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ELRCPartially AllowedIndustrial Court Cause (Nakuru) – memorandum of claim filed 24.04.2013· [2013] KEELRC 767 (KLR)

Bernard Damunga Ndunda v Kerio Valley Development Authority [2013] KEELRC 767 (KLR)

Industrial Court of Kenya
20 September 2013
BOByram Ongaya
2,976 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court reinstated a surveyor unfairly dismissed without notice or a hearing, holding employers cannot punish staff for failures in their own systems.

What this practically means

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Executive summary

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The claimant, a professional surveyor employed by Kerio Valley Development Authority from 7.11.2011, was summarily dismissed on 1.11.2012 after an internal audit found that, having been advanced Kshs.80,000 by the respondent to hire a total work station for its Survey Division, he surrendered the cash through receipts from a shop that did not deal in survey equipment. The audit had merely recommended that future equipment hiring go through the procurement department and that the claimant be cautioned. The board nonetheless upheld the summary dismissal. The court framed three issues: due process, valid reason, and remedies. It held that the audit, though attended by the claimant, was not a disciplinary process; the respondent was obliged to issue a show-cause letter and give a hearing under section 41 of the Employment Act, and its failure rendered the dismissal procedurally unfair. On substantive fairness, the court found the respondent failed to establish a valid reason: the direction to the claimant to source and pay for equipment itself breached public procurement and financial management procedures, and it was an unfair labour practice to visit the employee with adverse consequences for losses attributable to the employer's own defective operational systems. Reinstatement was granted under Article 236 of the Constitution with full gross pay of Kshs.1,040,589.00 from 1.11.2012 to 30.09.2013; alternatively Kshs.2,175,777.00 including 12 months' salary for the unfair termination. A claim for 14 years' gross pay to retirement was refused as the claimant could obtain alternative employment. The respondent was ordered to pay costs.

Key legal issues

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01

Whether the claimant was accorded due process before dismissal

Holding

No due process was accorded; the dismissal was procedurally unfair because no show-cause letter was issued and no hearing under section 41 of the Employment Act was held; the audit process was not a disciplinary process.

Reasoning

The audit findings were a preliminary finding of contemplated misconduct and established that the respondent's management breached procurement procedures. The respondent was then obliged to particularise the alleged misconduct in a show-cause letter and give the claimant a hearing under section 41. The board minutes showed dismissal on mere allegations, without notice of the details of allegations and without a chance of self-exculpation; hence no disciplinary process took place.

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02

Whether there was a valid reason for dismissal

Holding

The respondent failed to establish a valid reason; the alleged dishonesty was not investigated and established, and the respondent's own defective systems caused the irregular transaction.

Reasoning

The claimant hired the equipment as directed, but the direction itself breached public procurement and financial management procedures binding the respondent as a state corporation. The claimant was placed in a difficult position performing duties of procurement and accounting experts. The court held it was unfair to victimise the claimant where the respondent maintained defective operational systems and its true culprits were not held to account, applying its Grace Gacheri Muriithi opinion on unfair labour practices.

p. 4
03

Whether the claimant is entitled to the remedies prayed for

Holding

Reinstatement with full gross pay from 1.11.2012 to 30.09.2013 was granted; alternatively, Kshs.2,175,777.00 comprising the gross pay and 12 months' salary in lieu, with the 14-year claim refused.

Reasoning

Both parties being subject to Article 236 of the Constitution, and no good reason having been shown to make reinstatement impracticable, reinstatement was ordered. In the alternative, the claimant was entitled to 12 months' gross pay as compensation for unfair termination because the respondent breached both procedural and substantive fairness. The 14-year claim failed as the claimant could obtain alternative employment.

p. 4

Legal principles established

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  • Except for daily-wage contracts, an employer effecting summary dismissal must serve notice and accord the employee a hearing under section 41 of the Employment Act; the only leeway under section 44(1) is a shorter notice on account of gross misconduct.
  • It is an unfair labour practice for an employer to visit upon an employee adverse consequences such as dismissal for losses attributable to deficiencies in the employer's own operational policies and systems, contrary to Article 41(1) of the Constitution.
  • An audit or preliminary administrative process attended by an employee does not amount to the disciplinary process contemplated by section 41 of the Employment Act, which requires notice of the allegations and an opportunity to exculpate oneself.

Court orders

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  1. 1.A declaration that the claimant's summary dismissal by the respondent was unfair
  2. 2.Reinstatement of the claimant to his position with full accruing benefits from 1.11.2012, with full gross pay of Kshs.1,040,589.00 at Kshs.94,599.00 per month for 11 months ending 30.09.2013, and the claimant to report on 1.10.2013 for assignment of duties
  3. 3.In the alternative to reinstatement, the respondent to pay the claimant Kshs.2,175,777.00
  4. 4.Payment of the amount in (b) or (c) as elected, by 1.11.2013, failing which interest at court rates to run until full payment
  5. 5.The respondent to file and serve by 1.10.2013 an affidavit indicating its election between reinstatement and payment
  6. 6.The respondent to pay the costs of the suit

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 41(1); Article 236
  • Employment Act, 2007sections 35, 35(1)(a), 41, 43, 44, 44(1), 49(4)(f)
  • KVDA Terms and Conditions of Servicesection 10.4.1(h)
  • Code of Conduct for Public OfficersPart III (8)

Cases cited (3)

  • Shankar Saklani v DHL Global Forwarding (K) Limited
    Industrial Court Cause No. 562 of 2012 at Nairobi
  • Grace Gacheri Muriithi v Kenya Literature Bureau
    (2012) eKLR
  • Kenya Union of Printing, Publishing, Paper Manufacturing and Allied Workers v Timber Treatment International
    Industrial Court Cause No. 12 of 2012 at Nakuru
Jurisdiction invoked
Employment and labour relations jurisdiction of the Industrial Court under the Constitution and the Employment Act, 2007 (court determined unfair summary dismissal claim)

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, "Bernard Damunga Ndunda v Kerio Valley Development Authority [2013] KEELRC 767 (KLR)", Case Analysis (2013). Industrial Court Cause (Nakuru) – memorandum of claim filed 24.04.2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/767/eng@2013-09-20

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