Milton Muyodi Maloba v Crown Paints Kenya Limited [2018] KEELRC 1373 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI

CAUSE NO. 681 ’’A’’ OF 2014

MILTON MUYODI MALOBA                           CLAIMANT

V

CROWN PAINTS KENYA LIMITED          RESPONDENT

JUDGMENT

1. On 9 July 2012, Crown Berger Kenya Ltd offered Milton Muyodi Maloba (Claimant) employment as a Security Manager (Investigations and Anti-Counterfeit) for 5 years. The contract explicitly provided that it would lapse on 31 July 2017.

2. On 27 March 2014, Crown Paints Kenya Ltd (the Respondent) wrote to the Claimant to inform him that his position had become superfluous and would be declared redundant and consequently his contract would be terminated effective 31 March 2014.

3. The Claimant was aggrieved and on 23 April 2014 he instituted legal proceedings against the Respondent alleging unlawful and wrongful termination of a fixed contract. He sought salaries up to end of contract, salary for March 2014, pay in lieu of notice, accrued leave and damages for unfair termination of employment.

4. The Claimant also sought Kshs 507,966/- on account of a car he had purchased on a loan advanced by the Respondent.

5. In its Response and Counterclaim filed on 30 May 2014, the Respondent contended that the termination of the Claimant’s contract on account of redundancy was lawful and all dues were paid and that the Claimant had an outstanding car loan of Kshs 369,452/-, for which it counterclaimed.

6. The Claimant responded to the Response and Counterclaim on 18 June 2014, and on 3 September 2014, the parties compromised the dispute over the car loan by filing a consent.

7. Hearing commenced before Nduma J on 20 June 2016 when the Claimant testified and closed his case.

8. The Respondent’s Human Resources Manager testified on 18 June 2016 and hearing was adjourned to enable call another witness but on 18 June 2018, the Respondent opted to close its case without calling the witness.

9. The Claimant filed her submissions on 4 July 2018 while the Respondent filed its submissions on 11 July 2018.

10. The Court has considered the pleadings, evidence and submissions and condensed the Issues for determination as, whether the termination of the Claimant’s contract on account of redundancy was unfair and appropriate remedies.

Fairness of the redundancy

11. In terms of procedures, section 40 of the Employment Act, 2007 has set out the conditions an employer should comply with for a redundancy to pass the procedural fairness test.

12. The conditions include advance written notice of 1 month to the employee (when not a member of a union) and another to the local Labour Officer.

13. The Respondent gave the local Labour Officer a written notification through a letter dated 1 February 2014. The notice indicated that the redundancy was to take effect from 28 February 2014.

14. As regards the Claimant, the Respondent’s witness had a meeting with him on 27 March 2014 and gave him a termination of contract of even date indicating that the separation was effective from 31 March 2014.

15. When cross examined, the witness stated that it was not a legal requirement to give the Claimant written notice.

16. The Court of Appeal in Thomas De La Rue v David Opondo Omutelema (2013) eKLR held that the notice is mandatory and in consideration of the holding, this Court concludes that the termination of the Claimant’s contract on account of redundancy was procedurally unfair as the requisite notice was not given to the Claimant.

17. With the conclusion, it is not necessary for the Court to examine whether the Respondent discharged the burden expected of it by sections 43 and 45(2)(b)(ii) of the Employment Act, 2007.

Claimant’s remuneration

18. The parties made much of how much was the Claimant’s remuneration. In the view of the Court, that was a misconceived issue for a copy of the Claimant’s pay slip was produced indicating the basic pay and the gross pay.

19. Gross pay becomes relevant only when assessing compensation under section 49(1)(c) of the Employment Act, 2007. The basic pay applies when assessing pay in lieu of notice.

Appropriate remedies

Pay in lieu of notice

20. The Claimant sought Kshs 185,000/- as the equivalent of 1 month salary in lieu of notice. The redundancy letter informed the Claimant that he would be paid one month salary in lieu of notice.

21. The Respondent admitted in the submissions that pay in lieu was outstanding and the Court will allow the same.

Salary March 2014

22. The Claimant was paid salary up to 31 March 2014, and nothing turns on this head of claim/relief.

Accrued leave

23. The Respondent admitted in the submissions that it was ready to pay accrued leave which it computed as Kshs 83,333/- and being the custodian of the payroll and other employment records, the Court will accept its calculations.

Lost income to end of contract

24. Under this head, the Claimant sought Kshs 7,400,000/- and he cited the cases of Ruth Gathoni Ngotho v PCEA Foundation (2012) eKLR and Nairobi Cause No. 361(N) of 2009, Francis Lawrence Oyatsi v Nzoia Sugar Co.Ltd as authority for the proposition that the Court could grant the relief.

25. The Respondent also cited case law to urge that the relief was not available.

26. In my view, unless there is express contractual agreement or direct statutory provision this head of relief would not be tenable.

27. In this regard I would endorse the persuasive authority by the Supreme Court of Uganda in Bank of Uganda v Tinkamanyire(2009) 2 EA 66  thatthe contention that an employee whose contract of employment is terminated prematurely or illegally should be compensated for the remainder of the years or period when they would have retired is unattainable in law.

Compensation

28. The Claimant served the Respondent for about 2 years and on account of the length of service, the Court is of the view that the equivalent of 3 months gross wages at point of separation would be appropriate (gross salary was Kshs 185,000/0).

Conclusion and Orders

29. The Court finds and holds that the termination of the Claimant’s employment on account of redundancy was unfair and awards him

(a) Compensation               Kshs 555,000/-

(b) Pay in lieu of notice      Kshs 125,000/-

(c) Accrued leave                Kshs 83,333/-

TOTAL       Kshs 763,333/-

30. Claimant to have costs.

Delivered, dated and signed in Nairobi on this 27th day of July 2018.

Radido Stephen

Judge

Appearances

For Claimant  Mr. Moseti instructed by K. Moseti & Co. Advocates

For Respondent  Mr. Kiluva instructed by Kairu Mbuthia & Kiingati Advocates

Court Assistant  Ann Njunge/Stella