Regent Management Limited v Wilberforce Ojiambo Oundo
The bottom line
#Kenya's Court of Appeal confirmed a CEO's dismissal was unfair, but cut his compensation because the employer's contract only allowed three months' notice.
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 pendency of criminal proceedings barred the determination of the civil suit filed by the respondent
- 2.Whether the respondent's services were unfairly terminated
- 3.Whether the learned Judge exercised her discretion properly in awarding the damages she did
Key legal issues
#Whether pending criminal proceedings barred the civil suit
They did not; the learned Judge did not err in entertaining and determining the suit during the pendency of the criminal proceedings.
The court distinguished internal disciplinary proceedings (contract-based, balance of probability) from criminal proceedings (proof beyond reasonable doubt), citing Wigglesworth and Shollei. It concurred with the majority in Attorney General v Andrew Maina Githinji that a dismissed employee need not await criminal proceedings' outcome before challenging a dismissal. The respondent had also since been acquitted.
Whether the reasons for termination were valid
The appellant failed to establish valid reasons; the charge of losing Kshs.5,000,000 was dropped by the disciplinary committee and no evidence linked the respondent to the loss.
The appellant produced no financial policies or standard operating procedures; its own audit witness testified no finance manual existed. The disciplinary committee dropped the loss charge as unprovable. The salary-review allegation was moot (Board adopted it), the NHIF contract had already ended, and no evidence supported the other allegations.
Whether the termination was procedurally fair
It was not; the appellant committed glaring procedural flaws including denial of documents, non-payment of salary during suspension, and failure to interview the respondent during the forensic audit.
The respondent was left in limbo after his 30-day suspension expired, was denied certified copies of documents integral to his defence, was not interviewed during investigations despite the gravity of the allegations, and his salary was withheld without reason. His non-attendance at the hearing did not cure these flaws.
Whether the quantum of damages was properly awarded
Partly not; the 12 months' compensation lacked reasons and exceeded the contract term, and the leave pay award was unproven special damages.
The trial judge gave no reasons for awarding maximum compensation under Section 49, failing to act judiciously; compensation should have been within the contract, which was terminable by three months' notice. The 50 days' leave pay was special damages that the respondent merely specified without proving; the onus was on him.
Legal principles established
#- The institution of criminal proceedings is not a bar to civil proceedings on similar facts, and a dismissed employee need not await the outcome of criminal proceedings before challenging a dismissal founded on concurrent disciplinary processes.
- Internal disciplinary proceedings and criminal proceedings are distinct: the former is anchored on the contract of employment with proof on a balance of probability, the latter requires proof beyond reasonable doubt.
- Special damages must be both pleaded and proved; the burden of proving them rests on the claimant.
- A court will only disturb a trial judge's award of damages where the judge acted on a wrong principle or the amount is an entirely erroneous estimate.
- Compensation for unfair termination should ordinarily be confined to the terms of the contract of employment, and a judge awarding maximum compensation under Section 49 of the Employment Act must give reasons.
Court orders
#- 1.Setting aside the award of 12 months' salary as compensation for unfair termination
- 2.Setting aside the award of payment in lieu of 50 days' leave (Kshs. 552,183)
- 3.Upholding the rest of the trial court's award (3 months' salary in lieu of notice, salary for August to 22nd November 2010, and prorata gratuity)
- 4.Each party to bear its own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court at Nairobi
- Industrial Cause No. 200 of 2011
- Jurisdiction invoked
- First appellate jurisdiction over the Employment and Labour Relations Court; Section 35(4) of the Employment Act invoked as the substantive framework
Relief refused
#Appellant's challenge to the finding of unfair termination
The appellant failed to establish valid reasons for dismissal and committed glaring procedural flaws
Appellant's challenge to the award of 3 months' salary in lieu of notice and prorata gratuity
The rest of the award was upheld; only the 12 months' compensation and leave award were set aside
Costs
The appeal having succeeded in part each party shall bear its own costs.
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.
It is also settled that the institution of criminal proceedings is not a bar to civil proceedings on similar facts.
The totality of the foregoing is that we interfere with the award of damages by setting aside the award of 12 months salary and payment in lieu of 50 days leave. The rest of the award is hereby upheld. The appeal having succeeded in part each party shall bear its own costs.
whenever an issue of wrongful or unfair dismissal arises the court looks at the validity and justifiability of the reasons for termination and also interrogates procedural fairness.
we ought not to substitute our decision for that of an employer. Our duty is to determine whether the decision to dismiss was valid and fair within the circumstances of the employer.
It is trite law that special damages must be pleaded and proved.
Issues in the judgment
#Internal inconsistency on the contract end date: the judgment records 31st December, 2010, but the appellant's quantum submissions refer to 31st December, 2012.
The forensic audit firm is named inconsistently as 'Kimaru Kerrets & Company' and 'Kimani & Kerrets'.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Regent Management Limited v Wilberforce Ojiambo Oundo", Case Analysis (2018). Civil Appeal 106 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/883/eng@2018-01-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.