DAVID OWIYO V HARAMBEE CO-OPERATIVE SAVINGS & CREDIT [2012] KEHC 4479 (KLR)

1. Civil Appeal

2. Subject of Subordinate Court Case

CONTRACT

Employment Contract

2. 1           Made adult - employee

2. 2           Employed as a clerical officer with effect from 1st February 1984.

2. 3           Rose through the ranks to be

i)             A registry assistant (1988),

Job grade CH8 after training to be

ii)            Records officer II (27th February 1999)

Job grade HC7 with effect from

23rd June 1999.

iii)           Promotion letter

17th December 1999

iv)           Job description letter30th September 2002

2. 4           Employer a co-operative savings and creditsociety.

2. 5           Duties of employeeco-ordinating work flow within the section.Key tasks:

a)            Supervising and assigning duties tostaff in the section.

b)            Ensuring the customer service counter is  well manned.

2. 6           Appellant dealt with a file having a loan application, payslip but no guarantors.

2. 7           The applicant for emergency loan appeared to have sufficient shares.

2. 8           Appellant approved the loan without guarantors.

2. 9           It transpired that Ksh. 20,000/- as emergency loan was deducted from M. N Arwa of Mbita

2. 10         On investigations, deductions for Ksh. 20,000/- was found to be fraudulent.

2. 11         Indication led to the appellant, whereas the appellant not charged in criminal court case, he was

interdicted on the 14th May 2003 and summarily

dismissed on 7th November 2003.

2. 12         Appellant files suit in the magistrate’s court seeking:

i)             General damages for wrongful dismissal and breach of the terms under the management

staff terms.

ii)            Two months salary in lieu of noticeKsh. 157,138/-

iii)           Costs of suit

iv)           Interest

v)            Any other relief.

2. 13         After trial, Hon. Magistrate dismisses suit against the appellant on 8th October 2008.

2. 14         Appellant/original plaintiff files appeal on 7th November 2008.

3. Appeal

The Hon. Magistrate erred in law and fact:

3. 1           … to hold the plaintiff was to prove that he was

not negligent … when the burden of proof lay with

the defendants.

3. 2           … considering the evidence of an irrelevant witness.

3. 3           … in holding that plaintiff admitted to vetting the loan

application, subject matter of suit …

3. 4           … in not making a finding of facts in issue between

the parties.

3. 5           … in holding it was the plaintiff’s duty to vet the entire

confines of loan application.

4. Submission by appellant:

4. 1           Worked diligently for respondent from 1984 to

2003.

4. 2           Was unlawfully dismissed from employment.

4. 3           Claims damages of 2 months salary in lieu

of notice Ksh. 157,138/-

4. 4           Claims further damages for wrongful dismissal.

4. 5           Burden of proof shifted by trial magistrate to

appellant.

4. 6           There was no negligence on his part. Duty

only included vetting of guarantors who

guarantee loans not the loanees.

5. Submissions by respondent:

5. 1           Termination of appellant was lawful.

5. 2           Appellant was negligence in duty.

5. 3           Appellant admitted his duty included vetting of guarantors.

5. 4           The appellant was correctly dismissed, noDamages is entitled.

5. 5           Misconduct was proved against appellant.

5. 6           Prayed for costs.

6. Held:

6. 1           Decision of trial magistrate’s court upheld.

6. 2           Appeal dismissed.

7. Case law:

8. Advocates   :

i)David Owiyo appellant present in person

Original plaintiff

ii)M.N. Bonyo instructed by M/s Obura Mbeche & Co Advocates for the

Respondent/original defendant

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL APPEAL 605 OF 2008

DAVID OWIYO...................................APPELLANT/ORIGINAL PLAINTIFF

VERSUS

HARAMBEE CO-OPERATIVE SAVINGS & CREDIT..............RESPONDENT/ ORIGINAL DEFENDANT

(Being an appeal from the Ruling of the Hon. W. Mokaya – Principal Magistrate dated

8th October 2008 in CMCC 357 of 2005 in Milimani Commercial Courts)

J U D G M E N T

I.BACKGROUND

1. The relationship between the parties was that of employer/employee. The appellant/original plaintiff David Owiyo (herein referred to as the employee) was first engaged in service with the respondent/original defendant M/s Harambee Co-operative Sacco Ltd, (herein referred to as the employer) on the 1st February 1984.

2. He rose through the ranks to the position of a

2. 1Registry Assistant (1988)

Job Grade CH 8

2. 2Records officer II (27th February 1999)

Job grade HC 7

After undergoing training with effect from 23rd June 1999.

2. 3A promotion letter was issued to him on

17th December 1999.

2. 4A job description letter was issued on the

30th September 2002

3. His duties was described as a “co-ordinating work flow within the section.” The keys tasks being:

3. 1Supervising and assigning duties to the staff in the section.

3. 2Ensuring the customer service counter is well manned.

3. 3Compiling of weekly and monthly management report.

3. 4Vetting of guarantors

3. 5Attending to branch officials complaints and inquiries.

3. 6Co-ordinating the tracking of misplaced files.

3. 7Ensuring the files are returned to their dockets daily.

4. He was further given authority/decision making the following areas:

4. 1    Vetting access to the repository

4. 2    Vetting of guarantors

4. 3    Supervising staff in the section

5. As far as the appellant was concerned, he dealt with a file that came to him with a loan application and pay slip. The application had no guarantors but this was because the applicant had sufficient shares to guarantee his own loan.

6. In essence, the appellant opposed the forms on ground that the loanee had sufficient shares. The issue of the loan was to be handled by another section.

7. It transpired later that sometime before March 2003, Ksh. 20,000/- as emergency loan, had been deducted by monthly installments from the payslip of one N.O. Arwa, a member of the respondent’s co-operative of Mbita.

8. Upon investigation by the respondents the deduction for the Ksh. 20,000/= was found to be fraudulent.

9. Indication led to the employee. Whereas he was not charged before a court of law for a criminal offence, and whereas others had been so charged he was instead interdicted in May 14th the year 2003.

10. On the 7th November 2003, the employer summarily dismissed the employee appellant.

11. The employee’s formal computation was as follows:

11. 1 Salary in lieu of leave

11. 2 withheld salary

11. 3 Prorata salary

11. 4 Salary arrears

Total Ksh. 390,519/-

12. Less the following deductions

12. 1 Tax

12. 2 Salary advances

12. 3 Car loan

Total Ksh. 458,955/60

13. This brought a deficit sum of Ksh. 68,436/- that is the employee was to refund this sum of moneys back to his employer.

14. On the 17th January 2005, the employee filed suit against his employer through his advocates M/s Kandie Kimutai & Co Advocates. He prayed for:-

14. 1General damages for wrongful dismissal and breach of the terms under the management staff.

14. 2Two months salary in lieu of notice Ksh. 157,381/-

14. 3Costs of the suit.

14. 4Interest on the two months salary in lieu of notice.

14. 5Any other relief that the court may deem fit to grant.

15. The defence denied the allegation contained in the plaint.

16. After trial the Hon. Magistrate dismissed the suit against the appellant on 8th October 2008 as having not been proved that his employment was unlawfully terminated.

17. Being dissatisfied with the decision of the Hon. Magistrate, an appeal to the High Court was preferred by the employee. The memorandum was filed by M/s H. M. Mudeizi & Co Advocates 18th August 2006 (formerly of Kandie Kimutai & Co Advocates).

IIAPPEAL

18. The employee/appellant stated that the Hon. Trial Magistrate erred in law and fact:

18. 1 … to hold the plaintiff was to prove that he was not negligent … when the burden of proof lay with the defendants.

18. 2 … considering the evidence of an irrelevant witness.

18. 3 … in holding that plaintiff admitted to vetting the loan           application, subject matter of suit …

18. 4 … in not making a finding of facts in issue between the parties.

18. 5… in holding it was the plaintiff’s duty to vet the entire confines of loan application.

i)    Submissions by Appellant/Employee

19. In submissions the appellant put in written submission filed by himself. He in fact was acting in person but declined to address the court. (Notice to act in person being 7th June 2011)

20. I had occasion to peruse this written submission together with the lower court records.

21. In brief the employer/appellant stated he had worked diligently for the respondent from 1984 to 2003. He was summarily dismissed from employment unlawfully. As such, he prays that he be awarded the two months salary in lieu of notice amounting to Ksh. 157,138/-. He further claimed damages for wrongful dismissal.

22. The Hon. Magistrate had erred because she shifted the burden of proof to the employee to prove his case. According to the employee there was no negligence on his part. His duty only included the vetting of guarantors who are to guarantee the forms and not the loanees.

23. In essence although not stated, the employee wishes some token of payment from the employer for his loyalty throughout the years of employment.

ii          Submission by Respondent/Employer

24. In reply, the respondent employer stated that the termination was lawful. The appellant had been negligent in his duties. He even admitted that his duties included vetting of the guarantors in his letter of appeal. the appellant was therefore correctly dismissed and was not entitled to any damages as misconduct had been proved.

25. The employer prayed the appeal be dismissed with costs to them.

IIOPINION

26. There is without a doubt that some fraud occurred in the offices of the respondent whereby a loss of Ksh. 20,000/- occurred. The employee was implicated as he dealt with the application forms. Without his authority the funds may not have been paid. He further incriminated himself by stating:

“a)The loan is self guaranteed (guarantors not required)

b)I never dealt with the loanee’s file” (letter 13th November 2003)

c)… loan application which was brought to my attention to vet guarantors as part of my duty. I later on found that the member’s shares were higher than the loan in question.”

I then crossed, meaning the member could be granted this loan against shares.

So all the guarantors that were there were never vetted that is why I [did] not sign.”

(letter)

27. The employee gave the impression that the employee never had been charged in court to prove his guilty. If that was so, then he ought to have obtained the two months salary in lieu of leave and related benefits.

28. The employer explanation to this, the first being that yes, the employee had been charged with the criminal offence and as such was interdicted. This decision was not bound by the outcome of the police investigations. The whole exercise of interdiction was lawful.

29. The employee was in breach of his contract by simply not vetting the forms to confirm its genuineness before being presented to the next office for approval. The employee was negligence. He was implicated for the breach of his terms of service and was accordingly guilty of gross misconduct.

30. The employer was within the law to summarily dismiss the employee. That the terms of the collective bargaining agreement did not apply to the employee as he was in grade HC7. Anything outside this group grade would be subjected to the collective bargaining agreement. This explains why he was not entitled to what he claims was his entitlement.

31. Whereas all this evidence was before the Hon. Trial Magistrate who found that the employee had made no case against the said employer and

32. Whereas the employee prayed for general damages for breach of contract, damages are not awarded for breach of contract

Cyrus Nyaga Kalute –Vs -          Kirinyaga County Council

CA No. 29/85

33. As stated earlier, the dues entitled to the employee were paid. Unfortunately, he had an enormous car loan that brought his entitlement to a deficit of Ksh. 68,436/60.

IVCONCLUSION

34. I would conclude that the trial magistrate findings were correct. The appeal is dismissed with costs to the respondents.

DATED THIS 28TH DAY OF MARCH 2012 AT NAIROBI

M.A. ANG’AWA

JUDGE

Advocates:

i)David Owiyo appellant present in person

Original plaintiff

ii)M.N. Bonyo instructed by M/s Obura Mbeche & Co Advocates for the

Respondent/original defendant