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Court of AppealPartially AllowedFirst Appeal from ELRC at Nairobi (Mbaru, J.), judgment of 30th June 2022· [2024] KECA 434 (KLR)

Nairobi Bottlers Ltd v Imbuga (Civil Appeal E661 of 2022) [2024] KECA 434 (KLR)

Court of Appeal
26 April 2024
SKS. ole KantaiJMJ. MativoMGM. Gachoka
3,759 words in judgment
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The bottom line

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Kenya's Court of Appeal upheld Nairobi Bottlers' dismissal of its logistics director, ruling the company had properly followed the Employment Act's disciplinary process.

What this practically means

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Executive summary

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This was a first appeal from the Employment and Labour Relations Court at Nairobi (Mbaru, J.), which had declared the termination of Adrian Imbuga's employment by Nairobi Bottlers Limited unfair and unlawful, found he had been discriminated against, ordered his reinstatement without loss of benefits and back salaries from 1st May 2020, and awarded him Kshs.5,865,000 damages for discrimination plus costs. The employee, a long-serving Logistics Director, had been dismissed in April 2020 for negligence after the company lost substantial stock during his watch. The Court of Appeal, in a judgment led by Kantai, JA with which Mativo and Gachoka, JJA agreed, re-appraised the evidence as mandated on a first appeal and reversed the decision below. The court held that the employer had followed the process required by sections 41 to 49 of the Employment Act to the letter: show cause letter, response considered, disciplinary hearing with charges served in advance and a right to accompaniment, termination letter with a right of appeal, and an appeal heard before a different panel. The reasons for termination - failure to enforce stock routines and standard operating procedures leading to unexplained losses - were valid, fair and lawful and met the reasonableness test drawn from English authority. A court, the court emphasised, ought not to substitute its decision for that of a reasonable employer. The finding of discrimination and the damages award necessarily fell away. The appeal was allowed with costs to the appellant.

Key legal issues

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01

Whether the disciplinary and termination process followed by the employer satisfied the Employment Act

Holding

The appellant followed the law in the way it treated the disciplinary case; the respondent was accorded all rights an employee should be accorded and the termination was lawful.

Reasoning

The court traced the entire process: show cause letter, response, disciplinary hearing with charges served in advance, right to accompaniment, hearing before a panel, termination letter with a right of appeal, appeal before a different panel, and dismissal of the appeal. It held this satisfied sections 41 to 49 of the Employment Act and that process is a central consideration under the Act. The employer proved valid reasons - unexplained stock losses during the respondent's watch - and the court declined to substitute its own view for that of the employer.

p. 5
02

Whether the reasons for termination were valid and fair

Holding

The reasons for termination were valid, fair and lawful, having met the reasonableness test, being the respondent's failure to enforce stock routines and SOPs resulting in substantial losses he could not account for.

Reasoning

Applying section 43(2) of the Employment Act, the reasons are the matters the employer genuinely believed to exist at the time of termination. Relying on the band-of-reasonableness approach from British Leyland v Swift and Foley v Post Office, the court held that a reasonable employer could have dismissed the respondent for the negligence established in the disciplinary process, and that the minutes of the hearing, produced before the trial court, supported the validity of the reasons.

p. 7
03

Burden of proof in unfair termination claims

Holding

It is the duty of the employee to prove termination was unfair while the employer must prove termination was fair and for a valid reason with due process followed.

Reasoning

The court restated the statutory scheme under sections 41 to 49 of the Employment Act: the employer must prove the reasons for termination and that due process was followed, while the employee bears the duty of proving unfairness. Applying this to the facts, the employer discharged its burden through the documentary record of the disciplinary and appellate processes, which the trial Judge had failed to give proper weight to in re-evaluating on first appeal.

p. 5

Legal principles established

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  • For a termination to be fair, the employer must follow a process: notification and hearing in a language the employee understands, an opportunity to respond accompanied by another employee or representative, a valid and fair reason, and an appeal; where this is done, a court will not interfere with the employer's procedure.
  • In reviewing the fairness of a dismissal, a court must not substitute its own decision for that of the employer; the test is whether a reasonable employer might have dismissed in the circumstances.
  • Termination of employment is a process, not an event, requiring notification, opportunity to be heard, and communication of the decision.

Court orders

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  1. 1.The appeal is allowed with costs to the appellant

Authorities

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Legislation

  • Court of Appeal Rules, 2022rule 31
  • Employment Actsection 35
  • Employment Actsections 41, 43, 45, 46
  • Employment Actsections 41 to 49
  • Employment Actsection 43(2)
  • Employment Actsection 45(2)
  • Employment Act, 2007
  • Employment Act Cap 226 Laws of Kenya
  • Constitution of Kenya, 2010

Cases cited (6)

  • Nicholas Njeru vs. Attorney General & 8 Others
    [2013] eKLR
  • Samuel Kalomit Murkomen vs. Telkom Kenya Limited
    [2017] eKLR
  • Alfred Mutuku Muindi -vs- Rift Valley Railways (limited)
    [2015] eKLR
  • British Leyland UK Ltd vs. Swift
    [1981] IRLR 91 CA
  • Foley vs. Post Office
    2000 ICR 1283
  • HSBC Bank plc (formerly Midland Bank plc)
    2000 ICR 1283
On appeal from
Employment and Labour Relations Court at Nairobi
Jurisdiction invoked
First appeal under rule 31 of the Court of Appeal Rules, 2022

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (22)

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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, "Nairobi Bottlers Ltd v Imbuga (Civil Appeal E661 of 2022) [2024] KECA 434 (KLR)", Case Analysis (2024). First Appeal from ELRC at Nairobi (Mbaru, J.), judgment of 30th June 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/434/eng@2024-04-26

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