Mobile Link (K) Limited v Tabitha Masege [2017] KECA 155 (KLR)
The bottom line
#Kenya's Court of Appeal cut a dismissal payout in half but still held the employer liable because it fired the employee before hearing her side.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondent was employed by the appellant or by Mobile ya Wananchi (K) Ltd, a distinct entity
- 2.Whether there was a valid reason for the respondent's termination
- 3.Whether the termination was procedurally fair under section 41 of the Employment Act
- 4.Whether the trial court erred in dismissing the appellant's counterclaim for Kshs.441,510.50
- 5.Whether the award of compensation for unfair termination was excessive
- 6.Whether the award of unpaid NSSF deductions was justified
Key legal issues
#Procedural fairness in termination
The termination was procedurally unfair because the respondent was not furnished with the stock take report on which the allegations were based and her services were effectively terminated before she was given an opportunity to be heard.
The Court applied section 41 of the Employment Act and the audi alteram partem rule. The respondent requested the stock take report which formed the basis of the query, but the appellant did not furnish it. The director's email of 27th September 2010 removing her authority, and her being locked out of the office before she could explain the discrepancy, showed she was condemned unheard. The Court concurred with the trial Judge that there was no procedural fairness.
Valid reason for termination
There was a valid reason for termination: the respondent, as branch manager entrusted with capital of Kshs.1,421,425, failed to account for Kshs.441,510.50, which went to the core of her contractual relationship.
The Court departed from the trial Judge on this issue. The respondent's accountability for branch capital was not challenged, and the unaccounted amount warranted dismissal even without a criminal charge. Guided by McKinley vs. B.C.Tel. as adopted in Judicial Service Commission vs. Gladys Boss Shollei, the Court held the misconduct amounted to a breakdown in the employment relationship. Criminal prosecution is not a prerequisite to lawful dismissal.
Identity of employer / date employment commenced
Mobile ya Wananchi (K) Ltd was the appellant's predecessor and the two were one and the same; the respondent's employment ran from 1st December 2000 to 28th September 2010.
A letter dated May 2008 from the appellant confirmed the respondent had worked for it for the past seven years, corroborating her claim. The appellant, which claimed to have employed her in January 2007, failed to produce any letter of appointment to that effect. Its pleadings also admitted remitting NSSF contributions from 2007 to 30th September 2010, supporting continuity of employment from 2000.
The counterclaim for the unaccounted capital
The appellant established its counterclaim to the required standard and was awarded Kshs.441,510.50; the trial court's dismissal of the counterclaim was set aside.
Being convinced that there was a valid reason to terminate the respondent on account of the missing capital, the Court held that the appellant had proved the counterclaim. The respondent's accountability for the branch capital, confirmed by her acknowledgement note of 26th November 2009, and the unchallenged shortfall of Kshs.441,510.50 justified the award.
Quantum of compensation for unfair termination
The 8 months' gross salary awarded by the trial court was excessive and was substituted with compensation of 4 months' salary (Kshs.115,888).
The Court applied the Kemfro Africa principle that an appellate court interferes with quantum only in exceptional circumstances. Because the termination was unfair solely on account of procedural unfairness while a valid reason existed, the higher award did not reflect the true position. Compensation was reduced to 4 months' gross salary.
Legal principles established
#- An employer must, before terminating employment on grounds of misconduct, explain the reason to the employee and hear and consider any representations; termination effected before the employee is heard is procedurally unfair.
- Burden of proving that a dismissal was wrongful rests on the employee, while the burden of justifying the grounds for termination rests on the employer.
- The absence of a criminal charge or conviction does not by itself invalidate a termination; disciplinary and criminal proceedings are distinct processes with different standards of proof.
- An appellate court may interfere with quantum of damages only in exceptional circumstances, such as where an irrelevant factor was considered, a relevant one ignored, or the award is so inordinately low or high as to be wholly erroneous.
Court orders
#- 1.Unpaid salary for August and September, 2010 in the sum of Kshs.57,944 awarded to the respondent
- 2.Unpaid NSSF deductions in the sum of Kshs.10,000 awarded to the respondent
- 3.One month salary in lieu of notice in the sum of Kshs.28,972 awarded to the respondent
- 4.Compensation for unfair termination reduced to 4 months' gross salary, Kshs.115,888
- 5.Appellant's counterclaim allowed and the appellant awarded Kshs.441,510.50 against the respondent
- 6.Each party to bear its own costs both in the lower court and in this appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Industrial Court of Kenya at Nairobi (now Employment and Labour Relations Court)
- Industrial Cause No. 1554 of 2010
- Jurisdiction invoked
- First appeal to the Court of Appeal against a decision of the Industrial Court
Relief refused
#Retention of the 8 months' gross salary compensation for unfair termination awarded by the trial court
The award was on the higher side because the termination was unfair only on procedural grounds; there was a valid reason for dismissal
Costs
We order each party to bear its costs both in the lower court and in this appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Under section 47 (5) of the Employment Act the burden of proving that the dismissal was wrongful rests on the employee, while the burden of justifying the grounds of wrongful dismissal rests on the employer.
our perusal of the record reveals that the respondent's services were terminated before she was given an opportunity to defend herself.
an acquittal in a criminal case does not automatically render an employee immune to disciplinary action by an employer for the reason that a criminal trial and an internal disciplinary proceeding initiated by an employer against an employee are two distinct processes
The respondent is awarded: (i) Unpaid salary for August and September, 2010 in the sum of Kshs.57,944/=; (ii) Unpaid NSSF deductions in the sum of Kshs.10,000/=; (iii) One month salary in lieu of notice in the sum of Kshs.28,972/=; (iv) Compensation for unfair termination at the rate of 4 months' gross salary, that is, 28,972 x 4= Kshs. 115,888/=.
We order each party to bear its costs both in the lower court and in this appeal.
Issues in the judgment
#The judgment inconsistently states the months of unpaid salary - the trial court's award was for 'Unpaid salary for August and September, 2010' but in paragraph 20 the Court refers to 'unpaid salary of August and December, 2010', while the final orders revert to August and September 2010.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mobile Link (K) Limited v Tabitha Masege [2017] KECA 155 (KLR)", Case Analysis (2017). Civil Appeal No. 348 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/155/eng@2017-12-01
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.