Osiru v Rainforest Farmlands Kenya Limited (Cause E32 of 2021)  KEELRC 12890 (KLR) (13 October 2022) (Judgment)
Neutral citation:  KEELRC 12890 (KLR)
Republic of Kenya
Cause E32 of 2021
H.S Wasilwa, J
October 13, 2022
David Njite Otieno Osiru
Rainforest Farmlands Kenya Limited
1.The Claimant filed an Amended statement of Claim on 17th August, 2021 alleging that the Respondent unfairly terminated his services. He seeks the following reliefs:a.One and a half months’ notice as per the handbook of Kshs. 204, 900.b.Salary for the month of April, 2021 of Kshs 136,600.c.Annual leave balance for 14 days 2020-2021 of Kshs.63, 746.d.Telephone allowance for the month of April,2021 of Kshs. 2,500.e.Balance of off days in 2014 (11 days) of Kshs 50,095.f.Unpaid allowances on public holidays, 2015(5 days) of Kshs 45,540.g.Unpaid allowances on public holidays, 2016(5 days) of Kshs 45,540.h.Unpaid allowances on public holidays, 2017(4 days) of Kshs 36,432.i.Unpaid allowances on public holidays, 2018(2 days) of Kshs 18,216.j.Unpaid allowances on public holidays, 2019(4 days) of Kshs 36,432.k.Unpaid allowances on public holidays, 2020(4 days) of Kshs 36,432.l.Accumulated overtime from 15th September, 2014 to 28th April, 2021(5023hrs) at a rate of Kshs.853 per hour of Kshs. 4,284,617.m.Leave travelling allowance for 2021 of Kshs. 27, 320.n.Compensation for unfair termination (12 months of Kshs 136,600 per month0 of Kshs. 1,639,200.o.Refund Covid-19 medical expenses of Kshs. 13500.p.Year 2020 Bonus at 50% of basic salary of Kshs. 68,300.q.Pension at 10% of Kshs. 136,00 for the 12 months, 16 years Kshs. 2,622,720.r.Any other relief that this Court may deem fit to grant.s.Costs of this suit.
2.The Respondent filed a defence and counterclaim on the 23rd September, 2021 alleging that the Claimant was dismissed for justified reasons after being subjected to disciplinary hearing which he participated in and calculated his payment including his pension claim, however that the same was not paid because the Claimant has not cleared with the Respondent. The Respondent prayed for the suit to be dismissed with costs. In the counterclaim, the Respondent prayed for the Claimant to reimburse Kshs 100,572 being cost of a laptop, carriage bag and wireless mouse issued to the Claimant and never returned and Kshs 60,000 rent per month, from the date of termination till the date the Claimant vacates, being foregone rent of a cottage allocated to the Claimant during pendency of his employment, which he has failed to vacate upon termination. In the said counterclaim, the Respondent prayed for the following reliefs; -a.Special damages of Kshs. 100,572 being the cost of the laptop, carriage bag and wireless mouse issued to the Claimant by the Respondent.b.A declaration be issued that the Claimant is liable for the costs of all damaged and misplaced items in the cottage issued to him by the Respondent.c.General damages for trespass.d.Foregone rent at the rate of Kshs. 60,000 per month since 28th April, 2021 until the date when the Claimant vacates the premises.e.Costs of the suit and counterclaim.f.Interest at Court rates on prayers (a), (b), (c) & (d) from the date such amounts fell due until payment in full.g.Any other relief that this Honourable Court may deem fir to grant.
3.The suit was heard on 25th May, 2022 and 7th July, 2022 when the Claimant testified as Cw1 while the Respondent called her Human resource manager, Emma Nyarangi who testified as Rw1. Thereafter, the parties filed their written submissions.
4.David Njite Otieno Osiru (CW1), testified that he was employed by the Respondent vide the employment contract of 2nd September, 2014 as an Electrician with effect from 15th September, 2014. He was initially placed under three months’ probation which lapsed on 15th December, 2014 and was confirmed on permanent and pensionable terms and issued with a confirmation letter of the same date. Annexed to the employment letter was a job description manual which explained the roles and duties of the Claimant.
5.He testified that he performed his duties with diligence until sometimes in April, 2019, when the Respondent employed a new Regional Technical Representative whose duties were never explained to the Claimant and the other staff. It is averred that the said Regional technical Representative allocated the Claimant duties outside the job description such as management of electric fence and procurement. That he raised a complaint on the new set of duties but the same fell on deaf ears.
6.That throughout his employment he was issued with one warning letter in the year 2019, which was captioned, last chance, which raised an issue with power room that occurred while he was away on official duties. He appealed the said warning letter and the Human Resource manager changed it to 1st warning letter.
7.On 14th April, 2021, the employees were issued with an internal Memo which directed the employees to return all their tools of trade to the store for safe keeping. That he complied with the said directive. Later on, the Regional Technical Representative conducted a search, without notice, in the Claimant’s office which they shared with 5 other colleagues and collected some scrap machine and labeled then “Tools not returned”. That he petitioned against the unprocedural way in the search was done, which petition was never given any audience. That he felt discriminated in that the scrap of machine were allegedly recovered in their office and he was the only one that was held liable when they shared the said office with other 4 colleagues that were not implicated.
8.While this was going on, he tested positive for Covid-19 and took to isolation in April, 2021, for 14 days. That upon getting back he was summoned by Emma who was with Kaulo and served with termination later of 28th April, 2021 and in the evening of the same day he was paid Kshs 242,000. The reason for termination as captured in the termination letter was on issues that were outside his job description, which nonetheless had been dutifully executed by the Claimant. Prior to receiving the termination letter, the Claimant was served with a certificate of service on 27th April, 2021 and the said position was immediately advertised before the Claimant could even lodge his appeal.
9.He stated that on 6th July, 2020, there was a meeting on agility which was to take place in the morning, however that he arrived at 7.53am in the morning and was informed there was a problem in the cold room. He immediately went to the said room to sought out the issue, as a result he missed the agility meeting but registered his apology on the communication platform, Nevertheless, that the said issue caused the Respondent to issue him with a show cause letter via email, followed by a warning letter.
10.On the counterclaim, the Claimant testified that it has not cleared with the Respondent for fear of being held in trespass of their property and that he will return the said laptop with the bag and mouse on being paid his dues.
11.Upon cross examination by Macharia Advocate, the witness testified that he received Kshs 40,854 as April salary. He admitted that he sought to withdraw his pension savings. He testified that according to the Respondent’s handbook, he was to clear within 24 hours of termination to receive his terminal dues, however he confirmed that he had not cleared with the Respondent. He testified that he was a team leader of electrical department which position was not in the management level and that he was required to work for at least 8 hours in a day. He stated that even though he did not fill any overtime forms, he always requested for the same via email.
12.The Claimant admitted to receiving the warning letter of 12.4.2019, the caution letter of 8.7.2020 and the last chance letter of 22.9.2020 which he appealed against. He also admitted to receiving the show cause letter but denied ever being invited to any disciplinary hearing. He testified that he was reporting to Tariq, the regional Technical representative but that they had strained work relationship from day one. He stated that other staff who were not in the management level were housed by the Respondent. He avers that he has not vacated from the said house.
13.On re-examination, the Claimant testified that he received Kshs 40,000 without any explanation as to why he didn’t receive his full salary when the termination letter was for 28th April, 2021. He also stated that the reason he has not gone to pick his belonging is for fear of his security and also awaiting the outcome of this case.
14.Emma Nyarangi, the Respondent’ Human Resource manager testified as RW-1. She adopted her witness statement of 21st September, 2021 and a further statement of 15.3.2022 which in summary stated as follows; That the Claimant was employed as an electrician with effect from 15th September, 2014 and after completion of three months’ probation, he was confirmed on permanent terms with effect from 15th December, 2014. That the Claimant was initially paid Kshs 80,000 which was later revised upwards to Kshs 136,000. In addition to this the Respondent submitted the Claimant’s NSSF and NHIF deductions when they fell due. He was also registered in the Respondent’s pension scheme.
15.It is averred that in the job description, the Claimant was to undertake the following duties; be in charge of electrical team department, installing and maintenance of electrical equipment’s in the farm, requisitioning and verification of quality electrical spares and accessories, maintenance and servicing of standby generators, monitoring of power fluctuations, installation of internal wiring in the farm, prepare monthly accountability report, in charge of energy management in the farm and perform any other duties delegated to him by production management and General management.
16.The Respondent denied the alleged diligence in performance of the Claimant’s duties and instead avers that the Claimant was issued with a first warning letter on the 12th April, 2019 for laxity and negligence in handling the farm generator which compromised the safety and health of the employees under his supervision. A caution letter was issued upon him on the 8th July, 2020 for failing to attend agility meeting without communicating his absence in good time. A last chance warning letter was served on him on the 22nd September, 2020 for getting into an altercation with his supervisor, the Regional Technical Representative and failing to carry out duties given to him by the said supervisor. Another caution letter of 16th March, 2021 was served upon him for failing to respond to issues raised in a timely manner and poorly executing his duties especially with other department, considering that he was the one in charge of the electrical department. These issues culminated to his termination on 28th April, 2021 which was based on negligence in performance of his work, insubordination and failing to follow written policies and procedures as provided under the Respondent’s handbook.
17.Contrary to the allegation by the Claimant, the Respondent maintained that all the duties the Claimant performed where within his purview and under the job description.
18.She testified that, Prior to the termination the Respondent issued an internal memo dated 14th March, 2021 directed at all personnel working in the maintenance department to surrender all the items in their lockers to the store for safe keeping. Other employees complied, however by 22nd March, 2021 the Claimant had not complied and upon search, several items were recovered in his locker and an inventory prepared and served on him via email on the 23rd March, 2021 together with a show cause letter, why disciplinary action should not be taken against him. The Claimant then petitioned on the said inventory by a letter of 24th March, 2021 which was considered before disciplinary proceedings were commenced. The Claimant was then invited to disciplinary hearing vide a letter of 25th March, 2021and another invitation of 31st March, 2021 for hearing on 6th April, 2021. Though the Claimant was to proceed on leave on 29th March, 2021, the Respondent requested him to postpone his leave in order to attend the disciplinary hearing which he attended and participated in. The explanation given by the Claimant was not satisfactory, leading to the termination which the Claimant did not appeal against.
19.It is the Respondent’s case that the Claimant was not paid his terminal dues as he is yet to clear with the Respondent and return the Respondent’s properties such as the company Laptop, personal Protective equipment (PPES) given to him, and vacate from the company’s house.
20.On the reliefs sought, the witness stated that the Claimant was a member of the Respondent’s pension scheme which is the only pension that he is entitled to. On off days, overtime and public holidays pay, RW-1 states that the Claimant was duly paid during the pendency of his employment as such that the Claimant is not entitled to any of the reliefs sought.
21.On the final dues, the witness testified that the same were calculated and captured in the document dated 21.9.2021 at page 69. She added that gratuity was not payable to management level employees both seniors and middle management. The witness herein maintained that the Claimant was subjected to disciplinary hearing that was carried out on 6th April, 2021.she also stated that the Claimant has not been paid his terminal dues because he has not cleared with the Respondent to date.
22.Upon cross examination by Kariuki Advocate, the witness testified that the Claimant was the head of electrical section and that the letter of employment did not place him as a manager. She admitted receiving a complaint from the Claimant on treatment by the said Regional Technical Representative, Mr.Tariq, which she took action and called for a meeting with the General Manager and the said Tariq. She admitted that the Claimant did not have disciplinary issues before. That the warning and caution letter are the things that caused his termination. On being questioned about the agility meeting, she testified that these meeting were conducted on a daily basis at 8am and if a member is unable to attend, they send their apology via text message or call. She admitted that the Claimant apologized for failing to attend the meeting and followed up with a written explanation addressed to Tariq.
23.On whether disciplinary hearing was conducted, the witness testified that the Claimant was invited for disciplinary hearing that took place on 6.4.2021, which he appended his signature on the minutes of the said meeting. On the counterclaim the witness testified that the Claimant is yet to clear with the Respondent and return the laptop. She also stated that they were charging Kshs 60,000 for the house however on asked basis, she testified that the Respondent had to source alternative housing for other employee for the said amount. She maintained that no dues were paid to the Claimant and the basis is that the Claimant has not cleared with them. She affirmed that there is nothing on record to show an Exit interview was carried out.
24.The Claimant submitted on two issues; whether the Respondent unfairly terminated the Claimant and whether the Claimant is entitled to the reliefs sought.
25.On the first issue, it was submitted that for the Claimant that he was only issued with one warning letter in the year 2019 which was expired by close of the year. He argued that the said letter was titled, Last warning letter, confirming that the Claimants fate was already pre-determined as the warning letter intimated that the Claimant had been issued with several other warning letters. The reason for termination was based on the said warning letter which had expired as such that the termination was carried out without a proper reason as contemplated under section 43 of the Employment Act.
26.On whether due process was followed, it was argued that there was no disciplinary process that was conducted and that he was not subjected to any disciplinary hearing to allow him answer any accusations lodged against him contrary to provisions of section 41 of the Employment Act. To support this case the Claimant relied on the case of Mary Chemweno Kiptui V Kenya Pipeline Company Limited eklr where the Court held that ;
27.Accordingly, the Claimant submitted that any termination of employment must be preceded by the provisions of section 41 of the Employment Act, regardless of whether the termination was summary termination.
28.On the reliefs sought, it was submitted that since the Claimant was unfairly termination, the reliefs sought ought to issue.
29.The Respondent submitted on three issues; whether the reason for termination was valid, whether fair procedure was followed before termination and whether the Claimant is entitled to the reliefs sought.
30.On the first issue it was submitted that the Claimant was terminated for justified reason as contemplated under section 43 of the Employment Act. It is the Respondent’s argument that the Claimant failed to perform his duties to the satisfaction of the Respondent informing the issuance of the first warning of 12th May, 2019 and several caution letter thereafter. It was argued that the reason for termination was failing to manage the electric fence, failing to respond to Emails, delay on writing to KPLC over power outage that delayed for 2 weeks, failing to store company tools in the safe after an internal memo was issues, delay in generating an LPO for temperature display in the cold room, failing to attend to agility meeting for several weeks, failing to generate the generator repair report as requested by the General manager among others.
31.It was argued that the Claimant was subjected to disciplinary hearing, where he was granted ample opportunity to defend himself, however that the explanation given for the various mishaps was not satisfactory and therefore the Respondent terminated his services. The Respondent maintained that the Claimant was subjected to due process as stated under he Employment Act and reiterated in the case of Galgalo Jarso Jillo V Agricultural Finance corporation eklr, where the Court held that ;
32.It was submitted that the issues raised concerning the Claimant’s employment was addressed in the show cause letter of 23rd March, 2021. The Claimant made a response vide his letter of 24th March, 2021. He was then invited to a disciplinary hearing which was scheduled for 6th April, 2021 where the Claimant was heard however the decision to terminate his services was communicated on 28th April, 2021, giving a detailed reason for the said termination.
33.On reliefs sought, it was submitted that the Claimant was terminated for justified reason and after subjecting him to due process as such the reliefs sought are on warranted.
34.On April Pay, the Respondent submitted that it paid the Claimant his April salary as evidence by pays lip attached at page 5 of the Respondent’s bundle of documents. The annual leave pay was not disputed. On telephone allowance for April, 2021, the Respondent submitted that the same is not due as the Claimant was not working for it during such time. On public holidays pay, it was argued that the Claimant was fully compensated for the days served and the balance was on one off day pay of Kshs 5,253.85 which is due.
35.On accumulated overtime pay, it was submitted that the Claimant being at the management level had several benefits including company house, medical cover under APA Insurance, pension benefits under jubilee insurance and flexible hours which is not available for the other employees, these benefits disentitles the management level employees from overtime claim. Furthermore, that clause 9.3 of the Respondent’s handbook provides for overtime to be recorded on a weekly basis and claimed on a monthly basis as such in absence of such claim form, the said overtime pay is not due. Also that the Claimant unlike other employees did not work on most Saturday and was not surcharged for that because he was a management level employee.
36.On leave allowance pay, the Respondent argued that employees on the management level were indeed entitled to Kshs 27,320 as leave allowance but since the Claimant was terminated at the end of his leave he was only entitled to one way leave allowance of Kshs 13,660.
37.On Bonus pay, the Respondent argued that the same is discretionary and not payable. On pension the Respondent argued that the Claimant is entitled to the pension contribution made for the duration of his employment.
38.In conclusion, the Respondent submitted that save for the admitted claim, the claim should be dismissed with costs and instead the counterclaim be allowed with costs.
39.I have examined all the evidence and submissions of the parties herein.
40.The issue for this Court’s determination are as follows;-1.Whether the Respondent had valid reasons to terminate the services of the Claimant.2.Whether the Claimant was subjected to a fair disciplinary process before being terminated.3.Whether the counter claim is proved.4.What remedies to grant in the circumstances of the case.
Issue No. 1
41.The Claimant was terminated vide a termination letter dated 28/4/2021 which indicated reasons for termination as being;-
42.The reason No. 3 related to poor or non-performance of duties.
43.In relation to reason No. 1 above for the termination, the complaint was the Claimant declined to empty out his lockers of tools and equipment in their position.
44.That after checking his lockers some items were recovered from the Claimant and his colleagues as registered by the stores in charge.
45.The directive to empty lockers was issued on 23/3/2021 at 18.06pm.
46.He responded to the show cause indicating that he had been instructed to surrender the tools to stores which he did on 21st March, 2021.
47.He also indicated that the items indicated were found in his office where there are five people and so could not have been attributed to him.
48.He indicated that his drawer measures 40 x 40 x 42cms and so these items couldn’t fit in his locker. He further indicated that some of the items were not tools but spare parts out of which some are defunct.
49.Following this feedback, the Respondents HR Manager Emma acknowledged receipt and indicated that they would commence a meeting to conclude the matter next week and she would confirm the date and time.
50.In the meantime, the Claimant was requested to postpone his leave that was due to start on 29th March, 2021 to 31st March, 2021.
51.As per the Respondent’s appendix titled minutes for the hearing meeting on alleged negligence of duties by David Njite 7/4/21, it appears that the Claimant was subjected to some hearing on 7/4/21.
52.This meeting was a follow-up to a show cause letter which related to not surrendering tools to stores only. However there is no indication that the Claimant was issued any notice in relation to any disciplinary hearing.
53.During the hearing however, the Claimant explained why he had some tools with him which were important for his day to day duties.
54.The issue of the items being in an office shared by 5 people with Claimant was not however considered.
55.Another reason for termination of the Claimant as per the termination letter was previous infractions all related to poor performance but ranging to previous years of 2020 to 2021.
56.It is however true from the minutes of the meeting held on 7/4/21, that the poor performance was not part of the items discussed in the meeting.
57.It is not also clear whether this meeting was a disciplinary meeting or not as one CS indicated at page 3 of the meeting as follows;
58.The Claimant has submitted that as concern previous mistakes where he had been warned, they could also not be subject to any disciplinary action as the warnings had expired.
59.The Respondent referred Court to their HR Manual. Clause 6.7 of the HR deal with disciplinary procedures and state as follows;
60.Under Clause 6.7.2, warning last for 365 days. It is therefore unfair and uncalled for for the Claimant to be subjected to any disciplinary processes in 2021 for warning issued in 2019.
61.Clause 6.7.7, of the Manual also envisage a notice to be issued to an employee before any disciplinary process is instituted.
62.As indicated herein, no notice of any disciplinary hearing was issued to the Claimant detailing out infractions committed.
63.Section 43 of the Employment Act 2007 states as follows;-“43.Proof of reason for termination(1)In any claim arising out of termination of a contract, the employer shall be required to prove the reason or reasons for the termination, and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of section 45.(2)The reason or reasons for termination of a contract are the matters that the employer at the time of termination of the contract genuinely believed to exist, and which caused the employer to terminate the services of the employee.”
64.Indeed the law anticipates that as employer must have valid reasons before terminating an employee’s employment.
65.The validity of such reasons must be tested through a fair procedure instituted by a valid notice and a fair hearing.
66.In the case of the Claimant herein, the validity of reasons leading to Claimant’s termination was never established.
67.The Claimant explained why some items were in his shared office and it is not clear why the blame was placed only on him alone.
68.The Claimant was also subjected to infractions if at all committed in previous years which were not the subject of the show cause letter.
69.In this Court’s view, the validity of the reason for termination was not established and I find that the Claimant was terminated for invalid reasons.
2. Due Process
70.The process envisaged before termination is one set out under Section 41 of the Employment Act 2007 which states as follows;“41.grounds of misconduct(1)Subject to section 42(1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation.(2)Notwithstanding any other provision of this Part, an employer shall, before terminating the employment of an employee or summarily dismissing an employee under section 44(3) or (4) hear and consider any representations which the employee may on the grounds of misconduct or poor performance, and the person, if any, chosen by the employee within subsection (1), make”.
71.The Respondent’s HR Manual at Clause 6.7 cited above also sets out the disciplinary process to be used against an employee.
72.As discussed above, the Respondent did not adhere to the stated process. The Respondents have not displayed any letter inviting the Claimant to a disciplinary process.
73.The Emails sent to the Claimant just talked of a meeting to be held but there was no indication that it was going to be a disciplinary hearing.
74.That being the position, I find that the Claimant was not subjected to any fair disciplinary process.
75.It is my finding therefore that the termination of the Claimant was unfair and unjustified as provided for under Section 45(2) of the Employment Act 2007 which states as follows;
76.The Respondent set out a counter claim against the Claimant demanding he pays for the laptop and other items not surrendered and also pay rent for the house he has occupied since termination to date.
77.In relation to return of stores in his possession, the Claimant has indicated that he is ready and willing to return them but couldn’t have done so previously fearing for his security.
78.I will henceforth direct immediate return of the said items through Claimant’s Counsel.
79.As concerns payment of rent, the Claimant has explained circumstances under which he was terminated abruptly and unprocedurally.
80.The Respondent attempted to pay the Claimant his terminal dues but reversed the payment immediately. Indeed it was expected that the Claimant would have vacated the Respondent’s residence upon termination but there remained pertinent issues to be addressed which the Respondent never took a step to address or seek an eviction of Claimant from their residence.
81.The Respondents cannot be expected to benefit from their own laxity or wrong doing.
82.The Respondents have also not established that the rent payable to their house was 60,000/= and not any other figure.
83.In the circumstances, I find that the counter claim is not established and I dismiss it accordingly. However the claimant is expected to vacate the respondent’s premises forthwith within one month from today.
84.Having found as above, I enter Judgment for the Claimant and award him as follows;1.1 month’s salary in lieu of notice = 143,291/=2.Unpaid salary for 7 days of April 2021 = 7/30 x 143,291 = 33,435/=3.Leave of 14 days of 2020-2021 as pleaded = 63,746/=4.Telephone allowance for the month of April 2021 as pleaded = 2,500/=5.Compensation of 8 months salary for the unfair and unjustified termination based on the fact that the Claimant’s career path was cut short by the Respondent without due process = 8 x 143,291 = 1,146,328/=6.Year 2020 bonus at 50% of basic salary of kshs.68,300/=TOTAL = 1,457,600/=Less statutory deductions7.The Claimant be paid his pension dues.8.The Respondent will issue Claimant with a Certificate of Service.9.The Respondent will pay costs of this suit plus interest at Court rates with effect from the date of this Judgment.
DATED, SIGNED AND DELIVERED IN OPEN COURT THIS 13TH DAY OF OCTOBER, 2022.HON. LADY JUSTICE HELLEN WASILWAJUDGEIn the presence of:Kariuki for claimant – presentMuthuri for respondent – presentCourt Assistant – Fred