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ELRCPartially AllowedCause No 997 of 2010· [2013] KEELRC 698 (KLR)

Pius Ngao Mwenga v Kenya Tourist Development Corporation [2013] KEELRC 698 (KLR)

Industrial Court of Kenya
8 August 2013
LNLinnet Ndolo
1,186 words in judgment
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The bottom line

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An employer who accuses an employee of theft in Kenya must prove it in court, or the dismissal is converted to a normal termination with notice pay and benefits.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 15th August 1989 as a Security Guard II and confirmed on permanent and pensionable terms, rose to Senior Guard I before being suspended on 6th May 2005 and dismissed on 30th May 2005 over allegations of stealing 21 fluorescent tubes from the basement of Utalii House. He was arrested and detained by police but released unconditionally and never charged. He claimed service pay of 12 months' salary, three months' salary in lieu of notice, leave allowance, unpaid retirement benefits, gratuity, and reinstatement or the equivalent of nine years' salary up to retirement. The respondent justified the dismissal as summary dismissal under Section 44(4)(g) of the Employment Act, 2007, contending the claimant was given an opportunity to defend himself and acknowledged all his dues in full and final settlement. The court first determined that the applicable law was the repealed Employment Act (Cap 226), since the 2007 Act has no retrospective application to terminations before its commencement. Under the repealed Act an employer could terminate on notice without reasons, but having advanced a reason, the respondent had to prove it. The court found no adequate evidence of the theft allegations even on a balance of probability, and no documentation of the alleged internal disciplinary process. The summary dismissal was converted to a normal termination, and the respondent was ordered to pay one month's salary in lieu of notice and unpaid retirement benefits totalling Kshs. 278,205, together with costs. The remaining heads of claim were not awarded.

Key legal issues

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01

Applicable employment law regime

Holding

The repealed Employment Act (Cap 226) applies because the dismissal occurred on 30th May 2005, before the Employment Act, 2007 came into force.

Reasoning

The court noted the Employment Act, 2007 contains no retrospective application provision. Dismissal preceded the Act's commencement date, so the repealed Act governs both the substantive and procedural questions, including the availability of summary dismissal under Section 17(g) and the absence of a statutory right to be heard.

p. 2
02

Lawfulness of the summary dismissal for alleged theft

Holding

The dismissal was converted to a normal termination because the Respondent failed to prove the theft allegations even on a balance of probability; the Claimant was never charged in court and the disciplinary process was undocumented.

Reasoning

Although Section 17(g) of the repealed Act permits summary dismissal on reasonable and sufficient grounds of suspicion of a criminal offence against the employer's property, the Respondent, having advanced a reason for termination, bore the burden of proving it. The police released the Claimant unconditionally, he was never charged, and no documentation of the internal disciplinary process existed. The allegations therefore remained unproved.

p. 3
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Remedies on conversion to normal termination

Holding

The Claimant was awarded one month's salary in lieu of notice and unpaid retirement benefits, totalling Kshs. 278,205.

Reasoning

Having converted the summary dismissal to a normal termination, the court assessed the contractual entitlements due on notice termination under Section 14(5) of the repealed Act: one month's salary in lieu of notice and the employer's unpaid contribution to the Staff Retirement Benefits Scheme. The wider heads claimed, including 12 months' service pay and reinstatement or salary up to retirement, were not awarded.

p. 3

Legal principles established

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  • The Employment Act, 2007 does not apply retrospectively to employment contracts terminated before its commencement; the repealed Employment Act (Cap 226) governs such terminations.
  • Under the repealed Employment Act an employer could terminate employment on notice without assigning reasons, and where a reason was advanced, the employer must prove it on a balance of probability.
  • Section 17(g) of the repealed Act permitted summary dismissal where an employee commits or on reasonable and sufficient grounds is suspected of having committed a criminal offence against the employer or the employer's property.

Court orders

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  1. 1.Conversion of the Claimant's termination to a normal termination
  2. 2.Payment of one month's salary in lieu of notice (Kshs. 23,220)
  3. 3.Payment of unpaid retirement benefits (Kshs. 254,985), totalling Kshs. 278,205
  4. 4.Respondent to pay the costs of the case

Authorities

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Legislation

  • Employment ActSection 44(4)(g)
  • Employment Act (Cap 226) (repealed)Section 17(g)
  • Employment Act (Cap 226) (repealed)Section 14(5)

Cases cited (1)

  • Barclays Bank of Kenya Ltd Vs Joseph Mwaura Njau
    [2006] eKLR
On appeal from
High Court at Nairobi (transferred from Chief Magistrate's Court at Nairobi)
Jurisdiction invoked
Transfer by order of the High Court at Nairobi dated 6th May 2010 to the Industrial Court under the applicable labour dispute transfer provisions

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "Pius Ngao Mwenga v Kenya Tourist Development Corporation [2013] KEELRC 698 (KLR)", Case Analysis (2013). Cause No 997 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/698/eng@2013-08-08

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