[1998] KEHC 86 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (NAIROBI LAW COURTS)

Civil Sui 1515 of 1990

SAMUEL KAMAU MUKONO ........................... PLAINTIFF

versus

NAIROBI CITY COUNCIL .............................DEFENDANT

JUDGMENT

By this suit filed on 26th March, 1990 the plaintiff seeksjudgment against the defendant for damages for unlawful dismissal,salary arrears, 3 months salary in lieu of notice, costs andinterest on the grounds that his services were unlawfullyterminated by the defendant. On the other hand, the defendant bya defence filed on 24th May, 1990 contends inter alia that thedefendant had been lawfully summarily dismissed as he had allegedlymisappropriated the sum of Shs. 330,000/= from the defendant.Consequently prior to the hearing of the suit, the following issueswere framed by the parties for determination by the court, namely:-(i) Whether or not the defendant unlawfully suspended the plaintiff from employment on 3rd January, 1985 and subsequently terminated his employment on 14th March, 1988?

(2) Whether the plaintiff was given any notice prior to the said termination.

(3) Whether or not the plaintiff is entitled to benefits as in paragraph 8 of the plaint?According to the pleadings and the plaintiff evidence, the plaintiff was in the employment of the defendant prior to the events complained against in the suit. He was an Accountant III in charge of disbursement and collection of the defendants funds. To be exact, the plaintiff was employed on local pensionable terms with effect from 19th July, 1972, as a clerical officer II and confirmed to the post on 3rd April, 1973. He then progressed through the ranks and was promoted to the position of Accountant III in the defendants Housing Department with effect from 1st November, 1980 at a salary of £1488 per annum to a maximum of £2196 per annum. By the time the event complained about arose in January, 1985, he was earning Shs. 4,865/= per month.

As bad luck would have it, onor about 3rd January, 1985, theplaintiff was served with a letter suspending him from his dutiesindefinitely on the grounds that he had misappropriated some fundsfrom the defendants. According to the letter, it appears that theplaintiff had also misappropriated some funds form the defendantpreviously and that sum was being recovered from his salary. Hewas however required to reply to the said allegations by way ofexculpation and he duly denied the allegations levelled againsthim.

The investigations into the allegations made against theplaitiff appear to have not been fruitful, though referred^theCriminal Investigation Department of the Police Department. By letters dated 26th September, 1885 and 6th May, 1986, the CriminalInvestigation Department wrote to the defendant exonerating theplaintiff from the alleged wrong doing and requesting it to takeinternal administrative action against the plaintiff. After adelay of nearly three years 'suspension' during which period nosalary payments were made to the plaintiff, by a letter dated 14thMarch, 1988 and served on the plaintiff on 23rd March, 1988, thedefendant terminated the plaintiff's services with effect from 3rdMarch, 1985 (a date long past) and that 3 months salary in lieu of notice would be paid to the plaintiff. Further by a letter dated4th October, 1989 the defendant agreed to pay to the plaintiffterminal benefits as stipulated in the relevant terms andconditions. Despite the above promises, no payments were actuallymade and the plaintiff had to file this suit. On being served withthe plaint and despite having agreed to pay terminal benefits and3 months salary in lieu of notice, the defendant filed a defencecontending that it had lawfully summarily dismissed the plaintifffrom its services as he had misappropriated Shs. 330,000/= from thedefendant, but did not make a counterclaim for the said moneyagainst the plaintiff. At the hearing, the defendant did notproduce any evidence to prove the alleged misappropriation offunds.

After the hearing, the parties filed written submissions byconsent. According to Mrs. Ndegwa for the plaintiff, the plaintiffwas entitled to 3 months salary in lieu of notices from the datethe letter of dismissal was served on him and all the salary during the period he was under suspension plus terminal dues as agreed bythe defendant. In the counsel's view, termination could not bebackdated nor can a letter of termination have retroactive effectand should be deemed to be effective as from the date received. Tosupport this submission, the court was referred to the cases ofOmbanya vs. Gailey and Roberts limited [1974] EA 358 and Addis vs.Gramaphone [1909] AC 488. She also submitted that as the plaintiffwas still in service, he should be paid leave allowance of Shs.2,000/= per annum and cashiers allowance of Shs. 20/= day_ three and a half years, making a total of Shs. 6,000/= and Shs.17,220/= for leave and cashier's allowance respectively. On theother hand the plaintiff's counsel, Mr. Chepseb submitted that theplaintiff had breached his terms of service by misappropriating thedefendants funds and as such he was not entitled to anycompensation from he defendant. IN support of the aforesaidcontention he referred to a case known as Mansard Engineering Co.Ltd. vs. Taylor (1978) I.e. 44 E.A.T., a copy of which was notgiven to the court nor is the court aware of where it could beobtained. The learned counsel also stated that as the defendantwas entitled to summarily dismiss the plaintiff, he was alsoentitled to backdate such dismissal to the date it suspended the plaintiff from duty. Despite the aforesaid contention, the learned counsel Submitted that the plaintiff was "only entitled" to 3 months notice in lieu of notice, but not to leave and cashier'sallowances as the termination had been backdated.

As can be seen from the above, the main issue is whether or not the defendant was entitled to summarily dismiss the plaintiff.In this regard it is observed that no evidence was produced bydefendant to show that the plaintiff had misappropriated its funds.Further in agreeing to pay 3 months salary in lieu of notice andterminal benefits it had thereby impliedly conceded that it hadwrongfully terminated the plaintiff's services. In the result myanswer to issue (1) and (2) is that the defendant unlawfullysuspended the plaintiff from employment on 3rd January, 1985 andunlawfully subsequently terminated his employment on 14th March, 1988 and that no prior notice was given prior to the termination of the plaintiff's services.

On issue (3), which is whether, the plaintiff is entitled to benefits set out in paragraph 8 of the plaint and tabulated in paragraph 9 of the plaint, it is observed that the plaintiff has set out the following items as damages due to him by reason of the 'wrongful dismissal. They are:

(a) Damages for wrongful dismissal.

(b)______ Salary arrears from 3/1/85 to 16/1/88 asprovided in the relevant terms and conditions of service.

(c) 3 months salary in lieu of notice to terminate employment.

(d) Interest.

In paragraph 9 of the plaint, the plaintiff also claimed Shs.226,178. 30 as special damages made up as follows:

(a) Unpaid salary from 1st January, 1984 to 14th March, 1988 - Shs. 157,137/= inclusive of 3months notice.

(b) Leave allowance for 3 years - KShs. 1,800/=

(c) Cashier's allowance at 20/= per day for three yearsShs. 15,840/=.

(d) Dues on Provident Fund - Shs. 51,401/30

Grand Total Shs. 226,178/30I will deal with the above claim in the following order:

(a) Salary and dues during suspension includingunpaid salary, salary arrears, cashiersallowance and leave allowance.

(b) Dues under provident fund.

(c) Pay in lieu of notice to terminate service.

(d) Damages for unlawful dismissal.

With regard to the pay and dues during the suspension periods,it is observed that during that period the plaintiff was still inthe employment of the defendant. He could not have takenalternative employment without breaching his terms of employmentwhich also provided that the employee could be dismissed witheffect from the date of suspension if found guilty of grossmisconduct. As the defendant failed to establish gross-misconductor a conduct which is incompatible with faithful discharge of hisduties, by calling evidence, it was not open for it to terminatethe plaintiffs services from the date of suspension and is deemedto have been in the service of the defendant until it summarily dismissed the plaintiff by its letter dated 14th March, 1988. Theplaintiff is therefore entitled to be paid all the salaries whichwere due to him until the date of termination of service includingthe increments he would have been granted during the period he wasin suspension less statutory deductions. I however find that as hewas not performing the duties of a cashier during the suspensionperiod, he is not entitled to cashiers allowance as that is anamount payable while actively performing the duties and not byreason of holding that designation. I believe that this is so, asit was not payable on weekends or during leave when the plaintiffwas not. in the office. I therefore allow the plaintiff's claim forShs. 142,542?= {after deducting 3 months salary in lieu of noticewhich I will deal with separately) in respect of unpaid salaryduring the suspension period less statutory deductions plus salaryincrements/arrears which he would have been entitled to had he notbeen so suspended, subject also to normal statutory deductions onsuch payments. I also allow the claim for leave allowance of Shs.1,800/= which he would have earned if he had not been suspended.1 will deal with provident fund dues separately. I hereby dismiss the claim for cashiers allowance of Shs. 15,840/=.

The plaintiff also claims his provident dues as he had beenconfirmed and had qualified for same. He also claims 3 monthssalary in lieu of notice of dismissal. The defendant admitted inits letter of 4th October, 1989 that it would pay the plaintiff theterminal benefits which I take to be the provident fund dues plus3 months salary in lieu of notice. I therefore allow the Plaintiff’s claim for his provident fund dues to be calculateduntil the date of his dismissal i.e. on 14th March. 1988.

What is now left is the plaintiff's claim for unliquidateddamages for wrongful dismissal^ It is common ground that theplaintiff was suspended from his duties on 3rd January, 1985 andwas dismissed from duty with effect from that date by a letterdated 14th March, 1988 without notice. As the defendant has failedto establish an act of misconduct, gross misconduct or any conductwhich may rank as serious misconduct, I have allowed his claim forunpaid salaries up to and including the date which the letter ofdismissal was written and served onhim. I have also allowed hisclaim for leave allowance, provident fund during that period andpayment of 3 months salary in lieu of notice as stipulated in histerms of service. I have no evidence on actions taken by theplaintiff to mitigate his losses after the 14th March, 1988. Mrs.Ndegwa for the plaintiff did not press for this prayer in herwritten submission. Mr. Chepseb. in his written submissions didnot also deal with this prayer although the plaintiff did notformerly withdraw it.

It is now established law that when a person is employed andone of his terms of employment include a period of termination ofemployment, damages suffered are the wages for the period duringwhich the notice would have been current. In the instant case thenotice period was three months notice, which I have alreadyawarded. He therefore has no further cause of action. I thereforedismiss the plaintiff's claim for damages for unlawful dismissal.

In summary, I hereby enter judgment against the defendant forthe plaintiff for unpaid salary of Shs. 142,542/= from 3rd January,1985 to 14th March, 1988, leave allowance of Shs. 1,800, 3 months salary in lieu of notice of Shs. 14,595/= salary increments of 3/1/83 and of 16/5/88 so far as it affects salary due before 14th March, 1988 and provident fund dues up to 14th March, 1988, all to be less normal statutory deductions under the law. I also award to the plaintiff the costs of the suit and interest on damages andcosts from the usual dates at usual rates. The actual figures for damages to be worked out and agreed by the parties and in default to be determined by the Deputy Registrar of this court with liberty to apply to the court in the event of a dispute thereon, Orders accordingly.

Dated at Nairobi this 11th day of February, 1998.

G. P. MBITO

JUDGE