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ELRCPartially AllowedIndustrial Court Cause (Nakuru) – memorandum of claim filed 10.04.2012 (number not stated in judgment)· [2013] KEELRC 507 (KLR)

NAOMI J. MOROGO V VALLEY HOSPITAL LIMITED [2013] KEELRC 507 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
12 February 2013
BOByram Ongaya
2,402 words in judgment
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The bottom line

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A Kenyan hospital was ordered to pay a nurse 12 months' salary because it fired her without notice, a hearing, or reasons.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a nurse from 1 November 2000 and later serving as Nurse-In-Charge, was terminated with effect from 7 December 2011 by a letter giving no reasons but paying terminal dues including one month salary in lieu of notice. She claimed notice pay, severance pay for 11 years, commissions, compensation under section 49(c) of the Employment Act and a certificate of service. The parties agreed the employment facts, last gross salary of Ksh. 45,465 and the date of termination, leaving three issues: whether the termination was summary dismissal, entitlement to gratuity, and if so the fairness of its computation. Neither party called witnesses; the court decided on documents and submissions. The court held that payment in lieu of notice is available only where the employee has fundamentally breached the contract through gross misconduct under section 44 of the Employment Act, and that contractual clauses permitting termination by payment in lieu are otherwise unlawful and contrary to section 44(2). Guided by Article 47 of the Constitution and section 41 of the Act, and following its own prior decision in Shankar Saklani v DHL Global Forwarding (K) Limited, it held the claimant was entitled to notice, a hearing and written reasons; the summary termination was unfair. Compensation of twelve months' gross salary (Ksh. 545,580) was awarded. The gratuity/service pay claim failed because the claimant was an NSSF member with remittances made, per section 35(6). Judgment was entered for the claimant with a declaration of unfair termination, compensation plus interest, costs and a certificate of service.

Key legal issues

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01

Whether termination with payment in lieu of notice amounted to lawful summary dismissal

Holding

The termination was summary termination and unlawful and unfair because no notice, hearing or reasons were given despite no gross misconduct

Reasoning

The court held that section 35 payment in lieu of notice must be read within section 44, which permits summary dismissal only for gross misconduct. Article 47 of the Constitution entitled the claimant to fair administrative action, including written reasons and a hearing under section 41 of the Employment Act. Having served 11 years diligently without warnings and having been promoted, she deserved notice, a hearing and reasons before separation; the sudden termination without these was unfair and unlawful.

p. 4
02

Whether the claimant was entitled to gratuity/service pay

Holding

Not entitled, as she was an NSSF member with remittances made, per section 35(6) of the Employment Act

Reasoning

There was no dispute the claimant was a member of the National Social Security Fund and that remittances were made. Section 35(6) disentitles an employee who is a member of a provident or pension fund from service pay. Accordingly the gratuity claim failed and the fairness of its computation did not arise.

p. 4

Legal principles established

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  • Payment in lieu of termination notice is available only where the employee has fundamentally breached the contract through gross misconduct; contractual provisions permitting termination by payment in lieu are otherwise unlawful under section 44(2)
  • Employers must accord employees a termination notice and a hearing, guided by Article 47 of the Constitution and section 41 of the Employment Act

Court orders

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  1. 1.A declaration that the termination of the contract of employment was unfair
  2. 2.The Respondent to pay the Claimant Ksh. 545,580 plus interest at court rates from the date of judgment till full payment
  3. 3.The Respondent to pay costs of the case
  4. 4.The Respondent to issue and deliver the Claimant's certificate of service

Authorities

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Legislation

  • Employment Act, 2007section 49(c)
  • Employment Act, 2007section 51
  • Employment Act, 2007section 44(1)
  • Employment Act, 2007section 44(2)
  • Employment Act, 2007section 44(4)
  • Employment Act, 2007section 35(1)(c)
  • Employment Act, 2007section 35(5)
  • Employment Act, 2007section 35(6)
  • Employment Act, 2007section 36
  • Employment Act, 2007section 41
  • Constitution of Kenya, 2010Article 47 (including 47(3))
  • Constitution of Kenya, 2010Article 10
  • Constitution of Kenya, 2010Article 159(1)
  • Constitution of Kenya, 2010Preamble

Cases cited (1)

  • SHANKAR SAKLANI -VERSUS- DHL GLOBAL FORWARDING (K) LIMITED
    Industrial Court Cause No. 562 of 2012 at Nairobi
Jurisdiction invoked
Employment and labour relations jurisdiction under Article 162(2) of the Constitution (Industrial Court); judgment does not state the provision expressly

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "NAOMI J. MOROGO V VALLEY HOSPITAL LIMITED [2013] KEELRC 507 (KLR)", Case Analysis (2013). Industrial Court Cause (Nakuru) – memorandum of claim filed 10.04.2012 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/507/eng@2013-02-12

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