[Appeal from the judgment of Hon. G Sogomo delivered on 17 May 2024 in Mombasa MCELRC E113 of 2021]
The appeal arises from the judgment delivered on 17 May 2024 in Mombasa MCELRC E113 of 2021. The appellant is seeking that the judgment be set aside and the claim filed on 23 February 2021 with regard to underpayments for minimum wage and housing as per the minimum wage be awarded together with costs.
The background of the appeal is a claim filed by the appellant on the basis that in June 2017 he was employed by the respondent as a driver. On 22 December 2020 he was allowed to travel for personal reasons but upon return was informed that his position had been taken up and there was no work for him. This resulted in unfair termination of employment without payment of terminal dues. He claimed that there was underpayment in the wage and house allowance and claimed the following;
From June 2017 to August 2018 the wage paid is Ksh.15,000 instead of Ksh.16,724.75 and the house allowance of Ksh.2,508.71 for 11 months the difference is Ksh.78,494.83;
May 2018 to November 2020 wage paid Ksh.15, 500 instead of 17,561 and the house allowance of Ksh.2, 634.15 and for 31 months the underpayment is Ksh.232, 286.80.
The claims by the appellant were as follows;
Notice pay Ksh.19,233.46;
Underpayment of wages and overtime Ksh.1,007,887.86;
Public holidays Ksh.56,195;
Service pay Ksh.30,292.73;
Leave pay for 2 years Ksh.28,273.21;
Certificate of service;
Costs of the suit.
In response, the respondent’s case was that on 22 December 2020, the appellant requested leave to be absent from work. Upon being asked to put his request in writing, he did not turn up for work the next day and appeared on 5 January 2021 with a resignation letter. He said he was taking up employment with another employer and hence asked for a recommendation letter which was done he was issued with the liability release form and he returned all company property mainly motor vehicle No. KCS 903U witnessed by Henry. The respondent also accepted the resignation notice.
The response was also that on 11 March 2020, the appellant had abandoned a company vehicle, KBQ 892T, at the Mamba Village roundabout instead of handing it over to a colleague. Upon deliberations on 13 March 2020, it was agreed that he should be issued a warning letter. On 13 March 2020, the appellant was warned of negative conduct and careless driving. A first warning was issued on 4 February 2020 for sleeping while on duty.
The terms of employment provided for a wage of Ksh.15, 000 without housing. The appellant was only entitled to NSSF and NHIF contributions. Work was not allowed during public holidays, and only those willing to earn extra money were allowed to work on condition they were paid at the end of each day. The appellant took all his annual leave days. He had serious disciplinary issues, and he opted to resign. He is not entitled to notice pay, compensation, or the alleged underpayment and overtime.
In the judgment of the trial court, the learned magistrate dismissed the claim with costs to the respondent.
Aggrieved by the judgment, the appellant filed the appeal on three grounds;
The trial magistrate erred in law in dismissing the appellant’s prayer on underpayments.
The trial magistrate erred in law in making a finding that the signing of a discharge voucher/or having been cleared by the respondent estopped him from laying claim to further dues.
The trial court erred in law in failing to take into account the written submissions.
Only the appellant attended these proceedings and filed written submissions.
The appellant submitted that during employment he was underpaid contrary to the Wage Order guideline. He was not provided with housing and the respondent admitted to these facts.
A driver based in Mombasa was entitled to a wage of Ksh.16, 724.75 from June 2017 to April 2018 but he was paid Ksh.15, 000 per month an underpayment of Ksh.18, 972.25 for 11 months.
From May 2018 to November 2020 a driver was entitled to ksh.17, 561 but the appellant was paid ksh.15, 500 per month and underpayment of ksh.81, 658.65
Total underpayments Ksh.Ksh.192, 177.71.
In the case of Simon Muguku Gichigi v Taifa Sacco Society Limited [2012] eKLR the court held that the discharge voucher signed by the employee did not remove the employer from making lawful claims. The employee had a right to seek payment of what was lawfully his entitlements in terminal payments. The appeal should be allowed with costs.
There are no written submissions by the respondent. There was no attendance during the various mention dates for taking directions.
Determination
This is a first appeal. The court is allowed to review the record and re-assess and make its conclusions but take into account that the trial court had the chance to hear the witnesses testify in court.
The main issue is the payment of minimum general wage, the due house allowances and overtime worked. The response was that the appellant signed a discharge voucher hence removing the employer from any further liability.
A discharge voucher in employment has been addressed differently by the court.
In the case of Ronald Kipngeno Bii v Unliver Tea Kenya Limited [2022] eKLR the court held that Whether or not a settlement agreement or discharge voucher bars a party thereto from making further claim depends on the circumstances of each case.
In the case of Thomas De La Rue v David Opondo Omutelema [2013] e KLR, the Court held that:
We would agree with the trial court that a discharge voucher per se does not absolve an employer from statutory obligation and that it cannot preclude the Industrials Court from enquiring into the fairness of a termination. That is, however, as far as we are prepared to go. The court has in each case to decide, if the issue is raised, whether the discharge voucher was freely and willingly executed when the employee was seized of all the relevant information and knowledge.
In the case of Jane Vuligwa v Good Earth [Group] limited [2021] eKLR the court held that that discharge vouchers constitute binding contracts between the Parties. All the Court is required to do, where discharge is executed free of misrepresentation, duress, undue influence, coercion or fraud, is to give effect to the intention of the Parties.
The above addressed, an employee whose employment is terminated is allowed under the provisions of Section 35(4) of the Employment Act to challenge the lawfulness and fairness of the same;
(4) Nothing in this section affects the right—
(a) of an employee whose services have been terminated to dispute the lawfulness or fairness of the termination in accordance with the provisions of section 46; or
(b) of an employer or an employee to terminate a contract of employment without notice for any cause recognised by law.
Where a right is secured in law, an employer cannot take it away from an employee under a discharge voucher/clause to his disadvantage. Such would be to engage in unfair labour practices by taking advantage of the employee.
Further, under the provisions of Section 18(4) of the Employment Act, whatever reasons result in termination of employment, the employee is entitled to the terminal dues accrued as of right;
(4) Where an employee is summarily dismissed for a lawful cause, the employee shall, on dismissal be paid all money, allowances and benefits due to him up to the date of his dismissal.
Therefore, a careful reading of Section 18(4) and 35(4) of the Employment Act is that work done and the benefits earned, are secured. The employee should be paid what is lawfully due at the end of employment including monies, allowances and benefits due to him up to the date of termination of employment.
In this case, the claim for underpayment of wages, overtime, and house allowances are lawful dues and cannot be negated through a discharge voucher.
Indeed, a driver working in Mombasa from June 2017 was entitled to a wage of Ksh.17, 447.15 per month plus a 15 per cent house allowance at Ksh. 2,617 total gross wage Ksh.20, 064.
The appellant claimed that he was paid Kshs.15, 000 but in his evidence in court, he testified that he was earning Ksh.15, 500 per month. On the due wage and what was paid, this is less by Ksh.4, 564 and for 11 months, the total underpayment is Ksh.50, 204.
From May 2018 to November 2020 the wage due to a driver in Mombasa is Ksh.18, 319.50 plus a house allowance at 15 per cent being Ksh.2, 747.90. Gross wage Ksh.21, 066.90. The appellant was paid Ksh.15, 500. In this period the underpayment per month is Ksh.5, 567 and for 31 months the total due is Ksh.172, 574.70.
The total underpayment of wages is Ksh.222, 778.
However, my position on analyzing the underpayment of wages has since been changed and I am guided by the Court of Appeal in the case of The German School Society & another v Ohany & another (Civil Appeal 325 & 342 of 2018 (Consolidated)) [2023] KECA. In analyzing the underpayment of wages, the court held that employment claims crystallized upon the termination of employment since the employee would not have moved the court from time to time during the pendency of her employment because she hoped that the appellant would make good what she was entitled to upon the contract coming to an end. However, underpayments are in their nature continuing injuries which under the provisions of Section 90 of the Employment Act should be addressed within 12 months. The court held that;
Normally, a belated service-related claim will be rejected on the grounds of delay and laches or limitation. One of the exceptions to the said rule is cases relating to a continuing wrong. Where a service-related claim is based on a continuing wrong, relief can be granted even if there is a long delay in seeking remedy, with reference to the date on which the continuing wrong commenced, if such continuing wrong creates a continuing source of injury. Borrowing from the excerpts reproduced above and considering that the respondent continued to work under the same circumstances, we find and hold that the breach complained of was continuing, capable of giving rise to a legal injury which assumes the nature of a continuing wrong. It follows that the appellant’s argument that the claims were time-barred fails. On the contrary, the said claims fall within the ambit of a continuing wrongs contemplated under section 90.
Underpayments being a continuing injury that accrues every month, the subject employee must address within 12 months after the same accrue. That means the claim can only go back to 12 months only under the strict interpretation of Section 90 of the Employment Act and now Section 89 of the Employment Act, 2024.
This shift is necessary to address taking into account the developments in the law and jurisprudence of the court over the years. This court is bound by the findings by the Court of Appeal.
Under the current jurisprudence, the appellant should have applied for the underpayments within his employment within 12 months and any fears of loss of employment addressed under the protections of Section 46(h) of the Employment Act.
In this case, therefore, the last phase of employment had an accrued underpayment of Ksh.5, 567 per month which amounts to Ksh.83, 505.
This covers the wage and house allowance underpayments addressed in the appeal.
These are wages protected under the Wage Orders and an employer is not allowed to go below the minimum.
On the claims for overtime, upon cross-examination, the appellant admitted that work during public holidays was paid at the end of the day. He did not particularize any other overtime work or the public holidays worked to justify such a claim. Each public holiday is gazette by the Minister and must be demonstrated with an outline to justify a claim for payment during work on such a day.
On the claim for notice pay, upon his resignation and clearance, the appellant cannot justify a claim for notice pay or compensation for any matter arising from the termination of his employment.
Service pay only accrues under the provisions of Section 35(5) and (6) of the Employment Act. The appellant filed his payment statement which provided for payment of statutory dues. Service pay claim is not justified.
On the claim for leave, employment was terminated after the appellant had taken days off without permission. Upon return, he tendered his resignation. The appellant failed to take an honest analysis of his time while at work and the days absent to allow for a proper analysis of the leave days due.
Save for the underpayment of wages, assessed at Ksh.Ksh.83, 505. The trial court well addressed the other claims.
Accordingly, the appeal is allowed with the award of underpayment at Ksh.83, 505 only. No Orders on costs.
Delivered in open court at Mombasa on this 17 day of October 2024.
M. MBARŨ
JUDGE
The appeal arises from the judgment delivered on 17 May 2024 in Mombasa MCELRC E113 of 2021. The appellant is seeking that the judgment be set aside and the claim filed on 23 February 2021 with regard to underpayments for minimum wage and housing as per the minimum wage be awarded together with costs.
The background of the appeal is a claim filed by the appellant on the basis that in June 2017 he was employed by the respondent as a driver. On 22 December 2020 he was allowed to travel for personal reasons but upon return was informed that his position had been taken up and there was no work for him. This resulted in unfair termination of employment without payment of terminal dues. He claimed that there was underpayment in the wage and house allowance and claimed the following;
From June 2017 to August 2018 the wage paid is Ksh.15,000 instead of Ksh.16,724.75 and the house allowance of Ksh.2,508.71 for 11 months the difference is Ksh.78,494.83;
May 2018 to November 2020 wage paid Ksh.15, 500 instead of 17,561 and the house allowance of Ksh.2, 634.15 and for 31 months the underpayment is Ksh.232, 286.80.
The claims by the appellant were as follows;
Notice pay Ksh.19,233.46;
Underpayment of wages and overtime Ksh.1,007,887.86;
Public holidays Ksh.56,195;
Service pay Ksh.30,292.73;
Leave pay for 2 years Ksh.28,273.21;
Certificate of service;
Costs of the suit.
In response, the respondent’s case was that on 22 December 2020, the appellant requested leave to be absent from work. Upon being asked to put his request in writing, he did not turn up for work the next day and appeared on 5 January 2021 with a resignation letter. He said he was taking up employment with another employer and hence asked for a recommendation letter which was done he was issued with the liability release form and he returned all company property mainly motor vehicle No. KCS 903U witnessed by Henry. The respondent also accepted the resignation notice.
The response was also that on 11 March 2020, the appellant had abandoned a company vehicle, KBQ 892T, at the Mamba Village roundabout instead of handing it over to a colleague. Upon deliberations on 13 March 2020, it was agreed that he should be issued a warning letter. On 13 March 2020, the appellant was warned of negative conduct and careless driving. A first warning was issued on 4 February 2020 for sleeping while on duty.
The terms of employment provided for a wage of Ksh.15, 000 without housing. The appellant was only entitled to NSSF and NHIF contributions. Work was not allowed during public holidays, and only those willing to earn extra money were allowed to work on condition they were paid at the end of each day. The appellant took all his annual leave days. He had serious disciplinary issues, and he opted to resign. He is not entitled to notice pay, compensation, or the alleged underpayment and overtime.
In the judgment of the trial court, the learned magistrate dismissed the claim with costs to the respondent.
Aggrieved by the judgment, the appellant filed the appeal on three grounds;
The trial magistrate erred in law in dismissing the appellant’s prayer on underpayments.
The trial magistrate erred in law in making a finding that the signing of a discharge voucher/or having been cleared by the respondent estopped him from laying claim to further dues.
The trial court erred in law in failing to take into account the written submissions.
Only the appellant attended these proceedings and filed written submissions.
The appellant submitted that during employment he was underpaid contrary to the Wage Order guideline. He was not provided with housing and the respondent admitted to these facts.
A driver based in Mombasa was entitled to a wage of Ksh.16, 724.75 from June 2017 to April 2018 but he was paid Ksh.15, 000 per month an underpayment of Ksh.18, 972.25 for 11 months.
From May 2018 to November 2020 a driver was entitled to ksh.17, 561 but the appellant was paid ksh.15, 500 per month and underpayment of ksh.81, 658.65
Total underpayments Ksh.Ksh.192, 177.71.
In the case of Simon Muguku Gichigi v Taifa Sacco Society Limited [2012] eKLR the court held that the discharge voucher signed by the employee did not remove the employer from making lawful claims. The employee had a right to seek payment of what was lawfully his entitlements in terminal payments. The appeal should be allowed with costs.
There are no written submissions by the respondent. There was no attendance during the various mention dates for taking directions.
Determination
This is a first appeal. The court is allowed to review the record and re-assess and make its conclusions but take into account that the trial court had the chance to hear the witnesses testify in court.
The main issue is the payment of minimum general wage, the due house allowances and overtime worked. The response was that the appellant signed a discharge voucher hence removing the employer from any further liability.
A discharge voucher in employment has been addressed differently by the court.
In the case of Ronald Kipngeno Bii v Unliver Tea Kenya Limited [2022] eKLR the court held that Whether or not a settlement agreement or discharge voucher bars a party thereto from making further claim depends on the circumstances of each case.
In the case of Thomas De La Rue v David Opondo Omutelema [2013] e KLR, the Court held that:
We would agree with the trial court that a discharge voucher per se does not absolve an employer from statutory obligation and that it cannot preclude the Industrials Court from enquiring into the fairness of a termination. That is, however, as far as we are prepared to go. The court has in each case to decide, if the issue is raised, whether the discharge voucher was freely and willingly executed when the employee was seized of all the relevant information and knowledge.
In the case of Jane Vuligwa v Good Earth [Group] limited [2021] eKLR the court held that that discharge vouchers constitute binding contracts between the Parties. All the Court is required to do, where discharge is executed free of misrepresentation, duress, undue influence, coercion or fraud, is to give effect to the intention of the Parties.
The above addressed, an employee whose employment is terminated is allowed under the provisions of Section 35(4) of the Employment Act to challenge the lawfulness and fairness of the same;
(4) Nothing in this section affects the right—
(a) of an employee whose services have been terminated to dispute the lawfulness or fairness of the termination in accordance with the provisions of section 46; or
(b) of an employer or an employee to terminate a contract of employment without notice for any cause recognised by law.
Where a right is secured in law, an employer cannot take it away from an employee under a discharge voucher/clause to his disadvantage. Such would be to engage in unfair labour practices by taking advantage of the employee.
Further, under the provisions of Section 18(4) of the Employment Act, whatever reasons result in termination of employment, the employee is entitled to the terminal dues accrued as of right;
(4) Where an employee is summarily dismissed for a lawful cause, the employee shall, on dismissal be paid all money, allowances and benefits due to him up to the date of his dismissal.
Therefore, a careful reading of Section 18(4) and 35(4) of the Employment Act is that work done and the benefits earned, are secured. The employee should be paid what is lawfully due at the end of employment including monies, allowances and benefits due to him up to the date of termination of employment.
In this case, the claim for underpayment of wages, overtime, and house allowances are lawful dues and cannot be negated through a discharge voucher.
Indeed, a driver working in Mombasa from June 2017 was entitled to a wage of Ksh.17, 447.15 per month plus a 15 per cent house allowance at Ksh. 2,617 total gross wage Ksh.20, 064.
The appellant claimed that he was paid Kshs.15, 000 but in his evidence in court, he testified that he was earning Ksh.15, 500 per month. On the due wage and what was paid, this is less by Ksh.4, 564 and for 11 months, the total underpayment is Ksh.50, 204.
From May 2018 to November 2020 the wage due to a driver in Mombasa is Ksh.18, 319.50 plus a house allowance at 15 per cent being Ksh.2, 747.90. Gross wage Ksh.21, 066.90. The appellant was paid Ksh.15, 500. In this period the underpayment per month is Ksh.5, 567 and for 31 months the total due is Ksh.172, 574.70.
The total underpayment of wages is Ksh.222, 778.
However, my position on analyzing the underpayment of wages has since been changed and I am guided by the Court of Appeal in the case of The German School Society & another v Ohany & another (Civil Appeal 325 & 342 of 2018 (Consolidated)) [2023] KECA. In analyzing the underpayment of wages, the court held that employment claims crystallized upon the termination of employment since the employee would not have moved the court from time to time during the pendency of her employment because she hoped that the appellant would make good what she was entitled to upon the contract coming to an end. However, underpayments are in their nature continuing injuries which under the provisions of Section 90 of the Employment Act should be addressed within 12 months. The court held that;
Normally, a belated service-related claim will be rejected on the grounds of delay and laches or limitation. One of the exceptions to the said rule is cases relating to a continuing wrong. Where a service-related claim is based on a continuing wrong, relief can be granted even if there is a long delay in seeking remedy, with reference to the date on which the continuing wrong commenced, if such continuing wrong creates a continuing source of injury. Borrowing from the excerpts reproduced above and considering that the respondent continued to work under the same circumstances, we find and hold that the breach complained of was continuing, capable of giving rise to a legal injury which assumes the nature of a continuing wrong. It follows that the appellant’s argument that the claims were time-barred fails. On the contrary, the said claims fall within the ambit of a continuing wrongs contemplated under section 90.
Underpayments being a continuing injury that accrues every month, the subject employee must address within 12 months after the same accrue. That means the claim can only go back to 12 months only under the strict interpretation of Section 90 of the Employment Act and now Section 89 of the Employment Act, 2024.
This shift is necessary to address taking into account the developments in the law and jurisprudence of the court over the years. This court is bound by the findings by the Court of Appeal.
Under the current jurisprudence, the appellant should have applied for the underpayments within his employment within 12 months and any fears of loss of employment addressed under the protections of Section 46(h) of the Employment Act.
In this case, therefore, the last phase of employment had an accrued underpayment of Ksh.5, 567 per month which amounts to Ksh.83, 505.
This covers the wage and house allowance underpayments addressed in the appeal.
These are wages protected under the Wage Orders and an employer is not allowed to go below the minimum.
On the claims for overtime, upon cross-examination, the appellant admitted that work during public holidays was paid at the end of the day. He did not particularize any other overtime work or the public holidays worked to justify such a claim. Each public holiday is gazette by the Minister and must be demonstrated with an outline to justify a claim for payment during work on such a day.
On the claim for notice pay, upon his resignation and clearance, the appellant cannot justify a claim for notice pay or compensation for any matter arising from the termination of his employment.
Service pay only accrues under the provisions of Section 35(5) and (6) of the Employment Act. The appellant filed his payment statement which provided for payment of statutory dues. Service pay claim is not justified.
On the claim for leave, employment was terminated after the appellant had taken days off without permission. Upon return, he tendered his resignation. The appellant failed to take an honest analysis of his time while at work and the days absent to allow for a proper analysis of the leave days due.
Save for the underpayment of wages, assessed at Ksh.Ksh.83, 505. The trial court well addressed the other claims.
Accordingly, the appeal is allowed with the award of underpayment at Ksh.83, 505 only. No Orders on costs.
Delivered in open court at Mombasa on this 17 day of October 2024.
M. MBARŨ
JUDGE