Onyango v Tribe Hotel Ltd (Cause 417 of 2016) [2024] KEELRC 1144 (KLR) (17 May 2024) (Judgment)
Neutral citation:
[2024] KEELRC 1144 (KLR)
Republic of Kenya
Cause 417 of 2016
SC Rutto, J
May 17, 2024
Between
Josphat Cosmas Onyango
Claimant
and
Tribe Hotel Ltd
Respondent
Judgment
1.Through a Statement of Claim amended on 13th February 2019, the Claimant avers that he was employed by the Respondent as an Assistant Food and Beverage Controller vide an agreement dated 26th February 2010. The Claimant further avers that he performed his duties without fail and with a lot of diligence and faithfulness, serving the Respondent with zeal at all times. That as a result of his exemplary work, his salary was reviewed.
2.It is the Claimant’s assertion that his employment contract lapsed on 31st April 2015. However, he continued with his employment with the Respondent despite the lapse, with the belief that he had been inculcated as a permanent employee. With this belief, he proceeded to take out a loan with the NIC Bank using his salary as collateral.
3.The Claimant further avers that on or about 4th January 2016, the Respondent issued him with a backdated employment contract for a term of one year for the period between 31st April 2015 to 31st April 2016. He declined to execute the same. That vide a letter dated 26th January 2016, the Respondent informed the Claimant of its intention to terminate his contract on 31st March 2016. He then instituted the suit herein and in the interim, obtained orders restraining the Respondent from terminating his employment.
4.The Claimant further states that vide a letter dated 30th June 2016, the Respondent issued him with a redundancy notice on grounds inter alia that it had purchased a Beverage Control Software. Consequently, he moved the court and obtained preservatory orders stopping his termination on grounds of redundancy.
5.It is against this background that the Claimant prays for the following reliefs:a.A declaration that the Claimant was unfairly and unjustly terminated in line with Section 45 of the Employment Act 207 vide the letter dated 26th January 2016;b.A declaration that the Claimant’s termination was unfair and wrongful;c.General damages for wrongful/unfair termination as provided for under Section 49 of the Employment Act, 2007;d.Costs of this claim;e.Interest at commercial rates;f.A declaration that the Respondent did not follow the procedure encapsulated under Section 40 of the Employment Act and thus the letter dated 30th June 2016 declaring the Claimant redundant is unfair and wrongful;g.A declaration that the Respondent cannot both terminate the services of the Claimant and at the same time declare the Claimant redundant vide the letters d dated 26th January 2016 and 30th June 2016 and thus the letter dated 30th June 2016 is null and void ab initio;h.Salary for the remainder of 18 years being the remainder of the years the Claimant legitimately expected to work for the Respondent (Kshs. 81,833*12*18)……….17,675,928/=;i.Unpaid service charge from the year 2010 to 2016 amounting to Kshs 1,800,303/=j.Severance pay as provided for under Section 40(1) (g) of the Employment Act and Section 49 (4);k.Claimant be issued with a Certificate of Service and to pay the Claimant damages for breach of Section 51 of the Employment Act.
6.In response to the Amended Statement of Claim, the Respondent filed an Amended Reply and Counterclaim dated 22nd February 2019. It is the Respondent’s case that the Claimant was less than diligent in the manner in which he carried out his duties. The Respondent has further denied the Claimant’s assertions that his salary review was only made upon the outcome of the appraisal. The Respondent further denies creating an insinuation that the Claimant was a permanent employee. In this regard, the Respondent contends the Claimant’s employment contract lapsed on 31st April 2015 whereupon it opted to extend the same by a further one (1) year from 1st April 2015 ending on 31st March 2016.
7.With regards to the loan taken by the Claimant, the Respondent denies offering any guarantee whatsoever on his behalf.
8.The Respondent has further denied terminating the Claimant’s contract of employment unilaterally and without notice. According to the Respondent, the Claimant was rightfully terminated. That further, the issue of redundancy was considered by the Court and a decision made thereon on 19th October 2017. The Respondent contends that the Claimant did not appeal the Ruling and cannot litigate it further before this Court.
9.In its Counterclaim, the Respondent avers that the Claimant proceeded on 90 days leave from 5th May 2016. After the leave days were over, he failed to report to work. The Respondent conducted investigations and established that the Claimant had sought and secured employment at Premier Best Western and later with Hotel Rio. According to the Respondent, the Claimant unjustly enriched himself hence it is entitled to a refund of the amounts paid to him between September 2016 and September 2017 being the sum of Kshs 1,305,662.14.
10.Consequently, the Respondent has asked the Court to dismiss the Claimant’s Claim and enter Judgement against the Claimant for the sum of Kshs 1,305,662.14 plus interest from the date of filing the suit until payment in full. The Respondent further prays for costs of the Claim and the Counterclaim.
11.In response to the Defence and Counterclaim, the Claimant filed a Reply in which he has denied the Respondent’s averments and reiterated his averments in the Amended Statement of Claim. The Claimant avers that at all material times from when the suit was instituted, he sought severally to resume work to no avail as he was denied access to the work premises. As such, the Claimant has asked the Court to strike out the Counterclaim with costs for being frivolous and vexatious and judgment be entered in terms of the Amended Statement of Claim.
12.In rejoinder, the Respondent filed a Reply to Defence to Counterclaim in which it denies the Claimant’s assertions that he was denied access to the work premises.
13.The matter proceeded for hearing on diverse dates during which both sides called oral evidence.
Claimant’s Case
14.The Claimant testified in support of his case and for starters, he adopted his witness statement to constitute his evidence in chief. He further produced all the documents filed on his behalf as exhibits before Court.
15.It was the Claimant’s evidence that sometimes in November 2015 as per the Respondent's policy, an appraisal was carried out by the Respondent's Head of Department one Josiah Adera and his immediate supervisor Kennedy Mongare wherein he scored 80%.
16.Despite the said appraisal, he was shocked to be denied bonus for the year 2015 vide a letter dated 25th November 2015 under the guise that his performance appraisal was below par in that he had apparently scored 46% in his performance appraisal review.
17.He declined to execute the employment contract for the period between 31st April 2015 to 31st April 2016, as the Respondent had maliciously backdated the said contract under the guise of extension for a year whereas its intention was to terminate his contract in April 2016.
18.He later learnt that his appraisal for November 2015 had been unilaterally altered to a score of 46% by Shaileen Shah, the director of operations, and in his absence or any of his immediate supervisors.
19.The Claimant contended that the intention of manipulating the appraisal scores was aimed at ensuring that the average appraisal score goes below the threshold of 70% that is required for the long-term renewal of his contract or a guise to terminate his services without justifiable cause.
20.Thereafter, the Respondent vide a letter dated 26th January 2016 notified him of its intention to terminate his contract on 31st March 2016 in blatant disregard and in breach of the terms of the employment contract dated 26th February 2010 and in clear breach of his legitimate expectation.
21.After he instituted the suit herein and obtained orders restraining the Respondent from terminating his contract, the Respondent forced him to undertake his outstanding leave days which had cumulated to 75. He took the said leave under protest and great antagonism.
22.The Claimant further stated that despite obtaining the preservatory orders staying the Respondent's notice for redundancy, the Respondent proceeded to tabulate his redundancy dues in the sum of Kshs. 262,001.50 and forwarded them to his Advocate. The cheque was however returned to the Respondent.
23.According to the Claimant, the Respondent's allegations that he was employed elsewhere emanated way back in September 2016 vide a letter dated 13th September 2016. Despite the said allegation from September 2016, the Respondent failed to move the court appropriately to seek the orders in force to be discharged on the alleged grounds.
24.The Claimant further averred that from when the suit was instigated, he sought severally from the Respondent to report/resume work but was denied entry and access.
25.That at no time has the Respondent asked him to report to work and the same was declined. The Claimant further contended that the Respondent denied him access to the work premises since issuing the first letter of termination on 31st March 2016. That as late as 22nd June 2017, his Advocate was still asking the Respondent for communication as to when he should resume work.
26.The Claimant further averred that despite orders being in force for his services not to be terminated, there was push and pull regarding the payment of his salary.
27.He further stated that since the dismissal letter dated 26th January 2016 was never withdrawn by the Respondent, it appears that he was dismissed through the said letter and later declared redundant vide a letter dated 30th June 2016.
28.The Claimant further averred that his dismissal communicated vide a letter dated 26th January 2016 was without justification or notice and was contrary to and in breach of the Employment Act, Principles of Natural Justice, and the Constitution.
29.According to the Claimant, the Respondent’s action of declaring him redundant vide a letter dated 30th June 2016 was unlawful, unprocedural and geared towards circumventing the Ruling of this Honourable Court delivered on 5th May 2016.
Respondent’s Case
30.The Respondent called oral evidence through Mr. Josiah Adera Opiyo and Ms. Phoebe Wamuyu who testified as RW1 and RW2 respectively. Mr. Opiyo was the first to go. He started by adopting his witness statement to constitute his evidence in chief. He proceeded to produce the documents filed on behalf of the Respondent as exhibits before Court. This was with the exception of the employment contract and cheque from Premier Best Western which were marked for identification.
31.Mr. Opiyo stated that in 2014, the Respondent made a decision to enhance efficiency of the finance department which necessitated reshuffling its employees. In the reshuffling, the Claimant was moved and assigned Accounts Payable functions. He did not object to this rearrangement. However, two weeks into the new assignment, the Claimant became uncooperative as a result of which he was unable to cope and was reallocated his original duties.
32.He further averred that during the period the Claimant worked with the Respondent, he was paid all his benefits, allowances and remuneration. That he was treated with fairness and respect. That at no time did he complain of mistreatment or discrimination. That the benefits included discretionary perks like school fees for his children among others.
33.Mr. Opiyo further stated that the Claimant's performance was subjected to the established appraisal system twice every year, in March and September. That the method used to appraise the employees was uniform across the board and no employee was subjected to a different system.
34.It was Mr. Opiyo’s evidence that the Claimant had on average been scoring 70% score throughout his contract. It is therefore not true that there was any manipulation of the system to the Claimant's disadvantage.
35.That in 2015, the Claimant became complacent and his performance plummeted. He became uncooperative and even declined to sign a contract which was given to him for renewal of the term of one year. The Senior Management and Human Resources Department of the Respondent even invited the Claimant to come forward to discuss his performance but he declined.
36.It was Mr. Opiyo’s evidence that the Claimant's duties with regard to reporting the beverage shortages and requirements was inconsistent and unsatisfactory. The hotel started incurring beverage shortages and owing to its nature of business, lack of beverage shortage reports was a big compromise to the Respondent's core business.
37.The Claimant's failure to report the shortages continued for some time and he failed to rectify them despite complaints from the concerned departments. On 22nd February 2016 and 8th March 2016, the director of operations raised a complaint that shortages were going unreported for weeks.
38.On 11th January 2016 he (Mr. Opiyo) instructed the Respondent's then Human Resource (HR) Manager through email to issue a warning to the Claimant for absenting himself from work on 8th and 9th of January 2016. He averred that the Claimant had gone on leave for two (2) days without the approval of his seniors. Upon being asked, the Claimant responded rudely calling him (Mr. Opiyo) useless and rubbish.
39.The Claimant was given the warning letter which he refused to sign. Instead, he shouted that the management could do whatever it wanted.
40.When the Claimant's contract was still running, the Respondent reviewed its employment policy and restricted new contracts to a maximum term of two (2) years. The Claimant's contract was renewed for one (1) year beginning 1st April 2015 to 31st March 2016. He was made aware of this and called upon to execute the contract but he declined.
41.He was invited on several occasions (21st and 23rd December 2015; and 4th and 6th January 2016) for the signing of the contract but still declined.
42.On 11th January 2016, an email was sent to the Claimant, after which the Human Resource Manager held a meeting with him. In the meeting, the Claimant categorically said that he was not happy with the terms of the new contract and as such, he won't sign it.
43.After the meeting, he was asked to put in writing the reasons why he was unhappy with the contract so that the Respondent's senior management could discuss it. He did not write as agreed and on 15th January 2016, another email was sent to remind him.
44.According to Mr. Opiyo, at no time was the Claimant’s employment changed to a permanent contract.
45.On 26th January 2016, the Respondent wrote a letter to the Claimant reminding him of the end of his contract. He received the letter and signed without any protestation. After he signed the letter, it was explained to the Claimant that he could opt to go for his pending leave between that day and the last day of his contract. He said that he would think about it and get back to the management. The following day, the Claimant communicated that he would wish that his last day in office to be 31st March 2016. In that case, he did not want to take his leave.
46.Mr. Opiyo averred that the Respondent did not breach any contract in expressing its decision not to renew the Claimant's contract. That the decision not to renew the contract applied to many other employees and that the Claimant's case was not special in any way. He was treated in the same manner as the other employees.
47.On 17th March 2016, the Claimant was summoned by the HR and showed the calculations of his final dues. He was satisfied with the calculations and did not raise any complaints about it.
48.When the Claimant obtained orders of injunction, he was asked to go on leave. He had 75 days of earned and untaken leave. In Mr. Opiyo’s view, there is nothing wrong with sending an employee on leave as long as the same is paid and he has not been sacked.
49.It was his further evidence that after the Claimant went on leave, the Respondent purchased a software that made his job redundant. The Claimant however rushed to Court to restrain the Respondent from declaring him redundant. After he went on leave, the Claimant continued receiving salaries from the Respondent. This was because the Court had ordered the Respondent to keep the Claimant in its payroll.
50.In September 2016 the Respondent learnt that the Claimant had secured employment with its competitors. That the Claimant had been employed by Premier Best Western Hotel as a Food and Beverage Controller. The Respondent managed to get a copy of the letter of appointment and cheque number 5995 for salary for August 2016.
51.In January 2017, the Claimant left Premier Best Western Hotel and joined Hotel Rio in Nairobi West as a Food and Beverage Controller. He was also drawing salaries from the said hotel. The Respondent managed to get an investigator who established these facts.
52.When the Respondent learnt that the Claimant had sought and secured employment elsewhere, it verily and reasonably believed that the Claimant had terminated his contract and had no intention of going back, hence it stopped his salary.
53.When the Respondent stopped the salary, the Claimant moved the court for an order citing the directors of the Respondent for contempt of court. The Respondent opposed the application which was allowed on 6th April 2017.
54.Aggrieved by this Ruling, the Respondent filed an appeal. On 23rd February 2018, the Court of Appeal allowed the appeal and set aside the orders finding the Respondent’s Directors to be in contempt of court.
55.According to Mr. Opiyo, the Claimant effectively left the Respondent's employment when he refused to report back to work. It was his evidence that the Claimant would turn up at the Human Resource Office to pick his monthly cheque and walk away.
56.That between August 2016 and September 2017, the Respondent had paid the Claimant a total of Kshs 1,305,662.14. Mr. Opiyo opined that the Respondent is entitled to a refund for the money paid to the Claimant when he was providing services to its competitors.
57.Ms. Phoebe Wamuyu who testified as RW2, stated that she is the General Manager of Hotel Rio. It was her evidence that the Claimant worked at Hotel Rio as a Food and Beverages Controller from 2017.
Submissions
58.On his part, the Claimant submitted that the termination of his employment on grounds of effluxion of time was invalid on grounds that there was no fixed contract between the parties. In support of this argument, the Claimant placed reliance on the case of Sadra M. Waswa vs Article 19: Global Campaign for Free Expression (2022) eKLR.
59.Discounting the testimony of the Respondent’s witness that it had purchased a Beverage Control Software, the Claimant submitted that there is no system that can take stock and that a person must verify the physical stock.
60.It was further submitted by the Claimant that there is no evidence adduced by the Respondent to show that it had applied the criteria set out in Section 40(1) (c) to the employees who were to be declared redundant. It was the Claimant’s position that no evidence was adduced that there were any other employees who were declared redundant save for him.
61.The Claimant further posited that there was no redundancy by the Respondent and the same was just another smokescreen to terminate his services.
62.It was the Claimant’s further submission that the Respondent did not undertake any procedures espoused under Section 41 of the Employment Act. The Claimant further termed the reasons given by the Respondent invalid and hence did not meet the threshold under Sections 43 and 45 of the Employment Act.
63.In further submission, the Claimant stated that at all material times, he was willing to report to work but the Respondent had already dismissed him as per the email dated 9th March 2016.
64.With respect to the Respondent’s Counterclaim, it was the Claimant’s submission that RW2 did not have any documents to show that he (the Claimant) was employed there or that she was the General Manager at Hotel Rio.
65.The Claimant further contended that the Court order remained valid until when it was vacated by the Court of Appeal. That however the vacation of the order by the Court of Appeal did not apply retrospectively but proactively.
66.The Claimant urged the court to dismiss the Counterclaim with costs.
67.The Claimant further submitted that by the Respondent’s express and implied acts, he had a legitimate expectation to work for the Respondent as a permanent employee until retirement on condition that he fulfilled his obligations as an employee.
68.On the part of the Respondent, it was submitted that the Claimant was fairly and justly terminated. The Respondent further submitted that the Claimant was being paid as of August 2016 while he was working at Premier Best Western Hotel as a Food and Beverage Controller.
69.The Respondent further posited that it cannot be restrained by the Court from terminating the Claimant’s employment at any time as long as due process has been followed. It was the Respondent’s contention that the Claimant caused all his misfortunes when he absconded duty and joined a competing institution. In the same vein, the Respondent argued that it was not under any obligation to continue paying the Claimant who had absconded duties, worse in the situation where such an employee was earning and working for another employer.
70.The Respondent further posited that the law allows an employer to withhold the salary of an employee who has not worked without a lawful excuse. It was the Respondent’s further argument that Section 17(1) of the Employment Act imposes a duty on the employer to pay the salary earned by an employee.
71.The Respondent further submitted that the Claimant was employed under contract and the due date was 31st March 2015 and that upon its expiry, the Claimant was to sign another contract. That the Claimant was informed that the last day for his contract would be 31st March 2016 vide letter dated 26th January 2016 and he received the said letter without any protestation.
72.Citing the case of Margaret A. Ochieng vs National Water Conservation and Pipeline Corporation (2014) eKLR, the Respondent submitted that the Claimant’s employment lapsed upon expiry of his contract and therefore, the same cannot be deemed to have been unfair termination.
73.It was the Respondent’s further submission that the parties intended to be bound by the terms of the contract regardless of them being signed and that failure to sign the contract of employment does not invalidate the same.
74.The Respondent maintained that at no time was the Claimant’s employment changed to a permanent contract. In support of this position, the Respondent sought to rely on the case of George Onyango vs The Board of Directors Numerical Machining Complex Limited (2014) eKLR.
Analysis and Determination
75.Flowing from the pleadings on record, the evidentiary material placed before me, as well as the rival submissions, it is evident that the issues falling for the Court’s determination are: -a.Whether the Claimant’s contract of service lapsed by effluxion of time;b.Whether termination of the Claimant’s employment was unfair and unlawful;c.Whether the Respondent has proved its Counterclaim;d.Is the Claimant entitled to the reliefs sought?
Lapse of the Claimant’s contract of service by effluxion of time?
76.It is common cause that the Claimant was serving on a fixed-term renewable contract of five (5) years with effect from 26th January 2010. The contract was renewable subject to the Claimant scoring an average of 70% from the combined previous appraisals and the clearing of benefits accrued by the Respondent.
77.Vide a letter dated 26th January 2016, the Claimant was notified of his end of employment contract. The letter reads in part:
78.What I can deduce from the foregoing letter, is that the Claimant’s five (5) year contract ended on 31st March 2015. It is also apparent that the Respondent did not take any steps to have the same renewed before its expiry or on the date of its expiry. Nonetheless, the Claimant continued rendering services to the Respondent past 31st March 2015.
79.According to the Claimant, the Respondent presented him with a contract renewal in January 2016 and he declined to sign the same on account that it was backdated. In support of his position, the Claimant exhibited a letter dated 16th January 2016, addressed to the Respondent’s Human Resource Manager, in which he stated that he had declined to sign the extended contract due to the fact that it was backdated.
80.Testifying under cross-examination, RW1 confirmed the Claimant’s assertions that the said contract was backdated.
81.Further to the foregoing, the Respondent through a letter dated 2nd September 2015 to the NIC Bank, indicated that the Claimant was employed on a permanent basis. Notably, this was a period after 31st March 2015 and before the Claimant was presented with the fresh contract to sign.
82.What manifests from the foregoing is that through its own conduct, the Respondent acted in a manner to suggest that it had extended the Claimant’s contract of service beyond 31st May 2015. As such it is estopped from alleging otherwise.
83.In arriving at this finding, the Court is cognizant of the principle that fixed-term contracts carry no expectation of renewal. Be that as it may, the Respondent in this case, never expressed its intention much less imply that the Claimant’s contract of service had effectively terminated by effluxion of time. If I may say, its attempt to backdate the contract way after its expiry could not bring into force the fixed-term contract for another one (1) year.
84.My thinking on this issue aligns with the determination in the case of Justin Beswick vs Local Ocean Conservation (LOC) Kenya Ltd [2022] eKLR, where the Court held as follows: -
85.Accordingly, it is this Court’s finding that the Claimant’s contract of service was impliedly extended by the Respondent from 31st March 2015 and in which case, the contract became open-ended and ran from month to month. In this regard, the contract was only terminable under Section 35 (1) (c) of the Employment Act by each party giving the other at least 28 days’ notice.
86.It is also worth pointing out that in light of the foregoing, the Claimant was protected against unfair termination of his employment and such termination was to be undertaken procedurally in compliance with the provisions of Sections 41,43 and 45 of the Employment Act.
87.To this end, the court finds that the Claimant’s contract of service did not lapse by effluxion of time.
Unfair and unlawful termination?
88.The record bears that upon being issued with the letter dated 26th January 2016, the Claimant moved the Court through the instant suit. Contemporaneously, the Claimant filed a Notice of Motion Application dated 16th March 2016. On 24th March 2016, pending the hearing and determination of the Application, the Claimant obtained interim orders restraining the Respondent from terminating his employment.
89.Subsequently, in a Ruling delivered on 5th May 2016, the Court issued orders in favour of the Claimant in the following manner:
90.It is worth noting that as the Application was pending Ruling, the Claimant was asked to proceed on leave with effect from 2nd April 2016 up to 19th April 2016. The Respondent also advised the Claimant that he would receive further communication on 20th April 2016 regarding his reporting date.
91.As such, the Claimant remained in the Respondent’s employment and his contract was not terminated on 31st March 2016 as had been earlier communicated through the letter of 26th March 2016.
92.Vide a letter dated 30th June 2016, the Claimant was issued with a Redundancy Notice. The reasons for the redundancy were set out in the said letter. In this regard, the Claimant was notified that the Respondent had purchased a Beverage Control Software hence the manual checking of beverages would no longer be a requirement. The Claimant was further notified that duties and responsibilities were being restructured as a cost reduction measure and that majority of the administration departments were being centralized. That as such, the Respondent would not require the services of the Assistant Food and Beverage Controller. Effectively, the Claimant was declared redundant. The redundancy was to take effect from 1st August 2016.
93.The Claimant was aggrieved by the said notice of redundancy hence he moved the Court vide an Application dated 14th July 2016. On 20th July 2016, the Court issued a preservatory order staying the redundancy notice communicated through the letter dated 30th June 2016.
94.In a Ruling delivered on 19th October 2017, the Court disallowed the Claimant’s Application and stated as follows:
95.With the above Ruling, the Court acknowledged the right of the Respondent to declare a redundancy but noted that the same was subject to challenge and a justifiable cause. With that, the Respondent got the green light to proceed with the redundancy subject to the same being justified.
96.Notably, and understandably so, the Court in its Ruling, did not interrogate the reasons for the redundancy as laid down by the Respondent in its letter dated 30th June 2016. The question that now comes to the fore is whether the said redundancy was fair and lawful.
97.As was held by the Court of Appeal in Kenya Airways Limited vs Aviation & Allied Workers Union Kenya & 3 Others (2014) eKLR, termination of employment through redundancy ought to be both substantially justified and procedurally fair.
98.Essentially, substantive justification refers to the reasons for which the redundancy was effected while procedural fairness has to do with the procedure applied in effecting the redundancy. I will address the two elements under separate heads.
i. Substantive Justification
99.The starting point in considering substantive justification with respect to redundancy is Section 2 of the Employment Act, which provides as follows: -
100.The import of the aforestated provision is that the circumstances or reasons leading to an employee being declared redundant must fall within the statutory definition of the term redundancy.
101.More importantly, an employer is required to prove that the reason for the termination is valid, fair and based on its operational requirements. In default, the termination is unfair in light of the provisions of Section 45(2) (b) (ii) of the Employment Act.
102.Back to the instant case, the reason advanced for the Claimant’s redundancy was that the role of the Assistant Food and Beverage Controller which he was holding at the time, had been declared redundant as the Respondent had purchased a Beverage Control Software. According to the Respondent, the software which was due to arrive in three (3) weeks from 30th June 2016, would increase efficiency in the beverage management process. Therefore, the manual checking of beverages in the Respondent’s outlets would no longer be a requirement.
103.Notably, the Respondent did not adduce evidence in whatever form or manner, to prove its assertions that indeed, it had procured the said Beverage Control Software.
104.Indeed, as was held in Kenya Airways Limited vs Aviation & Allied Workers Union Kenya & 3 Others, redundancy could arise as a result of adaptation of modern technology and not just economic downturn.
105.However, this does not take away the employer’s burden to prove that the reason for the redundancy was fair, valid and related to its operational requirements.
106.Further to the foregoing, the Respondent cited restructuring of the role and job responsibilities of the Assistant Food and Beverage Controller, to be handled by the Food and Beverage Controller.
107.Again, the Respondent did not justify its assertions by way of evidence adduced in whatever form or manner, for instance through the organizational structure/chart/organogram before and after the restructuring.
108.No doubt, the Respondent was at liberty to determine the strategic and business decisions to take and implement, within its enterprise. However, it was duty bound to prove to the requisite standard that the Claimant’s redundancy was genuine and justified.
109.The total sum of my consideration is that the Respondent has failed to prove to the requisite standard that it had a valid and fair reason to terminate the Claimant’s employment on account of redundancy.
ii. Procedural fairness
110.The procedure to be applied in effecting a redundancy is stipulated under Section 40(1) of the Employment Act. Under the said provision, the following conditions must precede a redundancy: -a.where the employee is a member of a trade union, the employer notifies the union to which the employee is a member and the labour officer in charge of the area where the employee is employed of the reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy;b.where an employee is not a member of a trade union, the employer notifies the employee personally in writing and the labour officer;c.the employer has, in the selection of employees to be declared redundant had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy;d.where there is in existence a collective agreement between an employer and a trade union setting out terminal benefits payable upon redundancy; the employer has not placed the employee at a disadvantage for being or not being a member of the trade union;e.the employer has where leave is due to an employee who is declared redundant, paid off the leave in cash;f.the employer has paid an employee declared redundant not less than one month’s notice or one month’s wages in lieu of notice; andg.the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days’ pay for each completed year of service.
111.From the record, the Respondent notified the Claimant of his redundancy through a letter dated 30th June 2016, which was to take effect on 1st August 2016. A copy of the said letter was transmitted to and received by the Ministry of Labour on 1st July 2016.
112.In light of the foregoing, it is evident that the Respondent complied with the notice requirements under Section 40(1) (a) of the Employment Act.
113.The other requirement is in respect of the selection criteria stipulated under Section 40 (1) (c) of the Employment Act. In this regard, the employer is required to prove that in the selection of the employees to be declared redundant, it has paid due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy.
114.From the record, the Claimant was the only employee in his position, serving as the Assistant Food and Beverage Controller. Therefore, the requirement for a selection criteria was not applicable in this case.
115.As to the payments under Section 40(1) (e) (f) and (g) of the Employment Act, the Respondent cannot be faulted as the Claimant was advised through the letter dated 30th June 2016 that he would be entitled to salary for the month of July, two months salary in lieu of notice and 15 days of severance pay for each year served.
116.From the record, the Respondent forwarded a cheque for Kshs. 262,001.50 to the Claimant’s Advocate being the redundancy dues. Despite returning the same, the Claimant has not challenged the computation of his dues.
117.Accordingly, it is apparent that the Respondent acted in compliance with regards to the payments enumerated under Section 40(1) (e) (f) and (g) of the Employment Act.
118.In sum, it is this Court’s finding that the Respondent substantially complied with the provisions of Section 40 (1) of the Employment Act. Be that as it may, the Claimant’s termination was substantively unfair within the meaning of Section 45(2) (b) (ii) of the Employment Act.
Counterclaim?
119.As stated herein, the Respondent has lodged a Counterclaim against the Claimant for the sum of Kshs 1,305,662.14, being salary and school fees paid to him between September 2016 and September 2017.
120.In this regard, the Respondent has averred that the Claimant failed to report back to work after he had completed his leave of 90 days which was to end on 5th August 2016.
121.It is the Respondent’s case that following investigations, it established that the Claimant had secured employment at Premier Best Western and later at Hotel Rio.
122.In support of its position, the Respondent sought to produce a copy of a contract of employment ostensibly executed between the Claimant and Premier Best Western. The Respondent further sought to produce a copy of a cheque ostensibly issued by Premier Best Western to the Claimant.
123.Notably, the said documents were only marked for identification and were not produced as exhibits before Court following an objection by the Claimant’s Advocate. As such, their probative value was not tested in cross-examination.
124.The Court of Appeal in the case of Kenneth Nyaga Mwige vs Austin Kiguta & 2 others [2015] eKLR held that a document “marked for identification”, is of very little, if any, evidential value until it is formally produced.
125.Therefore, the said contract of employment and cheque having not been produced as exhibits before Court, were of little evidential value and did not aid the Respondent’s case.
126.The Respondent further called oral evidence through RW2 who identified herself as the General Manager of Hotel Rio. In her testimony, RW2 stated that the Claimant worked at the said hotel in the year 2017 as a Food and Beverage Controller. Nevertheless, her testimony was not backed by any documentary evidence. As such, it did little to aid the Respondent’s case.
127.In light of the foregoing, the Respondent’s evidence that the Claimant had taken up employment elsewhere while receiving salary and other benefits, was not supported by concrete evidence.
128.Further, it bears to note that in a letter dated 28th September 2016, the Claimant’s Advocates enquired from the Respondent as to when he (Claimant) could resume duty. From the record, the said letter did not elicit a response from the Respondent. Indeed, there is no indication that the Claimant was ever asked by the Respondent to resume duty.
129.In the same vein, there is no evidence from the Respondent’s end that it put the Claimant on notice and asked him to show cause why disciplinary action should not be taken against him for failure to resume duty.
130.In light of the foregoing observations, I cannot help but find that the Respondent has not proved its Counterclaim to the requisite standard. As such, the same is declined.
Reliefs?
Compensatory damages
131.As the Court has found that the Respondent did not prove to the requisite standard that it had a valid and fair reason to terminate the Claimant’s employment on account of redundancy, the Court awards him compensatory damages equivalent to six (6) months of his gross salary. This award takes into account the length of the employment relationship as well as the circumstances surrounding the termination.
Service Charge
132.The claim with regards to service charge also succeeds as the Court notes that the Claimant’s confirmation letter dated 10th September 2010 advised him that he was entitled to service charge. The Respondent did not lead evidence to prove that the same was paid or that the position earlier communicated to the Claimant in the letter of 10th September 2010, had changed.
133.The court declines to award the Claimant salary for 18 years, as the same is anticipatory in nature. In arriving at this finding, I am guided by the determination of the Court of Appeal in the case of D K Njagi Marete v Teachers Service Commission [2020] eKLR, where it was held as follows: -
134.As the employment relationship has not been disputed, the Claimant is entitled to a Certificate of Service in line with Section 51(1) of the Act.
Orders
135.In the final analysis, I allow the Claim and enter Judgment in favour of the Claimant against the Respondent as follows: -a.A declaration that the Claimant was unfairly terminated from employment.b.The Claimant is awarded compensatory damages in the sum of Kshs 490,998.00 being equivalent to six (6) months of his gross salary.c.The Claimant is awarded unpaid service charge being the sum of Kshs 1,800,303.00.d.The total award is Kshs 2,291,301.00.e.Interest on the amount in (d) at court rates from the date of Judgment until payment in full.f.The Counterclaim is dismissed with no orders as to costs.g.The Claimant shall have the costs of the Claim.
136.The Claimant is at liberty to collect his dues with regards to the redundancy.
137.The Respondent shall issue the Claimant with a Certificate of Service within 30 days from the date of this Judgment.
DATED, SIGNED and DELIVERED at NAIROBI this 17th day of May 2024.………………………………STELLA RUTTOJUDGEIn the presence of:For the Claimant Mr. Haggai instructed by Ms. GithogoriFor the Respondent Mr. Muli instructed by Mr. KasimuCourt Assistant Millicent KibetORDERIn 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 had 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 Civil 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.STELLA RUTTOJUDGE