Hakika Transport Services Ltd v Mwariwa & 3 others
The bottom line
#Kenya's Court of Appeal confirmed the workers were unfairly dismissed but cut their compensation from ten months' salary to four months each.
What this practically means
#Executive summary
#Key legal issues
#Whether the respondents' contracts of service were unlawfully terminated
Yes - the termination was procedurally unfair under section 41 and based on reasons that were neither valid nor fair under section 45; it amounted to constructive termination by the appellant.
The appellant's Personnel Officer admitted the appellant terminated the employment. Section 41's mandatory steps - explanation of reasons in the presence of a chosen colleague and hearing of representations - were not followed for the 1st, 2nd and 4th respondents. The show-cause letters were interlinked with the refusal to sign new contracts, so the cited misconduct was a creation of the appellant and failed the validity test.
Whether the awards made by the ELRC were reasonable and should stand
Partially - the one month's salary in lieu of notice was upheld, but the ten months' compensation was set aside and replaced with four months' salary for each respondent.
Compensation under section 49 is discretionary and must be justified by the section 49(4) factors. On the record the respondents had 5 to 9 years of service, clean disciplinary records, did not contribute to the termination, and some had secured other employment. Ten months, being near the statutory maximum, was very high and not justified by those facts; four months was adequate.
Whether the trial judge erred in failing to determine whether the appellant terminated the respondents' employment
No - the issue was subsumed in the agreed issue of whether the termination was fair and lawful, and the appellant was estopped from raising issues outside the agreed framework.
The issues tried were those adopted by consent of the parties, including the appellant's own counsel before the ELRC. The question of who terminated was subsumed in the fairness issue. Further, an appellate court's jurisdiction is confined to issues presented to the trial court; a court cannot err on an issue never argued before it.
Legal principles established
#- The Employment Act is incapable of being waived; employers must comply with its mandatory termination procedures.
- Termination passes the test of fairness only where the employer proves a valid and fair reason and a fair procedure.
- A party who agreed on the issues before the trial court is estopped from raising on appeal issues outside those placed before the court.
- Compensatory damages for unfair termination are discretionary and must be exercised judiciously on the section 49(4) factors.
Court orders
#- 1.Upheld the finding by the ELRC that the respondents' contracts of service were unlawfully terminated
- 2.Upheld the awards for one month's salary in lieu of notice
- 3.Set aside the awards of ten months' salary as compensation for wrongful termination of employment
- 4.In substitution, awarded each respondent an equivalent of four months' salary
- 5.Each party to bear their own costs of the appeal
- On appeal from
- Employment and Labour Relations Court at Mombasa
- ELRC Cause No. 673 of 2016 (Consolidated with ELRC 674, 675, & 676 2016)
- Jurisdiction invoked
- First appeal under Rule 29 of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Hakika Transport Services Ltd v Mwariwa & 3 others", Case Analysis (2022). Civil Appeal 125 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/783/eng@2022-06-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.