Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers v Leshau Boys' High School [2014] KEELRC 818 (KLR)

REPUBLIC OF KENYA

IN THE INDUSTRIAL COURT OF KENYA AT NAKURU

CAUSE NO. 31 OF 2013

(Formerly Cause No.61 of 2012 at Nairobi)

KENYA UNION OF DOMESTIC, HOTELS, EDUCATIONAL

INSTITUTIONS, HOSPITALS AND ALLIED WORKERS........CLAIMANT

-VERSUS-

LESHAU BOYS' HIGH SCHOOL.........................................RESPONDENT

(Before Hon. Justice Byram Ongaya on Friday 21st February, 2014)

RULING

The court entered judgment in this case on 29. 11. 2013 being in favour of the claimant for:

the respondent to pay the grievants Kshs.154,664. 00 as found due in the judgment;

the payment in 1 to be by 1. 1.2014, in default interest to be payable at court rates from the date of the judgment till full payment; and

the respondent to pay costs of the suit.

On 05. 12. 2013, the respondent filed a notice of motion under certificate of urgency seeking orders that:

the honourable court be pleased to certify the application urgent and the same be heard ex parte in the first instance;

pending the hearing and determination of the application inter-partes the honourable court be pleased to stay its order delivered in the judgment of 29. 11. 2013;

the court be pleased to review its order resulting from the judgment delivered on 29th November, 2013; and

the costs of the application be provided for.

The application was brought under sections 1A, 1B and 3A of the Civil Procedure Act and Order 45 Rules 1, 2(1) and Order 51 Rule 1 of the Civil Procedure Rules, 2010. The application was supported by the affidavit of the respondent’s learned counsel Mr. Ephantus N. Njuguna, Senior Litigation Counsel.

The claimant as the respondent in the application did not file any replying affidavit, a statement of grounds of opposition or a preliminary objection to oppose the application.  The application was certified urgent and was heard on 12. 02. 2014 when the court upheld the objection by the applicant’s counsel that the claimant could not be heard in opposition to the application in absence of filing and serving the relevant opposing documents.

The applicant urged two main grounds in the submissions to support the application.

First, it was submitted that the grievants in the case were members of a provident fund namely the National Social Security Fund (NSSF). Accordingly, they were not entitled to gratuity as prayed for because section 35(6) of the Employment Act provides that where the employee is provided for a pension or other retirement benefit, then the employee is not entitled to award of gratuity by the court.  Payment of the gratuity as ordered by the court would amount to double payment in the circumstances of the case.  Counsel for the applicant further submitted that under Gazette Notice No. 262 of 1993, the Minister of Education had empowered the applicant to appoint, promote and discipline its staff upon such terms as the applicant was at liberty to determine and review.  Accordingly, it was submitted for the applicant that the Memorandum of Agreement between the Ministry and the claimant, though genuine, had been overtaken by events in view of the changes at the Ministry and the provisions of the Gazette Notice.  Accordingly, the grievants were not entitled to gratuity under clause 31(a) of the Memorandum which provides that gratuity is payable where the employee has served for ten continuous years and attained 50 years of age or compulsory retirement age of 55 years.

The court has considered the submission and revisited the judgment.  The court stated as follows in the judgment:

“The collective agreement filed in court on 1. 07. 2013 is between the claimant and the Ministry of Education, Science and Technology.  It is dated 18. 03. 1986.  Clause 30 of the agreement prescribes the normal retirement age of 50 years and the payable gratuity upon retirement as per clause 31 is at the rate of one twelfth of each completed year of service.  The 1st grievant was employed in 1982 and the 2nd grievannt in 1991 and both retired with effect from 1. 06. 2010.  The 1st grievant had served for 28 and the 2nd for 19 complete years.

The respondent has submitted that the collective agreement is not binding in view of Legal Notice No. 283 of 1993 under which the Ministry of Education gave institutions the guidelines on non-teaching staff requiring tailor-made budgets.  The Legal Notice provides for Education (Board of Governors) (Non-Teaching Staff) Regulations, 1993.  They apply to appointment of staff by the Board of Governors of public schools such as the respondent in this case.  Regulation 9 on determination of issues states thus, ‘9. Any issue arising as to the construction of these Regulations or any act done or about to be undertaken under them shall be determined conclusively by the Minister.’

As at the time the Legal Notice was published in 1993, the collective agreement was subsisting.  The court has not been shown the Minister’s determination on the effect of the Regulations on the subsisting collective agreement that affected staff in the employment of the Board of Governors.  Regulation 6 provides that the Employment Act will apply to claims and grievances between the Board and its staff.  The court holds that the subsisting terms and conditions of service in the collective agreement could not be varied unilaterally by the respondent as envisaged in section 10(5) of Employment Act because under the section, consultations were necessary.  There is no evidence that the respondent and the grievants agreed to vary the terms and conditions of service as contained in the collective agreement.  The material on record shows that the terms in the collective agreement were never varied.  Accordingly, the court finds that the collective agreement applied to the grievants’ retirement.”

Accordingly, the court found that under the parties’ agreement as per clause 31 (a) of the Memorandum of 1986, the 1st grievant was entitled to Kshs.88,582. 00 and the second grievant to Kshs.52,812. 00 being gratuity.  The court finds that section 35(6) of the Employment Act, 2007 does not preclude parties from entering an agreement for retirement benefits or gratuity over and above the statutory NSSF arrangement.  Thus, the judgment is upheld and the court finds that it will not be reviewed in that regard.

While upholding the judgment, the court considers that the 1986 agreement between the Minister and the claimant union serves a useful purpose of sound governance and human resource management in public schools. It could be that there may be clauses that may need renegotiation and revision to keep pace with the changed times and alignment to the Constitution of Kenya, 2010 as well as the Employment Act, 2007.  The court has carefully considered the practical benefits of the Memorandum which essentially is a collective agreement between the claimant union and the Ministry.  It is obvious that such nationally negotiated agreement is in the best public interest rather than the union negotiating separate agreements with every management of the thousands of public schools in the Republic.  Accordingly, it is the court’s considered opinion that the claimant union shall serve this ruling and the judgment delivered in this case on 29. 11. 2013 upon the Cabinet Secretary for Education, Science and Technology and, the Attorney General, for the Cabinet Secretary’s considered further action.

Secondly, it was submitted that the grievants voluntarily applied to retire and the respondent accepted the request. The grievants were paid one month salary in June 2010 though they had not worked.  It was submitted that the pay was to cover for their respective annual leave and the court had erred in the judgment by finding that the payment for June 2010 was reasonably a pay in lieu of the retirement notice. It was submitted that the grievants were not entitled Kshs.7,140. 00 and Kshs.6,130. 00 for annual leave. It was also submitted that they were not entitled to retirement or termination notice because the retirement had been voluntary.  The court has considered the submission and agrees that as submitted for the applicant, the grievants were not entitled to a termination notice and the June 2010 pay was properly a pay in lieu of annual leave. The court finds that the judgment shall be reviewed accordingly.

In conclusion, the application for review will succeed partially with orders that each party shall bear own costs of the application.  Consequential to the review, the orders in the judgment are set aside and substituted with a judgment for the claimant against the respondent for:

the claimant union to serve, within seven days, this ruling and the judgment delivered in this cause on 29. 11. 2013 upon the Cabinet Secretary for Education, Science and Technology, and upon the Attorney General, for the Cabinet Secretary’s considered further action;

the respondent to pay the grievants Kshs.141,394. 00 as found due in this ruling;

the payment in (a) to be by 1. 04. 2014, in default interest to be payable at court rates from the date of  filing the suit; and

the respondent to pay costs of the suit.

Signed, datedanddeliveredin court atNakuruthisFriday 21st February, 2014.

BYRAM ONGAYA

JUDGE