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Court of AppealPartially AllowedCivil Appeal No. 262 of 2014· [2018] KECA 745 (KLR)

Julimatt Enterprises Limited v Vincent Mugadia Kitazi [2018] KECA 745 (KLR)

Court of Appeal
23 February 2018
DMD. K. MusingaSKS. Gatembu KairuAMA. K. Murgor
2,239 words in judgment
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The bottom line

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Kenya's Court of Appeal cut an unfairly dismissed employee's compensation from six months' salary to two, ruling the original award ignored required legal factors.

What this practically means

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Executive summary

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The Court of Appeal at Nairobi (Musinga, Gatembu Kairu and Murgor, JJ.A.) allowed an appeal in part against an award by the Industrial Court of Kenya (Wasilwa, J.) in favour of Vincent Mugadia Kitazi, whose employment by Julimatt Enterprises Limited was terminated on grounds of poor performance without a hearing. The appellant did not contest that the termination without an opportunity to be heard was unfair under sections 41 and 45 of the Employment Act; the appeal targeted quantum. First, the court held that the award of 6 months' salary (Kshs.189,000/=) as compensation was excessive and an arbitrary exercise of discretion, because the trial judge gave no reasons and failed to consider the mandatory factors in sections 49(4) and 50 of the Employment Act, including the employee's length of service, his admitted negligence causing loss, the employer's leniency in writing off part of the loss, and payments already made. The court applied Mbogo v Shah on appellate interference with discretion and substituted an award of 2 months' salary (Kshs.73,000/=). Second, the court set aside the award of Kshs.226,800/= as arrears of house allowance, holding that parties are bound by their pleadings: the respondent had neither pleaded nor proved a house allowance claim, and the omnibus 'any other relief' prayer could not sustain it; special damages must be specifically pleaded and strictly proved, per Sande v Kenya Cooperative Creameries. Since the appellant substantially succeeded, each party was ordered to bear its own costs. The decision binds subordinate courts on the requirement to consider statutory compensation factors and the prohibition on awarding unpleaded claims.

Key legal issues

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01

Interference with discretionary award of compensation for unfair termination

Holding

The award of 6 months' salary was excessive and arbitrary because the trial judge gave no reasons and failed to consider the statutory factors, including the respondent's length of service, his admitted negligence, the employer's leniency in writing off the debt, and payments already made

Reasoning

The court applied the Mbogo v Shah principle that an appellate court may interfere where discretion is exercised on wrong principles or where material matters are ignored. Section 49(4) and 50 of the Employment Act set out mandatory considerations. The judge stated no basis for choosing 6 months, ignored the employee's contributory conduct and prior payments, so the court substituted 2 months' salary (Kshs.73,000/=).

p. 4
02

Award of unpleaded house allowance

Holding

The award of Kshs.226,800/= house allowance was set aside because the respondent never pleaded or proved such a claim; the 'any other relief' prayer could not sustain an unpleaded claim

Reasoning

Parties are bound by their pleadings; since no house allowance claim was made, the monthly salary of Kshs.31,500/= was inferred to be consolidated. The court reiterated that special damages must be specifically pleaded and strictly proved, citing Sande v Kenya Cooperative Creameries Ltd, and set the award aside entirely.

p. 5
03

Unfair termination for want of a hearing

Holding

Termination on grounds of poor performance without according the employee an opportunity to be heard violates section 41 of the Employment Act and is unfair under section 45; this was not contested on appeal

Reasoning

The trial court found, citing section 41 of the Employment Act, that the respondent was not given any opportunity to be heard before termination on grounds of non-performance. The appellant did not contest unfairness on appeal; the appeal was confined to quantum and the house allowance award.

p. 2

Legal principles established

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  • An appellate court will interfere with a trial court's award where the trial court fails to take into consideration statutory factors it is obliged to consider, or otherwise misdirects itself, resulting in injustice
  • In awarding compensation for unfair termination under the Employment Act, a court must consider the statutory factors in section 49(4) as read with section 50, including the employee's length of service and conduct
  • Parties are bound by their pleadings; unpleaded claims such as house allowance cannot be awarded, and special damages must be specifically pleaded and strictly proved

Court orders

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  1. 1.Set aside the award of 6 months' salary as compensation for unlawful termination and substitute it with an award of 2 months' salary
  2. 2.Set aside the award of Kshs.226,800/= house allowance in its entirety
  3. 3.Each party to bear its own costs
  4. 4.The appellant shall pay the respondent Kshs.73,000/= being 2 months' salary as compensation for unlawful termination of employment

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 42(1)
  • Employment Actsection 45
  • Employment Actsection 45(5)(b)(c) and (f)
  • Employment Actsection 49(4)
  • Employment Actsection 50
  • Employment Actsection 41(1)

Cases cited (3)

  • CMC Civil Aviation Limited v Captain Mohamed Noor
    [2015] eKLR
  • Mbogo & Another v Shah
    [1968] E.A. 93
  • Sande v Kenya Cooperative Creameries Limited
    [1992] LLR 314 (CAK)
On appeal from
Industrial Court of Kenya (now Employment and Labour Relations Court) at Nairobi
Industrial Court No. 834 of 2012
Jurisdiction invoked
First appellate jurisdiction over the Industrial Court of Kenya (Employment and Labour Relations Court) under the applicable employment statutes

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Julimatt Enterprises Limited v Vincent Mugadia Kitazi [2018] KECA 745 (KLR)", Case Analysis (2018). Civil Appeal No. 262 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/745/eng@2018-02-23

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