Kenya Chemical & Allied Workers Union v Botanical Extracts (EPZ) Limited [2015] KEELRC 332 (KLR)

REPUBLIC OF KENYA

EMPLOYMENT AND LABOUR RELATIONS COURT ATNAIROBI

CAUSE NO. 2116 OF 2012

KENYA CHEMICAL & ALLIED WORKERS UNION…....…CLAIMANT

VERSUS

BOTANICAL EXTRACTS (EPZ) LIMITED …..………..RESPONDENT

JUDGMENT

This case was filed by Kenya Chemical and Allied Workers Union, the Claimant, on behalf of the Grievants Mr. Kiiru Nga’ng’a, Mr. Joseph Karina, Mr. Ezbon Mathenyu and Mr. James Kinyanjui Muiruri, the 1st, 2nd, 3rd and 4th Grievants respectively.  In the Memorandum of Claim filed on 18th October 2012 the Claimant states that it is registered as a trade union to represent workers in the Chemical and Allied Industries in Kenya.

The Claimant does not have a recognition agreement with the Respondent.  A dispute on recognition agreement was at the time of filing this suit pending for determination under Nairobi High Court Misc. Application No. 283 of 2010 following the Respondent’s objection to an award of the then Industrial Court in Cause No. 390(N) of 2009 in which the Industrial Court ordered the Respondent to sign recognition agreement with the Claimant Union in its award read on 8th April 2010.

The Claimant further states that the Respondent is a manufacturer of artemisimin combination therapies (ACTS) used in treatment and cure of malaria disease at its factory situated at EPZ, Athi River. The Claimant avers as follows in respect of the Grievants:

1. MR. KIIRU NG’ANG’A

He was first employed by the Respondent as an Electrical Technician on a 3 months contract by a letter dated 9th February 2007 effective from 19th February 2007.

His starting gross basic salary per month was Kshs.25,000.  He was then given a full time employment by letter dated 10th April 2007 effective the same date at the same monthly consolidated gross basic pay of Kshs.25,000/=.

He was verbally sent on unpaid leave on 30th April 2009 and eventually terminated on 30th May 2009 on allegation of deserting work. At the time of termination he had worked with the Respondents for 2 years and 3 months with a good record.

2. MR. JOSEPH KARINA

He was first employed on a 2 months contract on 1st June 2006 as an Assistant Erector at a starting gross basic salary of Kshs.10,000/= per month. He worked continuously up to 10th April 2007 when he was confirmed as a full time employee at a gross basic salary of Kshs.15,000 per month.

He was verbally sent on unpaid leave on 30th April 2009 and eventually terminated on 30th May 2009 on allegation of deserting work.

At the time of termination he had served the Respondents for a period of 2 years and 10 months with clean record.

3. EZBON MATHENYU MAINA

He was first employed on a short term contract by letter dated 7th June 2006 effective from 7th June 2006 as an Assistant Erector at a starting gross basic salary of Kshs.15,000/= per month.  He worked continuously up to 10th April 2007 when he was confirmed as a full time employee with his basic salary remaining the same at Kshs.15,000 per month.

He was verbally sent on unpaid leave when he declined to accept terms of the unpaid leave on 30th April 2009 and his employment was eventually terminated on 30th May 2009 on allegation of deserting his work.

At the time of termination, he had worked for the Respondents for a period of 3 years with a clean record.

4. JAMES KINYANJUI MUIRURI

He was first employed by the Respondents as an Erector by letter dated 13th April 2006 on a 3 months contract at a salary of Kshs.20,000/= gross basic pay.  He was later confirmed full time employee on 10th April 2007 as Mechanical Fitter with same salary of Kshs.20,000/= per month.

He was verbally sent on unpaid leave when he declined to accept terms of the unpaid leave on 30th April 2009 and eventually terminated on 30th May 2009 on allegation of deserting his work.

At the time of termination, he had served the Respondents for a period of 3 years and 2 months with a clean record.

The Claimant avers that all the Grievants were issued with letters of termination while on leave. The letters alleged that they had deserted work.  That prior to the termination, the Respondent had on 16th April 2009 written a letter to the District Labour Officer Machakos notifying him of the Respondents intention to declare some workers redundant. The Respondent also posted a notice of intention to declare workers redundant on its notice board on the same day.  The workers informed the Claimant about the notice prompting the Claimant to write a protest letter to the Respondent on 27th and 28th April 2009 seeking a meeting to discuss the intended action.

On 29th April 2009 the Respondent wrote a letter to the Minister for Labour stating that it intended to slow down its operations by sending 50 employees on unpaid leave.  On the same day the Respondent called a general meeting of the workers at which the workers were informed of the Respondents intention to send them on unpaid leave up to the end of November 2009.  They were informed that during the unpaid leave period they would be paid only house allowance of Kshs.1,304 per month.  All the workers were told to collect the letters to that effect on 30th April 2009.

The 4 Grievants did not accept the decision to send them on unpaid leave.  All workers other than the Grievants were issued with letters sending them on unpaid leave on 30th April 2009.  The Grievants were all the same sent away together with the rest of the workers. The Grievants were told they would be called later to sort out their case.

On the same date the Claimant wrote yet another letter to the Respondent seeking details of employees to be affected by the intended redundancy and the package the Respondent was offering them.

By a letter dated 27th May 2009 the District Labour Officer, Machakos invited the parties for a meeting on 29th May 2009 to discuss the layoff of 50 workers.

On 30th May 2009 the Respondent issued letters of termination to the Grievants. The ground for termination was desertion of duty. The letters stated as follows:

May 30, 2009

Mr. …

C/O Botanical Extracts EPZ Ltd

BE-098

Dear ……,

RE: TERMINATION OF EMPLOYMENT CONTRACT

The management has noted with regret that, since 1st May up to date, you have failed to report on duty neither have you communicated to us your reasons for absence.  Your whereabouts are unknown since you have not completed official leave form.

For this reason, the company has considered your absence as desertion from duty and therefore your services will be no longer required and declared a deserter with effect from today’s date.

Please arrange to clear or return the company property before collecting your final dues.

Yours faithfully,

Botanical Extracts EPZ Ltd.

Signed

Joseph Kithikwa

Personnel Officer

The Grievants responded to the letters of termination on 3rd June 2009 (3rd Grievant), and 4th June 2009 (1st, 2nd and 4th Grievants).  All the Grievants stated in their response that they did not desert duty but were away from work following the Respondents notification at the monthly staff meeting that there would be no production in the month of May 2009.  They further stated that they were still waiting for the company to communicate to them as advised.

On their failure to sign a leave form, the Grievants stated that they did not sign as the leave was unpaid and they had not applied for it.  They all stated that the termination was unlawful.

The claimant sought for a meeting to discuss the termination letters and two meetings were held on 29th June and 15th July 2009 at which no agreement was reached.  The Claimant thereafter reported this dispute to the Minister for Labour on 18th December 2009 after notifying the Respondent of the intention to do so by letter dated 28th July 2009.

The Conciliator convened a conciliation meeting on 6th May 2011 and prepared his report containing findings and recommendations dated 2nd August 2011.  The report recommended that the termination of the Grievants be reduced to normal termination and the Grievants be paid notice pay, accrued leave pay, overtime worked if any, wages for days worked and 6 months wages as compensation for loss of employment. The Claimant accepted the recommendations but the Respondent declined.  The Respondent also declined to sign the Certificate of disagreement.  The Claimant therefore filed this case.

At the hearing, the 1st Grievant testified on his behalf and on behalf of the claimant and his co-Grievants.

In the Memorandum of Defence filed on 23rd Janaury 2013, the Respondent objected to the locus standi of the Claimant on grounds that there was no recognition agreement between the parties.

The Respondent further averred that it sources for its main raw materials artemisia annua leaves from private farmers within the East African region. Due to poor rainfall from early 2008 the output of the crop went down resulting in severe shortage of the raw material as a result of which the company could not operate beyond 15% capacity. Due to the low production the Respondent was forced to suspend a significant part of operations for a period of 6 months from 1st May to early December 2009 when supply was expected to improve to enable the Respondent re-start full operations.

The Respondent considered declaring some workers redundant but changed its mind and decided to instead send 50 workers on unpaid leave from 1st May to early December 2009. The affected employees would be entitled to continuity of service, house allowance and existing medical support.  The Respondent averred that the intended action was sanctioned by the Labour Commissioner’s office.

The Respondent avers that it called a meeting of its workers on 29th April 2009 and communicated its decision to the workers.  The affected workers were issued with letters on 30th April 2009.  The 4 Grievants were not among the 50 workers sent on unpaid leave.  Following their absence from duty from 1st to 30 May 2009 their absence was considered as desertion of duty as a consequence of which their employment contracts were terminated.

The Respondent did not call any witnesses at the hearing and relied on their Memorandum of Defence.  Both parties filed written submissions.

In its written submissions the Claimant submitted that the Respondent failed to comply with both Section 41 and 43 of the Employment Act, and that the Grievants were on unpaid leave when they received letters of termination.  The Claimant submitted that there was no disciplinary hearing and the Grievants were terminated without being given an opportunity to be heard, that procedural fairness safeguarded by Section 41 of the Act was disregarded by the Respondent.

The Claimant relied on Cause No. 1113 of 2012, Kenya Chemical and Allied Workers Union v. National Cement Company Limited.

The Respondent submitted that the Grievants were never told to go away, that the Grievants were not among the 50 employees who were sent on compulsory leave and therefore deserted duty. That under Section 44(4) (a) which provides that an employer may dismiss an employee summarily if “without leave or other lawful cause, an employee absents himself from the place appointed for the performance of his work”the Respondent was entitled to dismiss the Grievants.

Issues for determination

The issues for determination are whether the termination of the Grievants’ employment was wrongful and if they are entitled to the reliefs sought.

Whether termination of Claimant’s employment was wrongful

The Claimant submitted that the Grievants were never given an opportunity to be heard as provided in Section 41 and the Respondent did not prove any charges against them.  The Respondent did not adduce any evidence to rebut these allegations in the Memorandum of Claim or testimony of 1st Grievant.  It did not call any witness and all the exhibits annexed to its Memorandum were in respect of Hillary Waithaka who is not a subject of this case.

The Respondent did not deny that the Grievants were never given a hearing after the alleged desertion.

I find that the termination of the Grievants did not meet substantive and procedural tests as provided in section 41, 43 and 45 of the Act and were therefore unfair.

Whether the Claimant is entitled to the reliefs sought

The Claimant sought the following reliefs:

1. That, this Honourable Court having noted the Claimants submission finds the Respondents to have acted unfairly, wrongfully and unlawfully for dismissing/termination the four employees in total disregard to provision of the law under the Employment Act 2007, Section 41, 43 and 45 as normal practice of being fair while taking such decisions/actions which were not adhered to.

2. That, this Honourable Court at its discretion orders the Respondent to reinstate the four Grievants back to employment loss of benefits and privileges to date and to be paid their monthly wages and allowances for the period they have been out of employment.

3. That, in case this Honourable Court finds reinstatement not possible, then this Honourable Court consider giving the four (4) Grievants benefits and entitlements bearing in mind that, the Respondents does not have a Collective Bargaining Agreement, as well as giving them maximum compensation permitted by law within Courts powers for suffering wrongful and unlawful terminations/dismissal for loss of employment, and having been subjected for over 6 months unpaid leave, only to be dismissed.

4. That costs be provided for in favour of the Claimants.

I have already ruled that the termination of employment of the Grievants was unfair.  An order for reinstatement is not available in this case as it is more than 3 years since the Grievants’ contracts of employment were terminated.  I can also not order the alternative of re-engagement for reasons that the evidence on record points to the fact that at the time of termination of the employment of the Grievants the Respondent was not functioning at full capacity due to shortage of raw materials and had even issued a notice of intention to declare 50 employees redundant.  The Claimant has not shown that the situation has improved. The only option available is to award terminal benefits and compensation.

The Conciliator had made the following recommendations which the Claimant had accepted:

(i) Notice pay,

(ii) Accrued leave pay,

(iii) Overtime worked if any,

(iv) Wages for days worked,

(v) 6 months compensation.

I adopt the same recommendations and direct that parties work out the actual sums involved and come back to court within 2 weeks from the date of judgment to record consent on the amount due in respect of each Grievant.  For the avoidance of doubt, each Grievant is entitled to salary for the month of May 2009.

There will be no orders for costs.

Dated this ……………..day of October 2015

HON. LADY JUSTICE MAUREEN ONYANGO

JUDGE

Delivered in Nairobi this 29th Day of October 2015

HON. LADY JUSTICE HELLEN WASILWA

JUDGE

In the presence of:

……………………………for Claimant

………………………….... for Respondent