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JudgmentKenya Wood Products Limited VS Varish Mehmud Sheikh18 min read

Kenya Wood Products Limited VS Varish Mehmud Sheikh

Employment and Labour Relations Court at Nairobi Employment and Labour Relations Court (ELRC) · · J. N. Abuodha

Summary

The Appellant appealed against the Principal Magistrate's judgment finding the Claimant unfairly terminated by Kenya Wood Products Limited. The appeal challenged the magistrate's findings that the Claimant was terminated, his salary was KES 70,000, and that irrelevant evidence was considered. The court upheld the appeal, setting aside the judgment and dismissing the Respondent's claim due to the Claimant's continued employment and salary payments until July 2021, contradicting the termination finding.


  1. Through the Memorandum of Appeal dated 17th April,2022, the Appellant appeals against the Judgment of Honourable H. M. Ng’ang’a, Principal Magistrate(PM) delivered in Nairobi on 23rd March, 2023) in Nairobi Milimani Law Courts ,Chief Magistrate’s Employment and Labour Relations Court, Cause No. E265 of 2022-VARISH MEHMUD SHEIKH (CLAIMANT) Vs KENYA WOOD PRODUCTS LIMITED (RESPONDENT).
  2. The Appeal was based on the grounds that:
    1. The Learned Magistrate erred in law and fact when he made a finding that the Claimant was unfairly terminated, against records / material evidence tendered by the Respondent showing that the Claimant was not terminated by the Respondent.
    2. The Learned Magistrate erred in law and fact by making a finding that the Claimant’s Salary was KES 70,000/=, a finding which is not supported by evidence as the Claimant Salary was KES 40,000/= before statutory deductions.
    3. The Learned Magistrate erred in law and fact to consider or / and determine irrelevant information and documents in favour of the Respondent and to find that a document from Respondent’s previous employer can determine salary payable or earned by the Respondent.
    4. The Learned Magistrate erred in law and fact when he failed to consider Respondent’s pleading pointing out a possible admission that he is not aware of the exact date when he was allegedly terminated from employment.
    5. The Learned Magistrate erred in law and fact when he failed to find that the Respondent received salaries for the months of August and Sep 2021 as evidenced by pay-slips tendered before Court, and yet he alleges to have been terminated from employment on unknown date of July 2021, as it is not possible for a terminated employee to continue drawing salaries from the employer.
    6. The Learned Magistrate erred in law and fact by failing to consider Appellant’s unchallenged or / and uncontroverted evidence presented before the trial Court, Pleadings and able submissions made thereto.
    7. The Learned Magistrate erred in law and fact by considering some of the evidence that were not tendered by parties, thereby arriving at a wrong and erroneously conclusion.
    8. The Learned Magistrate erred in law and fact by allowing the Respondent’s Memorandum of Claim dated 9th February 2023, against the compelling documentary evidence that indeed the Claimant was never and has never been terminated from employment in any way.
  3. The Appellant prayed that the appeal be allowed with costs and Judgment of 23rd March, 2023 be set aside and be substituted with order dismissing the Respondent’s Memorandum of Claim dated 9th February 2022, any other Reliefs or Order that the Honourable Court may deem fit to grant for ends of justice to materialize and costs of the appeal to be borne by the Respondent.
  4. The Respondent filed a replying affidavit sworn on 22nd November, 2023 which its contents are technically in his submission hence the Appeal was disposed of by written submissions.

APPELLANT’S SUBMISSIONS

  1. The Claimant filed written submissions dated 29th December, 2023.On the issue of whether in determining the Respondent suit, the trial learned magistrate made a proper and valid finding of whether the Respondent was terminated dismissed from employment by the Appellant, the Appellant submitted that the evidence tendered and admissions made by the Respondent points out an employee who was not terminated ,but decided by own volition to stay away from employment and demanded compensation for the alleged termination.
  2. It was the Appellant’s submission that the Respondent was still reporting to work until the month of July 2021 as per the attendance register/ gate entrance record and continued to receive salaries from the Appellant for the months of July, August and September.
  3. The Appellant relied on the case of Wangereka v Rupra (Cause 2473 of 2017)[2023]KEELRC 625 (KLR) (16 March 20230(Judgement) while submitting that the Claimant absconded duty as opposed to the Respondent terminating his contract because the Claimant was unable to indicate the precise date and month that his employment was terminated.
  4. It was the Appellant’s submission that it never terminated the employment contract of the Respondent on July 2021 and / or any other day after July 2021, as the Respondent continued to receive his full monthly salary for the months of July, August and September 2021 and that the Respondent was a senior citizen who is not eligible / available for termination in any way or at all.
  5. The Appellant submitted that it neither caused the termination against the Respondent nor by implication terminated the Respondent.
  6. On the issue of whether in determining the Respondent suit, the trial Court made a proper and valid finding of what was the Respondent’s remuneration / monthly salary the Appellant submitted that the Respondent’s monthly grossly salary was Kshs. 40,000/= as admitted by the Respondent and as per the bank statements tendered by the Respondent himself.
  7. It was the Appellant’s submission that the Prima facie evidence of an employee’s monthly salary is a pay-statement / a pay-slip. The Appellant relied on the case of Matsesho v Newton (Cause 9 of 2019) [2022] KEELRC 1554 (KLR) (29 July 2022) (Judgment) while submitting that section 112 of the Evidence Act, the employer being the ultimate custodian of records of payments of staff emoluments should be able to provide evidence to establish payment of any emolument to an employee in the event of a dispute.
  8. The Appellant submitted that the Respondent was employed in May 1999 and the contract dated 19/9/1997 containing a salary of Kshs. 60,000/=, did not exist between the Appellant and the Respondent but between the Respondent and his former Employer (Silent (K) Limited) thus the reasoning by the learned trial magistrate to the extent that the monthly salary of the Respondent was Kshs. 70,000/= was erroneous.
  9. On the issue of whether in determining the suit, the trial court considered evidence, pleadings, witness statements, submissions by parties and law, the Appellant submitted that the learned trial magistrate erred by not detecting the attempt by the Respondent to mislead the Court vide tendering contradicting / misleading information regarding his monthly salary, and by calling a witness who was not in the Appellant’s employment by the time the Respondent was granted employment in May 1999.
  10. The Appellant further submitted that even if the trial learned magistrate made the disputed finding that the Respondent was unfairly terminated, then the reliefs / remedies granted for notice pay were not merited because the Respondent confirmed having left employment on July 2021, and received salaries for the months of July, August and September 2021 and it should be Kshs. 40,000/= and not Kshs. 70,000/=.
  11. The Appellant further submitted that the trial magistrate erred both in law and fact in awarding the Respondent Kshs. 840,000/=, as maximum compensation yet the respondent was not terminated by the appellant. Further the trial Court did not justify or give reasons for the award of 12 months and further considering the fact that the Respondent used to work for 2 to 3 hour per day and from Monday to Friday.
  12. The Appellant submitted while relying on among others the Court of Appeal case of Kenya Broadcasting Corporation v Geoffrey Wakio [2019] eKLR that the Court’s discretion must be applied judiciously and not capriciously in awarding of damages. Counsel further relied on the case of Jephtar & Sons Construction & Engineering Works Ltd vs. The Attorney General HCT-00-CV-CS-0699- 2006 in submitting that the guiding principles for the remedies under section 49 is that they are awarded to compensate the claimant, not as punishment to the employer. In Concluding this issue the Appellant submitted that the trial magistrate’s judgment delivered on 23/3/2023 was erroneous both in fact and law, and reliefs / remedies awarded were not merited well founded in law and fact.

  1. On the issue of whether this Court should grant reliefs sought by the Appellants and disturb the trial Court’s Judgment entered on 23/3/2023, it was the Appellant’s submission that the Appellant’s Record and Memorandum of Appeal dated 23/3/2023 was merited, and the same be allowed, and orders sought, ought to be allowed accordingly.

RESPONDENTS SUBMISSIONS

  1. The Respondent filed his submissions dated 11th December, 2023 and on the issue of whether the Memorandum of Appeal and Record of Appeal both dated 17th April 2023 were duly filed submitted the Appellant did not extract an Order from the judgment being sought to be appealed in this case dated 17th April 2023 and even if it did do, it did not annexed it to the application.
  2. The Respondent therefore submitted that the same were incurably defective and should be struck out from record as the Appellant’s Advocate were purporting to seek orders in favour of the Appellant which it has not annexed an Order from the judgment being sought to be appealed in this case.
  3. On the issue of whether he was unfairly terminated,
  4. Respondent submitted that he was neither issued with any termination notice nor given a hearing contrary to Section 41(1) of the Employment Act 2007.
  5. Further the Respondent submitted that he was not issued with a written or employment contract similar to other employees as evidenced by PW2 Mr. Geoffrey Gitau in the examination-in-chief.
  6. The Respondent submitted that he was instructed by the Appellant to stay at home because the Appellant did not have orders from customers and that production was going down after the owner died. He was advised that he would be told when to resume work.
  7. It was the Respondents submissions that DW1 Francis Wanzina Mukiti testified under oath during examination-in-chief that there was shortage of timber materials and there was no work at the Appellant’s place and staff were told to stay home and they were being paid. That DW1testified under oath during cross-examination that the Appellant wrote a circular and posted it on the gate that if there were no orders, staff including managerial staff would stay at home since the Appellant’s company relied on orders. That if there were no orders and staff stayed at home they were considered to be Appellant’s employees.
  8. The Respondent submitted that he was kept in the darkness on when to resume work despite several enquiries. That if he was to be declared redundant, the correct procedure under the Employment Act 2007 ought to have been followed before he was asked by the Appellant to stay at home.
  9. It was his submissions that the Appellant’s argument that he deserted does not hold water on the premise that the Appellant should have caused a Notice to Show Cause letter to be issued to him. That he was not issued with termination notice or a hearing before termination. The Respondent relied on the cases of Naomi Wangui Kung’u Board of Governors S.C.L.P Samaj School [2022] eKLR and Kenya Union of Commercial Food and Allied Workers –Versus- Meru North Farmers Sacco Limited [2014] eKLR on this assertion on observance of section 41 by an employer before terminating an employee as a mandatory requirement.
  10. It was his submissions that he was dismissed without being accorded any hearing in the company of a fellow employee contrary to the above Section 41 (1). He was also not served with any notice before the dismissal and he had not received any previous warning or show cause letter. That this fact was not denied by the Appellant’s witnesses.
  11. The Respondent further submitted that the Honourable Principal Magistrate rightly upheld that there was an implied constructive dismissal premised on the fact that he was told by the Appellant to stay at home and he was not issued with any communication to return to work.
  12. The Respondent relied on section 43 of the Employment Act on the validity and fairness of reasons for termination by the employer. He submitted that the Appellant did not offer a valid reason or reasons to justify the unfair termination of the Respondent’s employment. The only reason given by the Appellant in its Response to the Claimant’s Memorandum of Claim was that the Respondent absented himself from work without any known permission from the Appellant.
  13. The Respondent submitted that DW1 testified under oath on cross-examination and confirmed to the trial Court that instructions from the Appellant were to inform him that due to lack of sales, he should stay at home until recalled to report duty. That during the COVID-19 pandemic, employees above the age of 58 years were required by the Ministry of Health directive on Covid-19 protocol to work from home and that his age at the material time was above 58 years old.
  14. It was his submission that he used to report to work Monday to Friday from 8:00 a.m to 12:00 p.m. due to the nature of his work as a senior employee as confirmed at paragraph 5 of the Respondent’s Response to Memorandum of Claim. That DW1 further testified under oath on cross-examination that he did not desert from work and that he, like other employees, was considered to be as employees of the Appellant working from home.
  15. The Respondent submitted that it was clear that at heart of the unfair termination was a redundancy process. The Appellant opted to divert focus from redundancy, arguing that termination was based on the alleged desertion on the part of himself. He submitted that he was a humble worker and he had never disobeyed any orders or instructions given to him by the Appellant. That in the course of his employment he exhibited hard work and served the Appellant diligently and honesty with a great long-standing record that has been acknowledged by the then Director of the Appellant K.S. Desai who confirmed in her letter dated 15th February 2017 to the American Embassy that he was holding the position of Workshop & Production Manager stating that: “He has been with us for over 15 years and has a great long- standing record with the Company” That this fact was corroborated by DW1 during hearing.
  16. The Respondent further relied on section 44(2) of the Employment Act which prohibits dismissal of an employee without notice or with less notice. He also relied on Section 45(2) of the Employment Act that require employer to prove that the reasons for termination were valid and fair reasons. He relied on the case of Jared Aimba –Versus- Fina Bank Limited [2016] eKLR, in that regard.
  17. Further the Respondent submitted that the Appellant infringed his right to Fair Administrative Action as protected under Article 47 (1) of the Constitution of Kenya,2010 as well as Section 47(5) of the Employment Act which puts on the employer the burden of proving the reason for termination in a claim arising out of the termination of employment.
  18. The Respondent submitted that he was unlawfully terminated from employment under provisions of the Employment Act, 2007 and that the termination was by no means lawful, reasonable or procedurally fair.
  19. On the issue of whether the learned magistrate erred in law and fact by making a finding that the Claimant’s salary was kes:70,000/- a finding which is not supported by evidence as the Claimant’s salary was Kshs. 40,000/- before statutory deductions, the Respondent submitted that he was aged 77 years and was an employee of the Respondent from May 1999 to July 2021 where he worked on long contract of employment spanning for over 22 years in various positions until the Appellant unlawfully terminated his employment in July 2021 when he was holding the position of a Workshop and Production Manager earning a salary of Ksh.70,000 per month.
  20. The Respondent submitted that he was not issued with pay slips by the Appellant. This was the case with other employees who worked with the Appellant as confirmed by CW1 on examination-in-chief that he was neither given an employment contract nor pay slips for his salary. That the pay slips filed by the Appellant in its Further List of Documents dated 10th August 2022 were prepared by the Appellant as an afterthought after he filed his claim and that the pay slips filed by the Appellant were for the period only from October 2020 to August 2021 whereas he worked at the Appellant’s place for more than 22 years.
  21. The Respondent submitted that the Appellant paid him a gross salary of Ksh.40,000/= through the latter’s Prime Bank account no. 2000038119 and Ksh.30,000/= in cash in a way to evade payment of tax dues. That he held the position of workshop/production manager and prior to that he worked as an Operations Manager in his previous employment with Silentnight (Kenya) Ltd in 1997 with a starting salary of Ksh.60,000/=
  22. Further the Respondent submitted that if he was earning a starting salary of Ksh.60,000/= in his previous employment in 1997, then how comes he will be earning Ksh.40,000 in 2021?
  23. The Respondent therefore submitted that the Honourable Principal Magistrate took judicial notice and rightly held that if the Respondent’s first salary was Kshs. 40,000 in 1997 therefore it is not possible that at the time of termination of his employment in 2021, the Respondent was earning Kshs. 40,000 and that there was no evidence to prove that the his salary had been reduced over years.
  24. In concluding, the Respondent submitted that the Appellant in the course of its actions breached the due process of terminating his employment which was contrary to Sections 41 (1), 43 (1), 44(2) and 45 (2) of the Employment Act, 2007. That the Memorandum of Appeal and Record of Appeal both dated 17th April 2023 does not raise triable issues with no chance of success. That the same was an abuse of the court process calculated to circumvent the judgment delivered by the Honourable H. M. Ng’ang’a (Principal Magistrate) on 23rd March 2023 and deny him his rightful terminal dues and therefore pray that the same be dismissed with costs.

DETERMINATION

  1. The duty of a first appellate court was well stated in the Court of Appeal in Selle vs Associated Motor Boat Company Limited [1968] E.A 123 thus:

“An appeal to this court from a trial by the High Court is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities……..or if the impression based on the demeanour of a witness is inconsistent with the evidence in the case generally.”

  1. In determining the Appeal herein, this Court shall similarly seek to re-analyze the evidence tendered before the Trial Court against the court’s conclusion and disposition.
  2. In this case, the judgment of trial court was a declaration that the termination of the Claimant’s employment was unfair and the dues payable were as follows;
      1. One Month Salary in lieu of notice…………..Kshs 70,000/=
      2. Compensation for unfair termination (12 months) ………Kshs 840,000/=

Total _Kshs 910,000/=

  1. The undisputed facts were that the Respondent was employed by the Appellant as from 1999 until around July 2021 17th May, 2021 when he was terminated by the Appellant which was a period of 22 years.
  2. From the grounds in the memorandum of Appeal and pleadings of the parties two major issues arise for determination.
  3. The Issues for determination are:-
      1. Whether the Respondent’s employment was unfairly terminated.
      2. Whether the Respondent was entitled to reliefs awarded.Aa. aa.

Whether the Respondent’s employment was unfairly terminated

  1. The Appellant alleged that on the month of August, 2021 the Respondent absconded his duties never to return. That the Appellant never terminated the services of the Respondent who was a senior employee.
  2. It is now a well-established requirement that for termination to pass the fairness test there should be both substantive and procedural fairness. On the issue substantive fairness the Appellant submitted that the Respondent absconded duty and he continued receiving salaries for July, August and September, 2021. The Court notes that the Appellant’s witness confirmed that the employees who were working from home were considered the Appellant’s employees and that the Respondent was told to stay at home until recalled as there were no orders. I agree with the trial court that the Appellant did not have a substantive reason for terminating the Respondent’s service. The Respondent who had served the Appellant for over 22 years did not just start absconding duties overnight, as he confirmed never receiving any warning nor disobeying any orders from his employer.
  3. I also agree with the trial court’s finding that there was no evidence of efforts to contact the respondent. No show cause letter or disciplinary proceedings if at all against the respondent if he absconded duty. In the case of Joseph Nzioka v Smart Coatings Limited [2017] eKLR Nduma J. observed that;

“Dismissal on account of absconding must be preceded by evidence showing that reasonable attempt was made to contact the employee concerned and that a show cause letter was issued to such employee calling upon such employee to show cause why his services should not be terminated on account of absconding duties.”

  1. It is noteworthy that the reason for termination must be a valid and fair one as provided for under section 43 of the Employment Act. The duty to prove the grounds lies with the employer under section 47(5) and that even if the same allegations of absconding duties falls under categories of gross misconduct under section 44(4) of the Employment Act the Appellant ought to prove this reason and that it really existed in the first place before the termination was carried out.
  2. This brings us to the other issue of unfair termination on the procedure followed. The Appellant admitted there was no show cause letter given to the Respondent, the Respondent did not make any representation on the said accusations, the Respondent was never called for any disciplinary hearing. This therefore means that the Respondent was condemned unheard. The Court agrees with the lower court’s finding on this. Section 41 of the Employment Act is couched in a mandatory terms and should be followed. This was the holding in Kenya Union of Commercial Food & Allied Workers vs Meru North Farmers Sacco Ltd(2014) eKLR that such termination would be unfair where section 41 of the Employment Act is not followed.

Whether the Respondent was entitled to reliefs awarded.

  1. I note that the trial court proceeded on erroneous award of notice pay yet the Respondent was constructively terminated on July,2021 but he got his salaries for the months of July, August and September 2021. This ground of appeal therefore succeeds.
  2. On the issue of salary payable whether it was Kshs 70,000/= per month or Kshs 40,000/= per month I note that the trial court considered a contract of 1997 between the Respondent and another employer and noted that an employee could not work for 22 years without any salary increment. This would be unfair labour practices more so where the Appellant never issued the Respondent with employment contract or payslips for the years worked. The Court will therefore concur with the trial Court and believe the Respondent that his salary was Kshs 70,000/= where Kshs 40,000/= was paid to his bank and Kshs 30,000/= in cash for whatever reasons the Appellant had.
  3. On the 12 months compensation for unlawful termination awarded by the trial court, this Court will interfere with this award which is discretionary and ought to be made in special circumstances upon justification. In the case of Kenya Revenue Authority & 2 others v Darasa Investments Limited (2018) eKLR the court held;

The court ought not to interfere with the exercise of discretion unless it is satisfied that the Judge misdirected himself in some matter and as a result arrived at a wrong decision, or that it be manifest from the case as a whole that the judge was clearly wrong in the exercise of discretion and occasioned injustice.

  1. Section 49 of the Employment Act provides for the circumstances to be taken in to account under sub section 4 in assessing the appropriate compensation. The trial court did not justify this award. The Court ought to have considered that the Appellant was going through financial challenges and Covid-19 that compelled it to ask employees to stay or work from home and would be called when there are orders. The appellant continued to pay salaries despite these constraints. The Court is however alive to the fact that the respondent had worked for the appellant for a long period of time this however did not justify maximum compensation. In the circumstance the Court will reduce the award to 10 months’ salary as compensation for unfair termination. This ground of appeal succeeds to that extent.
      1. In conclusion the Court the Appeal partially succeeds as follows:

      1. Compensation for unfair termination –Kshs 840,000/=
      2. One month salary in lieu of notice _Kshs NIL

Total _Kshs 700,000/=

      1. The appeal being partially successful, each party shall bear their

own costs.

  1. It is so ordered.

Dated this …………………………of April, 2024

Delivered this ……………………….. day of April, 2024

Abuodha Nelson Jorum

Judge

    Kenya Wood Products Limited VS Varish Mehmud Sheikh Kenya Wood Products Limited VS Varish Mehmud Sheikh