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ELRCPartially AllowedBungoma HCC No. 97 of 2003· [2019] KEELRC 2475 (KLR)

Fredrick Simiyu Wanyonyi & 2 others v Nzoia Sugar Company Limited [2019] KEELRC 2475 (KLR)

Employment and Labour Relations Court of Kenya at Kisumu
24 January 2019
MNMathews N. Nduma
2,230 words in judgment
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The bottom line

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Nzoia Sugar must pay three former managers their terminal benefits, pensions and costs because it produced no evidence to defend the dismissals.

What this practically means

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Executive summary

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Three senior employees of Nzoia Sugar Company Limited - a company secretary, a human resources manager and a chief internal auditor - were summarily dismissed on 24th November 2003 for gross misconduct. They sued for terminal benefits totalling Kshs.1,707,624.60, an injunction restraining repossession of three staff motor vehicles, general damages for unlawful dismissal, general damages for alleged defamatory publications by the Respondent's Principal Officers, fuel and gas benefits, pension/gratuity, interest and costs. The suit, filed in 2003 at the High Court in Bungoma and transferred to the ELRC in 2017, took 17 years to reach hearing. The Defendant filed a defence and counterclaim for unpaid car loans but tendered no evidence, its defence being closed after it failed to produce any of its listed witnesses. The court crystallised three issues: entitlement to terminal benefits and pensions; the counterclaimed debts; and the defamation claim. The court found the dismissals unlawful and unprocedural and, applying the law as it stood in 2003 when the Employment Act Cap 226 provided no compensation for unlawful dismissal, commuted the summary dismissals to normal terminations. Judgment was entered for the Plaintiffs on their terminal benefit claims, pension at 100% surrender value for the 1st and 2nd Plaintiffs and gratuity for the 3rd Plaintiff per the Collective Bargaining Agreement, less the admitted car loan balances. The counterclaim succeeded only to the extent of the Plaintiffs' admissions. The defamation claims were dismissed for want of proof of damage, and the Defendant was ordered to pay the Plaintiffs' costs plus interest at court rates from filing until payment in full.

Key legal issues

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01

Whether the Plaintiffs were owed the terminal benefits, pension and gratuity claimed

Holding

Yes. The Plaintiffs proved on a balance of probabilities their entitlement to the terminal benefits pleaded, and the summary dismissals were commuted to normal terminations to support notice pay, pension, gratuity and arrear salary claims.

Reasoning

The Defendant did not rebut the Plaintiffs' sworn evidence and had no answer to the allegations that the dismissals breached the Human Resource Policy Manual and natural justice. The court noted the Plaintiffs' admissions of outstanding car loans and ordered them set off against the awards. Pension and gratuity computations were left to the Respondent's clearance within 30 days.

p. 3
02

Whether the Plaintiffs owe the monies counterclaimed by the Defendant

Holding

Only to the extent of the admissions made by each Claimant; the balance of the counterclaim failed for want of evidence.

Reasoning

The Defendant closed its defence without calling any witnesses after an adjournment was refused for lack of explanation why the second witness was absent. The counterclaim lacked particulars and no evidence supported any sums beyond the admitted car loan balances of Kshs.169,913 (as found), Kshs.325,000 and Kshs.368,000.

p. 3
03

Whether the Plaintiffs were defamed by the Respondent's Principal Officers

Holding

No. The defamation claim was dismissed.

Reasoning

The Plaintiffs bore the onus of proving publication, falsity, malice and actual damage on a balance of probabilities. No evidence was tendered to prove the manner and extent of damage suffered as a result of the alleged publications regarding the circumstances of the dismissals, so no damages could be awarded.

p. 3

Legal principles established

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  • As at 2003, the then Employment Act Cap 226 did not provide for general damages or compensation for unlawful dismissal; the remedy of the Industrial Court was commutation of summary dismissal to normal termination to enable payment in lieu of notice and terminal benefits
  • A summary dismissal effected without a valid reason and in disregard of the employer's disciplinary procedures is unlawful and unprocedural and will be commuted to a normal termination
  • A defendant who fails to rebut the plaintiff's evidence is held to the plaintiff's proved claims; unparticularised counterclaims fail save to the extent of the plaintiff's admissions

Court orders

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  1. 1.1st Plaintiff awarded Kshs.708,090.20 being terminal benefits set out in paragraph 7 of the amended plaint
  2. 2.1st Plaintiff awarded pension at 100% surrender value over 8 years, less Kshs.169,913 owed as car loan
  3. 3.2nd Plaintiff awarded Kshs.513,624 being terminal benefits set out in paragraph 7 of the amended plaint
  4. 4.2nd Plaintiff awarded pension at 100% surrender value over 6 years, less Kshs.325,000 owed as car loan
  5. 5.3rd Plaintiff awarded Kshs.485,910.40 being terminal benefits set out in paragraph 7 of the amended plaint
  6. 6.3rd Plaintiff awarded gratuity for the years 1984 to 1987 as per the Collective Bargaining Agreement, less Kshs.368,000 owed as car loan
  7. 7.Respondent to provide necessary clearance and/or computation of the pension and gratuity due and owing to the Plaintiffs within 30 days
  8. 8.Defendant to pay the costs of the suit
  9. 9.Interest on the awards calculated at court rates from date of filing suit till payment in full

Authorities

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Legislation

  • Employment Act, Cap 226 Laws of Kenyanot specified (statute in force at time of cause of action in 2003)
Jurisdiction invoked
Transfer of suit from the High Court (Bungoma HCC No. 97 of 2003) to the Employment and Labour Relations Court by Justice Ali-Aroni on 6th June 2017

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Fredrick Simiyu Wanyonyi & 2 others v Nzoia Sugar Company Limited [2019] KEELRC 2475 (KLR)", Case Analysis (2019). Bungoma HCC No. 97 of 2003. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2475/eng@2019-01-24

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