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ELRCPartially AllowedCause Number 117 of 2013· [2014] KEELRC 118 (KLR)

Thomas Sila Nzivo v Bamburi Cement Limited [2014] KEELRC 118 (KLR)

Industrial Court of Kenya
28 November 2014
JRJames Rika
5,750 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court upheld Bamburi Cement's dismissal of an employee for unaccounted fuel but ordered payment of unpaid salary and leave totalling Kshs. 354,923.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 1st February 2003 and summarily dismissed on 2nd November 2012 as a Production Assistant earning Kshs. 110,932 per month, challenged his dismissal on the basis that allegations of receiving 13,500 litres of unaccounted Industrial Diesel Oil and safety violations were unproven and the disciplinary process was a sham. The dispute, heard by Radido J but decided by Rika J after Radido J's transfer, sought declarations of nullity, compensation, reinstatement, bonus, leave pay, meal allowance, salary for days worked and CBA gratuity of Kshs. 2,773,300. The court held the Respondent had reasonable and sufficient grounds under Section 44(4)(g) of the Employment Act 2007 to summarily dismiss the Claimant, since a physical audit found the oil unavailable despite his production records showing receipt and consumption; conclusive proof of involvement was unnecessary. Procedurally the process fully complied with Section 41, including an appeal. The dismissal was therefore fair in substance and procedure; compensation, reinstatement and the declarations were refused. Bonus was refused as performance-based and excluded by the Bonus Plan for dismissed employees. Gratuity was refused because the Claimant left unionisable ranks in 2007, accepted transfer of his gratuity to the Pension Scheme, and double benefits are impermissible. However, the court applied Peterson Ndung'u v KP&L to hold that withholding salary during suspension as a disciplinary warning is unlawful, awarding the conceded annual leave, meal allowance and salary for days worked totalling Kshs. 354,923 payable within 30 days, with no orders on costs.

Key legal issues

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01

Whether the summary dismissal was substantively justified

Holding

Yes - the Respondent had reasonable and sufficient grounds under Section 44(4)(g) of the Employment Act to suspect the Claimant, whose daily production records could not be reconciled with the physical audit

Reasoning

The Claimant received 13,500 litres of IDO and generated the Daily Production Report showing receipt and consumption, yet a physical audit found no such fuel in stock. Under Section 44(4)(g), conclusive proof of the employee's involvement is not required; reasonable and sufficient grounds suffice. The audit, the discovery, and the Claimant's role in receiving the oil justified dismissal, alternatively under Section 44(4)(c).

p. 9
02

Whether the disciplinary procedure met the minimum statutory standards

Holding

Yes - the process fully conformed to Section 41 of the Employment Act

Reasoning

The Respondent investigated, communicated charges, allowed the Claimant to prepare and answer with a colleague present, heard him, allowed an appeal, and communicated a reasoned decision. The court rejected the criticism that the Committee acted as complainant, prosecutor and judge, holding that disciplinary proceedings at the workplace need only meet the minimum standards of Sections 41 and 45.

p. 9
03

Whether suspended employee could be denied salary and allowances

Holding

No - withholding salary during suspension is not a lawful disciplinary sanction

Reasoning

Section 18(4) of the Employment Act requires payment of all monies up to dismissal even on summary dismissal. Only limited statutory situations permit withholding wages. The Handbook clause treating suspension without pay as a warning has no foundation in the Act; upholding it would punish the employee twice over the same wrong.

p. 7
04

Whether the CBA gratuity claim was payable despite the Claimant not being a union member

Holding

No - while CBAs extend beyond union members to unionisable employees, the Claimant joined management in 2007, paid neither union dues nor agency fees, and accepted transfer of his gratuity to the Pension Scheme

Reasoning

The court accepted that CBAs cover all unionisable employees and privity does not bar their application, distinguishing the civil court decisions relied on by the Respondent. However, the Claimant's appointment letter showed he moved to Non-Union management in 2007, agreed to the transfer of gratuity to his Pension Scheme, and Section 35(6) does not contemplate multiple social security benefits. He therefore could not claim gratuity for the whole 10 years.

p. 8

Legal principles established

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  • Withholding the salary of a suspended employee as a disciplinary sanction is not permitted under the Employment Act; wages are protected even during suspension
  • Collective bargaining agreements apply to all unionisable employees at a workplace, not only union members; privity of contract is subject to exceptions in labour law
  • An employer need not have conclusive proof of misconduct; reasonable and sufficient grounds suffice for summary dismissal under Section 44(4)

Court orders

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  1. 1.Declaration that termination of the Claimant's contract of employment was fair both in substance and on procedure
  2. 2.The Respondent shall, within 30 days of delivery of the Award, pay the Claimant Kshs. 289,331 in annual leave pay; 12 days salary for October and November 2012 at Kshs. 65,112; and 2 days meal allowance at Kshs. 480 – total Kshs. 354,923
  3. 3.No orders on costs

Authorities

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Legislation

  • Employment Act 2007Sections 18(4), 18(6), 19, 35(6), 41, 44(1), 44(4), 44(4)(c), 44(4)(g), 45
  • Labour Relations Act 2007Sections 49(1), 49(5), 57(1), 80
  • Industrial Court ActSection 12(4)
  • Industrial Court (Procedure) Rules 2010Rules 27(1)(a), 28
  • Civil Procedure Act
  • Constitution of Kenyafreedom of association (referenced generally)

Cases cited (8)

  • Kibe v. Telkom Kenya Limited
    Cause Number 25A of 2013 [2014] e-KLR
  • Mwendwa v. Anidan [K]
    Industrial Court Cause Number 50 of 2012
  • KUDHEIHA v. Pwani University College
    Cause Number 105 of 2012
  • Loice Otieno v. KCB
    Cause Number 1050 of 2011
  • Peterson Ndung'u & 5 Others v. KP&L Company Limited
    Cause Number 1149 of 2011 [2014]
  • Van Leer East Africa Limited v. Mujidho
    Cause Number 86 of 2006
  • Kogo v. Kenya Flourspar Company Limited
    High Court Civil Appeal Number 104 of 2000
  • Transport & Allied Workers Union v. Societe Internationale De Telecommunications Aeronatique [SITA]
    Cause Number 109 of 2010 [2011] e-KLR
Jurisdiction invoked
Industrial Court Act, Section 12; Industrial Court (Procedure) Rules 2010, Rule 27(1)(a)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (9)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Thomas Sila Nzivo v Bamburi Cement Limited [2014] KEELRC 118 (KLR)", Case Analysis (2014). Cause Number 117 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/118/eng@2014-11-28

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.