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Court of AppealPartially AllowedCivil Appeal No. 25 of 2014· [2017] KECA 383 (KLR)

Elizabeth Omoro v Nairobi Bottlers Limited [2017] KECA 383 (KLR)

Court of Appeal
28 July 2017
RNR.N. NambuyeFSF. SichaleSKS. Ole Kantai
4,687 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Court of Appeal ruled that even a justified dismissal must follow a fair process, awarding the employee extra compensation on top of notice pay.

What this practically means

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Executive summary

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This is a first appeal from the Industrial Court (Mbaru, J) in which Elizabeth Omoro, a Procurement Manager employed by Nairobi Bottlers Limited on permanent and pensionable terms, challenged her dismissal over improprieties in executing the company's contract with Skyy Space Media Limited. A reconciliation exercise revealed disbursements she approved that failed to tally with receipts, payments made against photocopies, unauthorised disbursements and a nonexistent performance bond, estimated at about Kshs. 5.6 million in unaccounted funds. The trial judge found valid reasons for the termination but an unfair process, because reasons were not stated in the termination letter and the appellant's statutory right of appeal was not facilitated; she awarded only one month's salary in lieu of notice. The Court of Appeal framed two issues: validity of the reasons for termination and adequacy of the remedy. It affirmed the finding of valid reasons, holding the impropriety rested on sound evidence that the appellant did not impugn as fabricated. It also affirmed the finding of an unfair process, conceded by the respondent. On remedy, the court held the trial judge misdirected herself: she failed to appreciate that section 49(1) permits notice pay and compensation concurrently, and ignored the appellant's prior clean record, the thwarted appeal, and the absence of any personal benefit or malice. The court allowed four months' salary (Kshs. 1,782,865.72) as compensation with interest at court rates, affirmed the discounted heads of claim and the notice award, and gave the appellant costs of the appeal and the court below. The appeal thus succeeded only on the quantum of remedy.

Key legal issues

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01

Whether valid reasons existed for the termination of the appellant's employment

Holding

Yes; the reconciliation exercise conducted with the appellant's participation revealed disbursements not tallying with receipts, payments against photocopies, unauthorised payments and a nonexistent performance bond, establishing impropriety under sections 43 and 45 ELRA.

Reasoning

The court found that the appellant's duty was to execute her functions per laid-down procedures and safeguard her employer's interests. Although she obtained proper approvals to initiate the Skyy contract, execution was flawed: disbursements she approved failed to tally with receipts, some payments were made against photocopies and in contravention of procedures, and the performance bond was founded on unauthentic documents. Her failure to allege fabrication of the reconciliation evidence meant the impropriety finding rested on sound evidence.

p. 6
02

Whether the process of termination was fair

Holding

The trial judge's finding of an unfair process was affirmed, since the reasons for termination were not stated in the termination letter and the appellant's statutory right of appeal under section 35 of the Employment Act was not facilitated.

Reasoning

The respondent did not contest, and counsel conceded, both the failure to specify reasons in the termination letter and the failure to facilitate the appellant's statutory right of appeal. These defaults independently rendered the process unfair even though the underlying reasons for termination were valid.

p. 6
03

Whether the remedy awarded by the trial court was appropriate

Holding

The award of only one month's salary in lieu of notice was inadequate; the court added four months' salary as compensation, holding that section 49(1) permits notice pay and compensation to be awarded concurrently.

Reasoning

The trial judge misdirected herself by failing to appreciate that section 49(1) empowers the court to award both the value of notice and compensation; by ignoring the appellant's prior good record handling larger transactions; by overlooking that a facilitated appeal might have allowed reconsideration; and by not weighing that the employer's loss arose from pure mismanagement with no personal benefit to the appellant. The discretion was therefore interfered with on settled principles.

p. 7

Legal principles established

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  • Determination of an appropriate remedy for a wrongfully terminated employee is a judicial discretion exercisable judiciously, and under section 49(1) a court may award both notice pay and compensation concurrently.
  • On a first appeal the Court of Appeal is entitled to reconsider and evaluate the evidence and draw its own conclusions, while making due allowance for the trial judge having seen and heard the witnesses.
  • An employer establishes valid reasons for termination where an unrefuted reconciliation exercise shows impropriety, including disbursements not tallying with receipts and payments against photocopies of receipts.

Court orders

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  1. 1.Affirmation of the trial court's findings that there were valid reasons for termination and that the process of termination was unfair
  2. 2.Affirmation of the heads of claims discounted by the trial court and the award of one month's salary in lieu of notice
  3. 3.Award of four months' salary as compensation for the unfair process of termination, being Kshs. 445,716.43 x 4 = 1,782,865.72
  4. 4.Interest on the amount at Court rates from the date of judgment in the superior court till payment in full
  5. 5.Costs of the appeal and of the court below to the appellant

Authorities

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Legislation

  • Employment Act, 2007section 35(1)(c)
  • Employment Act, 2007section 35
  • Employment Act, 2007section 49(1)
  • Employment Act, 2007section 49(4)
  • Employment and Labour Relations Act (ELRA)section 41(2)
  • Employment and Labour Relations Act (ELRA)section 43(1)
  • Employment and Labour Relations Act (ELRA)section 45(5)
  • Employment and Labour Relations Act (ELRA)section 45
  • Employment and Labour Relations Act (ELRA)section 50
  • Labour Institutions Actsection 15

Cases cited (12)

  • International Planned Parenthood Federation versus Pamela Ebot Arrey Effiom
    [2016] eKLR
  • Ken Freight (EA) Limited versus Benson K. Nguti
    [2016] eKLR
  • Coca Cola East & Central Africa Limited versus Maria Kagai Ligaga
    [2015] eKLR
  • Bamburi Cement Limited versus William Kilonzi
    [2016] eKLR
  • Daniel N. Ngunia versus KGGCU Limited
    CA No. 281 of 1998
  • Mbogo versus Shah
    [1969] EA 93
  • East African Airways versus Knight
    [1975] EA 165
  • Selle versus Associated Motor Boat Co.
    [1968] EA 123
  • Abdul Hameed Saif vs. Ali Mohamed Sholan
    (1955), 22 E.A.C.A 270
  • Jabane vs. Olenja
    [1986] KLR 664
  • Ephantus Mwangi vs. Duncan Mwangi Wambugu
    (1982-88) 1 KAR 278
  • Mwanasokoni vs. Kenya Bus Services
    (1982-88) 1 KAR 870
On appeal from
Industrial Court at Nairobi (now the Employment and Labour Relations Court)
Industrial Court Cause No. 2493 of 2012
Jurisdiction invoked
First appeal to the Court of Appeal from the Industrial Court under the employment dispute appellate framework (ELRA)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Elizabeth Omoro v Nairobi Bottlers Limited [2017] KECA 383 (KLR)", Case Analysis (2017). Civil Appeal No. 25 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/383/eng@2017-07-28

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.