GAZETTE NOTICE NO. 311

pursuant of a dispute, reaffirmed by the parties in a memorandum dated 14th May, 1979 which read: Agreement: the parties agreed as•follows: I. That the Management of City Printing Works (K) Limited, have agreed to recognize the above union as the sole body representing Unionisable employees of Messrs. City Printing Works (K) Limited. (a) That the Management of the above firm have agreed to implement the same terms and conditions of service as stipulated in the Printing Trades Group of the FKE agreement with the union. The said document is signed by the General Secretary of the Claimant union and the Managing Director of the Respondent company itne presence of a Mr. H.A. Alwy, Conciliator. Mr. Nyamwae for the Respondent did not deny the existence of the aforesaid document. The Claimant further avers that subsequent to the aforesaid agreement, the Respondent continued to pay salaries and wages to its employees in accordance with subsequent CBAs between the trade union and the FKE Printing Trades Group. The Respondent did not deny this. The Court has no reason to dispute the facts as presented. The Respondent did not file a Memorandum in Reply but filed a Statement of Reply that amounts to a bare denial of all the facts averred by the Claimant union in its Memorandum of Claim. The Respondent denied that it failed to adjust salaries as alleged; or that it declared the employees redundant; or that it failed to pay its employees their benefits as alleged. The Respondent further averred that "they neither signed a recognition with the Claimant nor are they members of the printing group of federation of Kenya employers." A letter from the FKE dated 21st July, 2000 states that the Respondent is neither a paid up member of FKE nor did it belong to the Printing group of FKE, In the circumstances, the Claimant did not have a cause of action against the Respondent as alleged. A perusal of the CBAs annexed by the parties do not suggest that the Respondent was, at those material times, a member of the Printing Group of FKE. The issue for determination in this regard, therefore, is whether or not the Respondent is bound by the CBA signed between the Claimant union and the FKE Printing Trades Group? CBAs are contractual agreement binding the parties thereto. In the case of group agreements, as in this instance, all members of the Printing Trades Group of FKE would he bound by the CBA, whether they were signatories thereto or not. The Respondent avers that it was neither a member of the FKE Group nor a signatory to any of it's CBA with the Claimant union. Therefore it was not bound to implement its terms and conditions. We accept that this would be the correct position in law, were the facts to be true. The Claimant avers that the Respondent has at all times been a member of the FKE and as a result has been implementing the various CBA signed between the said Printing Trades Group and the Claimant union. The evidence produced by the union suggests that the Respondent, as at 1995, was not a member of the FKE group. The Respondent may have been a member of the FKE group in earlier days as alleged and not denied by the Respondent, but we did not see proof before us that at the material time to this dispute, the Respondent was a member of the FKE Printing Trades Group. We cannot therefore find for the Claimant that purely on the basis of its membership of the FKE Printing. Trades Group; the Respondent was liable to implement the CBAs referred to by the Claimant union. There is however, a separate issue raised by the Claimant union as regards the Respondent's liability. The Respondent, by the aforesaid agreement of 14th May, 1979, voluntarily agreed to recognize the Claimant union as the sole negotiating party on behalf of the Respondent's unionisable employees as well as "to implement the same terms and conditions of service as stipulated in the Printing Trades Group of the FKE agreement with the union". The Respondent has not, any time to this dispute, denied the existence of the said agreement or its terms. The Claimant further averred that the Respondent did, pursuant to the said agreement, implement subsequent CBAs between the FKE Group and the Union. This was done between 1979 and 1995 – a period of at least 16 years. The Respondent did not deny this fact either. The Respondent may not have been a member of the FKE at all. However, its acceptance and implementation of the FKE negotiated agreements with the Claimant union clearly gives rise to continuing contractual obligations and a reasonable expectation in the mind of its employees that such obligations will be continued with by the employer. The Respondent employer may not, in law, switch contractual obligations on and off as it pleases. There is no evidence or averment by the Respondent that it did, at any one time, seek to rescind the agreement of 14th May, 1979. The Respondent has not denied evidence put before it by the Claimant prior to the time of filing its reply. The Respondent, by its failure to join the FKE Group, had surrendered its right to negotiate terms appropriate to its economic conditions. It signed away its responsibility through a blanket agreement with the Claimant union in 1979. It cannot now be heard to say that it will not implement a written agreement simply because it is not longer a member of the FKE group. This Court has no reason to doubt the evidence put before it, and neither has the Respondent raised any objection to the veracity of the evidence or the authenticity of the documents produced by the Claimant union. In the circumstances we find that the Respondent, by its own admission, obliged to implement the terms and conditions of service contained in all the CBAs between the Claimant union and the FKE Printing Trades Group signed after 1979 'until such time as the Respondent negotiates a change in the terms of agreement. It seems that sometime in 1995 the Respondent began to experience financial difficulties and in December, 1996 it sought to temporarily close down its business and send the employees on compulsory leave. We expected the Respondent to argue that as a result, the Respondent intended to renegotiate its earlier blanket agreement with the Union. The fact of refusal to implement the CBA singed towards the end of 1995 was evidence of the Respondent's new position that it intended to renegotiate the contractual agreement with the union representing its employees. However the Respondent's counsel made no such argument and only relied on its earlier blanket denial to the effect that as the Respondent was not a member of FKE, it was not bound by any CBA to which it was not a party. Indeed, the Respondent, to its credit, gave a written affirmation to its employees that should be Respondent's efforts to raise additional finances fail, it would resort to sale of the business and premises "so that each one of you will be paid his/her dues to the last cent." The Respondent's undated letter (Appendix K in the Claimant's Memorandum), copied to the Branch Secretary of the Claimant union was a noble gesture on its part. We were therefore surprised to hear the Respondent's counsel turning a blind eye to the Respondent's intentions and arguing the 18th January, 2008 THE KENYA GAZETTE 99 contrary in Court. Counsel made no effort to distinguish or explain evidence from his own client In the circumstances, and as the Court has already found for the Claimant union in this regard, the only course of action open to the Court is to order that the consequences of the parties' actions follow the event. This means that the Respondent is obliged by law to pay to its employees the wage increases contained in the succeeding CBAs signed by the Claimant union and FKE between 1995 and 2001 when the services of the said employees were finally terminated. The details of such claims have been tabulated by he claimant in its Memorandum. The Respondent has not objected thereto, save on the grounds that they are not due at all. We find for the Grievants and order that the Respondent do pay to the Grievants and to each of them the salary arrears due under the CBA. We now turn to the second issue for determination. Was the Respondent justified in summarily terminating the services of the Grievants herein without following the due process of law as contained in the law as well as in the CBA between the Claimant union and the FKE Printing Trades Group that, as we have found hereinabove, was applicable to the Respondent? On 1st February, 2001 the Respondent issued Certificates of Service to the seven (7) Grievants who were last of its employees and thereby terminated their services without paying any redundancy benefits to them. The said certificate stated that the reason for termination was because the "business went down due to the modern technology in printing and the company was taken over by the bank because of a heavy overdraft ready to the auctioned." The termination was therefore clearly a declaration of redundancy by the employer. The employees were therefore entitled to redundancy benefits under the law. As there was a CBA applicable to the parties as hereinbefore stated, the employees were entitled to the benefits therein contained. The investigator from the Ministry of Labour and Human Resources Development also found as much. The Respondent stated that the computation of wages by the Claimant was immaterial as the Respondent was not a member of FKE and therefore not bound by the CBA. However, the Respondent's counsel remained silent on the issue of redundancy benefits under the Employment Act Cap 226 as recommended , by the Ministry's investigator. We find the Respondent's approach strange in the circumstances. It wrote very nice letters to the employees assuring them of their dues despite financial difficulties. Are we now to assume that the Respondent only intended them as a ruse to keep. the employees and the union from suspecting its real motive to deny Hie employees their lawful dues? We hope not. The Respondent terminated the long services of the Grievants without any notice and without following any of the mandatory provisions of the law as to consultation, notice or payment of terminal dues. This Court has on several previous occasions stated that terminal benefits of an employee accrue on an annual basis and the employer automatically becomes a trustee thereof until such time as the employee is lawfully terminated and paid the said terminal dues that are in the possession of the employer. An employer cannot therefore summarily terminate an employee in order to avoid payment of such accrued benefits of which the employer is a trustee. The terminal benefits payable are calculated on the basis of a valid contract of service either under a CBA, as in this case, or otherwise by operation of law as contained in the provisions of the Employment Act Cap 226 and the Regulation of Wages and Conditions of employment Act Cap 229. We find therefore that the Respondent was obliged in law to pay to the Grievants and to each of them their lawful termination benefits as a result of their being declared redundant. These benefits are to be calculated in accordance with the latest applicable CBA between the Claimant union and the FKE Printing Trades Group. In conclusion therefore, we order that the Respondent do pay to the Grievants, and to each' of them the following. 1.All arrears of salary and housing allowance accrued under the applicable CBAs between the FKE Printing Trades Group and the Claimant Union between the years September, 1995 and January 2001; 2.All outstanding annual leave and leave travelling allowances due; 3.For Grievants who had not completed ten (10) years service — salary equivalent to fifteen (15) days pay of their last payable salary in accordance with the latest CBA for each completed year of service; 4.For Grievants who had completed more ten (10• years service — salary equivalent to twenty (20) days pay of their last payable salary' in accordance with the laces CBA for each completed year of service; 5.Three (3) months salary based on their latest correct monthly salary by way of compensation for unlawful redundancy. As the sitting members also agree, it is so ordered. Delivered at Nairobi this 6th day of May, 2005. MURTAZA JAFFER, Judge. D. K. SIELE, A. 0. WAFULA, Members. GAZETTE No= No. 312 THE AINTS AUTO GARAGE DISPOSAL OF UNCOLLECTED GOODS NOTICE is given under the provisions of the Diaposal of Uncollected Goods Act (Cap. 38) of the laws of Kenya, to Martin Khamala, of P.O. Box 59344-00200, Nairobi, the owner of Toyota Corolla 110 saloon, reg. No. KAS 408X, currently lying at the premises of Aints Auto Garage, Bum Bum shopping centre, Nairobi, within thirty (30) days from the date of publication of this notice, upon payment of storage-and other incidental expenses, failure to which, the said motor vehicle shall be sold by public auction or private treaty in case the owner fail to take delivery as herein stated. Dated the 7th January, 2008. GODFREY MULINDWA, Director, Aints Auto Garage.