John Gathogo Mwangi v Netplan East Africa Limited [2018] KEELRC 449 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT

AT NAIROBI

CAUSE NO. 793 OF 2013

(Before Hon. Lady Justice Maureen Onyango)

JOHN GATHOGO MWANGI...............................CLAIMANT

VERSUS

NETPLAN EAST AFRICA LIMITED...........RESPONDENT

JUDGMENT

The Claimant in his Memorandum of Claim dated 19th April, 2013 and filed in Court on 24th May, 2013 alleges that the Respondent herein has failed to pay his terminal dues. The Claimant seeks for the following remedies: -

a) Payment of full terminal dues owed to the Claimant of Kshs. 212,052. 90

b) Costs of the Suit

c) Interest on (a) and (b)

d) Any other relief that this Honourable Court may deem fit and just to grant

The Respondent filed a Defence to the Memorandum of Claim on 19th July 2013 in which it admits that the Claimant was its employee but denies that the Claimant is entitled to house allowance. The respondent contends that on or about 18th July 2011 it declined to renew the contract between it and the Claimant and a notice of non-renewal was issued to the Claimant to that effect on 18th July 2011.

The respondent contends that the Claimant is not entitled to the reliefs sought in his Memorandum of Claim and urges the Court to dismiss the Claim with Costs.

On 9th October 2017, the Claimant (CW1) in his testimony stated that he was employed by the Respondent on contract basis for 3 years. It was his further evidence that he left employment upon the expiry of his contract in 2011 and that he was not paid full salary in the months of April, June and July 2011.

CW1 further stated that his salary was Kshs.80,000 per month and that he was entitled to leave (37 days). That the total amount in terminal benefits that is due is Kshs.212,052. 90 as itemised in the Memorandum of Claim.

CW1 prays that the Memorandum of Claim be allowed as drawn.

On cross examination the Claimant averred that he worked on contract basis which was terminated on 18th July, 2011 when he was served with a notice of non- renewal of the employment contract.

The Respondent’s case was to be heard on 22nd January 2018. On the hearing date the Respondent opted to close its case without calling any witness. The parties thereafter filed and exchanged written submissions.

Claimant’s Submissions

In the written submissions the Claimant reiterated the contents of the Memorandum of Claim and his oral evidence in Court.

The Claimant further submitted that upon expiry of his Contract of employment on or about 18th July 2011 the Respondent computed all the Claimant’s outstanding terminal dues as evidenced by its letter dated 18th July 2011 produced in Court.

The Claimant submitted that the instant suit be allowed as prayed.

Respondent’s Submissions

It is submitted that the Respondent complied with the provisions of Section 35 (1)(c) of the Employment Act, 2007 which provides for termination notice.

It is further submitted that the Claimant was aware that the Contract would lapse after one year. For emphasis the Respondent relied on the following authority George Makau & 2 Others v Label Converters Limited (2016) eKLRwhere the Court held as follows;

“…the contention that because the Contract had a provision for one month’s notice of termination hence the Claimants were entitled to one month’s notice is not sustainable. The notice provision could only apply in circumstances where the Contract was to be terminated prematurely which is not the case here.”

It is further submitted that parties are bound by the terms of their contract and where the intention is to have a fixed term contract for one year, such must be upheld as the intention of the parties. The Respondent relied on the case of Wanjohi Muriuki versus Kirinyaga Water and Sanitation Co. Ltd & Another (2012) eKLR.

The Respondent further submitted that the Claimant is not entitled to the reliefs sought and the Court should dismiss the Claim with costs.

Determination

The claim herein is for terminal dues only. The terminal dues are set out in the respondent’s letter dated 18th July 2011 which has been produced by both the claimant and the respondent. The contents of the letter are thus not disputed. The respondent filed a defence but did not call any witness.

The letter is reproduced below –

“JOHN GATHOGO MWANGI

P. O. BOX 1453

NAIROBI

18th July 2011

Dear Sir

REF: RENEWAL OF CONTRACT

We refer to the above, and would like to inform you that the Company will not be renewing your contract which expires on 19th July 2011.

In the meantime we consider your terminal dues of Kenya Shillings, Two Hundred Twelve Thousand Fifty Two and Ninety Cents as follows: -

(a) Part of April 2011, Salary Kshs.45,209. 00

(b) June 2011, Salary Kshs.54,509. 00

(d)Leave days (37 days) Kshs.75,134. 00

(e) Certificate of Service.

Yours Faithfully

For and on behalf of NetPlan East Africa Limited

SIGNED

Andrew Ayres

Managing Director”

In view of the letter from the respondent setting out what it owed the claimant at the end of her contract and the fact that no evidence was adduced by the respondent, the defence is a sham. The respondent’s conduct can only be interpreted to be an intention to punish the claimant by keeping him out of his money for as long as the respondent could. This is calculated malice. It was also a waste of judicial time and resources. The court frowns upon such conduct.

I consequently enter judgment in favour of the claimant against the respondent as admitted and as prayed at paragraph 5 of the memorandum of claim as follows –

(a) Part of April 2011, Salary.......................Kshs.45,209. 00

(b) June 2011, Salary...................................Kshs.54,509. 00

(d) Leave days (37 days)............................Kshs.75,134. 00

Total Kshs.212,052. 90

(e) Certificate of Service.

In view of the fact that this sum was admitted in the letter dated 18th July 2018 and in view of the fact that it was grossly unreasonable for the respondent to cause this matter to proceed to hearing only to close its case without presenting evidence. It is my finding that the respondent herein acted in bad faith and has kept the claimant out of his money and subjected him to an unnecessary suit which has been pending in court since 2012.

I will award the claimant costs and interest at court rates from date of admission of the debt. In doing so I am guided by the decision of the court in the case of Lwangavs. Centenary Rural Development Bank [1999] 1 EA 175 where it was held that –

“The award of interest prior to the institution of the suit is rationalized in two ways: (1). that the plaintiff is thereby being compensated for being kept out of his money. He has been deprived of the use of his money from the time he incurred hisloss. On that basis, interest is to run from that date. (2). that the defendant wrongfully withheld the plaintiff’s money. The emphasis here is on the Defendant’s wrongful withholding of the Plaintiffs money. On that basis, interest is to run from the date when the Defendant ought reasonably to have settled the plaintiffs claim.”

The words of Havelock, J (as he then was) in awarding interest inVeleo(K) Ltd -V- Barclays Bank of Kenya Ltd (2013) eKLRare instructive;

“Accordingly I would find that there was no express provision as to the method of calculating interest rate on the pecuniary judgment in this case. However, the Defendant, having withheld the amount of money for a period of over twelve (12) years, it would be presumed to have applied, the same to its business, and therefore gained significantly from the same. The opportunities lost by the Plaintiff in this instance would only be adequately compensated by applying a rate that would reflect the time value component to interest ...I see no reason why the Plaintiff herein should not enjoy the same method of calculation of interest as would have been employed and calculated payable by it, if it had been in default.”

It is so ordered.

DATED, SIGNED AND DELIVERED AT NAIROBI ON THIS 30TH DAY OF NOVEMBER 2018

MAUREEN ONYANGO

JUDGE