Fredrick Ouma Otieno v Falcon Signs Limited

a) A declaration that the Claimant’s dismissal from employment was wrong, unfair and unlawful. b) A declaration that the Claimant is entitled to payment of his terminal dues and compensatory damages as pleaded. c) An order for the Respondent to pay the Claimant his due terminal benefits and compensatory damages totaling to Kshs. 219,296.00. d) Interest in (c) above from the date of filing suit till payment thereof. e) Cost of this suit f) The Respondent to pay the Claimant’s costs with interest. 2. The Respondent filed a response and counter claim dated 9 th October 2024 denying that it dismissed the Claimant and averred that the Claimant left employment in October 2013 without prior notice. It further averred that it remitted NSSF contributions for the Claimant and never denied him leave. RULING ELRC CAUSE NO. 1049 OF 2016 2

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Counter claimed against the Claimant the sum of Kshs. 29,405.00 being one-month salary in lieu of notice. 3. The Claimant filed reply to response and counter claim dated 30th October 2014 denying the alleged desertion and reiterated that the Respondent terminated his employment without following due process. Therefore, he prayed for the counter claim to be struck off and judgment be entered as prayed in his Memorandum of Claim. Evidence 4. The Claimant testified as CW1 and adopted his statement dated 17th March 2016 to his evidence in chief. He further produced 3 documents as exhibits. 5. In brief, his evidence was that he was employed by the Respondent in September 2011 as a carpenter and worked until September 2013 when his services were terminated by the Respondent’s Director. He stated that on 30 th September 2013 at 3 p.m. Ms. Heena Magdani, Respondent’s Director, told him that she was reducing workers and therefore his RULING ELRC CAUSE NO. 1049 OF 2016 3

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services were no longer required. As at that time his monthly salary was Kshs. 14,240.00. 6. He contended that no prior notice was served by the Respondent and no salary in lieu of notice was served on him. He denied the counter claim and maintained that he never left his employment without notice. He further stated that the Respondent continued to hire new employees after terminating his service. 7. He further testified that he never went for any annual leave and prayed for the same. Therefore, he prayed for the reliefs set out in the Memorandum of Claim. 8. On cross-examination he admitted that he was deducted PAYE, NSSF and NHIF from his salary. He contended that every employee has a right to annual leave but he failed to produce copy of his leave application. He further stated that he applied orally and the response was that no one was going for annual leave in the company. He reiterated that Ms. Heena terminated his services on 30 th September 2013 at 3 p.m. without according him any hearing. RULING ELRC CAUSE NO. 1049 OF 2016 4

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9. He stated that he was never aware of any employment policy for the Respondent and he never lodged any complaint under the alleged policy. He contended that the Respondent never called him after the termination. 10. The Respondent called Ms. Heena Magdani, its Finance Director, who testified as RW1. She adopted her statement dated 9th October 2024 as her testimony and produced 3 documents as exhibits. 11. In brief, RW1 denied ever terminating the Claimant’s employment and testified that the Respondent’s policy does not allow verbal termination. She further stated that the Claimant disappeared one day without notice. Efforts to follow him up via phone were in vain since he blocked their number. She contended that the company never gave the Claimant any termination letter. 12. On cross-examination she confirmed that she had not filed any evidence the phone calls or text messages used to contact the Claimant. She contended that she discarded the phone. RULING ELRC CAUSE NO. 1049 OF 2016 5

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13. She stated that the employment contract provided that it mis-corporated the Respondent’s Human Resource policy but the employee was not required to sign the Human Resource Policy. She contended that the employees are given the Human Resource Policy in a template to read before signing the contract. Finally, she stated that leave is applied by filing a leave form but the Claimant never filled any leave application form. Submission and issues for determination 14. After the close of the hearing, both sides filed written submissions. Having considered the submissions, pleadings and evidence, there is no doubt that the Respondent employed the Claimant from September 2011 to 30 th September 2013. The issues for determination are: (a) Whether the Claimant voluntarily left employment or he was laid off. (b) If the answer is lay off, whether the same was unfair and unlawful. RULING ELRC CAUSE NO. 1049 OF 2016 6

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(c) (d) Whether the Claimant deserves the reliefs sought. Whether the counter claim should be allowed. Desertion and lay off 15. RW1 contended that the Claimant deserted employment and the effort to reach him over the phone was in vain as the Claimant blocked her number. The Claimant denied that allegation and averred that she was fired by RW1 on 30th September 2013 at 3 p.m. when she told her that the company was downsizing its staff. 16. RW1 did not produce any electronic evidence to prove that she made any effort to contact the Claimant after the alleged disappearance. She did not state the date when the Claimant disappeared to rebut the Claimant’s evidence that his last working day was 30th September 2013. 17. On the other hand I find the Claimant’s evidence more believable that his last working day was 30 th September 2013 and that he met the Finance Director (RW1) who terminated his employment with immediate effect. I say so because the RULING ELRC CAUSE NO. 1049 OF 2016 7

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Claimant produced a payslip for September 2013 showing payment of his salary plus service pay of Kshs. 17,835.00. 18. The payment for service pay denotes that the Claimant exited the company service in September 2013 the same time the Claimant alleges that he was fired on account of redundancy. Consequently, I dismiss the case of the allegedly desertion and reiterate that the Claimant was laid off on 30 th September 2013. In the circumstance, I dismiss the Respondent’s counter claim. Unlawful termination 19. In view of the foregoing conclusion, the burden shifts to the Respondent to prove that he had a valid reason for terminating the Claimant’s employment and that due process was followed. However, it is clear from the record that RW1 never made any effort to discharge the said burden of proof and merely accused the Claimant on desertion which never was. 20. Section 45(2) of the Employment Act provides that: RULING ELRC CAUSE NO. 1049 OF 2016 8

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(2)A termination an employer is unfair of employment by if the employer fails to prove— (a)that the reason for the termination is valid; (b)that the reason for the termination is a fair reason—(i)related capacity or to the employees conduct, compatibility; or(ii)based on the operational requirements of the employer; and (c)that the employment was terminated in accordance with fair procedure. 21. The reason cited for the termination was redundancy and therefore the Respondent was bound to follow the mandatory procedure laid in section 40(1) of the Act. The section provides that: “(1)An employer shall not terminate a contract of service on account the employer complies of redundancy unless with the following conditions— RULING ELRC CAUSE NO. 1049 OF 2016 9

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(a)where the employee is a member of a trade union, the employer notifies the union to which the employee is officer in a charge member of the and the labour area where the employee is employed of the reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy; (b)where an employee is not a member of a trade union, the employer notifies the employee personally in writing the selection and the labour officer; (c)the employer has, in of employees to be declared redundant had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy; (d)where there is agreement between RULING ELRC CAUSE NO. 1049 OF 2016 in existence a collective an employer and a trade 10

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union setting out terminal benefits payable upon redundancy; the employer has not placed the employee at a disadvantage for being or not being a member of the trade union; (e)the employer has where leave is due to an employee who is declared redundant, paid off the leave in cash; (f)the employer has paid an employee declared redundant not less than one month's notice or one month's wages in lieu of notice; and (g)the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days’ pay for each completed year of service.” 22. The Respondent never followed the above procedure nor did it rebut the evidence that it continued to employ new staff after severing the Claimant’s employment. Consequently, I find and hold that the reason for the redundancy was not valid and the procedure followed was not fair and termination RULING ELRC CAUSE NO. 1049 OF 2016 11

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was rendered unfair and unlawful within the meaning of section 45 of the Act. Reliefs 23. In view of the foregoing conclusion, the Claimant is entitled to declaration that the termination of his employment was unfair and unlawful. For the same reason, he is entitled to relief under section 49(1) of the Employment Act being salary in lieu of notice and compensation for unfair termination. I award him Kshs. 14,240.00 being one-month salary in lieu of notice. 24. As regards compensation, I award him two months gross salary being Kshs. 28,480.00 considering his short service of two years and also the fact that he did not cause the termination through mis-conduct. 25. I also award him the claim for leave for the two years served being Kshs. 14,240 x 21/30 2 = Kshs. 19,936.00 Conclusion RULING ELRC CAUSE NO. 1049 OF 2016 12

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26. I have dismissed the counter claim and found merits in the Claimant’s case of unfair and unlawful termination. Consequently, I enter judgement for the Claimant against the Respondent as follows: (a) Declaration that his employment was unfairly and unlawfully terminate by the Respondent. (b) Award the following: (i) Notice Kshs. 14,240.00 (ii) Compensation Kshs. 28,480.00 (iii) Leave Kshs. 19,936.00 Kshs. 62,656.00 (c) Costs and interests at court rates from the date hereof. (d) The award is subject to statutory deductions. DATED, SIGNED AND DELIVERED VIRTUALLY IN OPEN COURT AT NAIROBI THIS 29TH DAY OF SEPTEMBER, 2026. ONESMUS MAKAU RULING ELRC CAUSE NO. 1049 OF 2016 13

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JUDGE Kamau for Claimant Nyamwaro for Respondent RULING ELRC CAUSE NO. 1049 OF 2016 14

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