Musundi v Kenya Revenue Authority (Cause 936 of 2012) [2014] KEIC 137 (KLR) (1 July 2014) (Judgment)

Musundi v Kenya Revenue Authority (Cause 936 of 2012) [2014] KEIC 137 (KLR) (1 July 2014) (Judgment) Bramwel Dibondo Musundi v Kenya Revenue Authority [2014] eKLR Neutral citation: [2014] KEIC 137 (KLR) Republic of Kenya In the Industrial Court at Nairobi Cause 936 of 2012 Nzioki wa Makau, J July 1, 2014 Between Bramwel Dibondo Musundi Claimant and Kenya Revenue Authority Respondent Judgment 1.The Claimant filed the suit seeking resolution of a dispute between himand the Respondent his erstwhile employer. He was dismissed by letter7th July 2004 backdating his dismissal to 7th July 2003. He claimed lossof earnings for 16 years, house allowance for 16 years, transportallowance for 16 years and medical allowance for 16 years, salaryincremental credits for 16 years and payment of all terminal benefits.He also sought general and exemplary damages, interest on the sumsclaimed as well as costs of the Claim. 2.The Respondent denied the Claim and in its response filed on 9th July2012 stated that the Claimant was dismissed for lack of integrity as aresult of the theft of USD 73,973 equivalent to Kshs. 5,878,899.40. TheRespondent averred that the claims for payment of various sums for16 years were misplaced as only serving employees were entitled tothose sums. The Respondent prayed that the Claimant’s suit bedismissed with costs. 3.The Claimant testified that he was employed in 1978 at the time hewas 18 and was terminated in 2003 having served the Respondent for24 years. At termination his net pay was Kshs. 39,175.60 a month. Hewas arraigned in Court to face criminal charges on 30th May 2003. Hewas acquitted on 4th February 2011. He stated that he appealed hisdismissal in 2004. He claimed the person who could dismiss him wasthe Commissioner General and not the HR Manager. He claimed thathe was not given the reasons for dismissal and that there was noresponse to his appeal. He testified that he did not secure any otheremployment and was thus entitled to reinstatement. In cross exam headmitted that he had been given a letter of suspension bearing thereasons for the suspension, namely gross misconduct. 4.The Respondent called Mr. Chrispin Nyamwaya Agata as SeniorAssistant Commissioner working in the Employee Relations Unit. Hetestified that KRA code of conduct was clear on gross misconduct andthat where an employee conceals, hides or compounds an attempt tosteal, defraud or commit any act contrary to the interest of KenyaRevenue Authority that is gross misconduct. He stated that theClaimant was dismissed when a pilot sought clearance to fly and it wasdiscovered that the figures on the receipt varied and afterinvestigations the Claimant and his colleague was asked to explain asthey were on duty during the shifts in question. They were suspendedand then dismissed. 5.In cross examination the witness testified that the Claimant wassuspended on account of the criminal case that landed the Claimant inCourt and the outcome was that the Claimant was acquitted as he hadno case to answer. After acquittal the Claimant was not reinstated andit was apparent he was not paid for the period between suspension anddismissal. He testified further that the disciplinary procedure and investigations placed the Claimant at the place the incident occurred.He relied on the procedure in KRA which could permit a suspensionwithout pay. He testified that the outcome in the criminal case doesnot determine the outcome of the internal process within theRespondent. 6.That marked the end of the testimony and the parties filed theirrespective submissions and in these submissions they have reiteratedtheir opposing positions. The Claimant’s Submissions were to the effectthat he was suspended for 1 year without pay as a result of a criminaltrial that was pending and consequently the criminal court acquittedthe Claimant and his co-accused. After the acquittal the Respondentdeclined to retain the Claimant to his employment. The Claimantsubmits that he was not given a fair trial and the provisions of the lawwere not followed and that the termination of the Claimant wasunlawful and unfair. It was submitted that Section 45(2) of EmploymentAct provides for unfair termination where employer fails to give validreason for termination and that the reason given for termination wasnot a valid reason. Only gross misconduct is given as reason and theparticulars of that gross misconduct are not given anywhere. TheClaimant relied on the cases of Walter Ogal Onuro v. TSC Cause No.955 of 2011 and Lawrence Oyatsi v. Nzoia Sugar Company Ltd.Cause No. 361 of 2009. On the basis of these findings Mr. Khalwaleurged the Court to find in favour of the Claimant and enter judgmentaccordingly and award the damages sought, costs and interest. 7.The Respondent submitted that Section 45 provides that a personshould not be dismissed except for unlawful conduct and theconditions are set out. The employment is to be terminated with fairprocedure and it is the Respondent’s case that there are very validreasons why the Claimant was dismissed. The Respondent relied on Section 43 (2) of the Employment Act and submitted that sub-section43(2) qualifies it that there should be reasons the employer at the timegenuinely believed to exist and these should relate to the employee’sconduct. It was submitted that evidence had been provided in theRespondent’s list of documents which show why the Claimant had tobe terminated. Among these are the investigations report compiled bythe police officers, the Respondent who found him guilty of the chargesand also memos from the commissioners who lost confidence inClaimant and whom they found lacked integrity. The Respondentsubmitted that the Claimant was given a fair hearing at every stage ofthe procedure used to remove him from employment, the suspensionletter gave him 14 days regardless of the process going on at Anti-Corruption Court. It was submitted that at no time was the Claimantpromised that the outcome of the criminal court would determinewhether he would be reinstated or not and the reasons for terminationwere based on the contract and the terms of the contract include theKRA Cole of Conduct which is binding on all employees of theRespondent. It was submitted that on the basis of the Court of Appealcase of KRA v. Mengiya Morgani that even if a criminal courtabsolves the employee the employer could still find employee liable fortermination because the standard the employer holds which isperformance governed by contract cannot be determined by criminalprocess which is inquiring into conduct within the Criminal ProcedureCode. It was submitted that even if a contract of employment iswrongfully terminated that would just amount to a breach of contractand in this case if at all the Claimant was wrongfully terminated hewould only be entitled to 3 months’ notice according to the contract.Miss Lavuna on that basis urged that the Court dismisses the suit withcosts. 8.I have considered the pleadings, the evidence and the submissions ofthe learned counsel appearing in the matter in coming to this decision.The evidence adduced was that the Claimant was suspended thendismissed on account of the loss of revenue while he was serving atJomo Kenyatta International Airport at the control tower where chargesfor Air Navigation are collected. From the records before Court, a sumof USD 73,973 among other revenue was lost during a period theClaimant was on duty. Internal investigations carried out pointed afinger at the Claimant and consequently he was charged before theAnti-Corruption Court after investigations. His trial took a long time andhe was acquitted as evinced by the Ruling by the Trial Magistrate. Hisacquittal came years after he had been terminated. Prior to histermination, the Respondent had given the Claimant a notice to showcause and undertook a disciplinary process that led to his dismissalfrom the service of the Respondent. 9.In the case of Francis Lawrence Oyatsi v Nzoia Sugar Companycited in support by Mr. Khalwale it was held that the Claimant in thatcase was entitled to a judgment against the Respondent and tocompensation as the Respondent did not serve any notice on theClaimant asking him to explain. At page 42 of the Award, JudgeMadzayo held “The Board of Directors should have sought a writtenexplanation to the accusation from the Chairman. If his written defenceor explanation was found to be unsatisfactory by the Board of Directorsthen a decision to terminate his contract of employment would havebeen appropriate. This would have been after the Claimant had beengiven an opportunity to defend himself against the seven seriousallegations.” In this case, the contrary holds. Mr. Bramwell Dibondowas granted opportunity to defend himself. 10.The provisions of the KRA Code of conduct were cited through theletters to the Claimant. Contrary to spirited allegations by the Claimantthat he was not aware of the reasons for his dismissal, the Claimantdefended himself against the accusations contained in his show causeletter. He also preferred appeals against his dismissal. In each of theletters he gave a detailed response to the accusations. He thereforecannot claim he was unaware of the reasons for his termination. Hewas fully aware of the reasons and he was informed of the areas of thecode of conduct he was in breach of. He was given letters inviting himto attend and defend himself in the disciplinary procedure theRespondent was undertaking. I find that he was given an amplehearing. The Claimant was accused of dishonesty, lack of integrity andfailure to execute his duties to the required standards leading to loss ofrevenue by the Respondent. The reason given for dismissal was grossmisconduct per section 3.7 of the KRA Code of Conduct. Under theCode if the Respondent conducts investigations and finds that anemployee committed the offence and was negligent it can proceed toterminate. 11.It was submitted that on the basis of the case of KRA v. MenginyaSalim Murgani this Court should find that the dismissal was proper. Inthe Menginya case, it was held at page 14 of that decision that “It isaxiomatic that contracts of service have a mutuality of rights andobligations for both parties because a contract of service is not a yokeof slavery or a contract of servitude. This is the reason why either partyis allowed to terminate the contract by giving the stipulated notice or areasonable notice if not specifically stipulated in the contract oralternatively, tender equivalent salary in lieu of notice. This applieswhether or not the contract is permanent or pensionable and this rightvests in both the employee and the employer. The superior court, in ourview, ought to have examined the Code of Conduct and if as it finally found it was silent on the period of notice it had the power to awardsalary in lieu of notice and also determine a reasonable period ofnotice.........Indeed, a contracting party does not have to rely onmisconduct to terminate a contract of service and a party can terminatesuch a contract without giving any reason! In the circumstances of thiscase and on the basis of the recorded evidence, if the reasons fordismissal were wrongful the measure of damages should have been inrespect of the period of notice specified in the contract, and if notspecified a reasonable notice” 12.In this case, I am presented with reasons for termination. The Claimant saysthese were not valid reasons. I disagree. The Court of Appeal has statedrather plainly that a dismissal can even be for no reason! Provided thecontracting parties adhere to the provisions of the contract. Of course a Courtwill examine the circumstances surrounding any disputed termination anddetermine if indeed the termination was in accordance with the contract andthe law. In this case, the termination was for good cause. Loss of revenue andthe attendant loss of trust due to suspected or apparent lack of integrity aresurely valid reasons for termination. I agree with counsel for the Respondentthat the threshold for proof of wrongdoing for purposes of the contractualobligation differs markedly from the proof in a criminal case. The Claimant’scase is therefore not one that will result in the success he wished for. Hecould be suspended without pay in terms of the Code of Conduct that wasbinding on him. This Court, and indeed no court can rewrite a contract forparties. He did not prove any mistake or fraud to vitiate the contract andrevert to common law. From the foregoing and on the basis of the provisionsof the contract, the code of conduct and the law applicable dismiss the Claimwith costs to the Respondent.Orders accordingly **DATED AND DELIVERED AT NAIROBI THIS 1 ST DAY OF JULY 2014****NZIOKI WA MAKAU****JUDGE**