[2024] KEELRC 1912 (KLR)

Okwirry v Honda Motorcycle (K) Ltd (Cause E026 of 2022) [2024] KEELRC 1912 (KLR) (25 July 2024) (Judgment)

Neutral citation: [2024] KEELRC 1912 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Kisumu

Cause E026 of 2022

CN Baari, J

July 25, 2024

Between

Eric Odhiambo Okwirry

Claimant

and

Honda Motorcycle (K) Ltd

Respondent

Judgment

1. The Claimant’s Statement of Claim is dated 25th April, 2022 and filed in court on 30th May, 2022. Under the claim, the Claimant seeks the following reliefs on account of unfair termination: -a.An order that he was unfairly and illegally terminated from employment.b.An order compelling the Respondent to pay the Claimant salary for days worked from 2nd - 6th of March, 2020 amounting to Kshs. 19,720. 57/-c.An order compelling the Respondent to pay the Claimant leave allowance for 28. 5 days totalling Kshs 112,407/=d.12 months’ salary as compensation for wrongful dismissal.e.Costs of the suit and interest from the date of filing suit.

2. In a Response to claim dated 4th August, 2022 and filed on 8th August, 2022, the Respondent asserts that the Claimant’s dismissal was lawful.

3. The matter proceeded for hearing on 5th February, 2024, with the Claimant and the Respondent’s Administrative Manager testifying in support of their respective cases.

4. Submissions were received from both parties.

The Claimant’s Case 5. The Claimant’s case is that he was employed on 15th June, 2015 as a sales and marketing representative of the Respondent’s company, and which position he held until his alleged unfair termination on 6th March, 2020.

6. It is the Claimant’s case that on 17th February, 2020 he was summoned to the Respondent’s head office in Nairobi and subjected to a disciplinary hearing the following day. He avers that he was not issued with notice to show cause and neither was he granted an opportunity to present his case.

7. At the disciplinary hearing, the Claimant’s case is that he was questioned on why he had not accounted for the monies he had gathered from sales and ordered to produce his M-pesa statement. It is his further case that he was ordered not to report to work until further notice.

8. It is the Claimant’s assertion that he opted to resign from the service of the Respondent after learning that his duties had been allocated to another employee. He avers that the Respondent responded to his resignation letter by terminating his services on account of failure to account for Kshs 400,000/= realised from sale of motorcycles.

9. The Claimant avows that the Kshs 400,000/= was recovered from his terminal dues despite the lack of investigations or even a report to the police. On cross-examination, the Claimant told Court that the money in question was not deducted from his salary.

10. The Claimant proclaims that at the time of the disciplinary hearing, he could not account for the monies as he was still reconciling his books.

11. The Claimant’s testimony is that he appeared for disciplinary hearing on 21st February, 2020 and not 18th February, 2020 as indicated in his pleadings. He further confirmed on cross-exam that he handled some money on behalf of the Respondent, and which money he could not account for on the premise that he was still doing reconciliation.

12. He confirmed to Court that he has not led evidence to show that he has since reconciled the figures.

13. The Claimant confirmed that he was earlier disciplined on a different issue and issued a warning letter.

14. It is his evidence that he attended the disciplinary hearing mounted by the Respondent, but was not represented

The Respondent’s Case 15. The Respondent’s case is that the Claimant was not diligent in his work. It further avers that the incident that led to the Claimant’s dismissal was the second incident of misconduct he had been involved in.

16. The Respondent avows that the Claimant had been previously suspended for misconduct that led to losses of among other things, 250 litres of oil, and for which he was let off with a warning.

17. The Respondent states that the Claimant failed to account for Kshs 400,000/= being proceeds of the sale of Chosa motorcycles sold through him, and which loss amounted to gross misconduct and went against the Respondent’s Regulations and Guidelines.

18. It is the Respondent’s case that the Claimant reported sales without a corresponding deposit of money received. This according to the Respondent, prompted them to make enquiries with the riders who stated that they had made payments to the Claimant.

19. The Respondent asserts further that an inspection of the Claimant’s M-pesa statements showed that he had indeed received the monies.

20. The Respondent’s further case is that the Claimant was issued with a notice to show cause and subsequently invited for a disciplinary hearing.

21. It is the Respondent’s assertion that at the disciplinary hearing the Claimant acknowledged receiving the cash and even promised to pay back.

22. Regarding their refusal to accept the Claimant’s resignation, the Respondent avows that disciplinary action had already been set in motion and was still ongoing.

23. The Respondent’s witness, one Eric Ngugi (RW1), told Court on cross-exam that the Claimant opted not to be represented at the disciplinary hearing. He stated further that the invitation letter did not inform him of his right to be represented.

24. It is RW1’s further evidence that the Claimant was not charged on the issue of misappropriation of funds. He stated further that he had not produced the insurance’s report implicating the Claimant nor the Claimant’s mpesa statement as prove that he received the money.

25. RW1 further testified that he had not produced minutes of the disciplinary hearing or in any other way shown that the disciplinary hearing rook place.

The Claimant’s Submissions 26. It is the Claimant’s submission that his termination was unprocedural as no notice to show cause was issued. He further submits that he was not represented by a peer or an advocate at the hearing.

27. In urging the unprocedural nature of the dismissal, the Claimant cites the case of Cooperative Bank of Kenya v. Yator [2021] KECA 95 (KLR) where the court laid emphasis on allowing an employee to give a defence before summary dismissal for gross misconduct.

28. In further support of his case, the Claimant avows that the Respondent assigned him the role of handling money contrary to his employment contract.

29. It is the Claimant’s submission that the burden of proving the reasons for termination lies on the employer and failure to do so renders the termination unfair. He cites Section 107 of the Evidence Act, Section 43 of the Employment Act and the cases of Cooperative Bank of Kenya Limited v Banking insurance & Finance Union (K) [2017] eKLR and lyego Farmers Cooperative Sacco vs Kenya Union of Commercial Food and AIlied Workers [2015] eKLR, to buttress this assertion.

30. In urging the court to award the remedies sought, the Claimant draws the court’s attention to Section 50 of the Employment Act and the case of John Jaoko Othino v Intrahealth International [2022] eKLR where the court awarded similar reliefs to the ones he is seeking herein.

The Respondent’s Submissions 31. On its part, the Respondent submits that the Claimant’s summary dismissal is justified. It avows that the Claimant misappropriated Kshs 400,000/= and draws the court’s attention to the Claimant’s acknowledgment in cross-examination to having received the cash on behalf of the Respondent. Additionally, the Respondent points the court in the direction of the Claimant’s witness statement in which he stated that he was still reconciling his accounts.

32. It is the Respondent’s further submission that the Claimant’s defence at the disciplinary hearing, he acceded to having disposed off 8 motor bikes and used the cash. Regarding the Claimant’s admission, the Respondent cites Diamond Industries Limited v Mwale (Appeal E028 of 2022) [2003] KELRC 1235 (KLR) where the court held that in an instance where an employee on their own volition opts to commit a criminal act cannot blame the employer for taking action. The court then proceeded to further state: -“The Respondent having been called to account and upon which he admitted and offered an apology, the need to call evidence beyond such admission was not necessary. It would have been a waste of time. What was there to proof after the admissions? Nothing absolutely.”

33. On the procedure for dismissal, the Respondent submits that the Claimant was given four clear days to prepare for the disciplinary hearing. It cites the Claimant’s testimony to the effect that he was called on 17th February, 2020 and told to appear before the Respondent’s officials the next day. Pursuant to this it is the Respondent’s assertion that the Claimant admitted in cross-examination to having attended disciplinary hearing on 21/2/2020.

34. Moreover, the Respondent avows that the Claimant did not object to the disciplinary on account of inadequate time or that he needed to call a witness.

35. It is further submitted for the Respondent that the Claimant’s evidence in testimony was not credible hence it should not be given a lot of weight. The Respondent avows that the Claimant denied ever receiving any money only to change tune on cross-examination once confronted with evidence. The Respondents rely on Anyona v Wells Oil Limited & 2 others (Civil Appeal E091 of 2022) [2023] KEHC 26833 (KLR) where the court dismissed an appeal on account of unreliable evidence brought out during cross examination.

36. On the reliefs sought, the Respondent reiterates that the summary dismissal was justified, thus the prayer for unfair termination is not merited. Additionally, the Respondent affirms that the claims for unpaid salary and leave allowance were continuing injuries not awardable after 12 months of cessation thereof. It cites Section 90 of the Employment Act and the case of Joseph Kamau & 468 others v G4s Security Services (Kenya) Limited [2015] eKLR among others to buttress this position.

37. On the prayer for 12 months’ compensation for unlawful termination, the Respondent emphasises that it is a discretionary award as per Section 49 of the Employment Act. The Respondent relies on the Supreme Court case of Kenfreight (E.A) Limited v Benson. N. Nguti [2019] eKLR where the court held: -“The Act does provide for a number of remedies for unlawful or wrongful termination under Section 49 and it is up to the judge to exercise his discretion to determine whether to allow any or all of the remedies provided thereunder.”

38. The Respondent strongly submits that the dismissal being fair, there is no basis for the court to exercise discretion in favour of the Claimant.

39. In conclusion, the Respondent submits that it has proven that the Claimant committed theft, that the Claimant had admitted to misappropriating the Respondent’s funds, and finally that the Claimant had attempted to mislead the court by deliberate omissions and pray that claim be dismissed.

Analysis and Determination 40. Upon careful consideration of the pleadings, the evidence adduced, witnesses’ testimonies and the parties’ submissions, the following issues crystalize for determination.i.Whether the Claimant was wrongfully dismissed from employment.ii.Whether the Claimant is entitled to the remedies sought.

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

42. The Claimant stated that he was not issued with a notice to show cause nor was he given a chance to present his case and be represented. The Respondent on its part averred that the Claimant had 4 clear days to prepare for the hearing after being summoned to the head office.

43. In testimony, the Claimant admitted to having been summoned on 17th February, 2020 and appearing for a disciplinary hearing on 21st February, 2020. The Respondent’s witness on his part testified that the Claimant was summoned and told to show cause why disciplinary action should not be taken against him. On cross-examination the Respondent’s witness averred that the Claimant opted not to be accompanied by a representative. He however confirmed that the invitation letter did not inform the Claimant to appear with a representative before the disciplinary committee.

44. In their submissions, the Respondent’s admitted that the notice to show cause had not been produced in evidence.

45. Section 41 (2) of the Employment Act expressly states: -“(2) Notwithstanding any other provision of this Part, an employer shall, before terminating the employment of an employee or summarily dismissing an employee under section 44(3) or (4) hear and consider any representations which the employee may on the grounds of misconduct or poor performance, and the person, if any, chosen by the employee within subsection (1), make.”

46. The Claimant was summoned to appear before the disciplinary committee by telephone, there being no evidence of notice to show cause having been issued. It is also confirmed that the Claimant was not informed of his right to be represented, which requirement is mandatory. I further note that the time the Claimant was allowed to prepare for the hearing was short and further considering that there was no show cause letter informing the Claimant of the charges levied against him, is indication that the Respondent did not adhere to the tenets of fair procedure.

47. The dismissal thus failed the procedural fairness test and which renders it wrongful, and so I hold.

48. On whether the Respondent had fair, valid and justified reasons to dismiss the Claimant, Sections 43 and 45(2) of the Employment Act places the burden on the Employer to prove that the reasons for termination are valid and fair.

49. The reason for termination as evinced by the summary dismissal letter is failure to account for Kshs 400,000/= received from the sale of Chosa Motorcycles. In support of this reason, the Respondent produced a statement of response from the Claimant and called one witness.

50. In testimony, the Respondent’s witness stated that the Claimant would make sales but there would be no corresponding deposit of funds in the Respondent’s account. The witness averred that when they inspected the Claimant’s M-pesa statement, it showed that he had received the monies for the subject sales, and which confirmation was further made by the riders who bought the motor cycles.

51. In his defence, the Claimant asserted that he was still reconciling his figures by the time he was summoned for disciplinary hearing, and further confirmed on cross-examination that he had not produced a reconciled statement of the sales as evidence before this court.

52. I have taken a look at the statement written by the Claimant in defence of his case at the disciplinary hearing. He accedes to having disposed off 8 motor cycles in the hope that he would get a top up loan and re-pay back the money. He goes ahead to assert that he used the funds to repair his house and to send his children to school.

53. This evidence was not controverted by the Claimant in any way throughout the hearing before this Court.

54. On the whole, I find and hold that the reasons for the dismissal have been proven on a balance of probabilities and which renders the dismissal substantively fair and lawful.

Whether the Claimant is entitled to the remedies soughtSalary for days worked and pay for leave not taken 55. The Respondent produced in evidence a final dues calculation which took into account both the days worked and the leave days not taken. In the calculation, the Court notes that the amount was used to off-set part of the Kshs. 400,000/- subject of the Claimant’s dismissal.

56. The Respondent admitted having been compensated by their insurer for the loss of the Kshs. 400,000/-, and to again deduct the amount from the Claimant’s final dues is to unjustly benefit itself.

57. In the premise I find and hold that the Claimant is entitled to the payment of Kshs.68,414. 14/- on account of leave and days worked.

12 months salary compensation for unfair termination 58. The Claimant’s dismissal has been held unlawful on account of failure by the employer/Respondent to adhere to procedural fairness. The dismissal has however been found to have been substantively fair. Considering that the Claimant admitted having received the money from the sale of the Respondent’s motor cycles and the admission that he used the money for his own purposes, leads me to the conclusion that one month salary will sufficiently compensate him for the unfair dismissal and which is hereby awarded.

59. In the final analysis, the Claimant’s claim partly succeeds and orders granted as follows: -a.A declaration that the Claimant’s summary dismissal is wrongful on account of procedure.b.An order that the Claimant be paid Kshs. 68,414. 14/- for leave and days worked.c.One-month salary for wrongful dismissal.d.Parties to bear their own costs of the suit.

60. Judgment of the Court.

SIGNED, DATED AND DELIVERED BY VIDEO-LINK AND IN COURT AT KISUMU THIS 25TH DAY OF JULY, 2024. C. N. BAARIJUDGEAppearance:Mr. Ouma present for the ClaimantMs. Muthama h/b for Ms. Kilonzo for the RespondentMs. Anjeline & Debra-C/As