Shatora v Orange Garage for World Navi Co. Ltd [2024] KEELRC 842 (KLR)

Shatora v Orange Garage for World Navi Co. Ltd (Employment and Labour Relations Cause 1770 of 2017) [2024] KEELRC 842 (KLR) (12 April 2024) (Judgment)

Neutral citation: [2024] KEELRC 842 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Employment and Labour Relations Cause 1770 of 2017

K Ocharo, J

April 12, 2024

Between

Selphine Khavugwi Shatora

Claimant

and

Orange Garage for World Navi Co. Ltd

Respondent

Judgment

Introduction 1. Contending that she was an employee of the Respondent for a period of about eight [8] years and seven [7] months up to until 4th August, 2017 but who the latter dismissed from employment unfairly and unlawfully, the Claimant sued it vide a Statement of Claim dated 1st September 2017 for various reliefs, thus; a declaration that the termination of her employment was unfair and unlawful; terminal benefits, and compensation for unfair and unlawful termination, cumulatively KSHS. 4,300,085. 70; interest and costs.

2. The Respondent resisted the claim through their Response to Statement of Claim dated 20th February 2020, denying that the Claimant has a cause of action against it, and entitled to the reliefs sought.

3. At the close of pleadings there was a joinder of issues, and the matter got destined for hearing inte- partes on merit.

Claimant’s case 4. At the hearing the Claimant asked the Court to adopt her witness statement dated 1st September 2017, as her evidence in chief and admit the documents under the list dated same day, as her documentary evidence. The Respondent didn’t object to either the adoption or the admission.

5. The Claimant contended that she first came into the employment of the Respondent in early November 2008 as a cleaner. The Claimant worked for six (6) days a week and was paid for only days worked. Further, whenever there were public holidays and off duties, the days could not be considered for purposes of remuneration. The Respondent could factor the days as non-compensable, then deduct her salary with the equivalent of the days’ earnings. The deductions were only particular to her. The other employees could be paid for all days worked, inclusive of public holidays and off -days. Unlike the other employees of the Respondent, she was never accorded annual leave.

6. She testified that she used to work [cleaning] at the garage up to 10. 00 a.m. then thereafter proceed to the Manager’s house to clean the same. There she would work up to 4. 00 p.m. She maintained that she was an employee of the Respondent.

7. The Claimant further stated that by reason of the premises above stated she felt that she was differentially treated and suffered workplace discrimination.

8. The Claimant stated that on the 4th August, 2017, the Respondent terminated her employment orally on the ground that her services were no longer necessary. According to the Respondent, the situation was a product of lack of business on its part due to high competition in the market.

9. The Claimant asserted that the termination of her employment was without any valid reason. It was not preceded by any notice as per law expected. The statutory procedure was not adhered to.

10. Upon terminating her employment, the Respondent refused to pay the Claimant her terminal dues including salary arrears, house allowance, leave for eight years, service pay for eight years, compensation for not paid for public holidays and off duty days and compensation for unfair termination.

11. Cross-examined by Counsel for the Respondent, the Claimant reiterated that the Respondent was her employer and that she worked for it for about 8 years. Further, her employment was without a formal letter of appointment. However, the documents In response to claims that she absconded her duties, the Claimant postulates that presented are a testament that she was an employee of the Respondent.

12. The Manager of the Respondent, Mr. Koji Kopayashi was not at any time her employer. Throughout, her relationship with him was that of a subordinate and manager.

13. She testified further that for all that time she worked for the Respondent she was not allowed to proceed on leave. Cross-examined on her salary, she stated that she was earning a monthly salary of KShs. 22,000/-, normally paid in cash.

14. The Manager, Mr. Koji resigned in the same month of her dismissal from employment. Her termination came at the time when general elections were due. The Respondent had allowed all its employees to break, to participate in the national exercise. However, when she resumed, she found that Ms. Asha Shuabi, a Secretary, had replaced her with another person. Asha sent her away.

15. The recommendation letter dated 21st June 2017 was issued to her by Mr. Koji and not one Stanley. The letter was given to her before the termination of her employment. Further, after the termination, she used the recommendation letter to get employed by a person who was working at the Japanese Embassy. However, she didn’t get down to work with him as when he sought for information from the Respondent, he was dissuaded from employing her.

Respondent’s case 16. The Respondent presented two witnesses to testify, Ms. Asha Shwaib Adam [ RW1] and Mr. Koji Kayapashi [RW2]. RW1 urged this Court to adopt her witness statement dated 20th February 2020 as her evidence in chief. She testified that at all material times she was in the employment of the Respondent as an Office Administrator.

17. The witness alleged that the Respondent Company was officially registered in Kenya in 2010 and started its operations and staff employment in 2013.

18. She further stated that the Claimant was employed in the position of an Office Cleaner on a piecemeal basis. She could work from Monday to Saturday before offices opened at 8. 00 am. Her salary was approximately 20,000 per month, depending on the number of days she worked in the month.

19. The witness alleged that the Claimant absconded duty from 2013 to 2017 August, leaving them unofficially with her friend, Annah Wanjiku Kariuki as their new cleaner. Whenever the Claimant was absent from duty, she had always invited Annah to step in for her.

20. She further stated that after getting confirmation that the Claimant had a new job with a Japanese family to whom the Manager had recommended her, the Respondent company decided to employ Annah as a cleaner with effect, August 2017. After five days of their working with Ann, the Claimant went back claiming for her job back. The circumstances could not allow the Respondent to allow her back.

21. The witness testified that the Claimant worked for Mr. Koji in his personal capacity, and also for the Respondent. She left her employment in her own volition. The Respondent didn’t dismiss her.

22. In answer to the clarification sought by this Court, the witness stated that the Claimant showed the interest of getting back to her job, five days after she had left. They got information from the Claimant’s friend that she had secured a job elsewhere.

23. Cross -examined by the Claimant the witness stated that they called the Claimant to confirm whether she had gotten a job elsewhere but she denied.

24. The witness further stated that on the day the Claimant went back seeking to continue working, she became unruly. The then Manager, Stanley was forced to require her to leave. Subsequently, the management decided to pay her a terminal due and let Ann continue working. The Respondent had decided to separate with the Claimant.

25. By consent of the parties, RW2’s statutory declaration of 27th September 2017 was adopted by this Court as part of his evidence in chief. In the declaration, the witness stated that the Claimant was not an employee of the Respondent at any time, but his. He employed her in 2008 to work on hourly basis to help him clean his residential house. She was not a permanent employee.

26. The witness stated that he resigned from the Respondent’s employment in June 2017. After resignation he didn’t need the house, and consequently the Claimant’s service. As a result, he secured a job for her with the family of Nakagome Masaki.

27. He further testified that sometimes in July 2020, the Claimant approached her for a recommendation letter and asked it to be on the Respondent’s letter head, since the new employer wanted it that way. As he had no reason to doubt the Claimant’s intention, he issued her with the letter.

28. At the time he was making the recommendation, he was still the Managing Director of the Respondent Company.

Issues for Determination 29. I have reviewed the parties’ pleadings and evidence, and return that the issues for determination are as follows; -a.Whether the Claimant was employed on a contract for piece work or a term contract;b.Whether the Respondent unfairly terminated the Claimant’s employment;c.Whether the Claimant should be awarded the terminal dues particularized in her Statement of Claim dated 1st September 2017.

Whether the Claimant was employed on a contract for piece work or a term contract. 30. Before I delve further into this issue, it is imperative to point out that this Court notes that the Respondent’s witnesses’ evidence was puzzlingly contradictory to each other’s. RW 1 testified that at all material times, the Claimant was an employee of the Respondent but as a piece rate worker, while RW2, asserted that she was not at any time an employee of the Respondent but his. This is a contradiction on a pivotal point which only speaks to lack of candidness on the part of the Respondent. One cannot fathom how a Managing Director of a Company and an Administrative Officer of the same enterprise could not be able to take a similar position as to whether a person whom they had both known for almost eight years was an employee of the enterprise or not.

31. Piece work form of employment is defined in section 2 of the Employment Act 2007 to mean;“…any work the pay of which is ascertained by the amount of work performed irrespective of the time occupied in its performance”

32. In the case of Krystalline Salt Limited v Kwekwe Mwakele & 67 others [2017] eKLR the Court of Appeal held that: -“The Employment Act recognises four main types of contracts of service; contract for an unspecified period of time, for a specified period of time, for a specific task (piece work) and for casual employment.Piece work form of employment is defined in section 2 to mean;“…any work the pay of which is ascertained by the amount of work performed irrespective of the time occupied in its performance”In a piece work or, as it is sometimes called, piece rate arrangement, the emphasis is on the amount of work and not the time expended in doing it. The decision to elect which form of employment to go for, either as an employee or employer will depend on a number of factors, but the dominant consideration is, for the employee, the earnings and other physical conditions of employment, and on the other hand, savings for the employer. An employee under piece work arrangement, though not entitled to all or some of the benefits of the other forms of employment, is at least entitled to minimum wage.”

33. In my view, the evidence by the Respondent’s witnesses does not at all characterize the Claimant’s employment as a piece rate contract of service. Keenly looking at the evidence, there cannot be doubt that the same shows her as an employee who was under a term contract but who worked on few hours daily. By reason of this, I come to an inescapable conclusion that the Claimant was a term employee of the Respondent.

Whether the Respondent unfairly terminated the Claimant’s employment 34. The Claimant has claimed that the termination of her employment was unfair and unlawful for lack of a valid reason and procedural fairness.

35. Section 43 of the Employment Act places an obligation on the employer in a dispute regarding termination of an employee’s employment to prove the reason[s] for the termination. However, it is not enough to discharge the burden contemplated under this provision. There is a further legal burden that must be surmounted for the termination to be held substantively fair, the burden contemplated under Section 45[2] of the Act, which provides;“(2)A termination of employment by an employer is unfair if the employer fails to prove—(a)that the reason for the termination is valid;(b)that the reason for the termination is a fair reason—(i)related to the employees conduct, capacity or compatibility; or(ii)based on the operational requirements of the employer; and(c)that the employment was terminated in accordance with fair procedure.”

36. RW1 asserted that the Respondent deserted duty from the 2013 to July 2017, hence the termination of her employment. However, she didn’t state on which date and month of 2013, the alleged desertion occurred. If indeed the Claimant absconded duty, as the Respondent’s witness alleged nothing could have been easier than for her presenting evidence that is not too general as she did, but evidence where specificity can be discerned. Further, the Respondent didn’t place any material before this Court showing that the Claimant absconded duty.

37. Desertion/Absconding was defined in the case of Julius Kyalo Malonza vs Ruth Osolo t/a Ereva Catering Services [2021] eKLR citing Seabolo vs Belgravia Hotel [1997] 6 BLLR 829 (CCMA) as follows: -“An employee who deserts his post does so with the intention of not returning, or having left their post, subsequently formulates the intention of not returning.”

38. In Ronald Nyambu Daudi v Tornado Carriers Limited [2019] Eklr, the Court held that:-“10. Desertion of duty is a grave administrative offence, which if proved, would render an employee liable to summary dismissal. It is however not enough for an employer to simply state that an employee has deserted duty. The law is that an employer alleging desertion against an employee must show efforts made towards reaching out to the employee and putting them on notice that termination of employment on this ground is under consideration (see Evans Ochieng Oluoch v Njimia Pharmaceuticals Limited [2016] eKLR).”

39. In light of the jurisprudence in the above decisions, while desertion/absconding duty is a valid ground for summarily dismissing an employee under Section 44 (4) (a) and (c) of the Employment Act 2007, the ground can only be successfully invoked by the employer as a valid ground for termination if he or she sufficiently demonstrates that he or she made reasonable efforts to reach the employee and inform him or her that he or she was considering terminating the employee from employment by reason of desertion, before taking the decision to terminate.

40. In the instant case, the Respondent has simply thrown desertion/absconding duty to the Court as a reason why they terminated the Claimant’s employment. In the view of this Court, the evidence by the Respondent’s witnesses does not establish any efforts made to reach the Claimant during the alleged period of desertion.

41. In conclusion, I am not persuaded that the Claimant did abscond duty as alleged by the Respondent. Consequently, I hold that it didn’t discharge the legal burdens under Sections 43 and 45[2] of the Act. The termination of the Claimant’s employment was substantively unjustified.

42. The Claimant contended that the termination of her employment was procedurally unfair. Section 41 of the Employment Act which is couched in mandatory terms provides for the procedure that the employer contemplating terminating an employee’s employment must adhere to. The employer must inform the employee of the reason[s] the basis for the contemplation, give the employee an adequate opportunity to prepare and make a representation on the grounds, and consider the representation before taking a decision. No doubt, the Respondent has not demonstrated that it adhered to the procedure. As a result, I conclude that the termination was not procedurally fair.

Whether the Claimant is entitled to the reliefs sought. 43. Having found as I have hereinabove that the Claimant’s employment was unfairly terminated, I now turn to consider the whether the reliefs sought can be availed to the Claimant.

44. The Claimant seeks one month’s salary in lieu of notice (Kshs. 22,000/-); payment in lieu of untaken leave for 8 years (Kshs. 152,533/-); service pay for 8 years (Kshs. 88,000/-); 4 days worked on August 2017 (Kshs.3,384. 60/-); Holidays not paid as a continuous working day being 10 days (Kshs. 67,692/-); Holidays not paid as a continuous working day from January 2017 to August 2017 (Kshs. 5,076/0-); Off duties not paid as a continuous working day for 8 years (Kshs. 324,923/-); Off duties not paid from Jan 2017 to August 2017 (Kshs. 23,692/-); House Allowance for 8 years (Kshs.316,800/-); House Allowance from January 2017 to August 2017 (Kshs. 23,000/-); Prorated leave days for January 2017 to August 2017 (Kshs. 8,983/-); compensation for unfair termination equivalent to 12 months gross pay (Kshs. 264,000/-); General Damages for Discrimination (Kshs. 3,000,000/-).

45. I note that the Respondent has not produced evidence disproving any of the Claimant’s claims. Under Sections 10(3) and 74 of the Employment Act 2007, the employer is the keeper of records relating to an employee’s leave days or payment of leave allowance, payment of salary, payment for overtime worked, and deductions made on the employee’s salary and remittance to the relevant authorities.

46. It was common cause that the Claimant’s salary was payable monthly. As a result, one cannot be off the mark to hold that her contract of employment was one terminable by at least 28 days’ notice under Section 35 (1) (c) of the Employment Act 2007. It has not been stated and proved by the Respondent that it issued the Claimant with any termination notice. She is therefore, entitled to notice pay.

47. Annual leave is a statutory entitlement for an employee and an obligation on the employer to allow enjoyment thereof, under Section 28 of the Employment Act 2007. The Claimant asserted that for the 8 years and seven months that she served the Respondent, the Respondent didn’t allow her to proceed for her annual leaves. The Respondent did not lead evidence to controvert this, may have been blurred by the position it took as regards the nature of her employment. I am persuaded therefore, that the Claimant had earned but unutilized leave days.

48. This question springs up then, ‘can the Claimant be compensated for the leave days earned but not utilized for the eight years and seven months? In my view, the limitation of actions imposed by section 90 of the Employment Act militates against an affirmative answer. Consequently, I will allow compensation for earned but unutilized annual leave days for three years immediately before the date of filing of this suit, 4th August 2014 to 4th August 2017.

49. On service pay, Section 35 (5) and (6) provides that: -“(5)An employee whose contract of service has been terminated under subsection (1)(c) shall be entitled to service pay for every year worked, the terms of which shall be fixed.(6)This section shall not apply where an employee is a member of—(a)a registered pension or provident fund scheme under the Retirement Benefits Act;(b)a gratuity or service pay scheme established under a collective agreement;(c)any other scheme established and operated by an employer whose terms are more favourable than those of the service pay scheme established under this section; and(d)the National Social Security Fund.”

50. The Respondent did not produce records showing that the Claimant fell under one of those categories of employees prohibited under the provision above from claiming to the entitled to service pay. She is therefore entitled to service pay for 8 years at the rate of 15 days per each year worked. I hereby grant the same in his favour.

51. The Claimant further sought for payment of deducted remuneration in respect of off days and public holidays that were. Faced with a case that was presented in a similar manner as the Claimant has in the instant matter, this Court held in the case of James Orwaru Nyaundi vs Kilgoris Klassic Sacco Limited [2022] eKLR as follows: -“78. The Claim for overtime and public holidays worked compensation has just been thrown to Court. This Court has incessantly urged that this practice must come to a stop. It is not enough for a Claimant to just give figures to court, asserting that he or she is entitled to them, cross her or his fingers hoping that the Respondent does not place before Court documents, and as a consequence of the failure say “behold the claim is proved, the employer has not tendered in evidence any documents.” The Claimant must if she or he has to succeed in the Claim, be specific on the days when he worked overtime, the specific public holidays, when he worked and wasn’t paid for.79. Parties often place reliance on Section 74 of Act, and wrong reliance I must say, to assert that whenever an employer does not produce documents in Court where overtime, public holiday worked, untaken unpaid for leave days are alleged, there is an automatic pass to a judgment in favour of the employee. My reading of the provision does not suggest that such an implication is one that follows it. The provision only provides for the record that must be kept by an employer, nothing to do with production of the records in Court.80. If one wanted to rely on the record[s] which is in the possession and control of the employer to prove and or fortify certain aspects of his or her case, there is a legal avenue available for attainment of that, issuance of as notice to produce under the Evidence Act, Cap 80, laws of Kenya. It will be only after the notice has been properly issued, and the employer fails to produce the record, that the default consequence will set in.81. The Claimant did not tender any specific in the nature mentioned herein above, the Claim for overtime, and public holidays worked compensation are declined.”

52. The Claimant did not specify the specific holidays claimed for the 8 years worked. She simply claims 10 holidays per year. She also does not specify which 4 days she took off every month for the 8 years. For the holidays worked between January 2017 and August 2017, the Claimant has listed them with specificity. The Respondent has not produced records to controvert the Claimant’s evidence that she was not paid for holidays between January 2017 to August 2017, as such compensation on this head can only be to the extent of the period.

53. Under section 31 of the employment Act, the employer is obligated to provide reasonable accommodation for its employees and where it doesn’t then it shall pay house allowance. It is trite law that house allowance is paid at the rate of 15% of basic salary. The Respondent, again has not produced evidence to the effect that it either gave the Claimant accommodation or paid her house allowance as per law required. As such I will allow her claim under this head but only to the extent that it shall be in relation to the period three years immediately before the filing of this matter.

54. I now turn to compensation for unfair termination. This Court has already concluded that the Claimant was unfairly terminated by the Respondents. Section 49 (1) (c) of the Act bestows on this Court power to grant a compensatory relief in favour of an employee who has successfully assailed his or her employer’s decision to terminate his or her employment or summarily dismiss him or her from employment. Exercise of the power is discretionary, influenced by the circumstances of each case, taking into account the factors contained in Section 49 (4).

55. The Claimant prays for 12 months’ gross salary as compensation. I have carefully considered; the manner in which the Claimant’s employment was terminated, the casual disregard for the law by the Respondent, the fact that it has not been shown that she contributed to the termination, her desire to continue working with the Respondent as came out in the evidence of the RW1, and her length of service, being 8 years 7 months, and find that she is entitled to the award, to the extent of five[5] months’ gross salary.

56. Per Section 51 of the Act, the Claimant is entitled to a Certificate of Service.

57. In the upshot, judgment is hereby entered for the Claimant as against the Respondent in the following terms: -a.A declaration that the Claimant’s termination of employment was unlawful and unfair.b.The Claimant shall be paid the following sums;1. One month’s salaryin lieu of notice Kshs 22,000. 002. Annual Leave accrued in 3 yearsBut not utilized Kshs. 46,200. 003. Service pay(846. 15 x 15 x 8) Kshs. 101,538. 004. Unpaid Holidays betweenJan-Aug 2017 (846. 15x6) Kshs. 5,076. 905. House Allowance (15% of22,000/- x 3) Kshs. 118,000. 006. Compensation for unfairTermination (10 months) Kshs. 110,000. 00c.Interest on (b) above at Court rates from the date of this Judgment until payment in full.d.That the Respondent bears the costs of this suit.e.The Respondent is hereby ordered to issue the Claimant with a Certificate of Service within 30 days from today.

READ, DELIVERED AND SIGNED THIS 12th DAY OF APRIL, 2024. OCHARO KEBIRA.JUDGEIn the presence of:Ms Muthee holding brief for Kabiru for RespondentMs Khavugwi ShatoraOrderIn 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 has 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 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.A signed copy will be availed to each party upon payment of Court fees....................................OCHARO KEBIRAJUDGE