Bakery Confectionery, Food Manufacturing And Allied Workers Union (Kenya) v The Wrigley Co. (E.A) Limited [2013] KEELRC 47 (KLR)

REPUBLIC OF KENYA

IN THE INDUSTRIAL COURT OF KENYA

AT NAIROBI

CAUSE NO. 247 (N) OF 2009

BAKERY CONFECTIONERY, FOOD MANUFACTURING

AND ALLIED WORKERS UNION (KENYA) …………………….…..……CLAIMANT

-VERSUS-

THE WRIGLEY CO. (E.A) LIMITED …………………………………..RESPONDENT

Mr. Muchai for the Claimant.

Mr. Orao Obura for the Respondent.

JUDGMENT

The Memorandum of claim dated 25th May, 2009 was filed on 26th May, 2009.

The issue in dispute in terms of the memorandum is;

“Unlawful, wrongful and premature retirement of Mr. Francis Ogutu (hereinafter “the grievant”).

In violation and breach of the current Collective Bargaining Agreement between the parties (hereinafter “the CBA”).

The matter was brought by the union on behalf of the grievant (hereinafter “the Claimant union”).

The Respondent is Wrigley Company (East Africa) Limited a subsidiary of William Wrigley Junior Company U.S.A (hereinafter “the Respondent”).

Claimant’s case

At the material time was in place a CBA concluded between the Claimant Union and the Respondent on behalf of the Grievant and all other members of the Union and unionisable staff at the Respondent’s enterprise.  The CBA was for the period 2004 to 2010.

The full text of the CBA is attached to the Memorandum of claim.

Clause 31 of the CBA provides;

“An employee who attains the retirement age of 55 years but 60 years for compulsory retirement, may retire or be retired.  On leaving his/her employment, such employee shall be paid retirement benefits on the following basis: -

….”

On 8th March, 2009, the Respondent issued a notice of intended compulsory retirement to the Grievant.  The said notice is said to be in breach of clause 31 of the CBA and the Industrial Court Award in Cause NO. 116 of 2004, issued on 17th November, 2005 to the effect;

“The court upholds the demand of the claimant and awards inclusion of a clause in the collective agreement that an employee may voluntarily retire at 55 years but must compulsorily retire at 60 years.”

The Claimant objected to the notice of intended retirement and when the objection was not heeded by the Respondent, on 30th April, 2009, the Claimant reported a trade dispute to the Minister of Labour on behalf of the Grievant.

The claim was accompanied by an interlocutory application seeking for an injunction to stop the retirement process pending the hearing and determination of the suit but this was overtaken by events as the matter took too long to settle and the retirement was hitherto effected by the Respondent.

It is the Claimant's case that the Respondents is duty bound to obey and abide by the provisions of the CBA and the Award of the court in Cause No. 116 of2004.

The  Claimant prays for an  order declaring that the  Claimant is bound to retire the  Grievant at the  age of sixty  (60) in accordance with  the  CBA and Court Award  and award damages for wrongful and premature compulsory retirement equivalent to the  earnings for the  remedies of the  years up to the  attainment of sixty  (60) years which is the  Grievant's retirement age.

Respondent'scase.

The Respondent filed a replying affidavit deponed to by Emma Saliamo Onyangoin opposition to the  interlocutory application and the  Memorandum of claim.

The deponent is the People  Leaving and Development (PLD) manager of the Respondent.

The   Respondent states that clause 31 of the   CBA  did   not   define   the retirement age for the  employees.

That the  parties had  in the  CBA dated 31st March 2003 agreed to refer  the issue of the  retirement age  to  the  court for  interpretation hence the  Industrial Cause No. 116  of 2004, in which the  court ruled on  17th November, 2005 that it upheld the  demand of the  Claimant and awarded inclusion of a clause in  the CBA that an employee may  voluntarily retire at fifty  five  (55)  years but must compulsorily retire at sixty  (60) years.

That the  ruling of the  court was  challenged by  way  of an Interpretation Application through Cause No. 1- 116  of 2004 questioning inter alia,the  court's jurisdiction to  determine a dispute relating to  retirement of employees of the Respondent in the  light  of the  provisions of the  Retirement Benefits Act,  No. 3 of 1999.

That the Industrial Court discussed the  Respondent's  challenge following which the  Respondent filed  a High  Court Misc.  Application No. 720  of 2006 by way  of Judicial Review  seeking inter  alia;an  order of  certiorarito  quash the Industrial Court Award  in Cause No. 116  of 2004 dated 17th November 2005 and the  Industrial Court ruling on Interpretation Application in Cause No. 1 - 116  of 2004 dated 12th  October, 2006 and an  order of  stay of  any other or  further proceedings arising from  or  connected to  the  Industrial Court Award  in  Cause No. 116  of 2004 dated 17th November, 2005.

That on 28th November, 2006, the High Court, issued an order staying any other or further proceedings arising from or connected to Industrial Court Award in Cause No. 116 of 2004 and Ruling in Interpretation Application No. 1 - 116  of 2004. The orders were to last for 120 days. The order is annexed to the Replying Affidavit and marked exhibit "ES0-3".

The order was on  27th March, 2007 extended to remain in  force  until the determination of the  suit.  See "ES04".

As at the  time  the  matter in  casuwas  filed at the  Industrial Court on  26th May,  2009, the   Judicial Review  Misc.  Application  No.  720   of  2006 was  still pending and the  interim orders were  still  in place.

The  issues for determination are  as follows;

1) Whether the  Respondent could lawfully compulsorily retire the Claimant  pursuant to a notice dated  Bth  March, 2009, whilst  there was in place an order of stay  in the H.C.Misc. Application No. 720 of2006.

2)  Whether this  suit was properly brought to stop the intended action by the Respondent.

3)  What  remediesifany  are available  to the Claimant.

For the record, the Respondent filed a supplementary memorandum with leave  of court dated 8th July, 2012 and the  same was  duly responded to by the Claimant on  16th July, 2012.

The  parties then agreed to  proceed by way  of oral  submissions and they duly  filed list  of authorities in support of those submissions.

In   the   Supplementary  Response, the   Respondent states  that  by  an agreement dated 8th December, 2010, the  parties agreed on  an out of court settlement of High Court Misc. Application No. 720  of 2006 which challenged the award in Industrial Court Cause No. 116  of 2004 and in particular the  question of retirement age.

The   court  observes that  a  meeting was   held   by  the   parties on    lOth February, 2011 to  attempt to  resolve the  matter amicably pursuant  to  earlier agreement.

An agreement was reached pursuant to the meeting held  on  lOth February, 2011 at Federation of Kenya  Employers Offices,  Nairobi.       The relevant parts of the agreement are as follows;

"The parties further deliberated on the issue of  the retirement age  and  agreed that for  the CBAs  between the years 2003  and   2008, no   retirement age clause would be  inserted.  However, for the CBAs for the years2009 - 2010, a  clause  on   retirement  age   would  be inserted to read  that the voluntary retirement age  shall be 55 years and  the  compulsory retirement age  shall be 60 years; provided thatno employee retired in 2009 or 2010. "

Emphasis mine.

For the  avoidance of doubt the  parties further agreed;

"The  company agreed to double-check this and stated if there was  an employee retiring between 2009 and  2010 the company would not be  able  to agree to insert the compulsory   retirement age of  60 years to the 2009/2010 CBA.  In such case, the  company would only be  willing to accept the compulsory retirement age of 60 years to be included in the 2011/2012 CBA."

The  court has endeavoured to interpret Clause 7 of this Agreement in the context of the  entire agreement between the  parties dated 15th March, 2011 and has come  to the  inevitable conclusion that there was  deliberate intention by the Respondent and therefore, the  parties consequent to  the  agreement to exclude the  retirement of the  grievant by notice of 8th March, 2009 from  its  purview.

This intention was achieved in the convoluted and contradictory manner in which clause 7 was  concluded.

The  result is that the  court is seized of the  issue as to whether or not  the Grievant ought or not  to have  been  retired at the  age of fifty five (55) years and if such action had not  been  injucted by the  High Court at the  time  it happened.

In  his  lengthy submissions, Mr. Muchai, representative for  the  Claimant ably  submitted that the  negotiations for  out  of court settlement were  done on without prejudice basis and in any  event did  not  settle the  issue on  retirement clause, as discerned on  the  face  of the  agreement itself.

That the  negotiations were  never  spelt out to extent and/ or  cover  Cause No. 247 (N) of 2009 in any  event.

That the issue in  dispute must therefore be  determined in  terms of the evidence and the  law  before  court.

Mr.   Muchai  therefore  urged  the   court  not   to   take  into   account  the agreement in the  determination of this case.

Mr. Obura countered this argument strenuously stating that negotiations on without prejudice basis, remain as such, but where an  agreement is reached, the  same becomes relevant and material to  the  settlement of the  matter before court.

That the agreement settled High Court Misc. Application No. 720  of 2006 hence the  court cannot now ignore the  terms of the  settlement.

Mr. Muchai disagrees and urges the   court to ignore the   agreement in determining this matter.

IssueI

From  the  facts of this case, it is  clear that the  Respondent purported to retire the  Grievant by a notice dated 8th March, 2009 when there was  an  order for  stay of  the   Industrial  Court in  Cause  No.  116   of  2004  restraining  the Respondent from  retiring the  Grievant at the  age  of fifty  five  (55)  as intended pending the  hearing and determination of the  H.C.  Misc.  Application No. 720  of 2006.

This status quoorder equally bound the Respondent from  proceeding to retire the  Grievant during the  pendency of the  Misc. Application No. 720  of 2006.

This is the legal  implication of that status order whether or  not  it clearly states so in express terms.

This is because the nature of a stay order as granted was interim in nature and the  stay was  conditional on  the  hearing and determination of the  pending case.

It was unlawful and violation of the status quoorder for the  Respondent to proceed to retire the  Claimant as it did.

This being the case, the Claimant was  perfectly entitled to file this claim and   an  application on  Certificate of urgency to  injunct the  illegality that was about to take place.

The  parties have  now  agreed to insert in the  material CBA of 2009 - 2010 a clause providing for  compulsory retirement at sixty  (60) years and voluntary retirement at fifty five (55) years.

From  the  facts of the  case, the  Claimant did  not  retire voluntarily.

The attempt to compulsorily retire him was injuncted by the  court and the Respondent nevertheless went ahead to unlawfully retire him.

The effect  of the  conduct by the  Respondent was  not  to retire the  Grievant but  to  unlawfully terminate his  services in  that the  termination was  not  for  a valid  reason in terms of Section 45(2)(a)of the  Employment Act.

The  Respondent in  the  circumstances failed  to discharge the  onus placed on  it by  Section 47 (5)of the  Employment Act to show that the  termination of the   Claimant  was   justifiable  taking  all   the   circumstances of  the   case  into account.

On the contrary, the Claimant has discharged its onus on a preponderance of evidence that indeed a wrongful termination of employment of the Claimant took place.

It is clear it was later agreed by the parties in the filed agreement that the Grievant ought to have been retired at age  sixty  (60).

The  Grievant has  specifically prayed that  he  be  awarded  damages  for wrongful and premature compulsory retirement equivalent to  the  earnings  for the  remainder of the  years up to  the  attainment of sixty  years which was  the lawful  retirement age.

The  court upon considering the  factors enumerated under Section 49of the  Employment Act,  especially, that the  Grievant for  no  fault of his  own  lost prospective income of five (5) years, was  terminated not  for misconduct but  due to   the   Respondent's  misapplication  of  the   law,   did   not   contribute  to   the determination, clearly wished to  be reinstated and/ or  paid  for  the  unserved term award him  maximum compensation for the  unlawful and unfair termination in terms of Section 49(1)(c)of the  Employment Act which award is twelve  (12) months gross salary as at the  time  of his termination.  In addition, the  Claimant is awarded general damages amounting to eight (8) months salary to mitigate the loss  of income for  the  five (5) years he was  entitled to work  prior  to retirement. This is because it would  not be reasonable to make an order for the  reinstatement of  the   Claimant,  it  being   about four   (4)  years from   the   date of  premature termination.  The Award  takes into  account that the  Claimant was  bound to mitigate his  losses by engaging himself in  gainful activities upon being  retired prematurely.

The  award be computed by the  Claimant within thirty (30) days from  the date of this judgment and be  presented to the  Respondent for  approval within fourteen (14)  days from  date of  service.  The quantification be filed in court thereafter for consideration and approval.

The  respondent to pay  costs of the  suit to the  Claimant.

Dated and delivered at Nairobi this 10thday of December, 2013.

MATHEWS N. NDUMA

PRINCIPAL JUDGE