[2021] KEELRC 1024 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT OF KENYA AT NAIROBI

CAUSE NO 827 OF 2017

VICTOR SANDAKI LUMWAGI................................................................CLAIMANT

VERSUS

INUKA AFRICA LTD.....................................................................1ST RESPONDENT

MRS ANNE AMINA......................................................................2ND RESPONDENT

JUDGMENT

1. The claimant’s claim against the Respondents is for inter alia, compensation allegedly for wrongful termination. The Claimant asserts that he was employed by the Respondents as a driver on 26th February 2016 only for him to be irregularly terminated on 13th March 2017. Therefore, the Claimant asks the court to declare the Respondents’ decision aforesaid null and void and order for his compensation under several heads. However, the fact of the termination of the Claimant by the Respondents being unlawful is disputed by the Respondents.

2. The parties filed their respective pleadings. In the Claimant’s statement of claim, he asserts that he was employed by the Respondents as a driver on 26th February 2016. This was at a salary of Ksh. 18,000/= per month.

3. During the term of the contract, the Claimant asserts that the Respondents failed to pay him house allowance. He further asserts that the Respondents made him to work overtime without pay and that he was not granted his leave.

4. The Claimant asserts that on 13th March 2017, the Respondents handed him a letter of even date terminating his services. He asserts that he was not given notice to terminate the contract.

5. The Claimant therefore seeks for several reliefs against the Respondents. These include:-

a) A declaration that termination of his contract of service was wrongful, unfair and hence null and void.

b) An order for payment of Ksh. 372,840/= as more particularly set out in the statement of claim.

c) An order for payment of interest on the sum above.

d) An order that the Respondents issue the Claimant with a Certificate of Service.

e) An order for costs in favour of the Claimant.

6. The Respondents filed their response. In it the 2nd Respondent denies ever having employed the Claimant. However, the Respondents concede that the Claimant was employed by the 1st Respondent but the correct date of hire was 1st March 2016.

7. The Respondents assert that the contract of service between the 1st Respondent and the Claimant was for one year to run from 1st March 2016 to 28th February 2017. They admit that the Claimant was hired at a salary of Ksh. 18,000/= but that this salary was consolidated to include house allowance. Therefore, they deny that the Claimant is entitled to claim for house allowance as a standalone item.

8. The Respondents aver that during the course of his employment, the Claimant had a series of discipline issues. This led to the 1st Respondent issuing him with several warnings. That because of the Claimant’s misconduct which impacted on performance of the 1st Respondent, the 1st Respondent opted not to renew the Claimant’s contract of service when it lapsed on 28th February 2017. That although the letter to terminate the Claimant was issued on 13th March 2017, the 1st Respondent had verbally communicated the decision to the Claimant earlier.

9. The Respondents deny that the Claimant worked overtime as he asserts. They further assert that the Claimant is not entitled to the leave claim as he was terminated before he had served continuously for one year. That in any event, the Claimant had been enjoying two days off each month in addition to his leave. Therefore, the leave claim was unwarranted.

10. The matter proceeded to trial when both parties gave evidence. They also adopted their respective witness statements and introduced documents in their lists of documents as exhibits.

11. In their written submissions, the Respondents proposed the following issues for determination:-

a) Whether the 2nd Respondent is a proper party to the suit.

b) Whether there were valid reasons for termination of the Claimant’s employment.

c) Whether the Claimant was given a hearing.

d) Whether the Claimant is entitled to the prayers sought.

Although the Claimant does not expressly set out a list of issues for determination, his written submissions substantially address the evidence tendered along the line of issues as framed by the Respondents. The court will therefore take the issues as framed by the Respondents as the proper issues for determination in the cause. These are addressed here below.

12. Is the 2nd Respondent a proper party to the suit?

The 2nd Respondent gave evidence to the effect that she had not employed the Claimant and had no personal relation with him. She only interacted with him in her capacity as the Human Resource manager of the 1st Respondent.

13. In his evidence, the Claimant seemed to own up to this fact. He admitted that the 2nd Respondent was not his employer. The 1st Respondent was.

14. Having regard to the evidence on record, it appears clear that the 2nd Respondent was improperly sued. She did not employ the Claimant. She only dealt with him as the Human Resource manager of the 1st Respondent. Accordingly, the claim by the Claimant against the 2nd Respondent must fail with costs to the 2nd Respondent. These costs shall be borne by the Clamant.

15. Whether there were valid reasons to terminate the Claimant.

The law regulating termination of contracts of employment by employers in Kenya no longer permits the application of the ‘’at will’’ principle. In effect, any employer wishing to terminate a contract of service must have valid grounds to support his/her decision unless the termination is on account of mutual agreement by the parties.

16. Under section 41 of the Employment Act as read with section 44 thereof, the employer may only terminate on grounds of gross misconduct, incapacity or incompetence. In addition, section 40 of the Act as read with section 45 recognizes redundancy as a ground that permits termination.

17. It appears to me that before taking a decision to terminate a contract of service, an employer must have reasonable grounds to believe that any one or more of these four grounds exist. It is only then that a termination will be held to be justifiable in terms of the requirements of sections 43 and 45 of the Employment Act.

18. The question in this cause is whether the 2nd Respondent had justifiable grounds to terminate the Claimant’s contract of service in terms of the provisions aforesaid. The 1st Respondent as witness for the 2nd Respondent stated that the Claimant had discipline issues during the duration of his contract of service. Some of these led to poor performance of the region he was attached to.

19. The witness produced 3 warning letters accusing the Claimant of various maladies including leaving work early to attend to personal fitness programmes without permission, driving the 1st Respondent’s vehicles recklessly and failing to adhere to a strict service routine for the company vehicles. In response to these accusations, the Claimant offered only plain denials. Instead of giving detailed and specific rebuttals of the accusations leveled against him by the 1st Respondent regarding his work ethic, the Claimant took the easier path of simply stating that he was never served with warning letters in the course of his employment. Consequently, the court is inclined to believe the Respondents that the Claimant has discipline issues in the course of his work.

20. The issues raised would fit in the category of grounds for gross misconduct as set out under section 44 of the Employment Act. The court therefore finds that the 1st Respondent had genuine justification to consider terminating the Claimant.

21. Whether the Claimant was given a fair hearing before he was terminated.

The requirement for fair procedure in the journey towards the termination of a contract of service is encapsulated in section 41 of the Employment Act as read with sections 43 and 45 of the Act. The law requires that before termination of a contract of service, the employer must notify the affected employee of the grounds upon which the employer seeks to terminate the contract. This must be done in a language that the employee understands. As well the employee must be accorded an opportunity to be heard in his/her defense. The employer must also allow the employee a chance to call witnesses.

22. Did the 1st Respondent respect this statutory dictates? To be able to answer this question, it is necessary to first interrogate whether the parties still had a running contract of service between them at the time of the purported termination.

23. From the evidence tendered by the parties, the Claimant’s contract of service was a fixed term contract running for one year from 1st March 2016 to 28th February 2017. However, this period was extendable for a further one year provided that neither party issued a notice of termination. This fact is self-evident from the Letter of Offer and the contract of employment itself. These were produced in evidence as exhibits by the Respondents.

24. According to the evidence as tendered by both parties, the 1st Respondent issued the letter terminating the Claimant on 13th March 2017. This was some thirteen days after the first contract of one year had lapsed. It is also evident that neither the 1st Respondent nor the Claimant had issued a notice of non-renewal of the first contract at the point of its lapse.

25. The net effect of the foregoing is that the Claimant continued working some thirteen days beyond the period of the first contract. This can only be construed to mean that the initial contract between the parties had been renewed for a further one year. The court therefore finds that at the time the termination letter dated 13th March 2017 was issued, the parties were working under a renewed contract of service that was to last for one year effective 1st March 2017.

26. Having found that the contract of service between the Claimant and the 1st Respondent had been renewed and was valid as at 13th March 2017, did the 1st Respondent observe the procedural strictures imposed by law before terminating the said contract?

27. According to the Claimant, all that the 1st Respondent did to terminate the said contract was to issue him with the letter of termination dated 13th March 2017. He said that the 1st Respondent did not issue him with a notice to terminate the contract.

28. On its part, the 1st Respondent appeared to emphasize that it terminated the contract of service on 28th February 2017 by not renewing the first contract on grounds of misconduct on the part of the Claimant. However, the 1st Respondent does not allude to the fact of having given the Claimant notice to terminate until 13th March 2017. As has been observed earlier, by the time the 1st Respondent took this step, the first contract had already lapsed and the parties had by their conduct walked into the renewed contract.

29. And when looked at critically, the letter of 13th March 2017 was not a notice of intention to terminate. Rather, it was a termination letter. It was therefore terminating the renewed contract. To the extent that the letter was a termination, it cannot possibly be argued that the 1st Respondent issued the Claimant with notice to terminate in terms of section 35 of the Employment Act.

30. Furthermore, even if the Claimant was said to have conducted himself in a manner that brought him within the purview of section 44 of the Employment Act, he was entitled to a hearing immediately before his termination at which he would have a chance to explain himself in terms of section 41 of the Employment Act. There was no evidence that the 1st Respondent afforded the Claimant this chance.

31. The 1st Respondent, in its evidence stated that it had complied with the requirements of notice and giving the Claimant a fair hearing allegedly when it summoned him for sit-downs before issuing him with warning letters. With respect, what the law contemplates in section 41 of the Act is a disciplinary session before termination and not just sessions to review employees’ output and issue warnings to them as the 1st Respondent appears to suggest.

32. It is true that a hearing need not always be oral as submitted by the 1st Respondent. However, there must be evidence that a charge was framed and communicated to the employee. That the employee was made aware that this was an inquiry which could result into his/her termination. That the employee was advised of his/her right to have representations from other employees in relation to the issue under inquiry. In a nutshell, there must be evidence of strict compliance with the requirements of section 41 of the Employment Act.

33. With respect, this evidence is lacking in the process that led to the Claimant’s termination. Consequently, the finding that the Claimant’s right to a fair process was denied by the 1st Respondent appears inescapable in the circumstances. And I so find.

34. The next issue for determination relates to the reliefs the Claimant is entitled to if any. I would award him salary in lieu of one month’s salary. This is on account of the demands of sections 35 and 36 of the Employment Act. There was no evidence that the 1st Respondent afforded the Claimant the minimum one month notice or pay in lieu of notice as required under these provisions of law.

35. The 1st Respondent submits that as the Claimant’s termination was summary, he was not entitled to notice. As a consequence, he is not entitled to claim salary in lieu of notice.

36. With respect, it should be clear that where the court has found a dismissal to be unfair, whether for want of substantive or procedural fairness, such dismissal ceases to qualify as a summary dismissal. Instead, it is treated as unfair termination. And hence the award of Ksh 18,000/= is tenable.

37. In relation to house allowance, it is agreed by both parties that the Claimant’s salary was Ksh. 18,000/=. While the Claimant asserts that this amount was not inclusive of house allowance, the Respondents assert that it was.

38. To be able to fairly resolve this question, it is sensible for the court to seek guidance from the minimum Wage Order that was in force during the subsistence of the contract of service between the parties. The relevant Order is as published through Legal Notice No. 117 of 2015. It fixed basic salary for drivers in Municipalities outside Nairobi, Mombasa and Kisumu at Ksh 13, 646. 40 exclusive of house allowance.

39. Ordinarily and as a matter of practice, the courts have computed house allowance entitlement at the rate of 15% of an employee’s basic salary. In this case, drivers in the Claimant’s category would be entitled to Ksh. 13,646. 40 x 15/100= Ksh. 2,046. 96. Therefore consolidated salary for such employee would be Ksh.15, 693. 36.

40. The Claimant was admittedly earning Ksh. 18,000/= at the time. This was well above the consolidated minimum wage. Although he does not indicate where he was stationed, some of the correspondence to him is copied to the 1st Respondent’s South Rift Regional Manager. The court takes this as evidence that the Claimant was attached to the 1st Respondent’s South Rift Regional Office. I therefore do not buy the Claimant’s counsel’s submissions that the Claimant was entitled to the minimum wage of drivers operating in Nairobi. Consequently, I am persuaded by the 1st Respondent’s position that the sum of Ksh. 18,000/= constituted the Claimant’s consolidated salary inclusive of house allowance. Accordingly, I decline this head of damages.

41. The Claimant has also claimed for overtime pay. He asserts that he was subjected to a daily overtime routine of 2 hours. Outside this assertion, he provided no evidence at all of this issue. It is incredible that one would be subjected to so a consistent overtime of 2 hours per day. Even if one worked overtime, it would be expected that there would be some variance in respect of the quantum of time expended per day. I find the Claimant’s demand in this respect not only suspect but unsupported by evidence. I therefore decline to make any award under this head.

42. With respect to leave, the Claimant asserts that he had accumulated leave for one year in 2016-2017 and pro-rata leave of some days in 2017 which he prays that it be converted into money’s worth. In response, the 1st Respondent asserts that this claim is not awardable as the Claimant had not completed one year continuous work with the 1st Respondent. In any event, the 1st Respondent asserts that the Claimant had been given two days’ rest monthly and a December break which should suffice. The 1st Respondent also asserts that the Claimant in any event had taken several leave days which should cover his demand.

43. I have looked at the evidence on record. The leave forms produced by the 1st Respondent show that if at all the Claimant went on leave pursuant to his requests, then he can only have gone on three days’ leave. That said the leave application form for two days leave shows that it was not approved by the 1st Respondent. This can only be understood to mean that the Claimant only took a day off.

44. From the record, the 1st Respondent appears to have kept proper records of leave applications and approvals. If indeed the Claimant took the twenty one days leave for the period 2016-2017, evidence of this and which is, in the ordinary course of things, in the control of the 1st Respondent would have been easily provided by the 1st Respondent in terms of section 112 of the Evidence Act. The fact that this was not done implies that the Claimant was correct on this point.

45. In respect of the December holiday break, there was no evidence that it was to serve as part of the employees’ annual leave. At least the letter granting the break to employees did not say so. As for the two days break per month, the letter of employment is clear that this was in addition to the annual leave entitlement.

46. The 1st Respondent’s contention that the Claimant was not due for leave is also mischievous. It is plain from the record that at the time the Claimant was terminated he had served the 1st Respondent for slightly over one year. He was therefore entitled to leave. For the above reasons I award the Claimant the leave claims of Ksh. 13,620/= as claimed.

47. As the Claimant had served for one full year before his termination, he is entitled to service pay in terms of section 35 of the Employment Act. This is particularly so as there is no record that he had been registered in any gratuity scheme. Although the 1st Respondent asserts in its witness statement and submissions that it had paid the Claimant 25% of his salary towards gratuity, no iota of evidence was provided in support of this bare assertion. Accordingly, this head of claim is awarded at Ksh. 9000/= as pleaded in the statement of claim. The prayer in the Claimant’s submissions for Ksh. 58,500/= is inconsistent with his pleadings and is rejected.

48. In respect of compensation equivalent to 12 months gross pay of the Claimant for wrongful termination, the court is obligated to consider several factors in arriving at the final award under this head. Some of these considerations include the conduct of the Claimant and how it contributed to his/her termination, the duration the parties had worked together, whether the Claimant had tried to mitigate his/her loss following the termination among others.

49. As I observed earlier, the Claimant’s conduct may not have been pretty good as established by the 1st Respondent. But for the failure to adhere to procedure by the 1st Respondent, the Claimant’s termination would have been upheld. The court also takes note of the fact that no evidence was given to show what the Claimant had done to mitigate his loss following his termination. Further, the court considers that the parties had been together for just a year and the maximum extension of their contract of service would have been another one year.

50. In the premises, to award damages equivalent to the Claimant’s 12 months’ salary would be manifestly oppressive to the 1st Respondent. Taking these factors into account, I am minded to award the Claimant the equivalent of 3 months’ salary totaling Ksh. 54,000/=.

51. The court awards the Claimant interest on the awards above to run at court rates. Costs of this claim are also granted to the Claimant.

52. With regard to the Certificate of Service, although the 1st Respondent states in its witness statement that it has issued it, no evidence was provided to support this bare statement. In the absence of this the court is unable to hold that this Certificate has issued. The 1st Respondent is accordingly required to issue the Claimant with a Certificate of Service.

53. All compensatory awards aforesaid to be subject to the applicable statutory deductions as contemplated under section 49 of the Employment Act.

54. Summary of the Award.

a) The 2nd Respondent was improperly sued in this cause. Accordingly, the claim against her is dismissed with costs to the 1st Respondent to be borne by the Claimant.

b) The 1st Respondent’s termination of the Claimant’s contract of service was procedurally unfair. Accordingly, the court declares the Claimant’s termination as unfair.

c) The 1st Respondent is ordered to compensate the Claimant to the tune of Ksh 94,620/= as more particularly set out in the judgment.

d) The sum in paragraph c) above to attract interest at court rates.

e) All amounts so awarded to be subject to applicable statutory deductions as dictated by section 49 of the Employment Act.

f) The 1st Respondent to pay the Claimant’s costs of the claim.

g) The 1st Respondent to issue the Claimant with a Certificate of Service.

Dated, signed and delivered on the 10th day of September 2021

B O M MANANI

JUDGE

In the presence of:

…………………………………..for the Claimant

………………………………….for the Respondent

ORDER

In view of the declaration of measures restricting court operations due to the Covid-19 pandemic and in light of the directions issued by his Lordship, the Chief Justice on 15th April 2020, this judgment has been delivered to the parties online with their consent, the parties having waived compliance with Rule 28 (3) of the ELRC Procedure Rules which requires that all judgments and rulings shall be dated, signed and delivered in the open court.

B O M MANANI

JUDGE