Edwine Otieno Okello v Nakumatt Holdings Ltd [2013] KEELRC 861 (KLR)

REPUBLICOF KENYA

INTHE INDUSTRIAL COURT  OF KENYA AT NAIROBI

CAUSE NO. 1592 OF 2011

EDWINE OTIENO OKELLO…………………………………………………CLAIMANT

VS

NAKUMATT HOLDINGS LTD..…………………………..……….……..RESPONDENT

JUDGMENT

1.  The Claimant filed his Claim  on 19th September 2011  and  the  issues  in the  Claim  were

a)  Unfair dismissal of the  Claimant contrary to  Section 45 of the Employment Act 2007

b)  Unlawful dismissal of the  Claimant from employment

c)  Failure to remit contractual gratuity

d)  Failure to remit contractual salary and benefits due

e)  Failure to issue Termination Notice

f)  Failure to remit contractual leave  allowance.

2.  The Respondent filed an appearance and Defence on  4th   October 2011 and averred that

a)  the  Claimant was paid  his salary for July 2011  in full

b)  The  Claimant is  not entitled to  payment in  lieu  of notice by virtue of his summary dismissal

c)  Leave  days  for the  year  2012  had not accrued

d)  Service  pay   or  gratuity  is  not  applicable as  they  are   not provided for in the  letter of appointment.

3.  The matter came  up for directions on 10th October 2011  where hearing was fixed for 21/5/2012.

4.  The hearings took  place  on 21st May 2012  before Judge Paul Kosgei  who was  the  predecessor of this  Court  under Section 33  of the  Industrial Court  Act. The  appearances  were   as  follows:  Court  Clerk:   Kipsang David, Mr.  Samwel Ogutu for Claimant and  Miss Agnes  Ndunda for the Respondent. The Claimant Edwin  Otieno Okello testified.  He stated that he  was  employed  in  2008   6th   September by  the   Respondent.  He testified  that  on   21st    June   2011    he   was   at  work    at  electronic department.  A  customer  bought  a  plasma  television  worth  Ksh. 69,995.  On 1st  July  2011  he  heard that it was  not paid  for and  that it was  lost.  He  was  called to  head   office where he  met  Macharia of security.  He   was   based   at  Lifestyle  branch.   Headquarters  is   at Mombasa     Road.  Macharia asked  where he  was  on  21st  June  2011. He said  he  had  been  transferred to  Kiambu Road  branch.   Macharia said the  television Edwin  sold was lost and wasn’t paid  for.

5.  Both  Macharia and the  Claimant checked the  records and it is recorded that the  Claimant sold  it.  He stated that when  a customer comes  you record the  code  on  the  book  plus  the  price.  He goes  to  cashier with receipt to  pay. After  paying  security  personnel are  given  the   two receipts to  take  out  the  item bought.  My  job  ends  upon  leaving the television at the  front of the  cashier.

6.  The  Claimant said  he  didn’t know   what  happened.  8  people were there.  On  7th   July   2011   two   of  the   staff  were   given  a  letter  of suspension for 7 days.  Claimant was  told  to  come  on that Friday  and he  returned on  Friday.   Four  supervisors were  there plus  two  security personnel.  They  met in private.  When  the  staff were  called four of the staff were  told  investigations showed four of them were  involved, i.e. Claimant, Isaiah  Onyango a  security officer, Sungura of security and John  Waoga  of security.  The Claimant was  a shop  assistant. The staff went out  briefly and  returned and  Sungura was told  to leave  as he had no  case.  The  remaining three staff were  told  they were  responsible. The Claimant asked  for time to investigate but  he was told  that he was disturbing them and  told   to  go  out.   The  security  people remained. When  he  returned he  was  told  the  security people had  agreed to  pay for the  television.  Onyango Isaiah  told  the  Claimant when  they went to head  office with money Respondent declined to  take  the  money and they are  still  employees. The  Claimant was  later  given a  dismissal letter but  the  matter was  not reported to  police.  His salary was  Kshs.28,300 per  month.  The payslip was produced as Appendix 4.   He was not  given a  certificate  of service. He  thus   prayed for  judgment  as prayed in the  statement of claim.  He had served the  Respondent for 3 years. He  had  earlier attended a  disciplinary hearing on  the  ground that he had used a wrong gate  at Lifestyle.

7.  In cross  examination by  Ms. Ndunda, the  Claimant stated that he  was employed  on  6th September  and   confirmed  after  three  months  in January  2009.  He didn’t have  confirmation documents. He was  a PTA teacher at Got Nyalgosi Primary School  before going to Nakumatt.  He didn’t give  a certificate of service from the  school.   The  appointment letter   provided  for  summary  dismissal. He   appeared  before   a disciplinary committee earlier on and  was suspended for 7 days.   After 5 days  he received the  dismissal letter.  Matter was not reported to the police.  Whoever lost the  item or  caused  its  loss  must pay  for it.  He stated that “It  was  not me”.  He wasn’t paid  salary for July  2011  and June 2011.  He was to go on leave  in June 2011  the  month the  TV got lost.  The claim includes notice pay,  leave, tree year  service pay at rate of 29,399 per month.  He had worked for two  years  and some  months.

8.  He  admitted  that  the   person  in  contact with  TV  was   himself  and security personnel.   He  stated the  security were  responsible for the loss  and  they agreed to  refund the  cost of TV.   He  didn’t know  who released TV from the  door.    He wrote a letter on 5th  July 2011  on how he sold  the  TV.   It is on the  same  day  he was  served with suspension letter.   He  was  transferred to  Kiambu Road  on  30th   July  2011.   He reported  and  worked  up  to  7th   July  2011   (seven  days).  The  book contained transactions is with the  Respondent.   He never asked  for certificate of service.

9.  In Re-examination he stated that he was transferred to Kiambu Road in July 2011.  He asked  them to  play  the  security footage. It showed the Customer and  Claimant upto the  ground floor.    They  said  the  TV got lost after delivery to ground floor.  His probation was not extended and he couldn’t have  been  on probation for 3 years.  He was  only  warned for using  wrong gate.

10. That was the  close  of Claimant’s case and Hearing was re-scheduled to 26th September 2012  at 2. 30  p.m.  The case therefore proceeded before me  on  26th   September 2012   at 3. 00   p.m.   where the  coram was  as follows: Judge: Nzioki  wa Makau,  Court Clerk:  Elly Jometho, Mr. Samwel Ogutu for Claimant and Miss Mutune for the  Respondent.

11. Miss  Mutune, I am  ready calling one  witness Samuel MubejaOdera. He testified that he is a Human Resource Officer at Nakumatt Holdings stationed at Nakumatt Head  Office along  Mombasa Road  and  worked from 1995  to date.  He became Human Resource Officer from 2001.  he stated he knows  Edwin  Otieno Okello  was  the  Respondent's employee stationed at Nakumatt Lifestyle and  he was  a shop  assistant.  He was employed on  6th  September 2008.  He  had  executed an  employment contract. Refer to  letter NHL-1  dated 6th  September 2008.   The employment was on probationary terms – three months and he was confirmed in January 2009.  On 21st June 2011  one of our superiors who checks  bulk  items went to  the  department were  he had  placed Edwin. It is the  electronics department on  1st  floor.   He was  the  only  person there  on   the material  date.  He found  that  there  was   a  plasma television set – Samsung which was  sold  (42” LCD) it was  retailing for Kshs. 69,995/=.    The   customer  went  to   the   staff  Mr. Edwin   and identified  the   item.    Normally we  issue   a  receipt  in  triplicate,  the customer keeps  the  white copy  and  the  item because it is a bulk  item which cannot be  scanned at the  till, the  customer proceeds with the white copy  to the  till to pay and the  staff takes the  blue  copy  and sticks it on the  item identified by  the  customer.  The pink  copy  is left in the book.  He followed all these  procedures up to that point. He alleges, he took  the  item through the  lift to  the  bulk  section near  the  cashier and the   place   is  guarded  by  our  security  guards. The  security guards stamp the  pink  and  the  blue  copy  (attached to  item), the  attendant then  can  go  back  to  his  work  place.    On this  date the  procedure was followed to a certain extent but  he erred to a certain extent.  When  he went with the  item to  the  lift he  did  not show  up  at the  bulk  section. Both  the  blue  and  the  white copy  could  not be  traced. This  initiated investigations  in  the shop. The  pink  copy   was  found  in  the   shop section. They  tried to  trace the  blue  and  white copy. They  tried to locate using  the  till duplicate copy. This  was  done  on  all  the  tills and on that date  no television was  sold.   We transferred him  to  a different branch.  Our  CCTV showed us that he  discussed with a customer and took  the  item and  packed it very  well. The CCTV footage also  showed him  going to lift with item. We were  expecting him  with the  TV at Bulk section near  cashiers.  We did not see it on the  CCTV on the  other part. All the  three security officers at the  bulk  section denied receiving a TV on the  material day.  We confirmed with cashiers that on the  items filled on that day  there was  no television tilled.  It was  not sold. There  was no white copy  plus receipt.  After we discovered TV was missing management transferred the  employee to  Nakumatt Ridgeways.  He was  to  report  on  28th   June  2011. He  did   not  report  to  Nakumatt Ridgeways and  after some  time around 5th  July  2012  we  deemed it fit to  suspend  him.  We  invited him   to  disciplinary meeting. We  had authority and power to transfer the  staff within Kenya  or where else we feel the  staff is of value to the  company.

12. Claimant attended the  disciplinary committee meeting.  The Claimant appeared at disciplinary meeting on 11th  July 2011.  In the  disciplinary meting there is a letter he owned up on what he says  he did.  He was interrogated on  several issues  on  sales  at bulk  section.  He  did  not however state how  the  item disappeared.  Most  likely he  went to  the basement. The  staff who  are  charged with verification of bulk  items also  were  charged with verification of bulk  items also  were  summoned and  they denied receipt of the  item.  Nothing implicated the  staff but Edwin,  could  not explain were  the  blue  copy  went to,  where the  white copy  went to or where the  item went to. The committee recommended that the  Edwin  be  terminated for theft of public company properly as he is the  one  who  served the  alleged customer and  wrote the  receipts in triplicate and  only  the  pink  copy  which is left in the  book  was found. He was dismissed.  Edwin  was aware he could  be dismissed summarily for criminal acts.   Summary dismissal would not attract any  notice.  He was dismissed on 13th July 2012  and later he came  to claim dues.  NHL 3 is the  letter of dismissal dated 13th July 2012.  He did  not work  in the month of July.   We processed leave  accrued from January  to  mid-June and  overtime from month of June.   The leave  allowance was  Overtime hours  carried over  were  2 hours  for OT 1 – 170/=, there was  54 hours for OT 2 – 6,114/= and  between January  the  accrued leave  was  11. 4 days  was  4,841/=.   The  total payment was  11,125/=.  Basic  pay  is 9,600/= House  allowance 15%  of basic  1,640/= Gross pay  is 28,399/= On leave  allowance the  salary is basic  plus  house  allowance which is Ksh. 11,040/=.  He was not entitled to other sums.

13. The  Claimant was  servicing a SACCO loan  and  the  loan  as at end  of June was Ksh. 23,512/=.  Statutory deductions were  to be paid to government but  there was  no  PAYE.  The  amount due  to  him   after statutory  deductions  10,655/=  and   we   used   that  to   service the personal  loan   with  the  SACCO.  Claimant  came   to   claim  pension payment on that date  but  he  refused to  sign  the  clearance form.  We processed pension nonetheless. The  pension was  payable.   We  had wanted  him  to  sign   clearance form  and   hand   over   the   company property in his possession.  There  is no money owed.

14. In  Cross examination by Mr. Ogutu Advocate the  witness stated that he works   in  Human  Resource department   and   what  transpired  in  the branch is reported to us.   The report was  by  the  Lifestyle manger.  He stated that  he  sits   in  the   Disciplinary  Committee. We  had   three security officer and the claimant.  On side of management we had Operations  Co-ordinator,   Human  Resource  Officer  –  Mary   Mbithi, Human Resource Manager. There  were  security officers summoned.  No shop  assistants were  summoned. The  minutes of the  committee are written but  he did  not produce any  in Court. There  was  no request for the  three employees to  compensate the  company. We have  the  CCTV cameras in  the  shop  and  the  CCTV cameras did  not show  him  on  the floor in  the  bulk  section.   Most  likely he  went to  basement. He  was however not certain.  The security officers are employed by Nakumattt Holdings.   There  are  security officers on  each  floor and  we  also  have those  located at bulk  section.  The  security is at entrances and  exits. The  lifts do  not pass  through main  shops,  one  can  bypass the  main shop.   There  are  security officers.  I am  not certain about the  CCTV at basement.  Familiar with most of the  shop.   Either a receipt or a card  is used.    If a card  is  used  it is  surrendered by  attended to  the  cashier. The customer takes receipt to cashier and if card  is used  the  attendant has  to  go  back   so  customer can  move to  front  of the   queue. The receipts are  taken as  follows; white copy  to  customer, the  attendant once  he takes  the  item to the  bulk  section the  staff stamp on the  pink and  blue  copy. The  security officers wait for customer to  come  with copy  of receipt and  security officers confirm the  two  tally.  The  CCTV does not show  anyone coming out  with bulk  items on ground floor.

15. In  answer to the  question whether it is it normal to transfer or suspend someone, he stated that transfer in case we suspect a person guilty of some  action.  It is in discretion of company to  transfer. The  loss  was not reported to  the  police.  We did  not wish  to  proceed that way.  We did  not want  to  punish the  Claimant further.  We did  not see the  need to go that way. We had  enough ground for dismissal.  The TV was not tilled in any  of the  tills.  The blue  copy  and white copy  were  never seen by  anyone. Edwin   claims he  took   the   pink   copy   and  item to  bulk section.   He  admits he  dealt with customer.  The  pink  copy  was  not stamped. There  was  no indication that the  attendant was  absent from work. The  dismissal was  justified.  The  receipt (pink) was  written by him. He was charged of taking care  of the  company property, he was guilty of theft.

16.  In  Re-examination by  Ms.  Mutune Advocate,  the  witness stated that the  CCTV showed Edwin  going into  the  lift with the  item but  he did  not come  out  of the  lift on  1st  floor.  If he  had  taken the  item to  the  bulk section, we  have  CCTV cameras which would have  captured the movement. There   was   no  evidence  anyone  handled  the   TV. He admitted to having filled the  pink  copy  but  the  TV went missing.

17. It is not disputed that the  Claimant was employed by  the  Respondent. The  only  issues  in  contention are  the  nature of the employment and the  termination. The Claimant avers  he was  confirmed in employment in   2008.  The   Respondent denies  this.   What   is   clear   is that  the Respondent did  not formally confirm the  Claimant but  the  contract of employment did  not suffer by  dint  of that failure. The  fact that the Claimant continued to  earn  a salary and  serve  the  Respondent in  thecapacity of Shop  Assistant  at a rate  of Kshs.  680/-  per  day  subject to statutory  deductions.   The  letter  provided the   mode  of termination which was explicit. The Contract provided thus  on Termination

Should Nakumatt HoldingsLtd terminate your services for any reason, a months notice or salary in lieu of such notice will be given provided that Nakumatt Holdings Ltd may summarily dismiss you without such prior notice or payment in lieu thereof, if, in the Company's judgment such summarily dismissal is justified.

18. The   Company alleges loss  of a  TV  which the  Claimant handled and which was lost during the  Claimant shift. He was on duty and  prepared the  necessary documentation for the  purchase and  escorted the  item to the  lift. Nothing was seen  on CCTV footage on the  shop  floor where items receipted by the  Shop Assistants were  ordinarily delivered for collection. The  last staff to  handle the item that was lost was  the Claimant. In the Court's mind the proximate cause  of the  loss was  the handling of the  item by the Claimant and  the  Respondent was justified in  summarily  dismissing  the  Claimant after  the  investigations  and inquiry conducted by  the  Respondent. The dismissal was  not unfair in terms of the  Employment Act and is therefore not to be disturbed. Due regard to the  principles of natural justice were  had as the  Claimant was accorded opportunity  to  appear and  explain the  loss  but  he  failed to satisfy the  Respondent thereby provoking the  dismissal in terms of the contract of employment.

19.  Heavy  weather was  made  by  the  Respondent on the  issue  of gratuity and  in brief reprise, the  Court gives  the  following guidance. Gratuity is governed by  Section 35 of the  Employment Act  which the  Respondent and its counsel would be well  advised to familiarise themselves with.

20.  The Claimant’s claim fails and  is dismissed but  each  party shall  bear their own costs.

Dated and delivered in Nairobi on this 15th day of January 2013.

Justice Nziokiwa  Makau

Judge