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ELRCPartially AllowedCause No 203 of 2011· [2013] KEELRC 675 (KLR)

Gachuri v Energy Regulatory Commission (Cause 203 of 2011) [2013] KEELRC 675 (KLR)

Industrial Court of Kenya
8 July 2013
3,334 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Industrial Court awarded a dismissed executive 12 months' salary because his employer gave him almost no chance to defend himself.

What this practically means

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Executive summary

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The Claimant, formerly Chief Manager, Technical Affairs of the Energy Regulatory Commission, sued claiming he was wrongfully and unfairly terminated on 29th September 2008, seeking special damages of Kshs.42,588,000, general damages for wrongful dismissal, humiliation and loss of future earnings, costs and interest. The Respondent maintained the termination was lawful and procedural, that the Claimant acknowledged it and willingly accepted three months' salary in lieu of notice and partial pension withdrawal benefits. The court, after hearing the Claimant and two Respondent witnesses, framed two issues: whether the termination was unfair, and whether the Claimant was entitled to the prayers sought. It found the termination unfair: the Claimant was ambushed by an email summoning him to a performance meeting on three hours' notice, given less than 24 hours to respond to a year's worth of written misconduct charges, denied a hearing before the Board - the accuser, the Director General, himself recommending termination to the Commission - and handed a termination letter giving no reasons, contrary to both the HR Policy Manual and sections 41, 43, 45 and 46 of the Employment Act. On remedies, the court held no damages run to retirement since no employment is permanent; it dismissed the Kshs.42,588,000 special damages claim, awarded maximum compensation of 12 months' salary (Kshs.4,083,129), plus Kshs.340,232.40 for 32 wrongly deducted leave days, with costs and interest from the date of judgment. Judgment was entered for the Claimant in the total sum of Kshs.4,423,361.40.

Key legal issues

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01

Procedural fairness of the termination

Holding

The termination was unfair - the Claimant was ambushed with a 3-hour-notice meeting, given less than 24 hours to respond to written charges, never heard by the Board, and dismissed without reasons in the termination letter.

Reasoning

The Director General, who was the complainant, summoned the Claimant to a meeting on 3 hours' notice, then gave him less than 24 hours to respond to a year's worth of non-specific charges. The same Director General recommended termination to the Commission without the Claimant being heard by the Board. The termination letter gave no reasons, contrary to the HR Policy Manual and the Employment Act, and the Claimant had received no prior warnings.

p. 5
02

Entitlement to special damages of Kshs.42,588,000

Holding

Refused - compensation for unfair termination is capped at 12 months' gross salary under section 49 of the Employment Act.

Reasoning

The Employment Act's remedies for unfair termination do not include damages to the date of retirement. A 'permanent and pensionable' contract is still terminable, and the Claimant could only recover damages for the unprocedural or substantively unjustified termination. The claim of six years' salary to retirement was therefore dismissed.

p. 6
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Compensation payable

Holding

Maximum compensation of 12 months' salary, Kshs.4,083,129, awarded given the Claimant's age and dim employment prospects.

Reasoning

Having found the termination unfair, and considering the Claimant was 54 years old with little chance of securing similar employment elsewhere, the court held that maximum compensation under section 49 of the Employment Act was reasonable.

p. 6
04

Deduction of compulsory leave days from final payment

Holding

Wrongful - the HR Policy Manual provides only for interdiction or suspension, not compulsory leave; the Claimant awarded Kshs.340,232.40 for the 32 unpaid leave days.

Reasoning

The leave form showed the Claimant entitled to 63 days' annual leave. He was sent on compulsory leave for disciplinary purposes although the HR Policy Manual provides only for interdiction or suspension. Having already been paid for 31 days, the balance of 32 days was wrongly deducted and was awarded.

p. 6

Legal principles established

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  • An employer must explain reasons for contemplated termination and give the employee an opportunity to be heard; termination without reasons violates both the Employment Act and the employer's own HR Policy Manual.
  • No employment is permanent; even permanent and pensionable contracts may be terminated, and damages cannot run to retirement.
  • Where an employee is ambushed with a short-notice disciplinary meeting, given less than 24 hours to respond, and the accuser recommends discipline to the decision-making body, the termination is unfair.

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent in the sum of Kshs.4,423,361.40
  2. 2.The Respondent to pay the costs of the Claimant for filing of this claim
  3. 3.The amount awarded to attract interest from the date of judgment to the date of payment in full

Authorities

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Legislation

  • Employment ActSections 41, 43, 45, 46, 49
  • Industrial Court ActNot specified
  • Respondent's Human Resources Policy ManualClause 6.81
Jurisdiction invoked
Industrial Court Act (claim transferred to the Industrial Court for hearing and final determination on 28th January 2011)

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, "Gachuri v Energy Regulatory Commission (Cause 203 of 2011) [2013] KEELRC 675 (KLR)", Case Analysis (2013). Cause No 203 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/675/eng@2013-07-08

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