (the Respondent) vide a Memorandum of Claim dated 25th January 2023 and filed on 2nd February 2023, seeking the following remedies: -i.A declaration that he was constructively dismissed.ii.A declaration that his termination from service was unfair and unlawfuliii.A total of Kshs 5,850,000/= in terminal dues and other outstanding amounts from the contract.iv.Costs of the suitv.Interest on (iii) and (iv) above at the prevailing court rates.

2. The Respondent filed a Memorandum of Response and a Counterclaim dated 21st February 2023, wherein, it argues that the Claimant was lawfully dismissed.

3. The Respondent’s Counterclaim is for the sum of Kshs 334,212/= plus interest from the date of filing suit until payment in full.

4. The matter proceeded for hearing on 14th February,2024 and again on 11th March, 2024, with two witnesses testifying on the Claimant’s behalf and three witnesses testifying in support of the Respondent’s case.

5. Both parties filed written submissions.

The Claimant’s Case 6. It is the Claimant’s case that he was initially employed on the 10th December 2018 as ‘Technician 1’ at a salary of USD 350. He contends that he was promoted to ‘Lead Technician’ on 4th December 2019, a position he held for two years.

7. It is the Claimant’s case that on 1st January 2022, he was promoted to ‘Technician Supervisor’ on a two-year fixed term contract. He asserts that it is through his diligent work that he was promoted to ‘Regional Manager’ on 1st September 2022 at a salary of Kshs 216,666. 67/=, a position he served in until 7th December, 2022 when he was unlawfully dismissed.

8. It is the Claimant’s case that his woes begun on 4th October 2022, when he was sent on an indefinite administrative leave contrary to fair labour practices. He affirms that his subsequent dismissal on the pretext of failure to refund monies advanced to him on 11th October, 2022 amounted to unlawful termination.

9. He avers that the administrative leave was conjured up as a ploy to constructively dismiss him on the pretext of misappropriation of funds.

10. The Claimant’s further case is that the money sent to him by the Respondent was utilised for company purposes, a fact which was well within the Respondent’s knowledge.

11. In testimony, the Claimant states that he was sent on administrative leave for purposes of an audit, but was not furnished with the audit report.

12. The Claimant acknowledged receipt of Kshs 458,750/= from the Respondent’s accounts department.

13. The Claimant equally asserts that his salary for November and December 2022 were unlawfully withheld.

14. On cross-examination, the Claimant told the Court that he was employed on contracts of one year from 2018 to 2021. He avers that the 2022 contract was for a term of two years.

15. It is the Claimant’s testimony that only himself and one other Regional Manager that were issued with two year contracts in 2022. He further told court that he did not see the other Regional Managers’ contracts, but confirms that their positions were similar.

16. It is the Claimant’s further testimony that he was aware that pursuant to the letter sending him on administrative leave, he was not supposed to transact on behalf of the Respondent.

17. It is his evidence that he utilized the money on the Respondent’s programs and that he has produced receipts of the payments in evidence. He confirmed that he did not invite the persons he paid as witnesses in the case.

18. The Claimant states that the receipts he produced are dated 3rd and 4th October, 2022, yet the money in issue was sent to his account on 11th October, 2022. He confirmed that he did not make any payments when he received the money.

19. The Claimant at first denied receipt of a show cause letter, but on further cross-exam, he admitted receiving the same via email. He further confirmed that he did not respond to the show cause letter.

20. It is the Claimant’s testimony on cross-exam, that he received an invitation to attend a disciplinary hearing through his email.

21. It is the Claimant’s further case that he signed the contract renewal dated 1st January, 2022 whose term was 12 months. It is his further case that he did not attend disciplinary hearing as he did not get the invitation. He further confirmed that all letters were sent to his email address, but that he did not read.

22. CW2, one Gideon Osoti told court that he signed the contract produced by the Claimant, and that the one produced by the Respondent bears his signature though he is not the one who signed it.

23. The Claimant prays that his claim be allowed.

The Respondent’s Case 24. On its part, the Respondent’s case is that being a non-profit organisation and reliant on donor funding, it only issues one-year contracts. It reiterates that the Claimant was therefore employed on a one-year contract. The Respondent contends that as the custodian of records it is a stranger to the two-year contract alluded to by the Claimant.

25. It is its case that after consultative and deliberative meetings on 4th October 2022, it was mutually agreed that the Claimant proceeds on leave to pave way for an internal audit.

26. The Respondent’s further case is that the Claimant willingly acquiesced to being sent on leave by signing the notification of administrative leave.

27. The Respondent states that during the pendency of the Claimant’s leave, it noticed some irregular disbursements to the Claimant’s account amounting to Kshs 708,750/=. It is the Respondent’s case that despite demand and numerous reminders, the Claimant refused to make a refund of the money necessitating the issuance of a notice to show cause.

28. The Respondent asserts that it is disciplinary issues that resulted in the Claimant’s dismissal.

29. It is the Respondent’s case that constructive dismissal does not arise as there was no resignation. Additionally, it asserts that unfair termination and 12 months’ salary compensation cannot issue as the Claimant was lawfully dismissed.

30. RW1 one Pius Juma Odawo, told court that no employee of the Respondent had a contract that was beyond one year. He further confirmed that each contract would be renewed upon expiry for a further one year. It is his evidence that contracts with two-year term could only have been forged.

31. It is RW1’s evidence that the Claimant elected not to participate in the disciplinary process. RW2 confirmed to court that a show cause letter was sent to the Claimant through his postal and email addresses giving reason for the intended disciplinary hearing. He states that the Claimant received Kshs. 458,750/- and another Kshs. 250,00/- send to his account by their then Country Director.

32. It is RW2’s evidence that the Claimant did not respond to the show cause letter, and only sought to know from the Respondent why his salary was not remitted. He states that the Claimant in making the inquiry about his salary, used the same email address that the Respondent used to send him the show cause letter and the invitation for the disciplinary hearing.

33. RW2 states that the Respondent’s through the counterclaim, seeks to recover a total of Kshs. 334,507/- being part of the money disbursed after deduction of his terminal entitlement.

34. RW3, the forensic document examiner, told court that the contract produced by the Claimant and that produced by the Respondent were printed from different sources.

35. He further affirmed that the contract produced by the Claimant, did not come from the employer/Respondent. It is his evidence that in carrying out the forensic examination of the documents, he was solely guided by the documents provided and not what the client wanted.

36. The Respondent prays that the Claimant’s claim be dismissed with costs and that its counter claim be allowed as prayed.

The Claimant’s Submissions 37. It is the Claimant’s submission that the Respondent had failed to justify his dismissal as required by Sections 43,45 and 47 of the Employment Act. He cites the case of Peter Otabong Ekisa v County Government of Busia [2017] eKLR where the court placed the burden of rebutting evidence of prima facie unfair dismissal on the employer.

38. In further support of his case, the Claimant submits that the 2-year contract he produced was valid. He cites the fact that it was sealed on all pages and that CW2’s testimony on its authenticity was not controverted.

39. Additionally, the Claimant submits that the document examiner did not impugn the contract’s authenticity, but only stated that it emanated from a different source.

40. In emphasising the lack of fair dismissal procedure, the Claimant submits that Section 45 of theEmployment Actis instructive. He cites the case of Lydia Moraa Obara v Tusker Mattresses ltd [2021] eKLR where the court reiterated the provisions of Section 45(2)(c) of the Employment Act on the importance of a fair procedure.

41. In respect of the remedies sought, it is the Claimant’s submission that they should be awarded as prayed. He cites Section 49 of the Employment Act.

The Respondent’s Submissions 42. In opposition to the suit, the Respondent submits that constructive dismissal does not arise in the circumstances of this case as the Claimant did not resign. It placed reliance in the cases of Milton M Isanya v Aga Khan Hospital Kisumu (2017) eKLR and Coca Cola East and Central Africa v Maria Kagai Ligaga (2015)eKR where the common thread was that constructive dismissal only occurs when an employee resigns due to a hostile work environment.

43. It is further submitted for the Respondent that the Claimant’s dismissal was necessitated by his failure to refund the Kshs 708,750/= illegally disbursed to him.

44. In support of the decision to send the Claimant on leave, the Respondent avers that it was a normal procedure that was always done for auditing purposes. The Respondent submits that through its CEO Tim McLellan, it called for the refund of the Kshs 708,750/= from the Claimant in vain necessitating the disciplinary action.

45. In further support of its case, the Respondent submits that despite numerous summons the Claimant failed to attend the disciplinary hearing. For this reason, it is the Respondent’s submission that there existed valid reasons for the Claimant’s dismissal and which reasons were not controverted.

46. The Respondent’s further submission is that the vouchers proving that the cash was utilised for company purposes were suspect as they were not produced at the initial disciplinary hearing.

47. In impugning the authenticity of the 2-year contract, the Respondent cites RW3’s testimony to the effect that it was printed from a different source. It submits that the contract was a forgery and that the court should equally disregard the CW2’s testimony as his contract which was the subject matter of another suit was also a forgery.

48. The Respondent cites the case of Kenya Engineering Workers Union v Narcol Aluminium Rolling Mills Limited [2015] eKLR, where the court dismissed the claim as it was founded on forgery.

49. On whether the Claimant was procedurally dismissed, it is the Respondent’s submission that the Claimant admitted in testimony to being issued with a notice to show cause. Subsequently, the Respondent submits that the Claimant was invited to a disciplinary hearing vide a letter dated 21st January, 2022.

50. It is the Respondent’s further submission that the letter notified the Claimant of his right to be accompanied by a representative, and also to tender his evidence.

51. The Respondent avers that by locking himself out of the internal disciplinary process, the Claimant was the author of his own misfortune, and therefore, is not deserving of the court’s assistance. It cites the case of Feroz Ali Omar v ECU Worldwide Limited [2018] eKLR where the court stated as follows: -“An employee who squanders the internal grievance handling mechanisms provided by an employer cannot come to Court and say, ‘I refused to talk with those people and therefore I was not heard, order them to pay me.’ It is not the role of the Court to supervise the internal grievance handling processes between employers and employees. The role of the Court is to ensure that such processes are undertaken within the law.”

52. In support of the counterclaim, the Respondent submits that the Claimant acknowledged receipt of Kshs 708,750/= and despite the Respondent requesting for a refund, the Claimant failed to make the refund.

53. It is further submitted for the Respondent that the argument that the Claimant utilised funds for company purposes, does not hold any water. It avers that the vouchers and receipts having not been produced at the disciplinary hearing were highly suspect and were most probably forgeries. In any case, the Respondent’s submits that the alleged forged vouchers only amounted to Kshs 472,000/=.

54. The Respondent submits that its claim for the cash is based on Section 19(1)(b) of the Employment Act and the case of Liech v Sameer Agricultural & Livestock (K) Ltd (now) Devyan Food Industries (K) Limited, where the court allowed a counterclaim after finding the Claimant responsible for loss of funds. It is the Respondent’s view that that the Claimant is not entitled to the remedies sought.

55. In conclusion, the Respondent urges this court to be guided by its decision in the related case of Jacob Otieno Oyugi vs Trees for the Future Inc (2023) eKLR, in finding that the Claimant had been lawfully dismissed from the service of the Respondent.

Analysis and Determination 56. Having considered the pleadings, the witnesses’ oral testimonies and the rival submissions, the issues that arise for determination are:i.Whether the Claimant was constructively dismissed; and if not, whether he was unfairly dismissed from service.ii.Whether the Claimant is entitled to the remedies sought.iii.Whether the Respondent is entitled to the remedy sought under the Counter-Claim.

Whether the Claimant was constructively dismissed; and if not, whether he was unfairly dismissed from service 57. The Claimant sought a declaration that he was constructively dismissed from the service of the Respondent. The principle of constructive dismissal is a presumptive concept developed by common law and the courts to address instances when an employer, in all circumstances of the case, conducts himself in a manner to infer termination. (George Ogembo, Employment Law Guide for Employers, Second Edition (2022)-Law Africa).

58. In Kenya today, there is no law defining with clarity when a constructive dismissal should be deemed to have occurred. It has however been largely applied by courts tied to the law of contract under the doctrine of discharge by breach.

59. The first element that must be present for constructive dismissal to be construed, is that the employee has to have resigned from the service of the employer, and the resignation must be by reason of the employer creating working conditions that leave the employee with no option but to resign.

60. Lord Denning in Western Excavating ECC Ltd v Sharp (1978) 2 WLR 344, opined thus on constructive dismissal: -“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so then he terminates the contract by reason of the employer’s conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once. Moreover, he must make up his mind soon after the conduct of which he complains: for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract.”

61. The Claimant was sent on administrative leave to allow for an audit of the Respondent’s programs. Per the letter of administrative leave, the Claimant was to remain an employee of the Respondent on full salary and benefits. It was equally agreed that the administrative leave was not a disciplinary process.

62. In the description of a constructive dismissal from the holding of Lord Denning in Western Excavating (Supra), a salient feature is that an employee must leave the service of the employer through resignation, with or without notice. In the case of Enid Nkirote Mukire vs Kenya Yearbook Editorial Board [2022] eKLR the Court held: -“Constructive dismissal occurs where an employee terminates his/her employment because of frustration by the employer, either by the employer breaching fundamental terms of employment contract or making the environment at work unbearable to the employee, thus forcing the employee to terminate the contract. The circumstances of this case do not lend themselves to any interpretation of constructive dismissal.”

63. In this matter, the Claimant did not at all allege to have resigned from the service of the Respondent. Both his pleadings and his oral testimony as well as the Respondent’s evidence, indicate that he was summarily dismissed for gross misconduct.

64. The Claimant did not at all lead any evidence to suggest that he was constructively dismissed. In light of the foregoing, I conclude by holding that the Claimant has not proved a case of constructive dismissal.

Whether the Claimant was unfairly dismissed from service 65. Section 41 of the Employment Act, 2007 demands that before terminating an employment contract on the grounds of misconduct, poor performance or physical incapacity, the employer allows the employee an opportunity to make representations, either in the presence of a colleague or representative of a trade union.

66. From the record, it is evident that the Claimant was issued with a notice to show cause on 14th November 2022. The notice detailed the reasons for the contemplated disciplinary action and invited the Claimant to respond to the allegations. Thereafter, the Claimant was invited for a disciplinary hearing on 21st November 2022.

67. Although the Claimant at first denied receipt of the show cause letter and the invitation to appear before a disciplinary committee, on further cross-exam, he admitted receiving the same via email. He further confirmed that he did not respond to the show cause letter. Further, the minutes of the disciplinary hearing confirm that the Claimant did not attend the hearing.

68. The only reservation the Claimant had with the disciplinary hearing was that it was to be done online. According to him, this did not meet the legal threshold. Apart from this assertion no reason has been advanced by the Claimant for his failure to appear at the disciplinary hearing.

69. In the case of Feroz Ali Omar v ECU Worldwide Limited [2018] eKLR the court had this to say on an employee’s failure to participate in a disciplinary process: -“An employee who squanders the internal grievance handling mechanisms provided by an employer cannot come to Court and say, ‘I refused to talk with those people and therefore I was not heard, order them to pay me.’ It is not the role of the Court to supervise the internal grievance handling processes between employers and employees. The role of the Court is to ensure that such processes are undertaken within the law.”

70. By dint of the foregoing, and the Respondent having made every effort to take the Claimant through fair process, I find his dismissal procedurally fair.

71. On whether the Respondent had valid, fair and justified reasons to dismiss the Claimant, otherwise referred to as the substantive fairness test, Sections 43, 45 and 47(5) of the Employment Act, require that an employer proves the reasons for termination/dismissal, prove that the reasons are valid and fair and further prove that the reasons are justified.

72. The Respondent dismissed the Claimant for failure to refund money erroneously sent to his account, and which he admitted receipt of. The Claimant’s position is that he used the money to pay for operations of the Respondent, and that he produced vouchers and receipts in evidence as prove that he utilized the money for the Respondent’s purpose.

73. The Claimant was sent on administrative leave on 4th October, 2022. Money was sent to his account on 3rd October 2022 and 11th October, 2022. He asserts that he spent the money on the Respondent’s operations, when the letter of administrative leave clearly stated that he was not supposed to transact the Respondent’s programs in the pendency of the administrative leave, and which position he confirmed being aware of during cross-examination.

74. The Claimant’s evidence is that the receipts he produced are dated 3rd and 4th October, 2022, yet the money in issue was sent to his account on 11th October, 2022. He further confirmed on cross-examination that he did not make any payments when he received the money.

75. Having admitted receiving Kshs.708,750/= from the Respondent, and disobeyed the employer’s demand to refund the money, is confirmation that the Respondent had a fair, reasonable and justified ground to summarily dismiss the Claimant.

76. I therefore hold the Claimant’s dismissal both procedurally and substantively fair.

Whether the Claimant is entitled to the remedies sought. 77. The Claimant’s dismissal has been held to be procedurally and substantively fair. This renders the claim for 12 months’ salary as compensation for the unfair dismissal untenable and it fails.

78. Regarding the Claimant’s entitlement to salary for November 2022 and part of December, 2022, the court notes that the same was recovered to offset part of the Respondent’s money send to the Claimant. This claim equally fails.

79. The Claimant was summarily dismissed for gross misconduct, which dismissal by law does not entitle an employee to either notice or pay in lieu thereof. The claim for pay in lieu of notice thus equally fails and is dismissed.

80. Compensation for the remainder of the contract is not a remedy known to the law, and neither did it form part of the agreement between the parties. The claim is similarly dismissed.

Whether the Respondent is entitled to the counterclaim 81. The Respondent contends that it computed the Claimant’s terminal dues upon dismissal and arrived at a figure of Kshs.374,242. 51/-, comprising of salary for the month of November, 2022, outstanding leave days and salary for 5 days worked in December, 2022.

82. It is the Respondent’s further assertion that it applied the amount of Kshs.374,242. 51/- to recover part of the Kshs. 708,750/- that the Claimant received and failed and/or neglected to refund in compliance with Section 19 of the Employment Act, and hence Kshs.334,507. 49/- is still outstanding, and is the subject of the counter claim.

83. In the case of Liech v Sameer Agricultural & Livestock (K) Ltd (now) Devyan Food Industries (K) Limited, cited by the Respondent, the court while addressing a similar issue of funds lost through the negligence of the employee held: -“In view of the foregoing finding that the Claimant caused the loss of Kshs.690,000 through negligence, I allow the Respondent's counterclaim for Kshs.310,075 being the balance of the lost money.”

84. Similarly, having found that the Claimant neither refunded nor utilised the amounts in issue for the benefit of the Respondent, the counterclaim is allowed as prayed.

85. In the final analysis, I make the following orders: -a.A declaration that the Claimant’s dismissal from the service of the Respondent is not unfair.b.An order that the Claimant pays the Respondent the amount of the Counter-claim at Kshs.334,507/=c.The Claimant shall bear the costs of the suit.

86. It is so ordered.

DATED, SIGNED AND DELIVERED BY VIDEO-LINK AND IN COURT AT KISUMU THIS 4THDAY OF JULY, 2024. CHRISTINE N. BAARIJUDGEAppearance:Ms. Mukoyo h/b for Mr. Otieno for the ClaimantMs. Kasyioka h/b for Mr. Gachaga for the RespondentMs. Anjeline Wanjofu & Debra- C/As