Kenya Union Of Domestic, Hotels, Educational Institutions, Hospitals & Allied Workers v African Tours & Hotels Ltd. (In Receivership) (Cause 84 of 2000) [2003] KEIC 25 (KLR) (Employment and Labour) (5 November 2003) (Award)
KENYA UNION OF DOMESTIC, HOTELS, EDUCATIONAL v AFRICAN TOURS & HOTELS LTD. (IN RECEIVERSHIP) [2003] eKLR
Neutral citation:
[2003] KEIC 25 (KLR)
Republic of Kenya
Cause 84 of 2000
CP Chemuttut, J, AK Kerich & JM Kilonzo, Members
November 5, 2003
Between
Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals & Allied Workers
Claimant
and
African Tours & Hotels Ltd. (In Receivership)
Respondent
Award
1.On 19thJuly, 2000, the Minister for Labour referred this dispute to the Court for consideration and determination under powers vested in him by Section 8 of the Trade Disputes Act, Cap. 234, Laws of Kenya (which is hereinafter referred to as the Act); and his reference, together with the statutory certificates from the Labour Commissioner and the Minister himself under Section 14(9)(e) and (f) of the Act, were received by the Court on 21stJuly, 2000.The dispute was then listed for mention on 9thAugust, 2000, when Messrs. S.N. Mwari and R.M. Muthanga, who appeared for the parties respectively, were directed to submit or file their respective written memoranda or statements by 1stSeptember and 11thOctober, 2000, and the dispute was fixed for hearing on 31stOctober, 2000.The Union submitted its memorandum on 5thSeptember, 2000.On 22ndFebruary, 2001, M/S. Oraro & Co., Advocates, filed a notice of appointment and a reply statement on behalf of AT&H; and on 8thNovember, 2001, the Union submitted a further or an amended memorandum to which no rejoinder was received from AT&H.Meanwhile, the parties took several adjournments for one reason or another, and on 11thApril, 2002, the dispute was fixed for hearing on 20thJune, 2002, and the parties were duly notified. On the said date, i.e. 20thJune, 2002, Mr. J.M. Kariuki appeared for the Union, but there was no appearance for AT&H, and no reasons were given for its counsel’s non-appearance.In the circumstances, the case was heardex-parte.
2.At the commencement of the hearing of this matter, Mr. Kariuki applied to withdraw issues Nos.2 and 3, leaving issue No.1 for consideration and determination. This being the case, I allowed the application for withdrawal and dismiss issues Nos.2 and 3 as withdrawn. Mr. Kariuki also amended the list of the grievants, and in the result only 124 of them are said to have been locked-out and are affected by this dispute, namely:-1.James Ongota2.Moses Ninah3.James Ng’ang’a4.Daniel Gitonga5.Charles Katee6.John Muiruri7.Rosemary Muturi8.Jacob Aneya9.Esther Watiri10.Jeniffer Maina11.Esther Jebii12.Margaret Anzemo13.David Ogos14.George Munguti15.Mercy Gikonyo16Jeniffer Kibias17.Charles Mutegi18.Joram Kabiru19.Joseph Mutua20.Kennedy Kisaka21.Michael Nguku22.John Ndegwa23.Gideon Kyalo24.Zipporah Chemtai25Charles Kiarie26.Monicah Wanjiku27.Patrick Shikuku28.Onesmus Kivondo29.Joshua Ogango30.Josphat Macharia31.Francis Wahindi32.Cliff Otieno33.Fred Onyango34.Joseph Ngelema35.Maria Partet36.David Munge37.Lazarus Munyi38.Josphat Gathoka39.Judy Kihingo40.Lilian Chelogoi41.James Kala42.Rose Wanza43.Mellen Michuki44.Jane Mngola45.Maureen Kituku46.Elizabeth Nthiwa47.Lucy Wairimu48.Roselyn Chepkurui49.Jane L. Waithera50.Margaret Githinji51.Joyce Adhiambo52.Joyce Simiyu53.Lorna Chemutai54.Patrick Obare55.Hellen Minayo56.Janet Mbithi57.Emily Kangu58.Elijah Mwaka59.Alfred Motobo60.Kinyua Githaiga61.Antoninah Wambui62.Geoffrey Wambu63.Maggrey Mbogo64.Faith Gathoni65.Tabitha Okiya66.Joyce Wanjiru67.Samuel M. Mwaura68.Anne Kimondo69.Anne Katunge70.Dorcas Karimi71.Eunice Kimotho72.Anne Adhiambo73.Pauline Chepngetich74.Florence Kabii75.Alice Odundo76.Samson Owiti77.Bernard Njuguna78.Patrick Ngunjiri79.Geoffrey Otuku80.Saulo Oliendo81.Esther Mugure82.Hellen W. Wanjara83.Kamuti Mwinzi84.Charles Mwangi85.Esther Muiruri86.Arnold Mawala87.Peter Ngugi Mburu88.Johnson Kang’ethe89.Peter Osano90.John Kuria91.James Matiri92.Arthur Adika93.Evans Jumba94.Paul Ng’ang’a95.Stephen Njuguna96.Grace Wanjiku97.Fabian Achuta98.Abisai Saisi99.Charles Wambai100.Peter Njoroge101.Justus Mutavi102.William Adero103.Stephen Wambua104.Samuel Wainaina105.Stephen anyoike106.Samuel G. Kamau107.John Mugo108.Gideon Musiva109.Hilary Mwangi110.Joseph Bunyi111.Simon Wainaina112.Gabriel Mwakaba113.Margaret Huta114.Margaret Watenga115.Naomi Muthui116.Henry Owiti117.John Ochieng118.Joseph Munguti119.Duncan Ndungu120.James Wambua121.Mogaka Oredho122.Robert Muyumba123.George Macharia124.Mary Muragu
3.This dispute arose on 30thJune 1998, when Milimani Hotel, which had been leased to AT&H. by Milimani Hotels Ltd. for a period of five (5) years and three (3) months, with effect from 1stJuly 1986, reverted back to the latter (Milimani Hotels Ltd.) after the former (AT&H.) was placed under receivership on 29thJune 1998.The parties met at their own level to resolve the matter but no settlement was reached. Consequently, the Union reported a dispute to the Minister for Labour in accordance with Section 4(1) of the Act.The Minister accepted the dispute and appointed Mr. E. Masara to act as the Investigator; and on the basis of the Investigation report, which was released to the parties on 4thOctober, 1999, the Minister found and recommended as follows:-
“Findings.
Recommendation:……….. I recommend that African Tours and Hotels should pay all the affected employees their June, 1998 salaries without any apportionment.They should further pay terminal dues to the 116 employees in category ‘B’ as stipulated in the parties CBA”.
4.The Minister finally appealed to the parties to accept the recommendation as a basis of resolving the matter.The Union accepted the recommendation, but it would appear that the Company rejected it. Hence, this dispute for consideration and determination (see U. App.8).
5.Mr. Kariuki submitted that before AT&H. was placed under receivership as aforestated, it managed several lodges and hotels across the country, including Milimani Hotel, Panafric Hotel, Olkurruk Lodge, Mountain Lodge, Buffalo Springs Lodge, Marsabit Lodge, Whitesands Hotel, Ngulia Safari Lodge, Mombasa Beach Hotel, Lake Bogoria Hotel, Meru Mulika Lodge, Voi Safari Lodge, Sunset Hotel, Sirikwa Hotel, Kilaguni Lodge and Kabarnet Hotel, all of which were members of the Kenya Association of Hotelkeepers and Caterers, with which the Union had entered into both valid recognition and collective agreements (see U.Apps.1 & 2).On 1stJuly, 1986, he said, AT&H. took over full operations of the Hotel on a lease basis, together with the 26 members of staff; and engaged about 99 other employees.However, on 30thJune, 1998, Hon. Matere Keriri, in his capacity as the Chairman of Milimani Hotels Ltd., issued a notice to all the employees to report to the Receiver/Manager on 1stJuly, 1998 “in connection with the payment of their emoluments and future employment” (see U. App.3).The notice read inextensothus:-
6.Mr. Kariuki submitted further that when the employees reported to the management of AT&H, they were locked-out and were denied audience.Therefore, AT&H, beingbona fideemployer of the grievants, was liable to pay themtheir terminal benefits, amounting toKshs.9,597,028/=as indicated in the attached schedule.
7.In rebuttal, AT&H vehemently denied in its written statement that it either locked-out the grievants or refused to meet the officials of the Union.However, it maintained that the grievants were the employees of Milimani Hotel Ltd., and, therefore, they (grievants) could have no cause of action against it (AT&H) outside the period of the tenancy agreement.In the circumstances, AT&H admittedly agreed to assume liability to the grievants for the period of the tenancy agreement to the extent of Kshs.4,000/= to every grievant; and the balance of their claim, if any, would rank in priority with its all the other unsecured creditors and can only be paid if and when there are funds available from which payment can be made.
8.The question which requires consideration in this case is whether, in the face of these clear admissions of liability, AT&H can be saddled with the obligations under Clause 4(r) of the lease agreement, which is usefully reproduced hereunder:-“4.Provided always it is hereby mutually agreed and declared as follows:-(a)………………………………………………………(b)…………………………………………………………………………(c)…………………………………………………………………………(d)…………………………………………………………………………(e)…………………………………………………………………………(f)…………………………………………………………………………(g)…………………………………………………………………………(h)…………………………………………………………………………(i)……………………………………………………………………….(j)……………………………………………………………………….(k)…………………………………………………………………….(l)……………………………………………………………………….(m)……………………………………………………………………(n)…………………………………………………………………….(o)……………………………………………………………………..(p)…………………………………………………………………….(q)…………………………………………………………………….Employees(r)All the servants employees and agents in the and Servants:
9.Three collective ingredients of the concept of employment are: and employer, his employee and a contract of employment between the two, i.e. employer and employee.It is not sufficient to say that “X” is an employee but the question that immediately follows is: whose employee is he?Therefore, unless there is a contract of employment or service between “X” and “Y”, there would be no relationship of employee and employer between them.The four indicia of contract of employment or service, derived from authorities of Courts in England, were recapitulated byLord ThankertoninShortv.Henderson Ltd. (1946) 62, T.L.R. 427,at page 429, which was decided in the House of Lords, are as follows:
10.In Harbour Boardv.Coggins & Griffith (Liverpool Ltd) (1947) I.A.C.I,the following observation was made:-
11.Therefore, the prima facie test for the determination of relationship between an employer and an employee is the existence of the right in the employer to supervise and control the work done by the employee, not only in the matter of direction in what work the employee is to do, but also the manner in which he shall do his work.
12.Thus, some of the tests or essentials to find out whether or not a person is in employment of a certain establishment or industry are:-(i)whether the establishment or industry has administrative control over the employee;(ii)whether the establishment or industry pays for the work done by the employee, and(iii)whether the establishment or industry has power to dismiss and reinstate the employee.
13.Where the lessee himself engages employees, as in the present case, for carrying on the work, which he has taken, the lessor cannot be said to have any control or supervision over the employees; and, as a logical corollary, the employees will be the employees of the lessee alone.It was held inWorkers’ Unionv.M.B. Hotel United, Karachi, 1975 P.L.C. 533,which is on all fours with the case at hand, that when an establishment was leased out by a proprietor and was being run by the lessee, the workmen employed in the establishment were, in the circumstances, not the employees of the proprietor.
14.As regards the liquidation of AT&H, this is a ground which has been pressed for the first time here, and such a ground cannot be made the basis of the decision in this case.The payment of terminal benefits to the grievants will, therefore, be quite capable of being implemented and their fate would be no better or no worst than other employees similarly affected by the liquidation, if any, of AT&H.
15.In this case, therefore, AT&H had administrative control over the grievants and also paid their wages or salaries and granted them leave, e.t.c.AT&Hhad also power to dismiss and reinstate the grievants.In the circumstances,I have no doubt in my mind that the grievants were the employees ofAT&H for the period that the lease subsisted, and AT&H is liable to pay all the outstanding terminal benefits due and owing to the grievants for the said period as shown in the attached schedule.I soawardandorder.
16.Both members of the Court were consulted and have supported this decision.
DATED AND DELIVERED AT NAIROBI THIS 5THDAY OF NOVEMBER, 2003.CHARLES P. CHEMMUTTUT,JUDGE.