REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT

AT NAIROBI

ELRC CAUSE NO. 1320 OF 2015

(Before Hon. Justice Hellen S. Wasilwa on 11^th July, 2019)

ESTHER MUTEMBEI............................................CLAIMANT

VERSUS

ORACLE SYSTEMS LIMITED......................RESPONDENT

RULING

1. The Applicant/Respondent, Oracle Systems Limited filed a Notice of Preliminary Objection dated 26/11/2018 together with a List of Authorities seeking to raise a Preliminary Objection to the hearing of the matter on the grounds that:-

1. The suit in its entirety was compromised by consent by virtue of the Consent Letter dated 04/09/2017 and filed in Court on 13/09/2017.

2. The Consent Letter marking the matter settled is binding on the parties.

2. The Claimant/Respondent, Esther Mutembei filed her List of Authorities and Grounds of Opposition both dated 04/12/2018 opposing the Applicant’s Preliminary Objection on the following grounds:-

1) The matters raised by the Respondent by way of a Preliminary Objection are matters that go into evidence and not matters to be raised by way of a Preliminary Objection (see Mukisa Biscuits Manufacturing Co. Ltd vs. West end Distributors Ltd {1969} EA 696.)

2) The Consent filed in Court was a product of the settlement agreement dated 12/09/2017 which settlement agreement has not been complied with.

3) The issue captured in the settlement agreement and more particularly Clause 2.2, 2.3, 2.4, 6.3 and 6.4 are clear matters of evidence and no section of the law on which the Preliminary Objection is premised has been quoted.

Applicant/Respondent’s Submissions

3. The Applicant/Respondent submits that a Consent is an agreement by parties in which they make reciprocal concessions in order to resolve their differences to avoid litigation or end litigation which has already began. That a consent acquires the force and effect of a judgment as observed in the case of John Waruinge Kamau –v- Phoenix Aviation Limited [2015] eKLR and that it is usually made in the presence and with consent of parties and their counsel and is binding on all parties as per Pastor Anthony Makena Chege –v- Nancy Wamaitha Magak & Another [2015] eKLR.

4. That the Consent as it stands is a valid and binding agreement between the parties which compromised the present suit against it unless varied or set aside. That the Court of Appeal in Samuel Mbugua Ikumbu vs. Barclays Bank of Kenya Limited [2015] eKLR and Board of Trustees National Social Security Fund vs. Michael Mwalo [2015] eKLR held that the variation of a consent can only be on grounds allowing a contract to be vitiated and which include but not limited to fraud, collusion, illegality, mistake, being contrary to the Court policy, absence of sufficient material facts and ignorance of material facts.

5.  It submits that there is no application before this Court to vary or set aside the consent as it stands and that the law binds the Court and both parties to its terms.

6. It submits that documents cannot be attached to Grounds of Opposition as has been done by the Claimant and that the same cannot be relied on. That the Claimant’s attempt to explain a dispute arising from the Consent by attaching a Settlement to her grounds of opposition is irregular and ought to be disregarded as they are not properly before Court.

7. That the Application herein cannot be equated to an application to set aside the Consent and that the Claimant is seeking to call for proof and/or adduce evidence to authenticate facts and not to address points of law raised in the Preliminary Objection, which should not be entertained by this Court. That the Court in the case of Hassan Nyanje Charo –v- Khatib Mwashetani & 3 others [2014] eKLR observed that parties ought to limit themselves to the grounds raised in the Preliminary Objection.

8. That without prejudice to its foregoing submissions, it paid out the sum of Kshs. 5Million to the Claimant’s account, less statutory deduction of Kshs. 1.5Million following the Consent.

9. That it also provided her with a Statement of Earnings & Deductions generated on 19/09/2017 showing how the said deductions were made and that the Claimant duly received and accepted that amount. That the Claimant’s Advocate alleging misrepresentation by the Respondent because he was not aware that statutory deductions were to be made from agreed settlement sum has not been proved. That the Court of Appeal in Directline Assurance Co. Ltd -v- Jeremiah Wachira Ichaura [2016] eKLR observed that “It is trite law that any lump sum payment for say, terminal dues, is subject to statutory deductions.”

10. The Respondent/Applicant submits that the hearing of the substantive suit cannot proceed with the filed Consent on the Court record and which is a valid contract between the parties. It prays that the Preliminary Objection is upheld.

Claimant/Respondent’s Submissions

11. The Claimant/Respondent submits that this Court should note that no section has been cited under which the Preliminary Objection is anchored and further submits that the said filed Consent has not been adopted as an order of the Court because the Respondent has not complied with the settlement agreement.

12. That the Respondent failed to honour the terms and only made a payment of Kshs. 3.5Million leaving a balance of Kshs. 1.5 Million and that Clause 2.2 of the settlement agreement was clear and did not state if indeed the said amount was subject to any statutory deductions. That the said Clause 2.2 provided as follows:-

“In consideration of the mutual covenants contained herein, the Respondent agrees to pay the Claimant in full and final settlement of the matters arising in the Dispute the sum of Kenya Shillings Five Million (Kshs. 5,000,000/=), all inclusive.”

13. She submits that parties are bound by the terms and conditions of contracts they enter into voluntarily as was provided in Clause 7 of the settlement Agreement and that the same was similarly held in the case of National Bank of Kenya Ltd –v- Pipe Plastics Sankolit (K) Ltd & Another {2001} KLR 112 (2002) EA 503 that parties are bound by terms of their contract unless coercion, fraud and undue influence are pleaded and proved.

14. That the Applicant cannot therefore introduce other conditions that were not expressly and impliedly provided for in the agreement and that since the filed consent has not been adopted as an order of the Court, there is no consent to be set aside or varied. That Section 49 of the Employment Act is not applicable in this case as the settlement agreement is not premised on any section of the law and that the said agreement did not state that payment was for wrongful dismissal/ unfair termination.

15. That the parties filed a settlement agreement which is different from a judgment of the Court and that the Applicant is not acting in good faith and in the spirit of the said settlement agreement.

16. The Claimant/Respondent urges this Court to dismiss the Preliminary Objection, invoke Clause 6.2 of the settlement agreement and Section 20(1) of the Industrial Court Act 2011 and exercise its discretion by interpreting the full import and meaning of the settlement agreement. That the Court should also enter judgment in her favour for the outstanding amount of Kshs. 1.5 Million plus costs and interests in terms of the settlement agreement.

17. I have considered the averments of the Parties.  I note that on 13/9/2017, there was a consent letter filed in Court by the Respondent’s Counsel seeking to mark this suit as settled.

18. However, the parties have been appearing in Court even after that consent letter was filed and intimated to Court that they had not settled the matter.  On 1/2/2018, Mrs. Wetende for the same Respondent told Court that they had not reached a settlement.

19. This Court then directed that the Parties take a hearing date for this case.

20. For the Respondent to turn back now and insist the consent be allowed as a settlement of this case is therefore not the true position of the Parties.

21. I reject the application and order the Parties to take a date for hearing of this case as ordered by Court on 13/3/2018 or in the alternative enter a fresh consent to be filed before this Court.

22. Costs in the cause.

Dated and delivered in open Court this 11^th day of July, 2019.

HON. LADY JUSTICE HELLEN WASILWA

JUDGE

In the presence of:

Ougo holding brief Mugalla for Claimant/Respondent – Present

Onyango holding brief Wetende for Respondent – Present