Olima v Prime Steel Mills Limited & another [2023] KEELRC 873 (KLR)

Olima v Prime Steel Mills Limited & another (Cause 2411 of 2016) [2023] KEELRC 873 (KLR) (14 April 2023) (Judgment)

Neutral citation: [2023] KEELRC 873 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause 2411 of 2016

SC Rutto, J

April 14, 2023

Between

Gad Barasa Olima

Claimant

and

Prime Steel Mills Limited

1st Respondent

Jokali Handling Limited

2nd Respondent

Judgment

1. Through a Memorandum of Claim filed on 24th November, 2016, and subsequently amended on 8th March, 2021, the claimant avers that he was employed by the respondent from February, 2010 as a general labourer and later as a machine operator. That he worked continuously and to the satisfaction of the respondent. That on 9th September, 2015, he was accused by his immediate supervisor, Mr. Kidero of disobedience and defiance and thereafter ordered him to go him and never return again. According to the claimant, the respondent’s action of chasing him away from his work premises amounted to summary dismissal which he has termed as unfair, unlawful and inhumane. It is against this background that the claimant seeks several reliefs being notice pay, compensatory damages and payment in lieu of leave not taken.

2. The 1st respondent opposed the claim and contended that it only engaged the claimant as a casual worker on 1st February, 2010. That it is also aware that sometimes in August, 2015, the claimant worked for the 2nd respondent which it had subcontracted for provision of labour services. That the claimant was not its employee and it is not aware of the circumstances leading to his termination as alleged. Consequently, the 1st respondent has asked the court to dismiss the claim with costs.

3. The 2nd respondent did not enter appearance nor file a defence in response to the Claim.

4. The matter proceeded for part hearing on 12th July, 2022 and subsequently on 7th November, 2022 when the 1st respondent had the opportunity to present its case.

Claimant’s case 5. The claimant testified in support of his case and to start with, he sought to adopt his witness statement together with his bundle of documents to constitute his evidence in chief.

6. It was his testimony that he was employed by the 1st respondent with effect from February, 2010. That he just learnt about the existence of the 2nd respondent and had never met anyone from the said company purporting to employ him. He maintained that he was working for the 1st respondent and the person purporting to terminate him from employment was from the 1st respondent company.

7. It was his evidence that he used to report to work from 8 am to 4 pm. That on 5th September, 2015, his immediate supervisor, Mr. Kidero told him that he was being paid a lot of money hence he should be reporting to work at 7am and leaving at 7 pm.

8. That therefore, on 6th September, 2015, he reported to work at 7 am and upon being asked by the head of department, Mr. Bima why he had reported early, he informed him that he was acting on the instructions of Mr. Kidero. That Mr. Bima told him to report at the usual time being 8 am and that he was answerable to him.

9. That on 9th September, 2015, he reported to work at 8 am and Mr. Kidero approached him and accused him of disobedience and defiance and ordered him to go home and never to return again. That his efforts to explain to him the reason he reported at 8 am fell on deaf ears.

10. That he was never given any notice of termination or any reason for dismissal. That further, he was never issued with any termination letter and efforts to enquire about his employment status and his terminal dues have been futile.

1st Respondent’s case 11. The 1st respondent presented oral evidence through Mr. Godfrey Oduor who testified as RW1. He described himself as a supervisor and for starters, he adopted his witness statement and the documents filed on behalf of the 1st respondent to constitute his evidence in chief.

12. It was RW1’s evidence that the 1st respondent only engaged the claimant as a casual labourer for one day. That the 1st respondent had subcontracted labour from third party companies and some of the subcontracted companies have employees working within its premises. That he had perused some of the documents handed over to them by their subcontracted companies and established that sometimes in August, 2015, the claimant took up casual employment with Jokali Handling Services, the 2nd respondent which has been subcontracted by the 1st respondent for provision of labour services.

13. That the claimant is therefore not entitled to the reliefs sought as it engaged him for one day.

Submissions 14. It was submitted on behalf of the claimant that nobody was called from the 2nd respondent to confirm his employment. That the claimant was therefore an employee of the 1st respondent on a balance of probability. That the claimant had acquired the status of a permanent and long term employee hence was entitled to not only due process but also to legitimate reasons before termination. That the 1st respondent failed to prove both the substantive reason for dismissal and due process.

15. On the other hand, the 1st respondent submitted that no document in the form of an employment contract or pay slip or NSSF statement or casual labour card was adduced to prove that the claimant worked for the 1st respondent continuously since the year 2010. That the claimant did not prove that it was in the employment of the 1st respondent in September, 2015. Placing reliance on the provisions of Section 47(5) of the Employment Act, it was submitted by the 1st respondent that no unfair termination has been proved by the claimant.

Analysis and determination 16. Having considered the issues arising from the pleadings, the evidence on record as well as the rival submissions, the Court is being called to resolve the following questions: -a.Who was the claimant’s employer at the material time?b.Whether the claimant was unfairly and unlawfully terminated from employment.c.Is the claimant entitled to the reliefs sought?

Who was the claimant’s employer at the material time? 17. The claimant stated in his testimony that he was employed by the 1st respondent. On the other hand, the 1st respondent has disputed the existence of any employment relationship with the claimant save that it engaged him as a casual labourer for one day being 1st February, 2010. The 1st respondent further averred that it utilizes outsourced labour from third party companies and that it established that the claimant took up casual employment with the 2nd respondent sometimes in August, 2015.

18. In support of its case, the 1st respondent exhibited a pay slip apparently issued by the 2nd respondent, bearing the name of the claimant. The 1st respondent further exhibited a clock time analysis in respect of the claimant for the month of August, 2015, from the 2nd respondent company. It is instructive to note that the claimant did not dispute the said evidence particularly, his pay slip.

19. The only evidence adduced by the claimant to prove that he worked for the 1st respondent is the casual labour card in respect of 1st February, 2010. Beyond that period, there is no other evidence to prove the existence of an employment relationship with the 1st respondent.

20. In light of the evidence exhibited by the 1st respondent, I am led to conclude that it is more than probable that at the material time, the claimant was an employee of the 2nd respondent and not the 1st respondent. Indeed, this could be the reason why the claimant amended his Memorandum of Claim thus joining the 2nd respondent in the suit.

21. It is therefore evident that at the material time, being 9th September, 2015, when the claimant alleges to have been terminated, he was an employee of the 2nd respondent.

22. Indeed, having been disowned by the 1st respondent from the word go, it was incumbent upon the claimant to prove that he was indeed its employee at the material time. In this regard, his employment relationship with the 1st respondent on 1st February, 2010 does not count. What matters is his employment at the material time.

23. If I may add, outsourcing of labour is now an accepted business strategy. It is an arrangement where a company decides to contract out the supply of services to another enterprise, which then carries out the work using its own employees and sometimes, equipment. Therefore, it would not be unusual if in fact, the 2nd respondent was contracted by the 1st respondent under a similar arrangement hence the employees so engaged, render services to the 1st respondent but are in actual sense, employees of the 2nd respondent.

24. Having determined that the claimant was an employee of the 2nd respondent, the case by the claimant against the 1st respondent, collapses at this point.

Unfair and unlawful termination 25. It is the claimant’s case that he was unfairly and unlawfully terminated from employment. Under the Employment Act, an employer is required to prove that an employee’s termination was not only fair substantively but also procedurally. Essentially, this is the standard for determining whether an employee’s termination was fair or not and in this regard, Sections 43, 45 and 41 of the Employment Act, are key.

26. Substantive justification entails proof of the reasons which resulted in an employee’s termination. In line with this, Section 43(1) of the Employment Act, requires an employer to prove the reason or reasons for the termination of an employee, and where it fails to do so, such termination shall be deemed to have been unfair within the meaning of Section 45.

27. In addition, Section 45 (2) (a) and (b) of the Employment Act provides that a termination of employment is unfair if the employer fails to prove that the reason for the termination is valid, fair and related to the employee’s conduct, capacity or compatibility; or based on its operational requirements.

28. In the instant case, the Court has established that the 2nd respondent was the claimant’s employer, hence it was bound to prove the reasons for which it disengaged with the claimant. That further, such reasons were fair, valid and related to his conduct, capacity or compatibility; or based on its operational requirements.

29. As the 2nd respondent neither entered appearance nor filed a Response to the Claim, such reasons, if at all, were not provided to the Court. Indeed, it can very well be said that such reasons, if any, are unknown. It thus follows that the Court is not in a position to evaluate whether such reasons meet the threshold under Section 45 (2) (a) and (b) of the Employment Act.

30. This essentially means that the 2nd respondent did not discharge its burden under Sections 43(1) and 45(2) (a) & (b) of the Employment Act hence I arrive at the inescapable conclusion that the claimant’s termination was unfair.

31. With regards to the question of procedural fairness, an employer is required to prove that an employee’s termination was undertaken in line with fair procedure. The specific requirements of what constitute a fair process are set out under Section 41(1) of the Employment Act. This procedure entails notifying the employee of the reasons for which it is considering termination and thereafter granting him or her the opportunity to be heard prior to being terminated from employment.

32. As the 2nd respondent did not tender any Response nor participate in the hearing, there was no evidence that the claimant was subjected to the process contemplated under Section 41 of the Employment Act. Indeed, there was no evidence that the claimant was heard prior to his termination. In light of the provisions of Section 45(2) (c) as read together with the mandatory provisions of Section 41 of the Employment Act, the respondent was bound to subject the claimant to a fair process prior to termination. Anything short of that rendered the termination unlawful.

33. In the circumstances, I cannot help but find that the 2nd respondent is at fault for want of procedure hence the claimant’s termination was unlawful.

34. The total sum of my consideration is that the claimant’s termination was both unfair and unlawful in terms of Sections 41, 43 and 45 of the Employment Act.

Appropriate Reliefs 35. As the Court has found that the claimant’s termination was unlawful, he is awarded one (1) month’s salary in lieu of notice.

36. Having found that the claimant’s termination was unfair and unlawful, the Court awards him compensatory damages equivalent to six (6) months of his gross salary.

37. As the 2nd respondent did not tender any evidence in form of the claimant’s leave records as per its obligation under Section 74(1) (f) of the Employment Act, the claimant is entitled to payment for untaken leave days. However, pursuant to Section 28(4) of the Act, this will be limited to 18 months preceding his exit from employment.

Orders 38. In the end, I enter Judgment in favour of the claimant against the 2nd respondent and he is awarded: -a.One month’s salary in lieu of notice being the sum of Kshs 16,000. 00. b.Compensatory damages in the sum of Kshs 96,000. 00 which sum is equivalent to 6 months of his gross salary.c.Unpaid leave for 18 months being Kshs 16,800. 00. d.The total award is Kshs 128,800. 00. e.Interest on the amount in (d) at court rates from the date of Judgement until payment in full.

39. The 2nd respondent shall also bear the costs of the suit.

DATED, SIGNED and DELIVERED at NAIROBI this 14th day of April, 2023. STELLA RUTTOJUDGEAppearance:For the Claimant Mr. NamadaFor the 1st Respondent Mr. MutoroFor the 2nd Respondent No appearanceCourt Assistant Abdimalik HusseinOrderIn view of the declaration of measures restricting court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open court. In permitting this course, this court had been guided by Article 159(2)(d) of the Constitution which requires the court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this court the duty of the court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes.