Instustrial Court 3

8/7/2019 Instustrial Court 3

1/15

REPUBLIC OF KENYAIN THE INDUSTRIAL COURT OF KENY A

AWARD IN

CAUSE NO. 40(N) OF 2009

KENYA UN ION OF COMM ERCIAL FOOD AND ALLIEDW OR KER SVERSUS

KAPA O IL REFINERIES

DELIVERED BY:-

HON. MR . JUSTICE ISAAC E.K. MUKUNYAJUDGEMEMBERS:Nashon N. UdotoMoses H. Alumande


2/15

REPUBLIC OF KENYAIN THE INDUSTRIAL COURT OF KENYA

CAUSE NO. 40 OF 2009

KENYA UNION OF COMMERCIAL FOODAND ALLIED W ORKERSLAIMANT

VERSUS

KAPA OIL REFINERIES LIMITEDESPONDENTISSUE IN DISPUTE:- Non-payment of dues of formerWasi and Neema Employees

Kenya Union of Commercial Food and AlliedWorkers Union represented by Mr. Charles Egesashall hereinafter be referred to as "the Claimant", and

1


3/15

M/s Kapa Oil Refineries Limited represented by MrsM. Onyango shall hereinafter be referred to as "theRespondent".

The parties were heard in Court at Nairobi on the28 th October 2009. They relied on their writtenmemoranda, the appendices annexedhereto, theClaimantalledw oitnessesndheirrepresentatives made oral submissions in support oftheir respective cases.

AWARD

This dispute was referred to the court by theClaimant filing a memorandum of claim on 2 nd April2009. It is averred in the memorandum that duringthe month of February 2007 the Respondent Company

2


4/15

contracted M/s Neema Packers Enterprises to providepackaging Services to the Respondent Company. Thaton 30t h April 2007, the said Neema PackersEnterprises disappeared with the wages of theemployees hired by the contractor in the packaging. Itis also averred that the Respondent Company alsocontracted M/s Wasi Enterprises to provide similarservices and that this sub-contractor also failed to paythe employees who were hired to provide the packagingservices. It is further averred that when the two sub-contractors failed to pay the terminal dues, the 200former employees of Wasi Enterprises and NeemaPackers Ltd contacted the Claimant. The ClaimantUnion consulted the Respondent who agreed to paythe dues to the employees. It is averred that when theRespondent refused to pay as agreed, the Claimantreported a dispute to the Minister who in turn

3


5/15

appointed an investigator.he report of theinvestigator had a finding that the Respondent hadagreed to take over the liabilities of the two sub-contractors and recommended that the Respondentpay to the 200 former employees of Neema and Wasitheir terminal dues. The Respondent failed to honourthe recommendation of the Minister, and the Claimantreferred the dispute to this Court for arbitration anddetermination.

The Claimant is praying the Court to award the200 former employees of Wasi and Neema theirterminal dues as well as maximum compensation forwrongful termination.

The Respondent in a Memorandum of Reply dated1 st September 2009 has opposed the claim and prayed

4


6/15

the court to dismiss the claim with costs. It is averredin the Reply memorandum that there was no contractof employment between the Respondent and theformer employees of both Wasi and Neema and thattherefore the Respondent is not obliged to pay themthe dues demanded. It is averred that the Respondenthad sub-contracted both Wasi and Neema companiesa packaging contract. The Respondent contends thatthe sub-contracted companies had to hire their ownemployees and that the said companies were to meetall obligations of their employees as required by thelabour laws and for other statutory payments such asNSSF, NHIF and PAYE. The Respondent denies havingtaken over payment of terminal dues of the 200 formeremployees of both Neema and Wasi Companies asalleged and contends that it only agreed to meet and

5


7/15

Claimant called two witnesses. Jonathan Kiio testifiedthat he used to work for the Respondent M/s Kapa OilRefineries in the Detergent Department. He statedthat both Wasi and Neema Companies were meresupervisors and that he was an employee of theRespondent and that he used to be paid a salary of shs6200/- per month but at a daily rate of shs 258/-. Healso said that the workers were being paid on weeklybasis.e identified an agreement between theRespondent and Claimant where the employer agreedto pay terminal dues to the workers of Wasi andNeema.t is dated 30th April 2007. It is annexed asAppendix III of the Memorandum of Claim. It was hisevidence that the Respondent agreed to take over theobligations of Wasi and Neema and should pay themterminal dues. He agreed during cross examinationthat although he was employed by the Respondent, his

7


8/15

working identification card had been issued by Wasi.He also said that he used to be paid shs 255/- perdays by Wasi and by Neema. He said he was claimingservice pay for the period worked. Dominic SinangeMeca also testified that he used to work for KAPA OilRefineries. He stated that he used to be paid by theRespondent (KAPA) through Wasi. He stated thatanother Company known as Neema took over andused to pay them as a supervisor.n crossexamination, he agreed that he was never issued witha letter of appointment by the Respondent but wasissued with an identification card by Wasi. He saidwas claiming service pay for years worked.

The representative of the Respondent made anoral submission. She repeated and reiterated thecontents of the Memorandum of Reply.he also

8


9/15

relied on the appendices annexed thereto especiallythe agreement between the Respondent and the twocompanies to provide packing services. A sample ofthe agreement effective 15 th October 2001 betweenWasi Investment Ltd and the Respondent. It wasannexed as Appendix 1 of the Memorandum of Reply.Clause 5 entitled Legal Requirements provided that"The packing contractor shall abide and conform to alllabour laws of Kenya." There was a similar agreementbetween the Respondent and Neema PackersEnterprises Ltd dated 10th February 2007. Clause 4also titled legal Requirements provided that thecontracted company shall abide with all labour laws.The agreement was annexed to the Memorandum ofReply as Appendix 2. The rest of the oral submissionby the representative of the Respondent amplified onthe contention that the Respondent Company had not

9


10/15

employed any of the grievants or former employees ofWasi and Neema as listed in Appendix IV of theMemorandum of Claim. She contended that theRespondent never at any time agreed to take over thestatutory obligations of the former employees of Wasiand Neema. She therefore argued that the claimsmade on behalf of the 200 employees could not bemaintainable as against the Respondent and that thesame should be dismissed with costs.

The Court has carefully considered the contents ofthe written memoranda, the appendices annexedthereto, the testimony of the witnesses and the oralsubmissions. The Claimant Union was making theclaim on behalf of the former employees of Wasi andNeema Companies. These two companies had beencontracted to provide packing services to the

10


11/15

Respondent Company. It was an express provision inthe agreements signed by the Respondent and the twocompanies that the two contracted companies shallabide with all requirements of the labour laws ofKenya. As contended by the representative for theRespondent, such requirements include payment ofterminal dues such as service pay.he agreement of30th April 2007 between the Respondent and Claimantprovided that the Respondent shall pay to the formeremployees will be paid daily wages due for the periodbetween 23rd December 2006 and 3rd January 2007.The Agreement is annexed and marked Appendix III ofthe memorandum of claim.

Theourtaslsoonsideredherecommendation of the minister that the Respondentdo pay to the former employees of Wasi and Neema

11


12/15

Companies terminal dues as per existing terms andconditions. This is an odd requirement where therewas no relationship between the workers and theCompany. Terms and conditions of employmentshould be defined by either a letter of appointment ora collective agreement or any law relating to labour.According to the contention of the Claimant the 200grievants are former employees of Neema and Wasi.Although the two witnesses claimed they were workingwith KAPA Oil Refineries, their documentation and thesubmission showed them to be employees ofcompanies that were distinct from the Respondent. Ithas not been shown that the agreement between theclaimant and the Respondent agreed to take over thelegal requirements of labour laws which had beenreserved by the two companies by their respectivecompanies in their agreements signed with the

12


13/15

Respondent. As contained by the representative of theRespondent, the agreement of 30th April 2007 betweenClaimant and the Respondent provided that theRespondent agreed to take over very specificobligations which was to pay pending daily wages duebetween 23rd December 2006 and 3rd January 2007.

The findings and recommendation of the Ministeris therefore not based on any legal or factual basis. Itis hereby rejected. The same are considered to beillogical and unreasonable. They are unreliable.

In the premises, the Court holds that theClaimant has been unable to establish any legal orfactual basis for the demand for payment by theRespondent of terminal dues and compensation forloss of employment to the 200 former employees of

13


14/15

Wasi and Neema Companies. The Claim as made inthe memorandum of claim is hereby dismissed. TheClaimant Union should have advised the 200employees to lodge a complaint against Wasi andNeema Companies who were the employers with alabour Officer as provided in section 47(1) of theEmp loym ent Act 2007. Th is li t igation w ould not h avebeen necessary. The Claimant Union will pay to theRespo ndent prop er costs of defending th is dispute andw h ich costs w ill be assessed or taxed by th e Registrarof the C ourt.Dated in Nairobi th is day of kt) ULl\A4,4@

JUAWAA,Hon. Mr. Justic IsaarukuJUDGE

Nashon N. UdotoMEMBER Mo ses Hillary AlumandeMEMBER14


15/15

The Industrial Court of KenyaNational Social Security HouseBlock C,3rdFloorBishops RoadP.O. Box 47606NAIROBI

15

Documents

Instustrial Court 3