[2021] KESC 56 (KLR)

Onyango & 23 others v Heritage Insurance Company Limited (Civil Application 16 of 2020) [2021] KESC 56 (KLR) (Civ) (24 March 2021) (Ruling)

Christopher Onyangot & 23 others v Heritage Insurance Company Limited [2021] eKLR

Neutral citation: [2021] KESC 56 (KLR)

Republic of Kenya

In the Supreme Court of Kenya

Civil

Civil Application 16 of 2020

AI Tullu, EN Wanjala, NS Ndungu & I Lenaola, JJ

March 24, 2021

Between

Christopher Onyango

1st Applicant

Patrick Kariuki

2nd Applicant

Grace Achieng

3rd Applicant

Judith Thuita

4th Applicant

Alice Ndung’u

5th Applicant

Caroline Kaminju

6th Applicant

Beatrice Mwangi

7th Applicant

Gairey Omole

8th Applicant

Gromyko Mwandoghoi

9th Applicant

John Mutisya

10th Applicant

Millicent Oketch

11th Applicant

Aggrey Ocholi

12th Applicant

Beatrice Maina

13th Applicant

Eliud Adiedo

14th Applicant

Patrick Butiko

15th Applicant

Anthony Munene Murage

16th Applicant

Jeckonia Maganda

17th Applicant

Christine Mutimba

18th Applicant

Edward Mumira

19th Applicant

Regina Wanjiru Mwangi

20th Applicant

Pritpal Kundi

21st Applicant

Duncan Wanjohi

22nd Applicant

Josyline Muthoni Bullut

23rd Applicant

Martin Muchuku Kabati

24th Applicant

and

Heritage Insurance Company Limited

Respondent

(Being an application for review of the decision of the Court of Appeal **(Ouko,** **Warsame, Sichale, JJ.A)** given at Nairobi on 19th June 2020 dismissing the Applicants’ request for certification)

Ruling

1. The cause of action in this matter can be traced from the Employment and Labour Relations Court Cause No. 781 of 2015, Christopher Onyango & 23 others v. Heritage Insurance Company Limited. There were four issues in dispute namely, termination of the Applicants’ employment on redundancy contrary to Section 40 of the Employment Act; termination of Applicants’ employment being unfair and wrongful contrary to Section 45 of the Employment Act; violation of theApplicants’ rights to legitimate expectation and contravention of Article 147 of the Constitution; and the Respondent’s failure to follow legal procedures in effecting the termination of the Applicants’ employment.

2. The Employment and Labour Relations Court at Nairobi (Monica Mbaru, J.) delivered its Judgment on 7th April 2016 awarding compensation to the 24 Applicants. They were awarded various sums of monies in respect of salaries for the number of years each one of them had worked, compensation, damages for discrimination, notice and severance pay. In doing so, the Judge took into account the Respondent’s two human resource Handbooks; one issued in 1994 and another subsequent one issued in 2013. The former prescribed a 30 days’ redundancy notice while the latter reduced the period from 30 days to 15 days. The Learned Judge was of the view that the Applicant’s terms of employment fell within the parameters of the 2013 Handbook. Consequently, she declared the redundancy notice issued to the Applicants unlawful; the termination of employment unfair; and found the acts of the Applicants of issuing redundancy notice and terminating the Applicants’ employment, unlawful and amounted to discrimination against the Applicants.

(i) Proceedings at the Court of Appeal 3. Aggrieved by the decision of the Employment and Labour Relations Court, the Respondent filed an appeal at the Court of Appeal, Civil Appeal No. 114 of 2016, The Court of Appeal crystalized four issues for determination: whether it is the Human Resource Handbook of 1994 or 2013 that applied to the Applicants’ employment; whether there was discrimination; whether there was redundancy and whether termination was wrongful; and whether the trial court erred in awarding as damages 10 months’ salaries.

4. On 20th December 2017, the Court of Appeal (Kariuki, Sichale, Kantai, JJA) in its Judgment, found merit in the appeal, set aside the Judgment of the Employment and Relations Court, with no orders as to costs. On the first issue, as to whether it was the 1994 or 2013 Handbook that was applicable, the Court found that the Handbook in force was the one that was issued in 2013, and that the Applicants were bound by it because the contract of employment of each Applicant had a clause to the effect that orders or directions issued from time to time through staff manuals or Handbook, were incorporated in the contract of employment and did not need the signature of an employee to bind him or her. Pertaining the issue as to whether there was discrimination; the Court found that no evidence was led to establish violation of any constitutional rights and none of the relevant Articles of the Constitution was alluded to in pleadings. As to whether termination was unlawful, the learned Judges found that since there was no evidence of the redundancy being fake and the Applicants having been paid in lieu of notice, the termination could not be said to have been wrongful; therefore, the question of damages did not arise. Further, the Appellate Court held that since the Applicants had been paid for severance under Section 40 of the Employment Act, being 15 days for each year worked in accordance with the terms of the contract, and in compliance with the Human Resource Manual (Handbook), the Respondent had complied with the law. There was therefore no justification for additional payment of compensation for ten (10) months under Section 49 of the Employment Act.

(ii) Court of Appeal, Certification application proceedings 5. Aggrieved by the decision of the Court of Appeal, the Applicants herein, lodged an application to the Court of Appeal for certification seeking leave to appeal to this Court on the ground that the matter involves issues of general public importance. In its Ruling dated 19th June 2020, the Court of Appeal (Ouko, Warsame, Sichale, JJA) declined to grant certification and dismissed the application on the grounds that the same did not raise matters of general public importance. In that regard, the Appellate Court found that the matter involved the construction of Section 40 of the Employment Act to determine whether the Respondent had complied with the conditions set out in that Section and the trial Judge’s conclusions on the applicable Handbook. The learned Judges concluded that the matter did not transcend the circumstances of the parties herein.

6. Dissatisfied with the Court of Appeal’s Ruling on the Certification application, the Applicants have now approached this Court for review and for grant of leave to file an appeal.

(iii) Proceedings at the Supreme Court (a) The Applicants’ case 7. The Applicants relied on their Supporting Affidavit sworn on 2nd July 2020 and written submissions filed on 21st July 2020. While citing Article 163(5) of the Constitution, Section 15(1) and 16(1) & (2) of the Supreme Court Act and Rule 33(1) and (2) of the Supreme Court Rules, 2020, the Applicants submit that this Court has jurisdiction to entertain the instant application.

8. Citing the case of Hermanus Philipus Steyn v. Giovanni Gnecci-Ruscone, Sup. Ct. Civil Application No. 4 of 2012 (the Hermanus Case) and Malcolm Bell v. Hon. Daniel Toroitich arap Moi & Another, Sup.Ct. Application No. 1 of 2013 (Malcom Bell Case), the Applicants submit that the intended appeal falls within the parameters set out by this Court and the Court of Appeal in certification of matters as being of general public importance. In that regard, they contend that the intended appeal transcends the parties herein as it related to the process of redundancy, which process affects and is likely to affect each and every Kenyan citizen in employment. They urge that this Court’s decision will affect any Kenyan approaching the courts and claiming termination on account of unprocedural declaration of redundancy. In support of their arguments, they cite this Court’s decision in Telkom Kenya Limited v John Ochanda & 996 others, SC Appl. No. 17 of 2014 [2015] eKLR (the Telkom Kenya Limited Case), the Court of Appeal’s decisions in Karagita Self Help Mixed Group vs. Thika River Estate Ltd [2017] eKLR and Murai vs. Wainaina (1982) KLR38. The Applicants also argue that the issues to be raised in the intended appeal transcend the parties herein as it relates to the application of human resource manuals and procedures to employment contracts.

9. The Applicants submit that the intended appeal raises two substantive issues of law that is, the provision of Section 40 of the Employment Act regarding declaration of redundancy and on the application of Human resources manuals to employees’ contracts of employment. Towards that end, the Applicants argue that they will ask the Court to settle the questions as to whether the burden of proving redundancy should shift from the employer to the employee, and if so, at what point, and whether that burden of proving change in employment terms rests with the employer or with the employee?

10. They rely on this Court’s decisions in the Hermanus Case and the Malcom Bell Case stating that where there is uncertainty in the law, a matter of public interest arises, arguing that the Court of Appeal’s decision departed from settled jurisprudential precedent, thereby introducing uncertainty into the law governing the subject of redundancy. They cite various Court of Appeal decisions to support their argument including Kenya Airways Limited vs. Aviation Workers Union Kenya & 3 others [2014]eKLR, Thomas De La Rue (K) Ltd vs. David Opondo Omutelema [2013]eKLR, Barclays Bank of Kenya Ltd & another v. Gladys Muthoni & 20 others [2018]eKLR, Rachel Asiko Angatia & 3 others vs. Heritage Insurance Company Limited [2018]eKLR and one case from the Supreme Court namely, Kenfreight (EA) Limited vs. Benson K. Nguti , Civil Appl. No. 18 of 2016; [2018]eKLR.

11. Furthermore, the Applicants submit that the decision by the Court of Appeal has explicit glaring failings of the judicial process. They argue that the Appellate Court failed to make substantive determination on the justification of the redundancy, and whether the Respondent followed the due procedure provided for in law thereby contravening Articles 24 and 50 of the Constitution. Additionally, they submit that the learned Judges shifted the burden of proving that the termination was fake to the Applicants contrary to Section 43 of the Employment Act. They insist that the Court upheld that the applicable manual was that of the year 2013 despite the Applicants evidence that there was only one manual, that of the year 1994. Consequently, they urge this Court to grant the prayers sought in the application.

(b) The Respondent’s case 12. In opposing this application, it is the Respondent’s contention that the decision of the Court of Appeal, was based on settled principles of employment law and was not a departure from any decision by the Court of Appeal as alleged by the Applicants. They maintain that the Ministry of Labour was notified of the redundancy; that there existed valid reasons to render the Applicants redundant; that it was not mandatory to observe Last in First Out policy; and that they complied with the employment contract, the Staff Hand Book and the Employment Act when calculating the Applicants’ final dues. They cite the Case of Kenya Airways Limited vs. Allied Workers Union & 3 others [2014] eKLR (the Kenya Airways Case) to anchor their submissions.

13. The Respondents also urge that the Applicants have not demonstrated how the Court of Appeal departed from the set principles in the Kenya Airways Case. In that context, they contend that the Applicants did not cite any authority to which they alleged the Court of Appeal to have departed from. The Respondent maintains that no single authority was cited by the Applicants in the motion to demonstrate the alleged departure. Therefore, they submit that the Court of Appeal did not create any uncertainty on the laws governing redundancy but created a better understanding on the issue and reaffirmed its position on the law on redundancy.

14. Furthermore, the Respondent submits that the Applicants have not identified the specific elements of general public importance to justify award of the orders sought. They state that at the Court of Appeal, the Applicants did not demonstrate that the issues in the intended appeal was one, the determination of which, transcends the circumstances of the instant case with a significant bearing on the public interest.

15. The Respondent also submits that the Applicants failed to demonstrate that the matter in respect of which certification was sought raised a substantial point of law, the determination of which will have a significant bearing on the public interest. The Respondent adds that no questions were framed by the Applicants for determination by the Supreme Court citing the Telkom Kenya Limited Case in support of their argument.

16. In line with the case of Johnson Githaiga Njoroge vs. Daniel Githaiga Mwaniki [2014] eKLR, the Respondents urge that the Applicants did not demonstrate the factual basis for their case, that they were bound by their pleadings and that the appellate Court was right to dismiss the application for certification.

17. Finally, the Respondent submits that the Applicants merely apprehends a miscarriage of justice which alone is not a proper basis for granting certification for an appeal to the Supreme Court. Ultimately, they urge the Court to dismiss the Application with costs.

Issues for Determination 18. From the foregoing submissions, the following issue arises for determination:Whether the matters raised by the Applicant are of general public interest and importance as required by Article 163(4)(b) of the Constitution?

19. We note at paragraph 16 of the Applicant’s supporting affidavit, the following have been listed as matters of general public importance: whether persons affected by the redundancy processes have a clear interest in knowing what their entitlements would be in such circumstances, bearing in mind the terms of employment, the provisions of the Employment Act, and the applicable employment policies and constitutional provisions; if so, whether this Honourable Court has a Duty to create certainty in the law regarding redundancy and remove the uncertainty created by the Court of Appeal in Civil Appeal No. 114 of 2016; whether the burden of proving redundancy should shift from the employer to the employee and if so, at what point?; and whether the burden of proving change in employment terms rests with the employer or with the employee?

20. We however find that the issues consequently framed were never framed as such before the Court of Appeal. Failure to specify those issues led to the learned Judges’ conclusion at page 5 of their Ruling that “…we have not been show the specific elements of general public importance which the Applicants attribute to the matter for which certification is sought”. The Applicants should have specified the said issues in their application before the appellate Court for it to render its determination on the same. Consequently, in determining the instant application, we shall therefore be guided by the issues as raised by the Applicants for certification before the Court of Appeal. The grounds raised by the Applicants for certification, upon which the Court of Appeal made a determination, were that: the Court of Appeal departed from settled jurisprudential position thereby introducing uncertainty into the governing redundancy and the Court of Appeal’s finding raised substantial questions of constitutional interpretation of Labour rights which affect not just the right of the litigants, but also extend to the public at large and of the construction of the scope of the right to fair labour practices, both of which are questions frequently deliberated upon by the Employment and Labor relations Court and subordinate courts, hence the general public importance.

21. This Court has made itself clear on instances in which it can exercise its powers to review a decision of the Court of Appeal in several of its authorities including the following cases Hermanus Case, Malcom Bell Case and Town Council of Awendo v Nelson Oduor Onyango & 13 others, Misc. Application No. 49 of 2014; [2015] eKLR (the Town Council of Awendo Case).

22. In the Town Council of Awendo Case we gave specific guiding principles as follows: -“21i.for an intended appeal to be certified as one involving a“matter of general public importance,” the intending appellant is to satisfy the Court that the issue to be canvassed on appeal is one the determination of which transcends the circumstances of the particular case, and has a significant bearing on the public interest;ii.where the matter in respect of which certification is sought raises a point of law, the intending appellant is to demonstrate that such a point is a substantial one, the determination of which will have a significant bearing on the public interest;iii.such question or questions of law is/are to have arisen in the Court or Courts below, and must have been the subject of judicial determination;iv.where the application for certification has been occasioned by a state of uncertainty in the law, arising from contradictory precedents, the Supreme Court may either resolve the uncertainty, as it may determine, or refer the matter to the Court of Appeal for its determination;v.mere apprehension of miscarriage of justice, a matter most apt for resolution in the lower superior courts, is not a proper basis for granting certification for an appeal to the Supreme Court; the matter to be certified for a final appeal in the Supreme Court, must still fall within the terms of Article 163 (4)(b) of the Constitution;vi.the intending applicant has an obligation to identify and concisely set out the specific elements of “general public importance,” which he or she attributes to the matter for which certification is sought;vii.determinations of fact in contests between parties are not, by and of themselves, a basis for granting certification for an appeal before the Supreme Court;viii.issues of law of repeated occurrence in the general course of litigation may, in proper context, become ‘matters of general public importance’, so as to be a basis of certification for appeal to the Supreme Court;ix.questions of law that are, as a fact, or as appears from the very nature of things, set to affect considerable numbers of persons in general, or as litigants, may become ‘matters of general public importance’, justifying certification for final appeal in the Supreme Court;x.questions of law that are destined to continually engage the workings of the judicial organs, may become ‘matters of general public importance’, justifying certification for final appeal in the Supreme Court;xi.Questions with a bearing on the proper conduct of the administration of justice, may become ‘matters of general public importance,’ justifying certification for final appeal in the Supreme Court.”

23. Having perused the Judgment of the trial Court and that of the Court of Appeal, the issues for determination before the two courts, the Application for certification before the Appellate Court, and now the one before this Court, we agree with the Court of Appeal’s determination that the intended appeal does not qualify for certification for final appeal before the Supreme Court. The Applicants have also not demonstrated how a determination of their issues transcend the parties herein.

24. Furthermore we have noted, that despite contending that the Court of Appeal departed from settled jurisprudential position thereby introducing uncertainty into the governing redundancy, the Applicants have not, neither in the application before the Court of Appeal nor the one before this Court, pleaded the Authorities which they allege the Court of Appeal departed from as was for example specifically pleaded in Kenfreight (E.A) Limited v Benson K. Nguti, SC. Petition No. 37 of 2018; [2019] eKLR (the Kenfreight (E.A) Limited Case). As it the law, parties are bound by their pleadings. Towards that end, we find and agree with the Learned Judges of Appeal that there is no uncertainty in law, arising from contradictory precedents for this Court’s resolution.

25. Moreover, the Applicants have not demonstrated how the determination on a manual that was applicable at the time of terminating their contract can qualify to be a matter of general public interest considering that not all employers have more than one Handbook. We therefore agree with the Court of Appeal’s finding that the determination made in both Courts concerned contested facts between the Applicants and the Respondent, hence, cannot form the basis for granting certification to appeal to this Court. Nevertheless, we note from decided case law, CMC Aviation Limited v Mohammed Noor; Civil Appeal No.199 of 2013, [2015] eKLR and Kenfreight (E.A.) Limited v Benson K. Nguti Civil Appeal No. 31 of 2011, the Court of Appeal has made a determination on the binding nature of company policies or put differently, company practices are binding. The Supreme Court upheld this finding in the Kenfreight (E.A) Limited Case. We therefore find the courts’ finding on question of “the binding nature of Handbooks/Manuals/Policies and/or their equivalent” already settled and does not need further determination by this Court.

26. Accordingly, this Application fails to meet the principles enunciated by this Court in the Hermanus Case, the Malcom Bell case and the Town Council of Awendo Case and is therefore dismissed with costs.Consequently, we make the following final Orders:i.The Application dated 2nd July 2020, is hereby dismissed.ii.The Applicants shall bear the costs of the Respondent in relation to this application.

Orders accordingly.

DATED AND DELIVERED AT NAIROBI THIS 24TH DAY OF MARCH, 2021. ....................................P. M. MWILUAg. CHIEF JUSTICE & Ag. PRESIDENT OF THE SUPREME COURT………………………………………………M. K. IBRAHIMJUSTICE OF THE SUPREME COURT…………………………………………………S. C. WANJALAJUSTICE OF THE SUPREME COURT……………………………………………….JUSTICE OF THE SUPREME COURT………………………………………………………NJOKI NDUNGUJUSTICE OF THE SUPREME COURT………………………………………I. LENAOLAJUSTICE OF THE SUPREME COURTI certify that this is a true copy of the originalREGISTRAR,SUPREME COURT OF KENYA