Ndugu Transport Company Limited v Onyango (Civil Appeal 24 of 2019) [2023] KECA 1249 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that even summary dismissal requires a hearing and valid, provable reasons, upholding an award of Kshs 436,727.80 against the employer.
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 respondent's summary dismissal was procedurally and substantively fair under sections 41, 43, 44 and 45 of the Employment Act
- 2.Whether the respondent was entitled to payment in lieu of notice despite summary dismissal
- 3.Whether the claim for annual leave was time-barred under section 90 of the Employment Act
- 4.Whether the appellant proved that the respondent had taken his leave days and rest days
- 5.Whether the award of Kshs 436,727.80 in damages should be disturbed
Key legal issues
#Fairness of summary dismissal
The verbal summary dismissal without hearing or written reasons was procedurally and substantively unfair under sections 41, 43 and 45 of the Employment Act.
Section 41 mandates explanation and hearing before termination, including summary dismissal. Section 43 places on the employer the duty to prove the reasons for termination, failing which the termination is deemed unfair under section 45. The appellant conceded the dismissal was verbal, no dismissal letter was issued, and no evidence of gross misconduct was placed before the trial court. The trial court therefore properly found the dismissal unfair and there was no basis for interference.
Payment in lieu of notice
Having found the dismissal unfair, the trial court properly awarded one month's salary in lieu of notice.
The appellant argued that summary dismissal precluded notice pay. The Court held that once the dismissal is found unfair, the trial court's award of Kshs 15,000 in lieu of notice was properly made and there was no basis for interference.
Limitation defence raised on appeal
A limitation defence must be specifically pleaded; it cannot be raised for the first time on appeal.
The appellant's contention that the leave claim was time-barred under section 90 of the Employment Act was not part of its response before the trial court, denying the respondent an opportunity to counter it. Under Order 2 Rule 4 of the Civil Procedure Rules, 2010, a statutory limitation defence must be specifically pleaded and cannot properly be raised before the Court of Appeal.
Burden of proof on leave and rest days
The employer, as custodian of employment records, bore the burden of proving leave and rest days were taken and failed to discharge it.
The respondent pleaded his entitlement to leave and testified to it; the burden then shifted to the appellant to disprove the claim, which it failed to do. On rest days, the appellant's own witness confirmed the respondent worked on Sundays and public holidays, so the award of Kshs 59,997.60 was properly made.
Compensation for unfair termination under section 49
The award of 12 months' salary as compensation under section 49 was within the trial court's discretion, having regard to the sixteen years of service and the manner of dismissal.
Section 49 permits compensation up to 12 months' salary, guided by factors in section 49(4), including the circumstances of termination and length of service. The respondent was dismissed verbally, called a thief, and given no reasons despite requesting them in writing. Alleged verbal warnings had no evidential support and could not meet the strictures of the Employment Act. Appellate interference requires a misdirection, which was not shown.
Legal principles established
#- An employer must prove the reasons for summary dismissal, that they are valid and fair, and must follow the mandatory notification and hearing process under section 41 of the Employment Act even in cases of summary dismissal; failure to do so renders the termination unfair.
- A defence founded on a statute of limitation must be specifically pleaded and cannot be raised for the first time on appeal.
- Where an employer is the custodian of employment records, once an employee pleads and testifies to leave entitlement, the burden shifts to the employer to disprove the claim.
- An appellate court will interfere with an award of damages only where the trial court exercised its discretion injudiciously or misdirected itself, resulting in a wrong decision.
Court orders
#- 1.The appeal is dismissed with costs to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the leading judgment finding the appeal without merit: the summary dismissal was procedurally and substantively unfair under sections 41, 43 and 45 of the Employment Act, and the trial court's awards on notice, leave, rest days and 12 months' compensation could not be disturbed.
Accordingly, I find no merit in this appeal. I would dismiss it with costs to the respondent.p. 6
- On appeal from
- Employment and Labour Relations Court, Kisumu
- Not stated in the judgment
- Jurisdiction invoked
- First appeal to the Court of Appeal under Rule 31(1)(a) of the Court of Appeal Rules
Relief refused
#Setting aside of the award of Kshs 436,727.80 for unlawful termination, including notice pay, annual leave and rest days
The dismissal was unfair; the employer bore the burden of proving leave was taken and could not raise limitation for the first time on appeal; the awards were properly made by the trial court.
Costs
The appeal is dismissed with costs to the respondent.
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.
There can be no doubt that the Act places heavy legal obligations on employers in matters of summary dismissal for breach of employment contract and unfair termination involving breach of statutory law.
Such procedural fairness is required even in the event of summary dismissal.
a party that desires to avail itself of a defence under a statute of limitation must specifically plead the defence
the burden then shifted to the appellant, as the custodian of employment records, to disprove the respondent's claim, which it did not do.
Accordingly, I find no merit in this appeal. I would dismiss it with costs to the respondent.
As Tuiyott, JA is in agreement, the appeal is dismissed with costs to the respondent.
Issues in the judgment
#The name of the appellant employer company is not stated anywhere in the judgment; the parties are referred to only as 'the appellant' and 'the respondent'.
The case number of both the appeal and the ELRC decision are not stated in the judgment.
The judgment contains typographical errors rendering 'off' as 'ofi' and 'effect' as 'efiect', suggesting the copy provided is imperfect.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ndugu Transport Company Limited v Onyango (Civil Appeal 24 of 2019) [2023] KECA 1249 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1249/eng@2023-10-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.