[2018] KEELRC 964 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT

AT NAIROBI

CAUSE NO. 516 OF 2016

RACHEL ASIKO ANGATIA...................................1ST CLAIMANT

BANCY WANGU MAHAGWA................................2NDCLAIMANT

MERCY GAKII..........................................................3RDCLAIMANT

PAUL MUSILI MWENDWA.....................................4THCLAIMANT

VERSUS

HERITAGE INSURANCE COMPANY LIMITED.....RESPONDENT

RULING

Introduction

1. The application here is the Respondent’s Notice of motion dated 7. 3.2018. It seeks for the striking out of the claimants suit with costs. The application is supported by the Affidavits sworn by Cynthia Tiany on 7. 3.2018 and 22. 5.2013. The gist of the applicants case is that the dispute herein is on all fours with to the one is ELRC No. 781 of 2015 Christopher Onyango & 23 others Vs Heritage Insurance Company Limitedwhich was determined by the Court of Appeal in Civil Appeal No. 114 of 2016 by way of dismissal and as such the suit now before the Court is frivolous, it does not establish any cause of action against the respondent and it is otherwise an abuse of the court process.

2. The claimants have opposed the application by filing the Replying affidavit sworn by their Advocate Mr. Kevin Kwaya on 4. 5.2018. In brief the counsel admitted that the dispute herein being redundancy is similar to the one in ELRC No. 781 of 2015 and Civil Appeal No. 114 of 2016 but contended that the decision by the Court of Appeal was contrary to fact and law and therefore per incuriam and should not be binding on this court because:

a. The court of Appeal never interrogated the redundancy process outlined in section 40 of the Employment Act and verified whether it was followed in the impugned redundancy.

b. The decision was in error of fact and law and contrary to other precedents of the Court of Appeal including African Nazarene University Vs David Muevu & 103 others [2017]eKLR, Kenya Airways Limited Vs Aviation & Allied Workers Kenya & 3 others [2014]eKLRandThomas De La Rue (K) Ltd Vs David Opondo Omutelema [2013]eKLR.

3. The application was disposed by written submissions filed by the applicant and the claimants on 24. 5.2018 and 14. 6.2018 respectively.

Applicants’ Case

4. The applicant submitted that the claimants were terminated through redundancy under clause 3. 8 of the Staff Hand book 2013. That clause 3. 8.4 thereof entitled the redundant employee to notice or salary in lieu of notice of redundancy while clause 3. 8.5 entitled the said employee to his or her pension contributions plus interest accrued thereon. On the other hand, the applicant submitted that a normal termination notice under clause 3. 7 of the Handbook and the claimants respective Appointment letters was one calendar month.

5. The applicant further submitted that from March 2011 she commenced review and implementation new information technology called PAS & SAP which led to reorganization of its management structure in 2014. That as a result of the said reorganisation, some positions were abolished, other roles merged while some skills were rendered obsolete including those held by the claimants herein and they were laid off on 30. 4.2015 under clause 3. 8 of the Respondent’s Staff Handbook. That under the termination letter dated 30. 4.2015, the claimants were paid one month salary in lieu of notice, all outstanding leave days, prorata leave allowance and severance pay at 15 days per year of service, pension benefits under the pension scheme rules and RBA regulations and 30 days extension of their respective medical covers.

6. The applicant contended that the suit herein is also res judicate because it challenges the legality of the process of the redundancy which was the same issue in ELRC 781 of 2015, Christopher Onyango and 23 Others Vs Heritage Insurance Co. Ltdwhich was filed by some of the employees who were terminated on redundancy with the claimants herein. That the trial court faulted the redundancy as unjustified and procedurally unfair and awarded the claimants compensation but on appeal the Court of Appeal set aside the entire judgment of the trial court and found that the redundancy process was lawfully done and the redundant employees had been adequately compensated. According to the applicant, therefore, the Court of Appeal has determined the issue of legality of the process of the redundancy undertaken by the respondent on her employees on 30. 4.2015. That the claim before the court now is an attempt to reopen a case that was heard and determined by the Court of Appeal. He relied on section 7 of the Civil Procedure Act and Hezekiah Muchoki Vs Attorney General & Another [2017]eKLRto fortify his submission that the suit is res judicata.

7. Alternatively, the applicant urged that the court should appreciate the doctrine of stare decisis and follow the decision of the Court of Appeal in making the decision herein. He relied on Justice Jean W. Gacheche & 5 others Vs Judges and Magistrates Vetting Board & 2 others [2015]eKLRto urge that I am bound by the decision of the Court of Appeal in the said Civil Appeal No. 114 of 2016 Heritage Insurance Co. Ltd Vs Christopher Onyango & 23 othersunder the said common law doctrine of precedent and as such I should just proceed to dismiss the suit herein as it was done by the Court of Appeal in the earlier suit.

Claimants Submissions

8. The Claimants admitted that they were terminated through redundancy on 30. 4.2015 together with other employees. That their colleagues filed ELRC No. 781 of 2015 and succeeded in getting compensation for the unfair redundancy but on appeal the said judgment was set aide. They submitted that this court is not strictly bound by the doctrine of stare decisis and no good reasons was shown by the applicant to justify the dismissal of the suit herein before the trial.

9. The claimants submitted that the doctrine of stare decisis being a common law practice must bow to the express provisions of Articles 2 of the constitution which rank the constitution as the supreme law; Article 48 and 50 of the constitution which provide for the right to access to justice and the right to fair hearing; and Article 25 of the constitution which provide that the right to fair trial cannot be limited. They further urged that courts have held that the doctrine can be departed form and cited Jasbir Singh Rain & 3 others vs

Tarhochan Singh Rai Estate & 4 Others [2013]eKLR, R.V. Nor Elc. Co.[53] McRuer C.J.H.C and Ernst & Young LLP VS Capital Markets Authority & Another [2017]eKLRto support that submission.

10. The claimants identified the circumstances in which a court may decline a decision which would otherwise been binding on the Court including:

a. Where there are conflicting decisions of the court;

b. The previous decision is inconsistent with a decision of another court binding on the court; and

c. The previous decision was given per incuriam.

They submitted that the decision of the Court of Appeal in Civil Appeal No. 114 of 2016 was made without paying heed to its earlier decisions on the procedure of redundancies in African Nazarene University vs Daniel Mutevu & 103 others [2017]eKLR; Kenya Airways Ltd vs Aviation & Allied Workers Union Kenya & 3 Others [2014]eKLRandThomas De la Rue (K) Ltd vs David Opondo Omutlema [2013]eKLR.

11. They submitted that, in the said decision, the Court of Appeal interrogated the procedure for redundancy laid out in section 40 of the Employment Act and the requirement for issuing notices to the Labour officer and employee. That the court had held in those decisions that failure to serve the said notices amounted to unfair declaration of redundancy and therefore unfair termination. That the court had in the said decisions held that where the employer fails to prove reason for redundancy, the redundancy would be unfair termination of employment.

12. In view of the foregoing conflict between the decisions in Civil Appeal No. 114 of 2016, and the said other decisions, without alluding to the same or giving the reasons for departing from the same, this court should not be bound by the decision in the Civil Appeal No. 114 of 2016 but should instead follow the other decisions in so far as the procedure for redundancy is concerned.

13. In addition, the claimants contended that the decision in Civil Appeal No. 114 of 2016 was per incuriam and relied on Michael Waweru Ndegwa vs Republic [2016]eKLRwhere a decisionper incuriamwas described as a wrong decision given in ignorance or forgetfulness or inconsistent with statutory provision or some authority binding on the court concerned. They urged that the reasons why the decision in Civil Appeal No. 114 of 2016 is per incuriam and therefore not binding on this court are;

i. The court never interrogated the issue of the redundancy process as outlined in section 40 of the Employment Act and verified whether the employer satisfied the set requirements.

ii. The court failed to make a determination on whether the notice issued to the employee and the labour officer was adequate within the meaning of section 40 of the Act.

iii. The court determined the Handbook applicable to the claimant but failed to address the issue of legality of the redundancy process and its substance.

iv. The Court erred by failing to find that there was no evidence to prove that the claimants had been made aware of the 2013 Handbook.

v. The court erred by shift the burden of proof to the employee to prove the fakeness of the redundancy contrary to section 40 and 43 of the Act which requires that it is the employer to prove the reason for terminating the employees’ employment.

vi. The court erred in holding that there was no evidence to prove that the redundancy was fake yet such evidence had been tendered during the trial.

vii. The court erred by failing to reconsider and re-evaluate the evidence on record but proceeded to make determinations not based on the record before it.

14. On the other hand the claimants submitted that their suit is not res judicataand relied onPeter Machari Muhura vs Teachers Service Commission [2015]eKLRwhere the essential elements of testing whether a suit is res judicata, were set out as follows;

a. existence of an earlier decision on the issue;

b. existence of a final judgment on the merits, and

c. involvement of the same parties in privity with the original parties.

Analysis and Determination

15. After careful consideration of the motion, and the rival affidavits and submissions filed by the parties, the issue for determination herein is whether the suit discloses any reasonable cause of action considering the Court of Appeal decision in the Civil Appeal No. 114 of 2016 in relation to the doctrines of stare decisis and res judicata.

Stare decisis

16. The applicant contended that some of her employees who were laid off with the claimants herein filed suit, ELRC No. 781 of 2015 before this court and obtained judgment declaring their termination on redundancy unfair and awarding them compensation. However on appeal through Civil Appeal No. 114 of 2016, the Court of Appeal set aside the entire judgment and gave the redundancy a clean bill of health, both substantively and procedurally. Consequently, the applicant’s contend that this court is bound by decision in Appeal No. 114 of 2016 by dint of the doctrine of stare decisis, and as such, it should dismiss the suit herein as it was done by the Court of Appeal in the said decision. In the alternative, the applicant contended that in consideration of the similarity of the dispute in Appeal No. 114 of 2016 and the present suit, the latter has been rendered res judicata and should be dismissed.

17. The claimants are however of a different view and have urged me to dismiss the application because the decision in Appeal No. 114 of 2016 was per incuriam and as such not binding on this court. They set out the circumstances under which the court should decline to be bound by the decision which could otherwise be binding on it including;

a. Where there are conflicting decisions of the Court.

b. The previous decision being inconsistent with decision of another court binding on the court; and

c. The previous decision being per incuriam.

18. The claimants contended that the decision in the Appeal No. 114 of 2016 was made without considering earlier decision of the same court, on the same issue of the procedure for declaring redundancies, including African Nazarene University vs David Mutevu & 103 Others [2017] eKLR, Kenya Airways Ltd vs AAWU & 3 Others [2014]eKLRandThomas De La Rue (K) Ltd vs David Opondo Omutelema [2013]eKLRand no reasons were given for departing form the said decisions. That in the said previous decisions the court had interrogated the procedure for redundancy provided by section 40 of the Employment Act and held that failure to serve prior notice to the employee and the area labour officer amounted to unfair termination. The claimants therefore urged me to decline to be bound by the decision in Appeal 114 of 2016 because it contradicted earlier decisions of the same court and no reasons were given for the departure from the previous decisions.

19. The claimant further urged me to find that the decision in Appeal 114 of 2016 was per incuriam because it was inconsistent with section 40 of the Employment Act on the procedure for declaring redundancies as it was held in Michael Waweru Ndegwa vs R [2016]eKLR.

20. After careful consideration of the submissions filed by the parties herein, it is clear that the doctrine of stare decisis is not absolute.

The Black’s Law dictionary 10th Edition has acknowledged that stare decisisis not absolute and sets out the exception as a decision madeper incuriam.The dictionary defines aper incuriamdecision as one which is made in ignorance or forgetfulness of a previous decision of which the doctrine of stare decisis applies and which ought to have been considered, or one made in ignorance of a legislation of which ought to have been considered. In Ernst & Young LLP v capital Markets Authority & another [2017] eKLRMativo J referred to the foreign case of R v NorElec.co where it was held

“… The doctrine of stare decisis is long recognized as a principle of our law. Sir Frederick Pollock, in his first book of jurisprudence, 6thed. Page 321: ‘The decisions of an ordinary superior court are binding on all courts of inferior rank within the same jurisdiction, and though not absolutely binding on courts of co-ordinate authority nor on the court itself, will be followed in the absence of strong reason to the contrary’…”

Mativo J then proceeded to hold that:

“It is also clear that this court can depart from a decision of the court of appeal, if there is a strong reason to do so. The phrase “ strong reason to the contrary “ does not mean a strong argumentative reason appealing to the particular judge, but something may indicate that the prior decision was given without consideration of a statute or some authority that ought to have been followed.”

21. The question that arises from the foregoing analysis is whether the court of appeal decision in Civil Appeal 114 of 2016 which was delivered on 20. 12. 2017 was made without consideration of its previous decisions or legislation which it ought to have considered. My careful perusal of the decision revealed that the decision was indeed made without considering its previous decision over the same issue of redundancy notification and did not fully consider the mandatory procedure for redundancy provided under section 40 of the Employment Act. In all the said previous decisions cited by the claimants herein, the court pronounced itself on the procedure of declaring redundancies under section 40 of the Employment Act and made a finding that the notification of redundancy upon the employee ( or trade union if a member) and the area Labour officer under subsection (1) (a) and (b) was mandatory.

22. In Thomas De La Rue (K) Ltd v David Opondo Omutelema [2013] eKLRthe court of appeal considered the provisions of section 40 of the Employment Act and held that:

“It is clear to that section 40(a) and (b) provide for two different kinds of redundancy notifications depending on whether the employee is or is not a member of a trade union. Where the employee is a member of a trade union, the notification is to the union and the local labour officer at least one month before the effective redundancy date. Where the employee is not a member of the union, the notification must be in writing to the employee and the local labour officer.”

23. In Kenya Airways ltd v Aviation & Allied workers union Kenya & 3 others [2014] eKLRthe court of appeal considered the provisions of section 40 of the Employment Act and and its decision in cited Thomas De La Rue (K) Ltd v David Opondo Omutelema aboveand held that:

“The appellant, however, failed to meet that statutory threshold of procedural fairness in the implementation of its redundancy decision in that it failed to give notice to the labour officer and a proper and adequate notice to the affected employees ortheir union,; it failed to hold meaningful consultations with the affected employees or their union; and its selection of the affected employees was not based on an objective and open criteria.”

On 28. 7.2017 the same court considered the provisions of section 40 of the Employment Act in African Nazarene University v David Mutevu & 103 Others [2017]eKLR,and upheld the decision inThomas De La Rue (K) Ltd v David Opondo Omutelema [2013] eKLRon the mandatory requirement of redundancy notification.

24. In addition to the failure to consider the foregoing decisions which it ought to have considered before entering the judgment in Civil Appeal no. 114 of 2016, the court of appeal never considered the mandatory procedure under the said section 40 (a) and (b) of the Employment Act, namely the mandatory minimum notice of one month to the employee (or his union) and the local labour officer. Instead the court considered only the procedure, of 15 days redundancy notice to the employee, provided under the respondent’s Human Resource Manual (Staff Handbook) 2013 and held that it was a binding term of their employment contract. However, by so holding, the court failed to appreciate another mandatory legislation, namely section 26 of the Employment Act which provides as follows:

“26(1) the provisions of this Part and Part VI shall constitute basic minimum terms and conditions of contract of service.

2. where the terms and conditions of a contract of service are regulated by any regulations, as agreed in any collective agreement or contract between the parties or enacted by any other written law, decreed by judgment, award or order of the industrial Court are more favourable to an employee than the terms provided in this Part and Part VI, the such favourbleterms and conditions of service shall apply.”

25. Flowing from the above provision, the redundancy notice of 15 days under the Respondent’ HR manual becomes questionable.

Considering the said failure by the court of appeal to consider its said previous decisions and the mandatory provisions in section 26 and 40 of the Employment Act which it ought to have considered, I decline to follow the said court of appeal decision in civil Appeal no. 114 of 2016 because in my considered view it made per incuriam.

26. In view of the foregoing finding, it is also my view that this suit is not res judicatavis a vis Civil Appeal 114 of 2016. The court decision in the said appeal having been made per incuriam, it is not binding on this court and in this dispute and the matter remains open for determination with due regard to the relevant legislation and the previous decisions to which the doctrine of stare decisis apply.

Conclusion and disposition

27. I have found that the court of appeal made the decision in Civil Appeal no. 114 of 2016 without considering section 40(a) and (b) of the Employment Act and its previous decision on the mandatory notification of redundancy to the employees (or their trade union) on one hand and the local labour officer on the other hand, which it ought to have considered under the doctrine of stare decisis. The failure by the court to consider the said previous decisions and the mandatory provisions of the legislation rendered the said decision per incuriam and not binding on this court under the said doctrine of stare decisis. I have further found that because the said decision was made per incuriam,the suit herein is notres judicataand the issue of unfair redundancy is open for determination by this court. Consequently, I dismiss the notice of dated 7th March 2018 with costs.

Dated, Signed and Delivered in Open Court at Nairobi this 12thday of October 2018

ONESMUS N. MAKAU

JUDGE