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ELRCPartially AllowedCause 1415 of 2011· [2013] KEELRC 447 (KLR)

CLEMENT MUTISO MUINDE v BRITISH AMERICAN INSURANCE COMPANY LIMITED [2013] KEELRC 447 (KLR)

Industrial Court of Kenya
8 April 2013
JRJames Rika
1,436 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court confirmed an employer can dismiss an employee before a related criminal trial ends, but must still pay accrued dues like salary and leave.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 13th October 1997 and rising to Disbursements Supervisor, was arrested in October 2004 at the respondent's instigation and charged with stealing by servant, over the loss of over Kshs. 1 million from his department between January and August 2004. He was acquitted on 6th December 2007 on the benefit of doubt. On 12th October 2007, while attending the criminal hearing, he was handed an envelope containing a letter of summary dismissal dated 17th September 2004, with a promise that terminal benefits would be computed and paid. He sued for salary for September 2004, one month's notice pay, leave pay, service pay for seven years, twelve months' salary as compensation, a declaration that termination was unfair, and a certificate of service. The respondent did not call evidence but maintained the dismissal was justified, that it was not bound by the criminal outcome, and that no benefits were due. The Court held that disciplinary proceedings need not await criminal trials, that the respondent had reasonable and sufficient grounds to suspect the claimant, and that the law at the time did not require an elaborate hearing. The dismissal was fair and justifiable, and claims for notice, gratuity and compensation failed. However, accrued benefits - salary for September 2004 and leave pay, totaling Kshs. 114,075 - were awarded, payable within 30 days, together with a certificate of service, with no order on costs.

Key legal issues

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01

Whether the disciplinary process had to await the criminal trial's outcome

Holding

No; the employer could discipline and summarily dismiss during the pendency of the criminal case.

Reasoning

The Court restated its consistent position that disciplinary proceedings may run concurrently with criminal trials on related facts. The employer's managerial prerogative was properly exercised in dismissing the Claimant while he faced criminal charges over the loss of company funds.

p. 2
02

Whether there was a valid reason for summary dismissal

Holding

Yes; the Respondent had more than reasonable and sufficient grounds to suspect the Claimant's involvement in the loss of finances.

Reasoning

The Claimant's department lost over Kshs. 1 million between January and August 2004; police investigation and arrest followed; the trial court found a case to answer; and the acquittal was on the benefit of doubt. Both the repealed Employment Act Cap 226 and the Employment Act 2007 permit summary dismissal on reasonable and sufficient grounds of suspicion of a criminal offence against the employer.

p. 2
03

Procedural fairness of the dismissal

Holding

Nothing turns on procedural fairness; the law applicable at the date of termination did not warrant an elaborate hearing.

Reasoning

The termination occurred when the law recognized employment at the will of the employer, so the absence of an elaborate hearing was not fatal. The Court also disbelieved the Claimant's claim that he learned of the dismissal only in 2007, holding that late receipt caused him no prejudice.

p. 3
04

Entitlement to terminal dues

Holding

The Claimant was entitled to salary for September 2004, leave pay and a certificate of service, but not notice pay, gratuity or compensation.

Reasoning

The Respondent failed to produce employment records discounting the Claimant's evidence on salary and leave, and had repeatedly promised to pay terminal dues. Gratuity was not in the contract and no company practice was proved. Notice and compensation were not merited given the summary dismissal for cause.

p. 3

Legal principles established

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  • Employers are not limited in taking disciplinary proceedings against employees pending criminal trials over related issues of fact; the disciplinary process need not await finalization of the criminal case.
  • An employer may summarily dismiss an employee who commits, or on reasonable and sufficient grounds is suspected of having committed, a criminal offence against or to the substantial detriment of the employer or the employer's property.
  • Accrued terminal benefits such as salary and leave pay are payable regardless of the manner of the employee's exit.

Court orders

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  1. 1.The Respondent shall pay the Claimant his salary of September 2004 at Kshs. 55,600
  2. 2.The Respondent shall pay the Claimant leave pay of Kshs. 58,475
  3. 3.The total sum of Kshs. 114,075 shall be paid within 30 days of delivery of the Award
  4. 4.Certificate of service be released to the Claimant forthwith
  5. 5.No order on the costs

Authorities

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Legislation

  • Employment Act (repealed)Cap 226
  • Employment Act 2007Not specified
Jurisdiction invoked
Jurisdiction of the Industrial Court of Kenya over employment and labour relations disputes

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (7)

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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, "CLEMENT MUTISO MUINDE v BRITISH AMERICAN INSURANCE COMPANY LIMITED [2013] KEELRC 447 (KLR)", Case Analysis (2013). Cause 1415 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/447/eng@2013-04-08

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