Steve Kipkore Kirmoyo v Speedex Logistics Limited [2018] KEELRC 1387 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT

AT MOMBASA

CAUSE NUMBER 715 OF 2016

BETWEEN

STEVE KIPKORE KIRMOYO........................CLAIMANT

VERSUS

SPEEDEX LOGISTICS LIMITED..............RESPOINDENT

Rika J

Court Assistant: Benjamin Kombe

Mogaka Omwenga & Mabeya Advocates for the Claimant

CM Advocates for the Respondent

____________________________

JUDGMENT

1.  The Claimant filed his Statement of Claim, on 26th September 2016. He states he was employed by the Respondent Company as a Clerk on 22nd January 2007. His contract was terminated by the Respondent on the allegation of theft, in February 2015. As of the time of termination, the Claimant earned a monthly salary of Kshs. 35,000. The Claimant avers termination was unfair and unlawful. He was not given any warning or notice. He was not heard. He was not paid terminal dues. He prays for Judgment against the Respondent in the following terms:-

a) 1 month salary in lieu of notice at Kshs. 35,000.

b) Salary for February 2015 at Kshs. 35,000.

c) Leave allowance from 2007 to 2015 at Kshs. 280,000.

d) 12 months’ salary for unfair dismissal at Kshs. 420,000.

e) Overtime and weekends at Kshs. 960,000.

f) Certificate of Service to issue.

g) Any other relief the Court may deem necessary.

2. The Respondent filed its Statement of Response and Counterclaim, on 6th December 2016. The Respondent does not contest that the Claimant was its Employee. His contract was not unfairly terminated. He was suspended on account of gross misconduct. He was asked severally to account for money entrusted to him for payment to Kenya Revenue Authority [KRA]. He did not account, and failed to return to work. The Respondent suffered reputational damage as a result of the Claimant’s actions. The Respondent seeks to have the Claim dismissed with costs to the Respondent. The Claimant was loaned Kshs. 30,000 by the Respondent which he had not repaid by the time he left employment. The Respondent counterclaims this amount.

3. The Claimant filed his Reply to the Statement of Response, and Response to the Counterclaim, on 11th January 2017. He states that the Counterclaim is fatally defective. The Respondent is not owed any money by the Claimant.

4. The Claimant gave evidence and rested his case, on 28th September 2017. Respondent’s Operations Manager Brian Kithome and Supervisor Onesmus Mutie Kiluki gave evidence on 12th February 2018. An Administrator of the Respondent, Jayendra Dhanji Hirani, gave evidence for the Respondent on 28th February 2018, when the hearing closed.  The matter was last mentioned in Court on 31st May 2018, when Parties confirmed the filing of their Submissions.

Claimant’s Case

5. The Claimant confirmed he was employed by the Respondent as a Clerk, on 22nd January 2007. On 18th February 2015, there was a letter sent to the Respondent from KRA. It was alleged that clearance of certain goods was not done properly in 2014. KRA alleged money due from the Respondent to KRA in customs duty, did not reflect in KRA Account. The Respondent was asked by KRA to pay the total sum of Kshs. 1,278,197, and claim refund later, if already paid. The particular entry made by the Claimant was for a sum of Kshs. 29,430. He did not deal with entries from Nairobi.

6. The Respondent paid the amount demanded by KRA under protest. The Claimant was suspended by the Respondent on 19th February 2015. He was never recalled. He was not taken through a disciplinary hearing. He did not admit having committed any employment offence to his Supervisor Onesmus Kiluki. No investigations were carried out. The Claimant was locked out by the Respondent, when he sought to ask about his employment status with the Respondent, after suspension. There was no letter of termination issued to him. He was not mentioned in Respondent’s Memo dated 18th February 2015. He earned Kshs. 35,000 per month. He asks the Court to find in his favour and grant Judgment as prayed.

7. Cross-examined, the Claimant told the Court he was a Field Clerk. He used to receive cash from the Respondent to pay KRA. Notice by KRA issued to the Respondent to pay the sum of Kshs. 1,278,197, is dated 3rd February 2015. The Claimant was suspended on 18th February 2015. There was no sufficient time to investigate. He was not called to a meeting by the Respondent to explain his role, between 3rd February 2015 and 18th February 2015. He agreed to salary deduction to recover the loss attributed to him, under protest.  He had written a letter of apology to the Respondent way back on 8th September 2010, relating to the Account of Doshi, because he accepted there was an error in handling of the Account. It was not his habit to steal from the Respondent. Internal Memo was issued to Claimant’s Colleagues. The Claimant read it. Suspension letter was the basis of termination. He was loaned Kshs. 40,000 by the Respondent, and had a balance of Kshs. 35,000 to pay by the time he left employment. Redirected, he told the Court that suspension letter did not say when he would return. He was never recalled. The Respondent did not exhibit any document on Claimant’s annual leave entitlement. Offences from the year 2010 had no relevance to the issues in dispute. He agreed to have deduction made on his salary under protest.

Respondent’s Case

8. Operations Manager, Kithome, told the Court the Claimant’s responsibility included payment of customs duty to KRA. The Respondent received demand from KRA, alleging the Respondent had not paid duty. KRA stopped the Respondent from accessing KRA’s online system. The Claimant was insisting he had paid the duty in question to KRA. He was called 3 times for a hearing. He kept saying he would produce receipts showing payment of duty. Lastly he told the Respondent he was following on payment, and was ready to have the amount in question deducted from his salary. He was suspended pending production of receipts. Cross-examined, Kithome told the Court Customer Transaction Receipts were mostly made by one Francisca, not by the Claimant. Receipts attributable to the Claimant were not displayed by the Respondent. The Claimant was suspended. There is no record of a disciplinary hearing. There is no evidence showing the Claimant was paid anything after suspension. No Certificate of Service issued. Kithome clarified on redirection that receipts exhibited by the Respondent were for the period the Respondent was compelled to pay duty by KRA to access KRA system. Hearings were conducted thrice. The Claimant asked for time to produce receipts.

9. Supervisor Kiluki confirmed that KRA made demand for payment of duty by the Respondent, amounting to Kshs. 1,278,197. The Claimant was to make payment through the bank. He was asked to account for the money entrusted to him by the Respondent to pay duty. He kept saying he would produce receipts showing he had paid. He never produced such receipts. He was suspended. His contract was not terminated. The Respondent was compelled to pay KRA, to avoid being locked out from accessing KRA system. The Claimant did not work overtime. He never applied, to go on annual leave. On cross-examination Kithome told the Court that Respondent’s Internal Memo mentioned the amount attributable to the Claimant was Kshs. 29,130.  It was not Kshs. 1,278,197. The Respondent counterclaims only the amount loaned to the Claimant of Kshs. 30,000. The Claimant was not called to a disciplinary hearing after suspension. Redirected, Kithome told the Court that the Claimant agreed he was wrong, by asking the Respondent to deduct the unremitted duty from his salary.

10. Administrator Jayendra Dhanji told the Court he oversees duty payments. He confirmed the position that the Claimant failed to pay duty to KRA, which compelled the Respondent to make payment to access Simba System which had been locked by KRA.  Dhanji corroborated what other Witness for the Respondent stated, on the steps taken by the Respondent against the Claimant.  Cross-examined, Dhanji told the Court the notice from KRA did not specify the amount claimed was over which period. The Respondent could produce documents to show the Claimant was entrusted Kshs. 1,278, 197. The Respondent does not counterclaim this amount. There were no notices inviting the Claimant to a disciplinary hearing. He was not given the opportunity to be heard, accompanied by a Colleague or Trade Union Representative. There were no warning letters issued against him. He was suspended the same day he indicated he would pay the sum of Kshs. 29,130 through salary deduction. Redirected, Dhanji told the Court Counterclaim relates to loan of Kshs. 30,000 given to the Claimant by the Respondent. If one did not apply for annual leave, leave was forfeited.

The Court Finds:-

11. The Claimant was employed by the Respondent as a Clerk in the year 2007. He left employment in February 2015. There is no evidence that his contract was formally terminated by the Respondent. The Respondent however concedes to have suspended the Claimant. There is an Internal Memo dated 19th February 2015 from the Respondent’s Managing Director in Nairobi, to the Respondent’s Office at Mombasa, suspending the Claimant. This was after the Claimant wrote to the Managing Director asking that the amount of Kshs. 29,130 be deducted from the Claimant’s salary, for transmission to KRA pending investigations.

12. The amount of money due to KRA, attributable to the Claimant, was clearly not Kshs. 1. 278,197, but Kshs. 29,130. The question that follows is whether the amount is question is relevant, in considering and determining whether the Claimant was involved in an employment offence. The Court does not think it is relevant. The Claimant appears to have conceded he could not account for Kshs. 29,130. It was not the first time he had failed to account for his Employer’s funds. There is a letter on record dated 17th December 2012 by the Claimant addressed to the Director of the Respondent, where the Claimant apologizes for what he calls ‘missusement’ of company resources. He offered to pay the amount in question, amounting to Kshs. 70,000, through payroll deduction, at Kshs. 5,000 monthly.  Earlier, in the year 2010, the Claimant was involved in another act of fraud against his Employer, with regard to Doshi Courier, and wrote to the Employer asking for forgiveness.  He was forgiven, on the condition he pays to the Employer Kshs. 2,000 monthly to be deducted from his salary.

13. Failure to account for the amount of Kshs. 29,130 followed this pattern of ‘missusement,’ apology and hope that all would be forgiven. The Claimant fundamentally breached his obligations arising under his contract. It resulted in the Respondent being denied access to Simba System. He was contributory to the Respondent’s loss of reputational damage. The Respondent would not have trust and confidence in the Claimant.  He committed, or on reasonable grounds was suspected of having committed a criminal offence against, or to the substantial detriment of his Employer or Employer’s property. He was clearly involved in an act of gross misconduct, which did not cease to be gross misconduct upon the Claimant’s offer to pay to the Respondent, the amount in question through salary deduction.  The Respondent would have valid reason to summarily dismiss the Claimant.

14. The Respondent did not however, summarily dismiss the Claimant. Instead, the Respondent suspended the Claimant indefinitely. He was not called to a disciplinary hearing. He was not confronted with any specific charges and asked to answer to those charges, at a disciplinary forum. The Respondent did not terminate the Claimant’s contract formally, but just suspended the Claimant, until he could produce receipts.

15. This was procedurally flawed. More so because the Claimant offered to pay the amount in question the same day he was suspended. The Respondent did not say if this offer was acceptable or objectionable; it just insisted that the Claimant produces evidence showing payment of duty. Suspension in the end, served as termination of employment. No disciplinary hearing was set in motion.

16. The Court is satisfied that there was a valid reason underlying termination of the Claimant’s contract of employment. He was engaged in an act of gross misconduct. He does not merit notice pay.

17. He was suspended on 19th February 2015. He worked for 19 days in February 2015. He merits and is granted salary for 19 days worked in February 2015 at Kshs. 25,576.

18. Termination of employment through a letter of suspension, in the view of the Court is a procedural default. The Claimant is granted compensation the equivalent of 1 month salary at Kshs. 35,000.

19. The Claimant has not established his prayer for leave allowance for the period 2007-2015. Leave allowance as submitted by the Respondent, must be shown to be a benefit given under the Parties’ contract of employment. It is not a statutory benefit. It is not explained to the Court how the figure of Kshs. 280,000 as leave allowance, is computed. There is no evidence showing the Claimant was entitled to leave allowance, and at what rate. The Claimant does not pray for annual leave pay in his Claim.

20. There was not the slightest evidence given by the Claimant to support the prayer for Kshs. 960,000 in ‘overtime and weekend payments.’ How is the Court to understand the demand for Kshs. 10,000 per month, for 8 years, being unpaid ‘overtime and weekend payments?’ These items are rejected. The Claimant concedes in his evidence that he owed the Respondent money. He was given a loan which he had not completed paying, by the time he left employment. The Counterclaim at Kshs. 30,000 is allowed.

IN SUM, IT IS ORDERED:-

a) The Respondent shall pay to the Claimant salary for 19 days worked in February 2015 at Kshs. 25,575 and compensation equivalent of 1 month salary at Kshs. 35,000- total Kshs. 60,575.

b) The Claimant shall pay to the Respondent the sum of Kshs. 30,000.

c) Upon offset the Respondent shall pay to the Claimant the sum of Kshs. 30,575 in full and final settlement.

d) No order on the costs.

e) Certificate of Service to issue.

Dated and delivered at Mombasa this 27th day of July 2018.

JAMES RIKA

JUDGE