[2022] KEELRC 13067 (KLR)

Opige & 4 others v Bollore Africa Logistics (K) Ltd & another (Cause 965 of 2016) [2022] KEELRC 13067 (KLR) (4 November 2022) (Judgment)

Neutral citation: [2022] KEELRC 13067 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Mombasa

Cause 965 of 2016

B Ongaya, J

November 4, 2022

Between

Peter Awuor Opige

1st Claimant

Hassan Mbuya Kisiangani

2nd Claimant

Hamisi Chiti Nyale

3rd Claimant

Abubakar Mohamed Athuman

4th Claimant

Martin Mgala Mwabaya

5th Claimant

and

Bollore Africa Logistics (K) Ltd

1st Respondent

Career Directions Limited

2nd Respondent

Judgment

1. The claimants filed the memorandum of claim on December 16, 2016 through Mathew Nyabena & Company Advocates. The claimant’s case is that the respondent employed them and dismissed them on September 11, 2015 without a justifiable cause. The claimants further pleaded as follows. They were employed in 1995, 2002, 2002, 2007, and 2007 respectively. Their case is that the respondents terminated them on September 11, 2015 on account of redundancy and it was not genuine but was driven by bias and discrimination because thereafter the respondents recruited other employees to perform the tasks they used to perform, without regard to the claimants’ long service, expertise, dedication and exemplary performance in their respective positions. They pleaded that the termination was in breach of sections 40, 41, 43, 45 and 47 (5) of the Employment Act, 2007 as well as article 41 of ILO Convention 158 on termination of employment, 1982. The terminal dues paid was not in accord with their long service. Each claimed for awards on the headings of one-month pay in lieu of notice; redundancy pay; and 12 months’ salaries in compensation for unfair termination being a sum of Kshs 1,639,251. They prayed for judgment for:a.Payment of Kshs 1,639,251. b.Certificate of service.c.Costs and interest at court rates.d.Any other relief that the court deems just and fit to grant.

2. The 1st respondent appointed Ameli Inyangu & Partners Advocates and filed the reply to memorandum of claim on March 7, 2017. The 1st respondent denied ever employing the claimants and denied ever terminating the contracts of service on September 11, 2015. Instead, it had contracted the 2nd respondent as an outsourced contractor to provide workforce as the sole employer. Under the outsourcing contract, it was the 2nd respondent’s obligations to undertake employer obligations of the persons it employed and deployed to work on the 1st respondent’s enterprise or premises. The obligations included:a.Under clause 5(h) to satisfy requirements of the Employment Act, 2007. b.Under clause 7(d) the understanding that the contractor was the employer and at no given time whatsoever shall the employees be treated as 1st respondent’s employees. The contract for outsourced labour would not be construed as establishing the relationship of master and servant between the 1st respondent and the 2nd respondent or the 2nd respondent’s employees.c.Under clause 7(e) the 2nd respondent had to adhere to provisions of the Employment Act, the Labour Relations Act, the Occupational Health & Safety Act, The Work Injury and Benefits Act, and other relevant enactments or amendments in Kenya. The 2nd respondent was to exercise fair labour practices; ensure employee discipline; provide employee safety wear and gear; provide them with identification tags; and keep all employee records.d.Under clause 12 the 1st respondent was to pay the 2nd respondent direct wages and overtime per prevailing wage rates per minimum government wage rates; management fees at 7% of the gross monthly wage bill including monthly employee contribution to NSSF chargeable on monthly basis (to be at a maximum of Kshs 800,000. 00 and minimum of Kshs 500,000. 00 per month); and other costs such as under the Work Injury Benefits Act, 2007. e.Clause 13 on billing stated the 2nd respondent to provide a bill by 15th of every month so it could be paid by the 1st respondent by 25th of every month and employees paid by last day of the month.

3. The 1st respondent pleaded that the 2nd respondent was not its agent or subsidiary but, it was an independent company. The 1st respondent denied terminating the contracts of employment and if there were terminations, the 1st respondent believed that the claimants must have been paid their final dues.

4. The 2nd respondent appointed Humphrey & Company LLP to act in the suit. The response to the claim was filed for the 2nd respondent on May 18, 2022. the 2nd respondent pleaded as follows:a.It employed the claimants by the contracts dated March 25, 2014 and seconded them to the 1st respondent to work.b.The 2nd respondent terminated the contracts on September 11, 2015 on account of redundancy. It became uneconomical to sustain them due to decline in business volumes. They were engaged depending on availability of work and the project they were engaged upon lapsed.c.The termination was in compliance with section 40 of the Employment Act, 2007. Sections 41 and 47(5) of the Act were not breached at all.d.Upon termination each claimant was paid full terminal dues including days worked in September 2015; overtime allowance; one-month payment in lieu of the notice; severance payment; days worked; and accrued leave days. The reliefs sought are therefore not just.e.The 2nd respondent was engaged by the 1st respondent about February 21, 2014 and they have separated.

5. The 2nd respondent prayed that the suit is dismissed with costs.

6. The claimants’ witness (CW) was Hassan Mbuya Kisiangani, the 2nd claimant. The 1st respondent’s witness (RW1) was Maurice Lugadiru, the senior legal officer. The 2nd respondent’s witness (RW2) was Rodgers Wafula, the legal officer.

7. Final submissions were filed for the claimants on October 7, 2022 and for the 1st respondent on November 3, 2022. The 2nd respondent failed to file submissions despite the court’s enlarged time to comply.

8. The court has considered all the material on record and returns as follows.

9. To answer the 1st issue, the court returns that by the agreement for provision and management of outsourced labour exhibited, the 2nd respondent was the sole employer of the claimants. The 2nd respondent by its own pleading admits to have employed the claimants. It is true that clause 5(e) provided that to ensure smooth transition from the previous contractor handling the provisions of outsourced labour services, the contractor (the 2nd respondent) was required to absorb all existing outsourced labour under the previous contractor on their current terms of employment and thereafter deal with the said employees in accordance with provisions of the Employment Act, 2007 and all applicable legislation regarding the termination of their services. It is submitted for the claimants that the 3rd and 4th claimants’ pay slips for period ended July 31, 2014 indicate each was employed on April 14, 2001 – so that pursuant to clause 5(e) the claimants were retained by the 2nd respondent with their accruing rights. While the submission sounds ingenious, the pleadings and the rest of the evidence taken together give a different account. The said 3rd and 4th claimants have pleaded that they were employed in 2002 and 2007 which conspicuously are not anywhere near April 14, 2001said to be on the pay slips. The court finds that the allegation that the 1st respondent may have employed the claimants has no supporting evidence. The court has considered the submissions filed for the 1st respondent and finds that as submitted for the 1st respondent, CW in his witness statement admitted that all the claimants were employed by the 2nd respondent. The pleadings were ambiguous on who, of the respondents, was the employer. The court finds that the evidence was that the sole employer of the claimants was the 2nd respondent.

10. Further, the claimants offered no evidence to show that each was employed on the date as was pleaded. In absence of any other material evidence, the court returns that the 2nd respondent was the sole employer and it employed each of the claimants on March 25, 2014.

11. To answer the 2nd issue, the court returns that by the pleadings of the claimants and the 2nd respondent and their respective evidence, the claimants’ contract of employment was terminated on September 11, 2015 on account of redundancy. Each had served for only one complete year in the service of the 2nd respondent.

12. To answer the 3rdissue the court returns that the termination was unfair both in substance and procedure. The evidence was that the termination was abrupt on September 11, 2015, it was in breach of all the safeguards in section 40 of the Employment Act, 2007 about a months’ notice to the claimants and the labour officer and, the selection criteria. While alleging that the project the claimants worked at lapsed, the evidence was that in fact the labour outsourcing contract between the respondents was subsisting. There is no reason to doubt the testimony by CW that thereafter the 2nd respondent engaged casual workers in the claimants’ positions.RW2 confirmed the outsourcing contract was expiring on May 31, 2017 but the claimants were terminated long before then on September 11, 2015. He confirmed that the 1st respondent never influenced the terminations and there was no evidence filed to show business was declining as was alleged. RW2 further confirmed that the absorption clause existed and 1st respondent never instructed the claimants be terminated. The reason for termination is found not to have been genuine and fair per sections 43 and 45 of the Act.

13. The court has considered the period of time the claimants had served with the 2nd respondent being about only 1. 5 years. They appear to have been good workers who wished to continue in employment. The 1st and 2nd respondents had agreed in the labour out-sourcing contract to ensure that the claimants were absorbed not on diminishing terms of service. The aggravating factor is that the 2nd respondent acted in most unfair manner to terminate them suddenly and without due consultations and preparation. Each is awarded 5 months’ salaries under section 49 of the Act in compensation for the unfair termination. Each was already paid severance payment, leave days, and a one-month notice per evidence by CW and RW2. In the circumstances, the claimants are entitled as follows:a.1st claimant Kshs 18,903 x 5 = Kshs 94,515. b.2nd claimant Kshs 18,294 x 5 = Kshs 91,470. c.3rd claimant Kshs 14,820 x 5= Kshs 74,100. d.4th claimant Kshs 18,903 x 5= Kshs 94,515. e.5th claimant Kshs 18,903 x5 = Kshs 94,515.

14. The claimants have substantially succeeded in their suit and the 2nd respondent will pay their costs. The 1st respondent was a necessary party for the expeditious, just, proportionate and complete determination of the suit. Thus each respondent to bear own costs of the suit. The certificate of service is due per section 51 of the Act.

15. In conclusion judgment is hereby entered for the claimants against the 2nd respondent with orders:1. The 2nd respondent to pay each claimant the amount found due as follows:a)1st claimant Kshs 18,903 x 5 = Kshs 94,515. b)2nd claimant Kshs 18,294 x 5 = Kshs 91,470. c)3rd claimant Kshs 14,820 x 5= Kshs 74100. d)4th claimant Kshs 18,903 x 5= Kshs 94,515. e)5th claimant Kshs 18,903 x5 = Kshs 94,515. 2.The amount in (a) above be paid by December 31, 2022 failing interest to be payable thereon at court rates from the date of this judgment till full payment.3. The 2nd respondent to deliver each claimant’s certificate of service by December 1, 2022. 4.The 2nd respondent to pay the claimants’ costs of the proceedings.5. Each respondent to bear own costs of the suit.

SIGNED, DATED AND DELIVERED BY VIDEO-LINK AND IN COURT AT MOMBASA THIS FRIDAY 4TH NOVEMBER, 2022. BYRAM ONGAYAJUDGE