Kariuki v Del Monte (K) Ltd (Cause 953 of 2011) [2012] KEELRC 259 (KLR)
The bottom line
#A Kenyan court found Del Monte unfairly dismissed a manager without a hearing, awarding him millions in damages plus his job back.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination was unfair and unprocedural under sections 41, 43 and 44 of the Employment Act
The termination was unfair under sections 43 and 41 of the Employment Act because the Respondent failed to prove gross misconduct at the time of dismissal and denied the Claimant notice and a hearing.
The Respondent elected to have the theft allegations investigated through state criminal proceedings, thereby precluding an internal disciplinary conclusion and giving the Claimant a legitimate expectation that his fate would depend on the criminal outcome. Before acquittal, the Respondent could not prove gross misconduct under section 44. The dismissal letter generally alleged gross misconduct without particulars, and the Claimant was given neither notice of the intended termination nor an opportunity to be heard, offending section 41 and Article 47 on fair administrative action.
Whether the termination grounded substantially on the employer's own deficient operational systems was lawful
Termination grounded substantially on the employer's deficient operational procedures, policies and systems was a constitutionally unfair labour practice and therefore an unlawful and unfair termination.
The Respondent's own special review report identified the absence of controls over movement of raw material containers, and the stolen sugar was under the stores section within the Finance Manager's responsibility, not the Claimant's Warehouse and Logistics function. The court held that imposing the loss of such theft on the employee offended Article 41(1) of the Constitution on fair labour practices. Section 43 required the Respondent to prove the reason for dismissal, which it failed to do.
Whether the Claimant was entitled to three months' salary in lieu of notice
Only one month's salary in lieu of notice was awarded, being the statutory notice prescribed by section 35(1)(c) of the Employment Act for monthly salaried employees.
The parties did not agree on any contractual notice period, so the statutory default under section 35(1)(c) prescribed a 28-day notice for monthly salaried employees. The court accordingly awarded one month's gross salary of Ksh.290,473.23 rather than the three months claimed.
Whether the Claimant was entitled to the maximum twelve months' gross salary compensation under section 49(1)(c)
The maximum compensation of twelve months' gross monthly salary (Ksh.3,485,666.76) was awarded in the absence of mitigating factors on the Respondent's part.
Having found the termination unfair, the court considered section 49(1)(c) of the Employment Act. There were no mitigating factors on the Respondent's part, and the court took into account the gross violations of the law: dismissal while the Claimant was in police custody, without notice or hearing, on grounds the Respondent could not prove, and against a loyal employee of 22 years who was later acquitted in the criminal case initiated by the Respondent.
Whether exemplary damages were payable for the dismissal
Exemplary damages of Ksh.5,000,000 were awarded because the compensation under the Employment Act could not adequately purge the Respondent's malicious and outrageous conduct.
The court invoked sections 12(3)(v) and 12(3)(viii) of the Industrial Court Act, 2011, and applied general principles governing exemplary damages: reprehensibility of conduct, proportionality between harm and award, and comparison with civil penalties in comparable cases. The Respondent's flagrant breach of the law against a trustworthy, long-serving top manager who was acquitted of the criminal charges it instigated warranted punitive condemnation beyond statutory compensation.
Whether the Claimant was entitled to reinstatement
Reinstatement was ordered in substance: the Claimant was to be reengaged as Warehouse and Logistics Manager from December 1, 2012 on the terms prevailing at dismissal or better terms as agreed.
The Respondent had not filled the Claimant's position, and the managers involved in the dismissal had retired, so trust and confidence had not been irretrievably lost. Weighing the balance of convenience, the court found reengagement in the interest of both parties, with effect from a convenient future date, treating the Claimant as if he had not been dismissed and requiring payment of salaries and benefits from the date of dismissal.
Legal principles established
#- Where an employer elects to have allegations against an employee investigated and determined through state criminal proceedings, it is precluded from internally concluding the disciplinary case and must take into account the outcome of the criminal proceedings.
- It is an unfair labour practice, unconstitutional under Article 41(1) of the Constitution, for an employer to visit an employee with adverse consequences arising from injury caused by deficiencies in the employer's own operational procedures, policies and systems.
- Summary dismissal on grounds of gross misconduct under section 44 stands on a thin line, and where the gross misconduct is not proved the protections of section 41 (notice and hearing) apply; employers are safer following due process of notification and hearing.
- An employee is entitled to fair administrative action under Article 47 of the Constitution before an employer prefers a criminal complaint arising from the employment relationship and dismisses him.
- A reason for termination that the employer could not have genuinely believed to exist at the time of termination cannot justify dismissal under section 43 of the Employment Act.
Court orders
#- 1.Declaration that the termination of the employment of the Claimant by the Respondent was unfair
- 2.Respondent to pay the Claimant Ksh.8,863,282.29 plus interest at court rates from the date of judgment until full payment
- 3.Claimant to be reengaged by the Respondent in the position of Warehouse and Logistics Manager with effect from December 1, 2012 upon the terms prevailing as at the date of dismissal or such better terms as the parties may agree
- 4.Respondent to pay costs of the cause
- Jurisdiction invoked
- Industrial Court Act, 2011 (Section 12) and Article 162(2) of the Constitution (labour and employment relations jurisdiction), reading the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kariuki v Del Monte (K) Ltd (Cause 953 of 2011) [2012] KEELRC 259 (KLR)", Case Analysis (2012). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/259/eng@2012-10-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.