Mary W. Ndirangu v Board Of Trustee National Social Security Fund [2013] KEELRC 94 (KLR)

REPUBLICOF KENYA

INTHE INDUSTRIAL COURT  OF KENYA CAUSE NO. 1625 OF 2011

MARY W. NDIRANGU………....……………………….……….………………CLAIMANT

VS

THE BOARD OF TRUSTEE

NATIONAL SOCIAL SECURITY FUND..………….....……………….….RESPONDENT

RULING

1.  The  matter was  filed under certificate  of Urgency on  26th September

2011   and  after a  series   of interlocutory  applications was  finally set down  for hearing on  a number of occasions but  the  hearings did  not take off until 27th  October 2012   before this  Court. The  appearances were    as   follows:   Mr.   Koceyo    for  Claimant  and    Mr.   Okeche    for Respondent. Mr.  Koceyo  called the  Claimant Mary  Wambui Ndirangu. She testified as follows :   The Respondent was my employer.  I was employed in  July  1990  as  a  Senior  Accountant.   I was  suspended as Internal Audit Manager in August 2011.  It was  allegedly done  in 2012 after a court case for neglect of duty for 2 years. The case was 15/2010 and I was accused No. 9.  The only  count I faced was count seven. The case  is  still pending.   I  was  charged with the  offence of neglect of official duty between January 2006  and 2008  failing to audit the  Fund’s Investment Department leading to a loss of 1. 6 billion through irregular payments.  The  case  is still ongoing.  I have  pleaded not guilty. I was suspended from duty on  9th  April  2010.  The  letter is attached and  is dated 13th  April  2010.  The suspension is by  my  employer on account of the  case.   I was put  on half salary until further notice.  The same  is contained in  paragraph 2 of the  letter.  I was  not paid  the  half salary. The salary was  stopped on 31st  August 2011.  I obtained a court order on 24th January 2012  to compel the  NSSF to pay the  half salary – Justice Kosgei  made  orders in this  case.   In spite  of the  orders of the  Judge for payment I have  not received payment.  I have  not been  terminated.   I am  still on  suspension as the  case  is ongoing. While  on  suspension I filed this  case because Respondent wanted to terminate me yet the employer is  the  one  that took   me  to  court.   I  was  going to  collect payslip  on  19th    September 2011   when   I  was   advised  I  had   been removed from payroll.  I was on suspension as I was not to leave  duty station until end of the  case.   Monthly I used  to come  to collect payslip. When  I came  to  collect payslip I was  told  l  had  been  removed from payroll from 31st  August  2011.  Since  there was  no  communication to that effect I asked  for document that removed me  from payroll.  I was given  a  copy   or   pay   change  advice  by   the   salaries  office  which indicated  that  I  had   been   retired.    It  is  marked  MWN6   and   the document is dated 9th  September 2011.  The  document states I have been  retired under 50  year  rule.    There  was  no prior letter before the PCA issued.  I got a photocopy when  I went to  pick  payslip. The  Staff Employment Guideline is what has  the  50  year  rule.    It is produced in court as  an  exhibit.   At page  46  of the  manual the  50  year  rule  is stated.   The  Notice is  given to  officers on  attaining 50  years   if the employer is terminating or  if the  employee wishes  to  terminate when getting to  50  years.  I was  56  years  old  as of the  time I was  removed from payroll.  I have  attached my  ID as last exhibit. I was  not notified nor  was  I called to  be  asked.    It was  not right to  be  retired.  It was unlawful.  I pray  for an order restraining the  employer from terminating my  services until the  case 15 of 2010  is determined.  The half salary is to  be paid  normally until the  case  is concluded.  I am  also  asking that the  employer meets the  costs  of the  case.

2.  In  Cross  Examination  by  Mr.  Okeche   she  stated that she  worked for NSSF  and   was   first  appointed  on   12th    July   1990.  The   terms  of employment were  permanent and  pensionable after confirmation. She stated that she  accepted the  terms of employment per  Appendix 1 of the  Respondent and was aware  of the  terms and conditions of Staff Regulations as per  page  3 of the  letter. She stated that her  salary was stopped with effect from 31st  August  2011.  She  was  not earning full salary but  half salary plus  allowances.   She  was  earning half salary because she was interdicted.  She was interdicted after being taken to court on  9th  April  2010.   She  was  charged in  a  case  investigated by KACC. Her understanding is that up until now  she is under suspension. She stated she was aware of the  “50 Year Rule”.   The Rule is under the Staff Employment  and  Guideline Policy  document at clause  5:8.    She agreed that there is  early  retirement in  the  staff pension.  The  early retirement is before one reaches the  age of 55 years.  By August 2011 she was already about 56 years. At present she is about 57 years.  She stated she  was  not retired at 55  years  as  the  retirement policy was changed by  government to  60  years.   The  early   retirement age  was also changed. It is from 55.   Between 50 and  55 the  employee can opt to  retire. She stated should not have  been  retired as the  other case  is running. She stated that it is a double punishment if she is terminated as if she  has  been  convicted.  She stated that she  has  been  auditing since  2003  and  used  to  audit personnel procedures.  She  stated she was  aware of other officers of NSSF who  were  retired on  attaining 50 years  of age.   She stated that if she was  to  be retired she would have been  retired under the  55  year  rule.  On being referred to  Staff Rules

5. 8(a) she stated that at 55 the  retirement is automatic.  Using  the  rule

50 does not apply since  60 was retirement age.

3.  In  Re-Examination by  Mr.  Koceyo  she  stated that the  amount of 2. 1 million was  not paid.    The  amount indicated to  have  been  paid  were never paid.  She stated that when  she filed the  case there was no issue of half salary payment,  the  only   case  at the  time was  termination. When  she came  to court the  salary was stopped and  she sought to get the  half salary. She stated that she  has  2 issues  in  Court  - half salary and termination. That marked the  end of the  case for the  Claimant.

4.  Mr. Okeche  called Mr. Wilson  Gachoni the  Employee Relations Manager NSSF. He testified as follows:- I am  conversant with the  matter before court.  Mary  Wambui Ndirangu was  terminated.  She was  served with letter of retirement under 50 year  rule.   Clause  58.   The claimant was employed in 1990.  She rose  up to level  of audit manager by  the  time she  left the  organization.  She is retired by  virtue of the  50  year  Rule. Refer to  Appendix 2 of Respondent memorandum.   The  payment was to be half salary.  She was paid.  Appendix 3 is the  letter issued  to Mary. The original of the  letter was by one  of the  officers to the  Claimant on

20th  October 2011.  The letter was  accepted.  There  are  dues  payable to  Mary.     The  amount was  calculated and  the  Claimant declined to accept the  sum.   The sum  has not been  collected.  Appendix 3(a)  is the payment of final dues.    The  signature under Approved is that of Alex Kasongo   the   Chief  Executive  Officer  of  Respondent.    The  approval means the   money is  payable to  her.   Appendix 5  – 5. 8  is  the   Staff Regulation. Paragraph  5:8(a) – the  persons above 50  can  be  retired under this  rule.   The years  of retirement was raised to 60 by the  Head of Public  Service.   The  age  56  is  below 60  so person can  be  retired. There  are  other cases  since  1999  when  we recorded the  first case of a Retiree under this  clause  Boaz Makoinigo.  There  are  managers at her level  who  retired at senior management level.   There  are  many who were  retired under this  rule.   It is not strange to be retired under early retirement scheme.

5.  In  Cross  Exam   by   Mr.  Koceyo,   the   witness stated  that  there  is  a difference in  clause  5:8  (a)  and  (c).    On  paragraph (c)  the  Managing Trustee may  call  upon  the  employee to  retire (a)  is  if the  employee

wants to retire.  She was called by employer to retire.  She could  have fallen under both. Mary  was  called upon  to  retire by  employer.   That would be under (c).   The clause  requires one to be given opportunity to give  representation. He stated that he was aware of her  being advised but  did  not carry the  letter advising her  of the  retirement – under 50 year   rule.   In  reference  to  Appendix  3,  the   witness stated that  the Claimant was  to  make   and  appeal if she  was  unhappy. There  is  no invitation for her  to make  representation prior to retirement. He stated that she was beyond age 50. He stated that the  letter was not irregular and  that the  letter was  in  compliance. There  were  others who  retired under 50  year  rule  above 50  years.   He  stated that half salary was stopped at that time the  Claimant was retired on 50 year  rule.  The last pay  of half salary is  August  2011   as  per  the letter.   The  half  salary was stopped  before  the  service  of  the  letter  on     21st   October  2011.    he admitted that was  unlawful. He  stated that suspension letter of 13th April  2010  was because of corruption case.

6.  In  Re-Examination by  Mr.  Okeche  the  witness stated that Payment  of half salary was until end  of 31st  August 2011.  Salary  is paid  in arrears, not in  advance.  The  due  was  only  up  to  August.  One  can  be  paid  6 months in lieu of notice.  Calculation included 6 months in lieu of notice per Appendix 3 3(a).

7.  Mr.  Okeche  wanted to  call  one  more  witness who  delivered the  letter and  prayed for an  adjournment to  a date  when  the  Court  could  hear the  witness. Mr.  Koceyo  conceded that the letter had  been  produced and the  witness would only  repeat it.  He proposed that parties instead submit. Mr. Okeche  was in agreement that parties could  submit if it is conceded there was  a  letter delivered. Parties  filed submissions and judgment was deferred to today.

8.  The issues  for determination are two:

a)  Wrongful termination

b)  whether during suspension the  Claimant was entitled to half-pay

9.  The provisions of Section 43 of the  Employment Act are crystal.

43. (1) In any claim arising out of termination of a contract, the employer shall  be required to prove the reason or reasons for termination, and where the employer fails to do so, the termination shall  be deemed to have  been  unfair within the meaning of section 45.

(2)  The reason or reasons for termination of a contract are  the matters that the employer at the time of termination of the contract genuinely believed to exist, and   which  caused   the  employer to  terminate  the  services of the employee.

10. No   reasons  were   given to  the   Claimant for  the   callous  termination meted out  to  her  and  she  only  found out  about the  termination when she went to check  on her payslip as she was wont to do periodically. In the  premises, the  termination amounted to unfair termination in terms of the  Employment Act.

11. The  Claimant was employed by the  Respondent, that is not in dispute.

The Claimant was  charged in Criminal Case No. 15  of 2010  where she is  the   9th   Accused.   The  only   count she  faces  is  Count   VII.  She  is charged with the  offence of neglect of official duty between January

2006   and  2008   whereat she  is  alleged to  have   failed to  audit the Fund’s  Investment Department leading to  a loss  of 1. 6  billion through irregular payments. She pleaded not guilty. Under  the  Anti  Corruption & Economic Crimes  Act,  the  law  under which she  was  charged, the  Act provides  under  Section  62(1)  that  a   public  officer  charged  with corruption or economic crime shall  be suspended on half pay from date of charge. Allowances are to be paid  in full.

12.  The salient parts of the  Section are as follows:-

62. (1) A public officer who is charged with

corruption or economic crime shall  be suspended, at half pay,  with effect from the date of the charge.

(2) A suspended public officer who is on half

pay shall  continue to receive the full amount of any allowances.

(3)........................................

13. The  Claimant was suspended but  her  half pay  was not effected. This is clear  breach of the  law and as such the  Respondent is bound to honour the  provisions of law.  The  Court  is minded that the  sums  due  will  be required to  be  calculated by  the  Respondent from date  of the  Charge until date of termination. The termination was  improperly done  as the Rule which was used  did  not strictly fit the  Claimant. Article 50 makes ample provision on presumption of innocence.

50. (1) Every  person has the  right to have  any dispute that can be resolved by the  application of law decided in a fair and public hearing before a court or, if appropriate, another independent

and impartial tribunal or body.

(2) Every  accused person has the  right to a fair trial, which includes the  right—

(a) to be presumed innocent until the  contrary is proved; (b) to be informed of the  charge, with sufficient detail to answer it;

(c) to have  adequate time and facilities to prepare a defence; (d) to a public trial before a court established under this Constitution;

(e) to have  the  trial begin and conclude without unreasonable delay;......................

14.  These  rights should not be  abridged by  the  Respondent and  to  the extent the  Respondent seems  to  have  ascribed guilt, the  Court deprecates  such   behaviour.  In   the   premises,  the   court  lifts  the termination and places  the  Claimant on suspension on half pay until termination of the  proceedings in the  Criminal Case or the  attainment of 60 years  by  the  Claimant whichever comes  earlier. If the  trial Court finds her not guilty she is entitled to her full pay  and reinstatement. Anaccused is  presumed innocent until  found guilty.  The  sum  of Kshs.

2,100,000/- which was  already prepared will  also  be  factored in  the

Claimant’s dues.

15.  The Claimant’s pay  shall  be calculated and paid  out  within the  next 15 days.

It is so ordered.

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

Justice Nziokiwa  Makau

Judge