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ELRCPartially AllowedCause 286 of 2011· [2013] KEELRC 415 (KLR)

RICHARD OJUANG HABADA v ELECTRO TECHNOLOGIES LIMITED [2013] KEELRC 415 (KLR)

Industrial Court of Kenya
10 April 2013
MNMathews N. Nduma
1,340 words in judgment
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The bottom line

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Kenya's Industrial Court ruled the dismissal unfair because the employer had no documents proving poor performance, awarding six months' salary.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 1st August 2006 as a shamba boy and later a messenger, claimed that his employment was unfairly terminated by letter dated 3rd May 2010. He sought one month's salary in lieu of notice (Kshs.7,500), payment in lieu of leave days not taken over four years (Kshs.28,000), and a maximum of twelve months' salary as compensation for unfair termination. The respondent, in its memorandum of defence, conceded employment but alleged termination for poor workmanship following deteriorating service, and produced a terminal dues computation showing payment of notice pay, pro-rata leave allowance, salary for days worked, and deductions including NSSF, NHIF, PAYE and an outstanding loan, leaving a negative balance. The hearing proceeded on 3rd December 2012 in the respondent's absence, the court taking the filed defence into account. The court held that under Section 43(1) of the Employment Act the employer must prove the reason for termination, and since the respondent produced no admonishment letters or a termination letter citing poor performance, the termination was unfair under Sections 43(1) and 45, entitling the claimant to compensation under Section 49(1)(c). However, the court accepted the respondent's evidence that terminal dues including notice pay and leave allowance were paid, and that the loan was lawfully deducted, dismissing all claims for terminal benefits. Taking into account four years of faithful service and the abrupt termination, the court awarded six months' salary (Kshs.45,000) as compensation and ordered the respondent to pay the costs of the suit.

Key legal issues

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01

Whether the respondent proved the reason for termination

Holding

The termination was unfair; the respondent failed to produce any documentary evidence of poor performance admonishment or a termination letter stating that reason

Reasoning

The employer alleged poor work performance but produced no letter of admonishment or counselling, nor a termination letter citing that reason. Under Section 43(1) of the Employment Act the employer must prove the reason for termination, failing which the termination is deemed unfair under Section 45. The claimant, having faithfully served for four years, was abruptly terminated without preparation, entitling him to compensation under Section 49(1)(c).

p. 3
02

Whether the claimant was entitled to notice pay, leave dues and other terminal benefits

Holding

Claims for terminal benefits dismissed; the court accepted the respondent's evidence that these were paid and that the loan was lawfully deducted

Reasoning

Although the claimant denied receiving salary advances, his own payslip for October 2009 showed a deduction of Kshs.1,010 for salary advance, which he did not address in evidence. The terminal dues computation dated 4th May 2010, appearing to be signed by the claimant, showed payment of notice pay, pro-rata leave allowance and salary for days worked. The court accordingly found these dues were paid and dismissed all terminal benefits claims.

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Legal principles established

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  • Where an employer alleges termination for poor work performance, it must demonstrate the reason through admonishments, counselling, performance improvement steps and warnings; failing which the termination is unfair under Sections 43(1) and 45 of the Employment Act.
  • The employer bears the burden of proving the reason(s) for termination; failure to do so renders the termination unfair.

Court orders

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  1. 1.The claimant is awarded six (6) months' salary being compensation for unfair dismissal in the sum of Kshs.45,000 (7,500 x 6)
  2. 2.All claims for payment of terminal benefits are dismissed
  3. 3.The Respondent to pay the costs of the suit

Authorities

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Legislation

  • Employment Act No. 11 of 2007Section 43(1)
  • Employment Act No. 11 of 2007Section 45(1)(2)
  • Employment Act No. 11 of 2007Section 49(1)(c)
Jurisdiction invoked
Industrial Court of Kenya jurisdiction under the Employment Act (Cause filed under the court's employment jurisdiction)

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, "RICHARD OJUANG HABADA v ELECTRO TECHNOLOGIES LIMITED [2013] KEELRC 415 (KLR)", Case Analysis (2013). Cause 286 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/415/eng@2013-04-10

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