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Court of AppealPartially AllowedCivil Appeal No. 85 of 2017· [2019] KECA 202 (KLR)

Daniel Ouma Okuku v Kenya Plantation & Agricultural Workers Union & another [2019] KECA 202 (KLR)

Court of Appeal of Kenya
8 November 2019
Martha Karambu KoomeM.K. KoomeFSF. SichaleSKS. ole Kantai
2,797 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled an employee can win compensation even when misconduct is proven, if the employer skips the legally required hearing process.

What this practically means

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Executive summary

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The appellant, elected Branch Secretary of the Kenya Plantation & Agricultural Workers Union Thika Branch in 2006 and re-elected for a further term, was suspended in December 2011 following a branch executive committee meeting held in his absence and thereafter terminated, receiving terminal dues of Shs.63,375 plus Shs.100,000 ex gratia. His claim before the ELRC (Mbaru, J) for notice pay, gratuity, unpaid salary, leave, house allowance and damages for unlawful suspension was dismissed, prompting this first appeal on 12 grounds. The Court of Appeal, comprising Koome, Sichale and ole Kantai, JJ.A, in a single judgment of the court, re-examined the record under the Selle v Associated Motor Boat Company principles. It held that although the allegations against the appellant (failure to call meetings and collecting excess union dues) were not seriously contested and the union was substantively entitled to terminate, the process was procedurally unfair: there was no notice of allegations, no opportunity to respond, no suspension or termination letter on record, unsigned minutes, and no evidence of the appeal process the trial judge had found to exist. Sections 41, 43 and 45 of the Employment Act and rules 7 and 15 of the union's constitution required notice, a hearing and a right of appeal, none of which was demonstrated. The court also held the trial judge erred in failing to rule on, and in refusing, the application to amend the statement of claim made at the close of the appellant's case, though nothing turned on that finding. The appeal was allowed to that extent only: the appellant was awarded compensation equivalent to three months' salary for unfair termination, with costs of the appeal and below.

Key legal issues

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01

Procedural fairness in termination of employment

Holding

The termination was procedurally unfair because no notice of allegations was served, no opportunity to respond was given, no suspension or termination letter existed on record, and no appeal process was undertaken

Reasoning

Although allegations of not calling meetings and collecting excess union dues were not seriously contested, entitling the employer substantively to terminate, the process was flawed. Section 41 of the Employment Act requires notification of allegations and a hearing; section 43 places the burden on the employer to prove fair reasons. The unsigned minutes and absence of any notices, charge, representations or appeal process meant the statutory and union-constitution procedures were flouted.

p. 3
02

Burden of proving reasons for termination

Holding

The employer bears the duty under section 43 of the Employment Act to prove that the reasons for termination were fair; failure renders the termination unfair

Reasoning

The court restated sections 41, 43, 45 and 49 of the Employment Act, 2007: the employee must be notified of allegations and heard, the employer must prove the reasons for termination, unfair termination is prohibited and remedies are provided for wrongful or unfair termination. Here the employer produced no documentation of the process, so it failed to discharge that burden as to procedure.

p. 3
03

Amendment of pleadings at the close of a party's case

Holding

The trial judge erred both in deferring a ruling on the amendment application to the judgment and in refusing the amendment, though nothing ultimately turned on that finding

Reasoning

Order 8 of the Civil Procedure Rules gives the court a wide discretion to allow amendment at any stage before judgment to determine the real questions in controversy. An application made as the appellant closed his case should have been considered and determined; delay alone does not automatically defeat it, as Suleiman v Karasha confirms. However, given the court's conclusion on procedural unfairness, nothing stood or fell on this ground.

p. 4
04

Effect of acceptance of terminal benefits

Holding

The court did not treat acceptance of terminal dues as defeating the claim; it found the termination procedurally unfair notwithstanding receipt of terminal dues

Reasoning

The trial judge had found that acceptance of terminal benefits ended the contract and compromised the claim. The Court of Appeal, re-evaluating the record, found no evidence of an appeal process and held the termination procedurally flawed, awarding compensation. The acceptance of dues did not bar relief, though it informed the quantum limited to three months' salary.

p. 3

Legal principles established

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  • Termination of employment on grounds of misconduct without notice of the allegations, an opportunity to respond, and a record of the process flouts the employee's rights and is procedurally unfair under sections 41 and 43 of the Employment Act
  • On a first appeal, the Court of Appeal must re-examine the record, evaluate the evidence and draw its own conclusions, and may disagree with the trial judge on findings of fact not backed by evidence or where conclusions are perverse
  • An application to amend pleadings may be made with leave at any stage before judgment, even after the hearing has concluded, and the court must consider and determine it

Court orders

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  1. 1.The appeal succeeds to the extent that the termination of the appellant's employment was procedurally unfair
  2. 2.The appellant is awarded compensation equivalent to 3 months' salary for unfair termination of employment
  3. 3.The appellant is awarded costs of the appeal and costs in the court below

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 45
  • Employment Actsection 49
  • Employment Act, 2007sections 41 and 45 (as cited by counsel)
  • Civil Procedure RulesOrder 8
  • Constitution of the Kenya Plantation & Agricultural Workers Union (registered constitution and rules)rules 7 and 15

Cases cited (2)

  • Selle & Another v Associated Motor Boat Company Limited & Others
    [1968] EA 123
  • Suleiman v Karasha
    [1989] eKLR
On appeal from
Employment and Labour Relations Court of Kenya at Nairobi
ELRC Cause No. 1103 of 2012
Jurisdiction invoked
First appeal to the Court of Appeal under the Employment and Labour Relations Court Act/Civil Procedure framework (judgment does not cite a specific appellate provision; appeal is expressed as a first appeal)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (7)

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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, "Daniel Ouma Okuku v Kenya Plantation & Agricultural Workers Union & another [2019] KECA 202 (KLR)", Case Analysis (2019). Civil Appeal No. 85 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/202/eng@2019-11-08

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