SGA Security Solutions Limited v Mulei [2024] KEELRC 1406 (KLR)

SGA Security Solutions Limited v Mulei (Appeal E136 of 2023) [2024] KEELRC 1406 (KLR) (23 May 2024) (Judgment)

Neutral citation: [2024] KEELRC 1406 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Mombasa

Appeal E136 of 2023

M Mbarũ, J

May 23, 2024

Between

SGA Security Solutions Limited

Appellant

and

Titus Mulei

Respondent

(Being an appeal from the judgment of Hon. M. L. Nabibya in Mombasa CMELRC E094 of 2021 delivered on 9 November 2023)

Judgment

1. The appeal arises from the judgment delivered on 9 November 2023 in Mombasa CMELRC E094 of 2021. The appellant is seeking the judgment be set aside and is substituted with an order dismissing the suit with costs.

2. The background of the appeal is a claim filed by the respondent herein, Titus Mulei against the appellant on the basis that on 16 May 2028, he was employed as a driver at a monthly wage of Ksh.31, 808. 38 per month. On 21st October 2020, he was called by the human resources manager Ms. Caroline who verbally informed him that his employment was no longer tenable and should vacate the premises immediately.

3. The claim was also that the respondent was not allowed to take his annual leave, overtime, house allowance or pay statutory dues during the period of his employment were not paid. The respondent claimed the following;a.One month notice pay Ksh.31,808. 38;b.House allowance for 38 months at 15% Ksh.133,595. 20;c.Unpaid leave for 3 years Ksh.66,798. 90;d.12 months compensation Ksh.391,700. 56;e.Unpaid overtime for 28 months Ksh.172,284. 00;f.Service pay/severance pay for 3 years Ksh.47,712. 57;g.Costs.

4. In response, the appellant filed a response and counter-claim and denied the allegations made by the respondent. The response was that through a letter of appointment dated 10 May 2018, the respondent was placed on probation for 3 months at a wage of Ksh.755. 32 per day. On 22 August 2018, the probation period was extended for one month due to non-performance. His employment was confirmed on 1st December 2018 at a basic wage of Ksh.17, 882. 60 and a 15% house allowance. His last working day was on 30 November 2020 whereby he left employment without notice and never returned and the appellant did not know his whereabouts. On 19 January 2021, the appellant received a demand notice from the respondent alleging unfair termination of employment after he had failed to return to work. There was no termination of employment on 21 October 2020 as alleged. The respondent had a record of warnings and the claims made that he worked overtime, had accrued leave days, was entitled to a house allowance or was entitled to service pay are not justified and should be dismissed. Notice pay is not due following desertion of duty. The wages paid included house allowance. The respondent took his annual leave days in full and there was no overtime work.

5. In the counter-claim, the appellant’s case was that during employment, the respondent had a loan with Alarms Sacco and the appellant was the guarantor through monthly deductions from his wages but he defaulted and should be compelled to pay the arrears. An amount of Ksh.77, 688 is outstanding unpaid. The claim is also that following his desertion without notice, notice pay is due in lieu thereof at one month's wage. The appellant claimed the following;a.Payment of Ksh.77,688 outstanding loan arrears;b.Ksh.17,882. 60 one month notice pay;c.Costs of the counterclaim and interests.

6. In response to the counterclaim, the respondent’s case is that he took a loan with Alarms Sacco and the respondent was not a guarantor as alleged. He had five guarantors, Nishat Kimeu, Bemdudu Kassim, Peter Muriuki, Shadrack Matheka and Jackson Mwinji and the allegations that the appellant was a guarantor are without merit. The respondent admitted that he had a loan balance of Ksh.77, 882. 60 and he was repaying it with Alarms Sacco without the involvement of the appellant and the counterclaim should be dismissed.

7. The learned magistrate delivered judgment on 9 October 2023 with findings that there was unfair termination of employment and made the following awards;a.Notice pay ksh.31,808. 35;b.Leave allowance ksh.13,780;c.Overtime Ksh.172,282;d.6 months compensation;e.Costs and interests.

8. Aggrieved by the judgment, the appellant lodged this appeal on five (5) main grounds;1. The magistrate erred in law and in fact by holding that the respondent was unfairly terminated from employment yet he had not been terminated from employment.2. The magistrate erred in law and in fact by failing to consider the appellant’s evidence produced in court.3. The magistrate erred in law and in fact by shifting the burden of proof from the respondent to the appellant yet the respondent had failed to establish a case against the appellant on a balance of probability.4. The magistrate erred in law and in fact by awarding the respondent Ksh.408,718. 00 (less outstanding loan of Ksh.77,688. 00) as terminal dues made up of;a.One month salary in lieu of notice yet the respondent had not been terminated from employment.b.Leave pay Ksh.13, 780. 00 yet the respondent used to proceed for leave and paid for the same.c.Unpaid overtime Ksh.172, 282. 00 yet the respondent failed to prove this claim.d.6 months’ salary as compensation for unfair termination Ksh.190, 848. 00 yet the respondent was never unfairly terminated but left on his own.5. The magistrate erred in law and in fact by failing to hold that the respondent had terminated his own employment without issuing any notice and/or payment in lieu of notice Ksh.17, 882. 60 as pleaded in the appellant’s counterclaim.

9. On 9 April 2024, both parties attended court and agreed to address the appeal by way of written submissions.Only the appellant complied and filed written submissions on 8 April 2024.

10. The appellant submitted that the findings by the trial court that there was unfair termination of employment were erroneous. In his Statement of Claim, the respondent pleaded that he was unfairly terminated but his case related to desertion of duty without notice. His last day at work was on 30 November 2020 and efforts to trace him were fruitless. On 15 December 2020, the appellant wrote to the union seeking to have a meeting over the matter but there was no response. In the case of Nzuki v Protech Industrial Equipment Limited Cause No.1217 of 2018, the court held that the employee deserted work and was not constructively dismissed as alleged.

11. In this case, without any proof of termination of employment, the respondent had no prima facie case under Section 47(5) of the Employment Act to justify the appellant's discharge of its burden under Section 43 of the Employment Act of justifying the reasons for termination of employment.

12. The appellant submitted that the award of Ksh.408, 718 was in error. The trial court award of notice pay failed to take into account that the respondent deserted duty. The award for leave was despite evidence of the respondent taking his annual leave following his request forms filed with the response. The respondent admitted in evidence that he took leave days. The claims for overtime were without proof and in his close-examination, the respondent admitted that he would be paid for overtime. He did not present any document to prove time worked and not paid for.The appellant submitted that the findings that there was unfair termination of employment were in error because of the desertion and abandonment of work by the respondent. The allegations that on 17 October 2020, the respondent was sent away are not supported by evidence as he only made a demand in January 2021.

13. The trial court should have found the respondent guilty of terminating his employment without notice and held him liable to pay notice for one month under Sections 35 and 36 of the Employment Act. The appeal be allowed with costs.As noted above, there are no written submissions by the respondent.

Determination 14. This is a first appeal. Having considered the issues raised in this appeal, this Court’s mandate is to re-evaluate, re-assess and re-analyze the extracts on the record and then determine whether the conclusions reached by the learned magistrate should stand, and give reasons either way. These principles are addressed in the case of Abok James Odera t/a A. J. Odera & Associates v John Patrick Machira t/a Machira & Co Advocates [2013] eKLR.

15. On the one hand, the respondent claimed that on 21st October 2020, his employment was terminated by Ms. Caroline the human resources manager verbally. On the other part, the appellant’s case is that the respondent did not resume work after 30 November 2020. That efforts to establish his whereabouts were fruitless.

16. Desertion of duty is a serious matter and is classified as gross misconduct under Section 44(4) of the Employment Act, 2007 An employee who is alleged to have deserted duty or is absent from duty without good cause or seeking permission from the employer must be called to render an account of his whereabouts and his case addressed under the provisions of Section 41(2) of the Employment Act, 2007.

17. The appellant’s case was that they called and tried to trace the respondent without success. From 21st October 2020 to 30 November 2020, this period is not accounted for by the appellant as the employer. Until the respondent issued a demand notice dated 19 January 2021, the alleged desertion of duty from 30 November 2020 was not addressed.

18. The appellant’s witness Patrick Kilonzo in his witness statement avers that on 28 January 2021, he responded to the demand notice by the respondent. This response is not filed. Did the appellant accept the desertion? Did the appellant invite the respondent back to work or invite him to show cause why he was absent from work? These questions should and ought to be considered in the response before the trial court.

19. An alleged desertion of duty should not be left empty. The employer must demonstrate what action(s) were taken in addressing a case of an employee who is alleged to have abandoned work without good cause. This is addressed in the case of Ayub Kombe Ziro v Umoja Rubber Products Limited [2022] eKLR that;… It is not open to the employer to simply plead abandonment of duty by the employee as evidence of termination of the contract. The employer must demonstrate that he has taken reasonable steps to find out the whereabouts of the employee and required him to resume duty to no avail. The employer must where possible demonstrate that he has addressed the matter of the employee’s unexplained absenteeism through the available internal disciplinary channels.

20. This position is reiterated in the case of James Okeyo v Maskant Flower Limited [2015] eKLR that desertion being a unilateral act of abandonment of the contract cannot operate to bring a contract of service to a close until the employer acts on it. The employee who deserts employment does not dismiss himself, so to speak. The decision to formally end the employment relationship should come from the innocent party, the employer.

21. In this regard, the learned magistrate analysed the evidence well and found that there was an unfair termination of employment. Notice pay and the award of compensation cannot be faulted.

22. With regard to the amount awarded in notice pay, the respondent claimed that his monthly wage was Ksh. 31,808. 38 while the appellant asserted that his monthly wage was Ksh.17, 882. 60.

23. With his Memorandum of Claim, the respondent filed his employment contract dated 12 November 2020. The clause on salary gave a consolidated amount of Ksh.21, 068. 06 and an accident-free allowance of Ksh. 2,500 per month.

24. The appellant filed the employment contract dated 10 May 2018 and the clause allowed a daily wage of Ksh.755. 32 per day.

25. In the letter dated 4 December 2018, the respondent was confirmed in his employment that your probation has been confirmed to the post of a driver with effect from 1st December 2018. Your basic salary will be Ksh.17,882. 6/= per month plus a 15% house allowance. …

26. The employer is the custodian of work records under Section 10(6) and (7) of the Employment Act, 2007. The records filed by the appellant as the employer are the true and correct position with regard to the employment.Ksh.17, 882. 6 basic wage plus 15% house allowance made a gross wage of Ksh.2, 682. 40 + 17,882. 60 = Ksh.20, 564. 99.

27. The contract dated 12 November 2020 provided a higher wage of Ksh.21,068. 06 plus an accident–free allowance of Ksh.2,500 per month total due being Ksh.23,586. 60. The court will apply the higher amount.Notice pay is due at ksh.23, 586. 06. Compensation at 6 months is due at Ksh.141, 516. 06

28. On the claim for house allowance, there was a provision for the same under the letter confirming employment dated 4 December 2018. To award beyond such allocation is not justified.

29. On the claim for unpaid leave days, in his evidence on 28 March 2023, the respondent testified that he had 4 leave application forms.The appellant filed leave application forms;a.application dated 1st July 2020 for 26 days;b.application dated 31 July 2019 for 26 days;

30. Cumulatively, the respondent took his annual leave when due as evidenced by the filed records. The award for leave was not justified. Section 28(4) of the Employment Act only allows the allocation of annual leave to accumulate for 18 months. The learned magistrate's assessment going back from May 2018 to December is in error.

31. On the claim for overtime, the respondent did not particularise the work hours and how overtime hours accrued. There is a general allegation of unpaid overtime (205. 10 x 10 1hr x 30 days x 28 months). The baseline for such a claim is a wage above what was allocated. The start end and exit hours are not stated.

32. To assist the court in arriving at a just decision in assessing what overtime hours accrued, the respondent should and ought to have particularized these claims. In the absence of discharging such duty, the award in overtime is in error.

33. The award of costs in employment claims is discretionary. However, such discretion should be applied judicially on given principles outlined under Sections 3 and 12(4) of the Employment and Labour Relations Court Act, 2011. The learned magistrate should have given reasons with regard to the award for costs and interests. The discretion to award costs can be interfered with for lack of reasons.

Counter-claim 34. On the counterclaim, the issue of notice pay is addressed above.On the claim for payment of the loan amount balance of Ksh.77, 688, the respondent’s case was that this loan was not from the appellant but from Alarms Sacco and he had five persons who were his guarantors and not the appellant. However, the loan was being offset from his wages. The employment relationship and securing the loan facility are interlinked.

35. Under Section 19(1) (h) of the Employment Act, the employer is allowed to deduct from the employee’s wages and remit the same to a party following an agreement, memorandum or application by the employee. Where the employee has taken a Sacco loan and authorized the employer to make a deduction and remit to the Sacco, such is an authorized deduction and at the end of employment, the employer is duty-bound to address the same.

36. In the case of Javan Were Mbango v H. Young & CO. (EA) LTD [2012] eKLR the court held that;Employees who out of their own free will join employees Sacco do so by virtue of their employment and do authorize the employer to make deductions from their salaries to the Sacco for their welfare and for the collective good of all. An employee is therefore stopped from claiming that once their employment is terminated, there are owed all their savings without taking into consideration the collective agreement under their Sacco and or cooperative society. Where an employee has enjoyed a loan facility from the collective kitty he is equally under a duty to make good any dues where his relationship with the collective is severed by virtue of the termination of his relationship with the principal.

38. In the case of Loise Njeri v Devkan Enterprises Limited [2020] eKLR the court held that upon Sacco deductions, the employer must issue the employee with the evidence.

39. In this case, the respondent admitted he had a Sacco loan with Alarms Sacco and had a balance of Ksh.77, 688 at the end of his employment. This was being offset by his wages. At the end of employment, the employer is justified to make a deduction from his terminal dues.

40. The appeal is partially successful as analysed above and in this regard, for proceedings before the trial court and this appeal, each party is to bear its costs.

41. Accordingly, the judgment in Mombasa CMELRC No.E094 of 2021 is hereby reviewed in the following terms;a.Compensation awarded at Ksh.141, 516. 06b.Notice pay ksh. 23, 586. 06. Counterclaimc.The counterclaim is allowed to the extent that the sum of Ksh.77,688 is due for a loan advanced to the respondent through the appellant to Alarms Sacco;d.Dues under (a) and (b) above to be paid less amounts due in counterclaim;e.Each party bears its costs for the appeal and proceedings before the trial court.

DELIVERED IN OPEN COURT AT MOMBASA ON THIS 23 DAY OF MAY 2024. M. MBARŨJUDGEIn the presence of:Court Assistant:……………………………………………… and …………………..…………………