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ELRCPartially AllowedCause 811 of 2011· [2012] KEELRC 252 (KLR)

JOSEPH OMWENGA V KENYA REVENUE AUTHORITY [2012] KEELRC 252 (KLR)

Industrial Court of Kenya
18 September 2012
HWHellen Wasilwa
3,485 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's employment court ruled KRA unfairly fired an accountant and awarded him over Kshs. 900,000 because he was never given a hearing.

What this practically means

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Executive summary

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The Claimant, employed by the Kenya Revenue Authority from 1996 as an Accounts Assistant and later promoted to Accountant, was suspended on 13th August 2002 over allegations concerning the fraudulent utilisation of a cheque from Caltex Oil (K) Ltd, and dismissed by letter dated 18th June 2003 for negligence and lack of integrity. He had earlier been arrested and charged with others before the Chief Magistrates Court in Mombasa but was acquitted under section 210 of the Penal Code. He sought reinstatement, salary and allowances for the interdiction period, twelve months' compensation, terminal dues, costs and interest. The Respondent asserted the dismissal followed its Code of Conduct and internal audit findings of negligence leading to loss of government revenue, and contended the suit was time barred under section 4 of Cap 22. The court framed three issues: limitation, unfair termination and remedies. It held the claim was not statute barred because time ran from 25th November 2008, when the Respondent communicated the disallowance of the Claimant's appeal, and the suit was filed within six years of that date. On the merits, the court found the dismissal unfair: the employment letter contained no job description to measure the alleged negligence against, the criminal acquittal could not ground an inference of misconduct, and critically the Claimant, though allowed a written response, was never heard before a panel, contrary to Article 50 and natural justice. Reinstatement was refused as impractical after nearly a decade, and service pay was excluded as the Claimant was a pension scheme contributor. The court set aside the dismissal, converted it into a normal termination, and awarded notice pay, twelve months' damages for wrongful dismissal, six months' damages for loss of employment, a certificate of service and costs, totalling Kshs.905,140.

Key legal issues

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01

Whether the claim was time barred under section 4(1) of the Limitation of Actions Act (Cap 22)

Holding

The claim was not time barred; time began to run when the Respondent communicated the disallowance of the Claimant's appeal on 25th November 2008, and the suit filed in May 2011 was within six years.

Reasoning

Although the dismissal letter was dated 18th June 2003, the Claimant pursued appeals, the last of which was disallowed by letter dated 25th November 2008. In a contract claim the six-year period runs from when the cause of action arose, and the court treated the communication of the final appeal decision as the point time started running. Filing on 24th May 2011 fell within the six years expiring 25th November 2011. The limitation point had also been raised only in submissions, not as a preliminary objection.

p. 4
02

Whether the Claimant's dismissal was wrongful or unfair

Holding

The dismissal was unfair: the Respondent failed to accord the Claimant an oral hearing before a panel, and the criminal acquittal could not support an inference of misconduct.

Reasoning

Under section 45 of the Employment Act an employer must prove a valid and fair reason and fair procedure. The audit report alleged negligence, but the Claimant's letter of employment contained no job description, so his performance could not be measured against his contract. The criminal charges ended in acquittal under section 210 of the Penal Code and the Respondent admitted it was not connected to the prosecution. Procedurally, the Claimant answered accusations in writing but was never heard before a panel, contrary to Article 50 of the Constitution and natural justice, and was condemned unheard on the basis of an audit report to which he contributed no input.

p. 6
03

What remedies are available for the unfair dismissal

Holding

Reinstatement was declined as impractical after nearly a decade; the court awarded notice pay, twelve months' damages for wrongful dismissal, six months' damages for loss of employment, a certificate of service and costs.

Reasoning

Sections 49 of the Employment Act and 12 of the Industrial Court Act 2011 empower the court to award damages and reinstatement. Given the length of time out of employment and the Claimant's professional qualifications, reinstatement would not be practically realized. Service pay was excluded because the Claimant contributed to a pension scheme under section 35(6) of the Employment Act. The court quantified notice pay and compensatory damages accordingly.

p. 6

Legal principles established

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  • Time in a contractual employment claim begins to run from the date the employer communicates the final decision disallowing the employee's appeal, not from the date of dismissal itself.
  • An employee must be accorded an opportunity to be heard before a panel before adverse disciplinary findings are made; condemning an employee unheard breaches natural justice and renders dismissal unfair.
  • An acquittal in a criminal trial cannot be relied upon by an employer to infer bad conduct justifying dismissal on the same facts.

Court orders

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  1. 1.The dismissal of the Claimant by the Respondent is set aside and is converted into a normal termination
  2. 2.The Claimant be paid one month's salary in lieu of notice Kshs.47,638/=.
  3. 3.Damages for wrongful dismissal calculated at Kshs.47,639/= x 12 = Kshs.571,668/=.
  4. 4.Damages for loss of employment at an equivalent of six months pay Kshs.47,639/= x 6 = Kshs.285,834/=.
  5. 5.The Claimant be provided with a certificate of service
  6. 6.The claimant is entitled to costs of this suit
  7. 7.The Claimant is free to execute this judgment as a decree within 30 days if not paid within that period

Authorities

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Legislation

  • Penal Codesection 210
  • Limitation of Actions Act (Cap 22)section 4(1)
  • Limitation of Actions Act (Cap 22)sections 26 and 27
  • Employment Act 2007section 41
  • Employment Act 2007section 44(4)
  • Employment Act 2007section 45
  • Employment Act 2007section 49
  • Employment Act 2007section 10
  • Employment Act 2007section 35(6)
  • Employment Act 2007section 51
  • Industrial Court Act 2011section 12
  • Constitution of Kenya 2010Article 50

Cases cited (3)

  • Elyna Sifuna Vs Kenya Broadcasting Corporation
    Industrial Cause No. 740 of 2011
  • Kenya Union of Sugar Plantation Allied Workers Union VS South Nyanza Sugar Company Limited
    Industrial Court Cause No. 346(N) of 2009
  • Kenya National Examination Council Vs Republic exparte Gathenji and others
    Civil Appeal No. 266 of 1966
Jurisdiction invoked
Industrial Court Act 2011 (dispute referred under the Industrial Court's jurisdiction; cause filed 2011)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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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, "JOSEPH OMWENGA V KENYA REVENUE AUTHORITY [2012] KEELRC 252 (KLR)", Case Analysis (2012). Cause 811 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/252/eng@2012-09-18

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