John Baptista Ndegwa & Wilson Okoti Maikara v Axel Engineering and Manufacturing Limited [2017] KEELRC 1627 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI

CAUSE NO 640 OF 2012

CONSOLIDATED WITH CAUSE NO 644 OF 2012

JOHN BAPTISTA NDEGWA…………………………………..1STCLAIMANT

WILSON OKOTI MAIKARA……………………………….….2NDCLAIMANT

VERSUS

AXEL ENGINEERING AND MANUFACTURING LIMITED…....RESPONDENT

JUDGMENT

Introduction

1. This consolidated claim is brought by the Claimants, John Baptista Ndegwa and Wilson Okoti Maikara against their former employer, Axel Engineering and Manufacturing Limited. The claim is contained in Memoranda of Claim dated 16th April 2012 and filed in Court on even date. The Respondent filed Memoranda of Response on 26th September 2012.

2. At the hearing, the Claimants testified on their own behalf and the Respondent called its General Manager, Edward Irungu Mwangi. Both parties also filed written submissions.

The Claimants’ Case

3. The 1st Claimant, John Baptista Ndegwa states that he was employed by the Respondent as a Procurement Manager in December 2003. He was later appointed to the position of Customer Liaison Officer at a monthly salary of Kshs. 50,000 from 21st June 2010.

4. On 8th February 2012, the 1st Claimant was summoned by the Respondent’s General Manager to a meeting where he found a number of his colleagues. The General Manager notified the 1st Claimant and his colleagues that he would be suspending them to allow for investigations into cases of theft at the Respondent’s workshop. They were informed that they had been singled out for suspension because the alleged theft was due to the poor performance of their duties.

5. The 1st Claimant’s suspension was documented by memo dated 8th February 2012. The suspension was to commence immediately and last for ten (10) days after which the 1st Claimant was to report back on 21st February 2012.

6. When the 1st Claimant reported on 21st February 2012 he was handed a letter of termination dated 15th February 2012. According to the termination letter the decision to terminate the 1st Claimant’s employment was made following findings of an investigation conducted by the Respondent which had attributed increased theft in the workshop to the 1st Claimant.

7. The 1st Claimant states that the termination of his employment was in contravention of the Employment Act. Specifically, he was not accorded any opportunity to be heard as required under Section 41 of the Act. Moreover, there was no valid reason for the termination as the theft was related to general security at the Respondent’s premises which did not form part of the 1st Claimant’s job description.

8. The 1st Claimant further states that he was coerced into signing a discharge voucher so as to receive the sum of Kshs. 58,864 offered by the Respondent. He maintains that this sum was way below his lawful terminal dues.

9. The 1st Claimant now claims the following:

a) Unpaid salary from 1st February-29th February 2012…..Kshs. 36,207

b) 9 unpaid leave days…………………………………………...……21,429

c) Salary in lieu of notice…………………….………………………...50,000

d) 12 months’ salary in compensation………………………….....600,000

e) Less sums paid…………………………………………………...(58,864)

f) Costs plus interest

10. The 2nd Claimant, Wilson Okoti Makiara was initially employed by the Respondent as a Workshop Manager from 1st January 2004. He was later appointed as Assistant Projects and Fabrication Manager at a monthly salary of Kshs. 46,000.

11. On 8th February 2012, the 2nd Claimant was summoned by the Respondent’s General Manager to a meeting where he found a number of his colleagues. The General Manager notified the 2nd Claimant and his colleagues that he would be sending them on suspension to allow for investigations into alleged cases of theft in the Respondent’s workshop. The 2nd Claimant and his colleagues were informed that they had been singled out for suspension because the alleged theft was attributable to the poor performance of their duties.

12. The 2nd Claimant was issued with a memo dated 8th February 2012 notifying him that his suspension was to commence immediately and last for seven (7) days after which he was to report back on 16th February 2012. When he reported back he was issued with a termination letter dated 15th February 2012. According to the termination letter, the decision to terminate the 2nd Claimant’s employment was informed by findings from an investigation which attributed increased theft in the workshop to the 2nd Claimant.

13. It is the 2nd Claimant’s case that the termination of his employment was in contravention of the provisions of the Employment Act. In this regard, the 2nd Claimant was not availed an opportunity to be heard as required under Section 41 of the Act. Further, the reason advanced for the termination was unfair as it related to general security at the Respondent’s premises which did not form part of the 2nd Claimant’s job description.

14. The 2nd Claimant pleads that he was coerced into signing a discharge voucher so as to receive the sum of Kshs. 127,701. 86 offered by the Respondent. He states that this sum was way below his lawful terminal dues.

15. The 2nd Claimant claims the following:

a) Unpaid salary from 1st February-21st  February 2012……..Kshs. 33,310

b) 12 months’ salary in compensation……………….........………....552,000

c) Costs plus interest

The Respondent’s Case

16. In its similar responses dated 26th September 2012 and filed in Court on even date, the Respondent admits having employed the 1st Claimant a Customer Liaison Officer from 21st June 2010 and the 2nd Claimant as a Workshop Manager from 10th January 2004.

17. On 8th February 2012, the General Manager invited key employees to a meeting to discuss issues of theft affecting the Respondent. The employees were asked to show cause why disciplinary action should not be taken against them and to outline measures to be taken to curb the theft.

18. The 1st and 2nd Claimants failed to respond and were therefore suspended pending investigations. Their employment was subsequently terminated following investigations which established their failure to curb the rampart theft.

19. The 1st and 2nd Claimants having been paid their terminal dues discharged the Respondent from any further liability.

Findings and Determination

20. There are two (2) issues for determination in this case:

a) Whether the termination of the Claimants’ employment was lawful and fair;

b) Whether the Claimants are entitled to the remedies sought.

The Termination

21. The termination of the Claimants’ employment was communicated by similar letters dated 15th February 2012 stating as follows:

“Dear Ndegwa/Wilson,

RE: TERMINATION OF YOUR EMPLOYMENT CONTRACTReference is made to the memo dated 8thFebruary 2012.

After investigations, the management held you responsible for the apparent increase in theft cases in the workshop with you (sic). This cannot be tolerated, and having discussed the issue on several occasions, the management terminates your employment with immediate effect.

Notwithstanding this, we shall pay you notice and service. Your final dues will be paid at the end of February 2012.

You will however be required to carry out clearance with all the relevant departments before these dues are paid.

Yours Faithfully,

(Signed)

Edward Mwangi

General Manager”

22. Prior to this letter the Claimants had been sent on suspension for ten (10) and seven (7) days respectively. The suspension was effected by memo dated 8th February 2012 stating as follows:

“DISCIPLINARY SUSPENSION

There have been serious and recurrent theft cases in the workshop, something that has resulted in the company spending money on replacing those items and equipments (sic) that have been lost. Different measures undertaken to curb this theft have ended up being futile, and the cases have continued to rise, despite your commitment to stop this problem. As the people concerned, you bear the responsibility. This was confirmed in the impromptu meeting that was held today, and it was agreed you lack seriousness in the execution of your duties.

In this consideration, the management would like to carry out independent investigations, and identify the persons involved in this practice. As a person who has failed to stop this practice, the investigations will be carried (sic) in your absence.

You are therefore suspended without pay for 10/7 days. You will report to my office on 21stFebruary 2012/16thFebruary 2012 at 9AM. This suspension takes effect, today, dated 8thFebruary 2012.

Yours Faithfully,

(Signed)

Edward Mwangi

General Manager”

23. A reading of the suspension memo and the termination letter indicates that the Claimants were accused of failure to arrest spiraling theft in the Respondent’s workshop. The memo however also reveals that this was an accusation leveled against a group of employees, not just the Claimants.

24. With this is mind, the question remains whether the Respondent had a valid reason for terminating the Claimants’ employment as required under Section 43 of the Employment Act, 2007.

25. From the evidence on record, the Respondent responded to the issue of theft in its workshop by calling a joint meeting of seven (7) of its managers. However and in spite of the Respondent’s concern about the increasing incidents of theft in its workshop, there was no evidence of any specific charges served on the Claimants’ for their response.

26. It was therefore not possible for the Court to establish whether the incidents of theft were as a result of the claimants’ negligence or systemic failure within the Respondent’s operations. In light of this the Court finds that the Respondent failed to establish a valid reason for the termination of the Claimants’ employment.

27. Regarding the procedure adopted by the Respondent in effecting the termination, the Court observed that the Respondent chose to send the Claimants on suspension on the same day of the joint impromptu meeting held on 8th February 2012. A record of the proceedings of this meeting which the Claimants disputed shows that the Claimants alongside two (2) other employees were required to “express through writing on (sic) why they should not be dismissed and the measures they would take if not dismissed, to curb the vices.”

28. It was however not lost on the Court that there was no such requirement in the suspension letters issued to the Claimants on the same day. On their part, the Claimants testified that what they were required to do was to write resignation letters which they declined. At any rate, even assuming that the Claimants were indeed instructed to submit written explanations, the time given to do so being lunchtime according to the Respondent’s witness, Edward Irungu Mwangi and 4. 00 pm according to the minutes of the meeting held on 8th February 2012, was far too short. This, coupled with the fact that no specific charges were put to the claimants to elicit their response rendered the process procedurally unfair.

29. Moreover, the memo sending the Claimants on suspension which is referenced “Disciplinary Suspension” notified the Claimants that their suspension was without pay. As held by this Court in Wilberforce Ojiambo Oundo v Regent Management Limited [2013] eKLRsuspension is a neutral action requiring an employee to step aside to allow for unfettered investigations.

30. Suspension is ordinarily not a disciplinary action. In this regard and as held by the Court of Appeal in James Njuguna Muchiri v Armed Forces Canteen Organisation (AFCO) [2016] eKLRthe power of an employer to suspend an employee without pay accrues from the contract of employment. In my understanding the corollary of this would be that an employer has no right to suspend an employee without pay unless there is provision for such an action in the employment terms of the employee. That said, the Court finds that the Respondent’s action of sending the Claimants on suspension without pay amounts to disciplinary action without due procedure.

31. In sum, the Court did not find any attempt by the Respondent to subject the Claimants to the mandatory disciplinary procedure set out in Section of the Employment Act.

Remedies

32. Ultimately, the Court finds the termination of the Claimants’ employment substantively and procedurally unfair and awards each one of them ten (10) months’ salary in compensation. In making this award I have taken into account the Claimants’ length of service as well as the Respondent’s conduct in the termination process.

33. I further award the Claimants salary for 15 days in the month of February 2012. In the absence of leave records to counter the 1st Claimant’s claim for 9 leave days, the claim succeeds and is allowed.

34. The Claimants were paid in lieu of notice at termination and this claim is therefore dispensed with.

35. Before making the final award in this matter, I need to make a determination on the issue of the disclaimers signed by the Claimants on 7th March 2012. The law is now well settled that an employer cannot escape lawful obligation to an employee by hiding behind a discharge or disclaimer signed by the employee (see Simon Muguku Gichigi v Taifa SACCO Limited [2012] eKLR and Charles Nyangi Nyamohanga v Action Aid International [2015] eKLR)

36. In light of the foregoing, I enter judgment in favour of the Claimants in the following terms:

1stClaimant- John Baptista Ndegwa

a) 10 months’ salary in compensation…………..Kshs.500,000

b) Salary for 15 days in February 2012. ...............................25,000

c) Leave pay for 9 days (50,000/30x9)……………....…….15,000

Total………………………………………………….............540,800

2ndClaimant- Okoti Makiara

a) 10 months’ salary in compensation………..…Kshs. 460,000

b) Salary for 15 days in February 2012………………….....23,000

Total……………………………………………………….......483,000

37. These amounts will attract interest at court rates from the date of judgment until payment in full.

38. The Claimants will have the costs of this case.

39. Orders accordingly.

DATED SIGNED AND DELIVERED IN OPEN COURT AT NAIROBITHIS 17THDAY OF MARCH 2017.

LINNET NDOLO

JUDGE

Appearance:

Mr. Odongo for the Claimant

Mr. Kilonzo for the Respondent