Ex-Portland Cement staff awarded Sh2.6m severance pay

A former East African Portland Cement Company  (EAPCC) executive sacked in 2011 over the loss cement worth over Sh9 million has been awarded Sh2.6 million as severance pay after the court found that he was wrongfully terminated.

Mr Ishmael Otieno Ondigo was the company’s acting regional sales executive for West, Central and Nyanza regions for a two-year period beginning November 30, 2009.

He was sent home following allegations that he had caused the loss of 11,173 bags of cement at the company’s Kisumu depot.

Justice Nduma Nderi noted that Mr Ondigo had worked for EAPCC between 1999 to 2007 on a contract basis and did not have annual leave for the over 10 years of his employment which was a failure on the company’s part and was not a time barred claim.

Justice Nderi awarded him Sh1.5 million for leave but dismissed his compensation claim and saying that the company was justified to terminate his employment for flouting its policy, but not to summarily dismiss him.

The judge also ordered EAPCC to pay him salary for the time he was to complete his contract, and the period which he was under suspension, which amounted to Sh2.5 million and the costs of the suit.

“Failure to grant him annual leave which is a statutory obligation constitutes a continuing injury for the entire period the employee is at work and therefore, the claim is not time barred.

Accordingly, EAPCC was bound to terminate the employment of the Claimant in terms of the contract of employment and not to summarily dismiss him,” said Justice Nderi.

A close of year stock taking conducted on June 30, 2010, had allegedly revealed  that Mr Ondigo had made unauthorised credit sales to non- guaranteed customers for 6,840 bags of cement valued at Sh6,142,320 while a further 4,333 bags worth Sh3,215,806 could not be accounted for.

EAPCC said this loss to the company occurred during his tenure hence he was to be held duly accountable and the money was to be recovered from what would have been his salary.

During his suspension Mr Ondigo was required to show cause within 14 days why stern disciplinary action should not be taken against him, demonstrate how the company would recover the loss and keep off EAPCC’s premises unless required to report to the management.

But the former boss had admitted that he had sold cement on credit as alleged to boost regional sales despite being aware of the policy of not selling to non-guaranteed customers.  

He claimed that over the years he had made such deals without getting any objection from EAPCC and had even been commended as well as promoted for good work in growing sales in the region.

He also claimed that some of the clients who had taken cement on credit had already paid the debt and that he had collected over Sh6 million as the outstanding debt.

He further claimed that he worked under great pressure, was inhibited from collecting the remaining debts because he was not allowed to go to the company premises and therefore could not access the relevant records while under suspension.

He alleged that the remaining amount had been Sh3.2 million which he offered to pay to cover the balance.