Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealPartially AllowedNot stated in judgment· [2023] KECA 297 (KLR)

Ufanisi Freighters (K) Limited v Nyamai (Civil Appeal 105 of 2019) [2023] KECA 297 (KLR)

Court of Appeal
17 March 2023
4,593 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~18 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal upheld an unfair dismissal ruling against Ufanisi Freighters but cut the compensation award, confirming awards are based on gross salary.

What this practically means

#

Executive summary

#
Wambua Nyamai, a truck driver employed by Ufanisi Freighters (K) Ltd from August 23, 2014, claimed he was verbally dismissed on July 22, 2015 after querying unexplained salary deductions. The employer maintained he absconded duty and was lawfully dismissed on August 21, 2015 after a show-cause letter and a disciplinary hearing he failed to attend. The ELRC (O.N. Makau J) found the dismissal unfair under section 45 of the Employment Act, awarding one month's salary in lieu of notice, five months' salary as compensation based on a fixed-term contract with six months remaining, and the sum of unexplained deductions, with costs and interest. On appeal, the Court of Appeal at Mombasa (Kairu, Nyamweya and Lesiit JJA) framed two issues: the lawfulness of the termination and the reliefs. On the first, applying Selle v Associated Motor Boat Co, Jabane v Olenja and Mbogo v Shah on the first appellate court's duty, the Court found no basis to disturb the trial Judge's conclusion that the dismissal preceded the disciplinary process and was both substantively and procedurally unfair, the employer having failed to discharge its burden under section 43. On quantum, the Court found the trial Judge's finding of a fixed-term contract with six months remaining had no evidential basis, set aside the five months' compensation, and substituted two months' gross salary (Kshs 53,300/=). It affirmed that notice pay under section 49(1)(a) is additional to compensation, that awards are pegged on gross salary under section 49(1)(c) with deductions at the point of payment under section 49(2), and upheld the findings on the deductions. All other findings and awards were affirmed; each party was ordered to bear its own costs of the appeal.

Key legal issues

#
01

Whether the termination of the respondent's employment was unlawful and unfair

Holding

Yes. The trial court's finding that the respondent was verbally dismissed on July 22, 2015 and that the disciplinary process was an afterthought was supported by the evidence; the employer failed to prove the reason for dismissal or to afford a hearing before dismissal

Reasoning

The employer's own chronology showed a memo reassigning duties on July 22, 2015, an acknowledged demand letter alleging dismissal, and a show-cause letter and dismissal only after the demand letter. The employer never replied to the demand letter nor proved service of the memo. Under sections 43 and 45 of the Employment Act, the employer must prove the reason for termination on a balance of probabilities; failure renders termination unfair.

p. 6
02

Whether the award of five months' gross salary as compensation was justified

Holding

No. The trial court's premise of a fixed-term contract with six months remaining had no evidential foundation; the Court reduced compensation to two months' gross salary

Reasoning

Neither the pleadings, witness statements, nor the demand letter referred to a fixed term contract or a remaining term. The claimant himself sought 12 months' pay as compensation without reference to a remaining contract term. Given the roughly eleven months of employment, two months' gross salary was held adequate compensation under section 49(1)(c).

p. 7
03

Whether the award should be computed on gross or net salary

Holding

Section 49(1)(c) pegs the award on gross monthly salary; statutory deductions are the employer's responsibility at the point of payment under section 49(2)

Reasoning

The Court held that section 49(1)(c) specifically provides that the guiding figure is the gross monthly wage or salary, and that the employer makes statutory deductions at the point of payment. The one month's salary in lieu of notice was also justified since no notice of termination was given.

p. 7
04

Whether the salary deductions were justified

Holding

No. The payslips showed deductions only as 'personal accounts' and the employer proved no contractual term allowing the deductions or their manner of calculation

Reasoning

The Court agreed with the trial Judge that the payslips did not explain the purposes of the deductions, and the appellant did not produce evidence of a contractual term permitting deductions for diesel recovery or their mode of calculation. The refunds of two amounts confirmed some deductions were unjustified.

p. 7

Legal principles established

#
  • A first appellate court must reconsider and evaluate the evidence and draw its own conclusions, departing from trial findings only where they are not based on the evidence, rest on wrong principles of law, or where discretion was exercised injudiciously
  • Once parties agree under rule 21 of the ELRC (Procedure) Rules, 2016 to dispose of a suit on documents and submissions without examination of witnesses, the veracity of the statements and documents filed is deemed not in question
  • An employer bears the burden of proving the reason or reasons for termination on a balance of probabilities; failure to do so renders the termination unfair under section 45 of the Employment Act
  • Salary in lieu of notice under section 49(1)(a) is independent of, and additional to, compensation under section 49(1)(b) or (c); quantum under section 49(1)(c) is pegged on gross salary, with statutory deductions made by the employer at the point of payment under section 49(2)

Court orders

#
  1. 1.Set aside the award of 5 months' gross salary of Kshs 133,350/= as compensation for unfair termination
  2. 2.Substituted an award of two months' gross salary of Kshs 53,300/= as compensation for unfair termination
  3. 3.Affirmed and upheld all other findings and awards of the trial court, subject to the qualifications in the judgment
  4. 4.Each party to bear their own costs of the appeal

Authorities

#

Legislation

  • Employment Actsection 45
  • Employment Actsection 49
  • Employment Actsection 47(5)
  • Employment Actsection 44
  • Employment Actsection 44(4)(a)
  • Employment Actsection 43
  • Employment Actsection 35
  • Employment Actsection 36
  • Employment Actsection 50
  • Employment Actsection 49(1)(a)
  • Employment Actsection 49(1)(b)
  • Employment Actsection 49(1)(c)
  • Employment Actsection 49(2)
  • Employment Actsection 49(4)
  • Employment and Labour Relations Court (Procedure) Rules, 2016rule 21
  • Employment and Labour Relations Court (Procedure) Rules, 2016rule 15
  • Employment and Labour Relations Court (Procedure) Rules, 2016rule 25(3)

Cases cited (9)

  • Selle and Another v Associated Motor Boat Co. Ltd & Others
    (1968) EA 123
  • Jabane v Olenja
    [1986] KLR 661
  • Mbogo & Another v Shah
    (1968) E.A.
  • Reuben Ikatwa & 17 others vs Commanding Officer, British Army Training Unit & another
    [2017] eKLR
  • Regent Management Ltd vs Wilberforce Ojiambo Oundo
    (2017) eKLR
  • Janet Nyandiko vs Kenya Commercial Bank Limited
    (2017) eKLR
  • Regent Management Limited v Wilberforce Ojiambo Oundo
    (2018) eKLR
  • CMC Aviation Limited v Mohammed Noor
    (2015) eKLR
  • Directline Assurance Co Ltd v Jeremiah Wachira Ichaura
    (2016) eKLR
On appeal from
Employment and Labour Relations Court
Not stated in judgment
Jurisdiction invoked
First appellate jurisdiction under the Employment and Labour Relations Court Act / Court of Appeal jurisdiction over appeals from the ELRC (not expressly stated in the judgment)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Ufanisi Freighters (K) Limited v Nyamai (Civil Appeal 105 of 2019) [2023] KECA 297 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/297/eng@2023-03-17

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