Patrick Isinga Amugune &Sophie; Nechesa Wabuyabu v Mumias Sugar Company Limited [2018] KEELRC 1311 (KLR)

REPUBLIC OF KENYA

EMPLOYMENT AND LABOUR RELATIONS COURT

AT KISUMU

CAUSE NO. 71 OF 2014

(Before Hon. Lady Justice Maureen Onyango)

PATRICK ISINGA AMUGUNE.....................1ST CLAIMANT

SOPHIE NECHESA WABUYABU................2ND CLAIMANT

VERSUS

MUMIAS SUGAR COMPANY LIMITED.....RESPONDENT

JUDGMENT

This suit is filed by Patrick Isinga Amugune and Sophie Nechesa Wabuyabu vide statement of claim dated 1st September 2011.  They allege that their employment contracts were terminated unfairly by the respondent.

The respondent filed a memorandum of response on 2nd December 2011 denying the averments in the statement of claim.

At the hearing of the case both claimants testified on their behalf while the respondent did not call any evidence.

The claimants were both employees of Mumias Sugar Company, the respondent.  The 1st claimant PATRICK ISINGA AMUGUNE was employed on 26th July 1993 as a labourer and rose in rank progressively to the position of supervisor of Nairobi go down.

The 2nd claimant SOPHIE NECHESA WABUYABU was employed by the respondent by letter date 23rd February 1994 as Library Assistant Clerk 03.  She rose through the ranks to the positon of warehouse supervisor Grade B3(b).

The claimants were arrested on 21st May 2009 and arraigned in court the following day on 22nd May 2009.  They were changed together with one Gladys Amukoye Were with the charge of stealing contrary to Section 275 of the Penal Code and uttering a document contrary to Section 353 of the Penal Code.  They pleaded not guilty and were released on bond.

Both claimants testified that they were served with show cause letters on 10th June 2009 requiring them to show cause within 48 hours why severe disciplinary action should not be taken against them on account of allegations that they had been adversely mentioned in a case of theft of a Banker’s cheque worth Kshs.7 million belonging to a customer.  The show cause notices further suspended them from duty for a period not exceeding 21 days.  The suspensions were extended for another 21 days by letter dated 1st July 2009.

The claimants both responded to the show cause letters on 11th June 2009 explaining that they only assisted one Gladys who was working at the security department to connect her friends with a distributor through whom the friends were to buy sugar from the respondent as the friends were not registered distributors.  Gladys used a banker’s cheque of Kshs.7 million to pay for the sugar.  This was in April 2009.

They both stated that they were not aware the cheque was stolen.

On 17th July 2009 both claimants were served with letters of termination of service dated 1st July 2009.  The criminal case no. 433 of 2009 at the resident magistrate’s court in Butere was heard and the claimants eventually acquitted in the judgment delivered on 26th November 2010.

The claimants prays for the following remedies –

1. Declaration that their termination was unfair and unlawful

2. Salary arrears since 17th July 2009 to date reinstatement

3.  Costs of this suit

4. Any other relief the court may deem just and fair in the circumstances to grant.

In the submissions filed on behalf of the claimants it is averred that there were no valid reasons for termination as the respondent failed to prove the reason for termination as required under Section 43 (1) of the Employment Act.

The claimants relied on the decision in cause 261 of 2010, ANNE ATIENO OMAM -V- WESTERN EDUCATION ADVOCACY AND EMPOWERMENT PROGRAM (WEAEP) in which the court stated that-

“unfair termination occurs when an employer fails to give valid reasonfor termination.”

Although the respondent did not call any witnesses, it filed written submissions in which it is urged that due process was followed as provided in Sections 41 and 42 of the Employment Act and that the termination was justified under Section 44(4)(g) of the Act.  It is further submitted that the acquittal of an accused does not mean they are innocent of the crime.

Determination

I have considered the pleadings, the evidence on record, the law and the authorities cited.  The issues for determination are whether the termination of the employment contracts of the claimants was fair and whether they are entitled to the remedies sought.

The Law

The law governing termination of employment is in Sections 41 which provides for fair procedure and Section 43 which provides for proof of valid reasons.

The letters of termination of the claimants do not give any reason for the termination.  The letters of termination states –

“17th July 2009

Mr Isinga Patrick Amugune PR/NO.8263

MSC – Customer Service Section,

Private Bag

MUMIAS

Thro’ Head Sales and Distribution

Dear Sir

RE: TERMINATION OF SERVICE

Reference is made to the contract of employment singed with the company on 26th July 1993.

In line with paragraph 5 under probation and notice of the said contract, Company Rules and Regulations and the Employment Act, 2007 of the Laws of Kenya, this is to notify you that your services with Mumias Sugar Company Limited shall be terminated with effect from 17th July 2009.

Consequent upon this decision you will be paid the following terminal benefits: -

i. Salary earned up to and including 17th July 2009.

ii. Two months’ salary in lieu of notice period.

iii. Leave days accrued, if any less any debt owed to the company.

iv. Your benefits under the pension scheme in accordance with the scheme rules and the RBA regulations.

Please arrange to report to the HR Administration Section which will effect your departure formalities.

Yours Faithfully

For: Mumias Sugar Company Limited

SIGNED

Maria K. Ligaga

HEAD OF HUMAN RESOURCES

cc. Head of Sales and Distribution – Please raise his leaver’s forms and forward them to HR Administration Manger

Treasury Accountant – stop his salary with effect from 17th July 2009”

Although the claimants were issued with notices to show cause and responded to the same, they were never called for disciplinary hearing.

The termination of employment was therefore without compliance with either Section 41 or Section 43 and was in terms of Section 45(2) unfair.  I therefore declare the termination of employment of the claimants unfair.

Remedies

The claimants prayed for payment as follows –

Patrick Isinga Amugune Kshs.6,459,553. 80 being salary for 84 months.

Sophie Nechesa Wabuyabu Kshs.6,410,098. 80 being salary for 84 months.

The 84 months is the period from 17th June 2009 to 26th June 2017.

Under Section 49 of the Employment Act the maximum compensation payable to an employee upon termination of employment is 12 moths salary.  The claimants having worked for the respondent for periods of 16 and 15 years respectively for the 1st and 2nd claimants and having found that the termination of their employment was both procedurally and substantively unfair, having further considered all the circumstances of the case, I award each of them maximum compensation equivalent to 12 months gross salary.  The claimants appear to have abandoned the prayer for reinstatement as it is not mentioned in the trial submissions or in their testimony in court.

In conclusion, I declare the termination of employment of the claimants by the respondent unfair and award them compensation as follows –

1. . PATRICK ISINGA AMUGUNE............... KSHS.922,793. 40/=

2. . SOPHIE NECHESA WABUYABU........... KSHS.915,728. 40/=

The respondent shall bear costs of the claimants.

The decretal sum shall accrue interest from date of judgment.

DATED AND SIGNED AT NAIROBI ON THIS 21ST DAY OF JUNE 2018

MAUREEN ONYANGO

JUDGE

DATED AND DELIVERED AT KISUMU ON THIS 30TH DAY OF JULY 2018

MATHEWS NDERI NDUMA

JUDGE