REPUBLIC OF KENYA

IN THE INDUSTRIAL COURT OF KENYA

AWARD IN

CAUSE NO. 40(N) OF 2009

KENYA UNION OF COMMERCIAL FOOD AND ALLIED

WORKERS

VERSUS

KAPA OIL REFINERIES

DELIVERED BY:-

HON. MR . JUSTICE ISAAC E.K. MUKUNYA

JUDGE

MEMBERS:
Nashon N. Udoto
Moses H. Alumande
 REPUBLIC OF KENYA

IN THE INDUSTRIAL COURT OF KENYA

CAUSE NO. 40 OF 2009

KENYA UNION OF COMMERCIAL FOOD

AND ALLIED WORKERS CLAIMANT

VERSUS

KAPA OIL REFINERIES LIMITED RESPONDENT

ISSUE IN DISPUTE:- Non-payment of dues of former

Wasi and Neema Employees

Kenya Union of Commercial Food and Allied

Workers Union represented by Mr. Charles Egesa

shall hereinafter be referred to as "the Claimant", and

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

Respondent".

The parties were heard in Court at Nairobi on the

28 th October 2009. They relied on their written
memoranda, the appendices annexed thereto, the
Claimant called two witnesses and their
representatives made oral submissions in support of
their respective cases.

AWARD

This dispute was referred to the court by the

Claimant filing a memorandum of claim on 2 nd April
2009. It is averred in the memorandum that during
the month of February 2007 the Respondent Company

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contracted M/s Neema Packers Enterprises to provide
packaging Services to the Respondent Company. That
on 30 th April 2007, the said Neema Packers
Enterprises disappeared with the wages of the

employees hired by the contractor in the packaging. It

is also averred that the Respondent Company also
contracted M/s Wasi Enterprises to provide similar
services and that this sub-contractor also failed to pay
the employees who were hired to provide the packaging
services. It is further averred that when the two sub-
contractors failed to pay the terminal dues, the 200
former employees of Wasi Enterprises and Neema
Packers Ltd contacted the Claimant. The Claimant
Union consulted the Respondent who agreed to pay
the dues to the employees. It is averred that when the
Respondent refused to pay as agreed, the Claimant
reported a dispute to the Minister who in turn

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appointed an investigator. The report of the

investigator had a finding that the Respondent had

agreed to take over the liabilities of the two sub-

contractors and recommended that the Respondent

pay to the 200 former employees of Neema and Wasi

their terminal dues. The Respondent failed to honour

the recommendation of the Minister, and the Claimant

referred the dispute to this Court for arbitration and

determination.

The Claimant is praying the Court to award the

200 former employees of Wasi and Neema their

terminal dues as well as maximum compensation for

wrongful termination.

The Respondent in a Memorandum of Reply dated

1 st September 2009 has opposed the claim and prayed

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the court to dismiss the claim with costs. It is averred

in the Reply memorandum that there was no contract

of employment between the Respondent and the

former employees of both Wasi and Neema and that

therefore the Respondent is not obliged to pay them

the dues demanded. It is averred that the Respondent

had sub-contracted both Wasi and Neema companies

a packaging contract. The Respondent contends that

the sub-contracted companies had to hire their own

employees and that the said companies were to meet

all obligations of their employees as required by the

labour laws and for other statutory payments such as

NSSF, NHIF and PAYE. The Respondent denies having

taken over payment of terminal dues of the 200 former

employees of both Neema and Wasi Companies as

alleged and contends that it only agreed to meet and

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Claimant called two witnesses. Jonathan Kiio testified

that he used to work for the Respondent M/s Kapa Oil

Refineries in the Detergent Department. He stated

that both Wasi and Neema Companies were mere

supervisors and that he was an employee of the

Respondent and that he used to be paid a salary of shs

6200/- per month but at a daily rate of shs 258/-. He

also said that the workers were being paid on weekly

basis. He identified an agreement between the

Respondent and Claimant where the employer agreed

to pay terminal dues to the workers of Wasi and

Neema. It is dated 30 th April 2007. It is annexed as

Appendix III of the Memorandum of Claim. It was his

evidence that the Respondent agreed to take over the

obligations of Wasi and Neema and should pay them

terminal dues. He agreed during cross examination

that although he was employed by the Respondent, his

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working identification card had been issued by Wasi.

He also said that he used to be paid shs 255/- per

days by Wasi and by Neema. He said he was claiming

service pay for the period worked. Dominic Sinange

Meca also testified that he used to work for KAPA Oil

Refineries. He stated that he used to be paid by the

Respondent (KAPA) through Wasi. He stated that

another Company known as Neema took over and

used to pay them as a supervisor. In cross

examination, he agreed that he was never issued with

a letter of appointment by the Respondent but was

issued with an identification card by Wasi. He said

was claiming service pay for years worked.

The representative of the Respondent made an

oral submission. She repeated and reiterated the

contents of the Memorandum of Reply. She also

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relied on the appendices annexed thereto especially

the agreement between the Respondent and the two

companies to provide packing services. A sample of

the agreement effective 15 th October 2001 between

Wasi Investment Ltd and the Respondent. It was

annexed as Appendix 1 of the Memorandum of Reply.

Clause 5 entitled Legal Requirements provided that

"The packing contractor shall abide and conform to all

labour laws of Kenya." There was a similar agreement

between the Respondent and Neema Packers

Enterprises Ltd dated 10 th February 2007. Clause 4

also titled legal Requirements provided that the

contracted company shall abide with all labour laws.

The agreement was annexed to the Memorandum of

Reply as Appendix 2. The rest of the oral submission

by the representative of the Respondent amplified on

the contention that the Respondent Company had not

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employed any of the grievants or former employees of

Wasi and Neema as listed in Appendix IV of the

Memorandum of Claim. She contended that the

Respondent never at any time agreed to take over the

statutory obligations of the former employees of Wasi

and Neema. She therefore argued that the claims

made on behalf of the 200 employees could not be

maintainable as against the Respondent and that the

same should be dismissed with costs.

The Court has carefully considered the contents of

the written memoranda, the appendices annexed

thereto, the testimony of the witnesses and the oral

submissions. The Claimant Union was making the

claim on behalf of the former employees of Wasi and

Neema Companies. These two companies had been

contracted to provide packing services to the

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Respondent Company. It was an express provision in

the agreements signed by the Respondent and the two

companies that the two contracted companies shall

abide with all requirements of the labour laws of

Kenya. As contended by the representative for the

Respondent, such requirements include payment of

terminal dues such as service pay. The agreement of

30th April 2007 between the Respondent and Claimant

provided that the Respondent shall pay to the former

employees will be paid daily wages due for the period

between 23 rd December 2006 and 3 rd January 2007.

The Agreement is annexed and marked Appendix III of

the memorandum of claim.

The Court has also considered the

recommendation of the minister that the Respondent

do pay to the former employees of Wasi and Neema

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Companies terminal dues as per existing terms and

conditions. This is an odd requirement where there

was no relationship between the workers and the

Company. Terms and conditions of employment

should be defined by either a letter of appointment or

a collective agreement or any law relating to labour.

According to the contention of the Claimant the 200

grievants are former employees of Neema and Wasi.

Although the two witnesses claimed they were working

with KAPA Oil Refineries, their documentation and the

submission showed them to be employees of

companies that were distinct from the Respondent. It

has not been shown that the agreement between the

claimant and the Respondent agreed to take over the

legal requirements of labour laws which had been

reserved by the two companies by their respective

companies in their agreements signed with the

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Respondent. As contained by the representative of the

Respondent, the agreement of 30 th April 2007 between

Claimant and the Respondent provided that the

Respondent agreed to take over very specific

obligations which was to pay pending daily wages due

between 23 rd December 2006 and 3 rd January 2007.

The findings and recommendation of the Minister

is therefore not based on any legal or factual basis. It

is hereby rejected. The same are considered to be

illogical and unreasonable. They are unreliable.

In the premises, the Court holds that the

Claimant has been unable to establish any legal or

factual basis for the demand for payment by the

Respondent of terminal dues and compensation for

loss of employment to the 200 former employees of

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Wasi and Neema Companies. The Claim as made in
the memorandum of claim is hereby dismissed. The
Claimant Union should have advised the 200
employees to lodge a complaint against Wasi and
Neema Companies who were the employers with a
labour Officer as provided in section 47(1) of the
Employment Act 2007. This litigation would not have
been necessary. The Claimant Union will pay to the
Respondent proper costs of defending this dispute and
which costs will be assessed or taxed by the Registrar
of the Court.
Dated in Nairobi this day of kt) ULl\A4,4@

JUAWAA,
Hon. Mr. Justic Isaaruku
JUDGE

Nashon N. Udoto Moses Hillary Alumande

MEMBER MEMBER

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The Industrial Court of Kenya
National Social Security House
Block C, 3 rd Floor
Bishops Road
P.O. Box 47606
NAIROBI

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