1. The Kenya Engineering Workers Union (the Union) sued Farm Engineering Industries Ltd (the Respondent) before the Court sitting in Nairobi alleging breach of contract (underpayment of wages) in respect of James Oloo Ochieng, Polycap Okeyo and Edwin Nyaata (the Grievants).
2. On 20 February 2024, the Cause was transferred from Nairobi to Kisumu, upon the application of the Union.
3. When the Cause was mentioned before this Court on 6 May 2024, the Court granted the Respondent leave to file and serve a Response, witness statements and documents. The hearing was after that set for 24 June 2024.
4. The Respondent filed a Response on 15 May 2024. In the Response, the Respondent raised a plea of limitation based on section 90 of the Employment Act, 2007.
5. The Union filed a Reply to the Response on 29 May 2024.
6. On 6 June 2024, the Respondent informed the Court that it had filed a Preliminary Objection on 15 May 2024. The Court directed that the Objection be taken as part of the hearing (it had been brought to the attention of the Court during the setting of the hearing date).
7. The Cause was heard on 24 June 2024. James Oloo Ochieng testified on behalf of the Union while Huwaida Ahmed, an Office Administrator testified on behalf of the Respondent.
8. The Union filed its submissions on 6 July 2024, and the Respondent on 23 August 2024.
9. The Court has considered the pleadings, evidence and submissions.
Limitation
10. The Respondent contended that the claims for underpayment were caught up by the prescriptive limitation law set out in section 90 of the Employment Act, 2007.
11. According to the Respondent, the claims for underpayments brought by the Union were pleaded to have accrued from 2012 to 2018, and since the Cause was filed on 5 October 2022, the claims were statute-barred.
12. Underpayments constitute a continuing injury (see The Germany School Society & Ar v Ohany & Ar (2023) KECA 894 (KLR)), and in terms of section 90 of the Employment Act, 2007 an action to recover such underpayments should be lodged with the Court within 12 months of cessation.
13. James Oloo Ochieng separated from the Respondent on or around 5 July 2021 through resignation.
14. Polycap Okoth Okeyo separated from the Respondent around November 2019, whilst Edwin Nyaata’s contract was terminated on 8 August 2019.
15. The Memorandum of Claim was filed in Court on 5 October 2022, more than 12 months after each of the Grievants had left the employment of the Respondent.
16. The claims for underpayments, being continuing injury were brought outside the prescribed period and the same are statute barred by virtue of section 90 of the Employment Act, 2007, and the Court so finds.
Breach of contract
Severance pay
17. The Union sought Kshs 24,817/- on account of severance pay for Edwin Nyaata. The pleadings asserted that the said Grievant’s contract was terminated unlawfully but did not plead termination on account of redundancy.
18. During oral testimony, no evidence was led on redundancy.
19. Under section 40 of the Employment Act, 2007, severance pay is due upon termination on account of redundancy. If there was a contractual basis for payment of severance pay, the same was not placed before the Court.
20. Since no evidence was led to support the claim for unfair redundancy, the Court finds that the relief for severance pay has no legal or contractual foundation.
Accrued leave
21. The Union claimed accrued annual leave on behalf of James Oloo Ochieng from March 2015 to August 2019.
22. This head of the claim was brought outside the 3 years outlined in section 90 of the Employment Act, 2007, and is caught by the limitation provision since separation was in July 2019.
23. Polycap Okoth Okeyo and Edwin Nyaata separated from the Respondent in November 2019 and August 2019 respectively.
24. Again, these heads of the claim for accrued leave were brought outside the period prescribed by section 90 of the Employment Act, 2007 and relief is not available.
Unfair labour practices
25. The Union also alleged that the Respondent kept the Grievants as casual employees beyond the period set by clause 7 of the collective bargaining agreement in place.
26. Clause 7 of the collective bargaining agreement makes provision for a probationary period of employment.
27. Section 2 of the Employment Act defines casual employee. A casual employee is one paid at the end of each day.
28. The Respondent placed before the Court copies of pay slips for James Oloo Ochieng. He was earning a monthly wage and therefore he was not a casual employee.
29. The Union did not place any evidence before the Court to support the contention that the other Grievants were paid at the end of each day.
30. The assertion that these Grievants’ employment contracts violated the law or the terms of the collective bargaining agreement was not proved.
Alternative dispute resolution and limitation
31. The actions asserted by the Union accrued from 2012 to November 2019. The Union reported a trade dispute to the Cabinet Secretary, Labour and the Conciliator issued a report on 17 February 2020.
32. The Cause was filed on 5 October 2022, more than 3 years after accrual of the cause of action.
33. The Court of Appeal addressed the question of limitation time vis-a-viz alternative dispute resolution processes in Rift Valley Railways (Kenya) Ltd v Hawkins Wagunza Musonye & Ar (2016) eKLR and held:
While there is no doubt …… the Employment and Industrial (sic) Relations Act encourages alternative dispute resolution, it must be court-based and conducted within the law. Time does not stop running merely because parties are engaged in an out of court negotiations. It was incumbent upon the respondents to bear in mind the provisions of Section 90 of the Employment Act even as they engaged in the negotiations. The claim went stale three years from the date of the termination of the respondents’ contracts of service.
34. The Union moved the Court outside the prescribed limitation period.
Conclusion and Orders
35. In light of the above, the Court finds the claims not only caught up by the law on limitation but without merit.
36. The Cause is dismissed with costs.
2. On 20 February 2024, the Cause was transferred from Nairobi to Kisumu, upon the application of the Union.
3. When the Cause was mentioned before this Court on 6 May 2024, the Court granted the Respondent leave to file and serve a Response, witness statements and documents. The hearing was after that set for 24 June 2024.
4. The Respondent filed a Response on 15 May 2024. In the Response, the Respondent raised a plea of limitation based on section 90 of the Employment Act, 2007.
5. The Union filed a Reply to the Response on 29 May 2024.
6. On 6 June 2024, the Respondent informed the Court that it had filed a Preliminary Objection on 15 May 2024. The Court directed that the Objection be taken as part of the hearing (it had been brought to the attention of the Court during the setting of the hearing date).
7. The Cause was heard on 24 June 2024. James Oloo Ochieng testified on behalf of the Union while Huwaida Ahmed, an Office Administrator testified on behalf of the Respondent.
8. The Union filed its submissions on 6 July 2024, and the Respondent on 23 August 2024.
9. The Court has considered the pleadings, evidence and submissions.
Limitation
10. The Respondent contended that the claims for underpayment were caught up by the prescriptive limitation law set out in section 90 of the Employment Act, 2007.
11. According to the Respondent, the claims for underpayments brought by the Union were pleaded to have accrued from 2012 to 2018, and since the Cause was filed on 5 October 2022, the claims were statute-barred.
12. Underpayments constitute a continuing injury (see The Germany School Society & Ar v Ohany & Ar (2023) KECA 894 (KLR)), and in terms of section 90 of the Employment Act, 2007 an action to recover such underpayments should be lodged with the Court within 12 months of cessation.
13. James Oloo Ochieng separated from the Respondent on or around 5 July 2021 through resignation.
14. Polycap Okoth Okeyo separated from the Respondent around November 2019, whilst Edwin Nyaata’s contract was terminated on 8 August 2019.
15. The Memorandum of Claim was filed in Court on 5 October 2022, more than 12 months after each of the Grievants had left the employment of the Respondent.
16. The claims for underpayments, being continuing injury were brought outside the prescribed period and the same are statute barred by virtue of section 90 of the Employment Act, 2007, and the Court so finds.
Breach of contract
Severance pay
17. The Union sought Kshs 24,817/- on account of severance pay for Edwin Nyaata. The pleadings asserted that the said Grievant’s contract was terminated unlawfully but did not plead termination on account of redundancy.
18. During oral testimony, no evidence was led on redundancy.
19. Under section 40 of the Employment Act, 2007, severance pay is due upon termination on account of redundancy. If there was a contractual basis for payment of severance pay, the same was not placed before the Court.
20. Since no evidence was led to support the claim for unfair redundancy, the Court finds that the relief for severance pay has no legal or contractual foundation.
Accrued leave
21. The Union claimed accrued annual leave on behalf of James Oloo Ochieng from March 2015 to August 2019.
22. This head of the claim was brought outside the 3 years outlined in section 90 of the Employment Act, 2007, and is caught by the limitation provision since separation was in July 2019.
23. Polycap Okoth Okeyo and Edwin Nyaata separated from the Respondent in November 2019 and August 2019 respectively.
24. Again, these heads of the claim for accrued leave were brought outside the period prescribed by section 90 of the Employment Act, 2007 and relief is not available.
Unfair labour practices
25. The Union also alleged that the Respondent kept the Grievants as casual employees beyond the period set by clause 7 of the collective bargaining agreement in place.
26. Clause 7 of the collective bargaining agreement makes provision for a probationary period of employment.
27. Section 2 of the Employment Act defines casual employee. A casual employee is one paid at the end of each day.
28. The Respondent placed before the Court copies of pay slips for James Oloo Ochieng. He was earning a monthly wage and therefore he was not a casual employee.
29. The Union did not place any evidence before the Court to support the contention that the other Grievants were paid at the end of each day.
30. The assertion that these Grievants’ employment contracts violated the law or the terms of the collective bargaining agreement was not proved.
Alternative dispute resolution and limitation
31. The actions asserted by the Union accrued from 2012 to November 2019. The Union reported a trade dispute to the Cabinet Secretary, Labour and the Conciliator issued a report on 17 February 2020.
32. The Cause was filed on 5 October 2022, more than 3 years after accrual of the cause of action.
33. The Court of Appeal addressed the question of limitation time vis-a-viz alternative dispute resolution processes in Rift Valley Railways (Kenya) Ltd v Hawkins Wagunza Musonye & Ar (2016) eKLR and held:
While there is no doubt …… the Employment and Industrial (sic) Relations Act encourages alternative dispute resolution, it must be court-based and conducted within the law. Time does not stop running merely because parties are engaged in an out of court negotiations. It was incumbent upon the respondents to bear in mind the provisions of Section 90 of the Employment Act even as they engaged in the negotiations. The claim went stale three years from the date of the termination of the respondents’ contracts of service.
34. The Union moved the Court outside the prescribed limitation period.
Conclusion and Orders
35. In light of the above, the Court finds the claims not only caught up by the law on limitation but without merit.
36. The Cause is dismissed with costs.