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ELRCPartially AllowedCause No. 684 of 2012 (Consolidated with Causes Nos. 1002 and 1092 of 2012)· [2013] KEELRC 54 (KLR)

Gilbert Odanga & 2 others v Kenya Comfort Hotel [2013] KEELRC 54 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
29 November 2013
3,020 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Sarova Stanley's staff dismissals over a missing-drinks stock take were ruled unfair because the hotel couldn't prove the theft or hold a fair hearing.

What this practically means

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Executive summary

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Three causes (Nos. 684, 1002 and 1092 of 2012) against the same employer, arising from a surprise stock take on about 13th January 2012 that found 9 bottles of beer and 3 tots of whisky missing, were consolidated with Cause No. 684 of 2012 as the primary file. The claimants - a bar tender on permanent and pensionable terms and two fixed-term waiters/waitresses - were summarily dismissed for theft and claimed notice pay, leave pay, service pay, service charge and damages. The court held the dismissals wrongful, unlawful and unfair: the stock take ignored the opening stock and morning sales, no evidence linked the claimants to the loss, and no fair hearing was afforded. The Respondent failed to discharge its burden under Section 47(5) of the Employment Act. The 1st Claimant was awarded 10 months' gross salary (Kshs.140,156) as compensation under Section 49(1)(c), and the 2nd and 3rd Claimants were awarded compensation equivalent to salary for the unexpired terms of their contracts, following the Ruth Gathoni Ngotho-Kariuki authority. Notice pay and admitted service charge were awarded. Claims for severance pay failed because the claimants were NSSF-registered, and no award was made for leave pay as the Respondent showed outstanding leave had been paid. Total awards: Kshs.171,312, Kshs.235,640 and Kshs.116,513 respectively, with costs to each claimant.

Key legal issues

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01

Fairness of the summary dismissals

Holding

The dismissals were wrongful, unlawful and unfair; no evidence linked the claimants to the alleged loss and no fair hearing was given

Reasoning

The surprise stock take excluded the opening stock and ignored sales made on the morning of the take, making the discrepancies unreliable. No evidence connected the claimants, jointly or separately, to the loss, and none was given an opportunity to explain before the abrupt dismissal. The General Manager's testimony on the stock take was hearsay, and warnings relied on for the 1st Claimant were unrelated to loss of stock.

p. 4
02

Burden of proof under Section 47(5) Employment Act

Holding

The Respondent failed to justify the dismissal or prove fair procedure

Reasoning

The court found the 1st Claimant had established a prima facie case of unlawful dismissal on a preponderance of evidence, and the Respondent failed to discharge its statutory onus to show the reasons for dismissal were justified, and denied him a fair hearing contrary to Section 42(2)(c).

p. 7
03

Remedy for unfair termination of fixed-term contracts

Holding

The 2nd and 3rd Claimants, on fixed-term contracts, were awarded compensation equivalent to the salary they would have earned for the unexpired term

Reasoning

Following the approach in Ruth Gathoni Ngotho-Kariuki, the court held compensation for the reasonably expected future employment adequately covers unfair termination, and awarded the 2nd Claimant 18 months' salary (Kshs.215,280) and the 3rd Claimant the equivalent for his unexpired contract.

p. 7
04

Compensation for the permanent employee

Holding

The 1st Claimant, employed on permanent and pensionable terms, was awarded 10 months' gross salary

Reasoning

In exercising discretion under Section 49(1)(c), the court considered his over 8 years of service, minimal contribution to the termination, part payment of terminal benefits during the proceedings, and the unlawful curtailment of his means of livelihood, awarding 10 months' gross salary of Kshs.140,156.

p. 7

Legal principles established

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  • An employer bears the onus under Section 47(5) of the Employment Act to justify the reasons for dismissal; failure to afford a fair hearing renders a dismissal unfair
  • Compensation for unfair termination of a fixed-term contract may be pegged on the remuneration the employee would have earned for the unexpired term

Court orders

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  1. 1.Compensation for unfair termination: 1st Claimant Kshs.140,156 (10 months gross salary); 2nd Claimant Kshs.215,280; 3rd Claimant Kshs.104,052
  2. 2.Notice pay: 1st Claimant Kshs.14,156; 2nd Claimant Kshs.12,960; 3rd Claimant Kshs.8,761
  3. 3.Service charge: 1st Claimant Kshs.17,000; 2nd Claimant Kshs.7,400; 3rd Claimant Kshs.3,700
  4. 4.Total awards: 1st Claimant Kshs.171,312; 2nd Claimant Kshs.235,640; 3rd Claimant Kshs.116,513
  5. 5.No award for payment in lieu of leave
  6. 6.Respondent to pay costs of the suit to each of the Claimants

Authorities

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Legislation

  • Employment ActSection 49(1)(c)
  • Employment ActSection 47(5)
  • Employment ActSection 42(2)(c)

Cases cited (1)

  • Ruth Gathoni Ngotho-Kariuki vs. Presbyterian Church of East Africa and Presbyterian Foundation
    [2012] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction over claims of wrongful and unfair termination (Employment Act, Sections 42(2)(c), 47(5) and 49(1)(c))

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Gilbert Odanga & 2 others v Kenya Comfort Hotel [2013] KEELRC 54 (KLR)", Case Analysis (2013). Cause No. 684 of 2012 (Consolidated with Causes Nos. 1002 and 1092 of 2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/54/eng@2013-11-29

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