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ELRCPartially AllowedCause No 1045 of 2011· [2013] KEELRC 813 (KLR)

Benedict Musyoka Mutie v Payless Car Hire & Tours Limited [2013] KEELRC 813 (KLR)

Industrial Court of Kenya
3 October 2013
LNLinnet Ndolo
1,101 words in judgment
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The bottom line

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A Kenyan court ruled a driver's one-month dismissal unfair because the employer proved no cash shortage and never gave him a hearing.

What this practically means

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Executive summary

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The Claimant, a driver employed by the Respondent on 18th August 2009 at a monthly salary of Kshs. 15,000, was summarily dismissed on 18th September 2009 on allegations that he had incurred a cash/revenue shortage of Kshs. 2,540. He sued for wrongful and unfair termination, claiming notice pay, salary for the month worked, and twelve months' salary as compensation. The Respondent admitted the employment and the termination, alleging breach of contract through the cash shortage, and submitted that the Claimant was still on probation and thus not entitled to Employment Act benefits. The Court held that a probationary contract could not be inferred where the employment contract made no reference to probation, the service period being one month. On the Section 45(3) thirteen-month service threshold, the Court followed Lenaola J's decision in Samuel G. Momanyi v the Hon. Attorney General & SDV Transami Kenya Ltd declaring that provision unconstitutional insofar as it bars short-service employees from suing for unfair termination. On the merits, the Respondent produced no evidence establishing the alleged shortage, and there was no evidence the Claimant was heard as required by Section 41(1) and (2); the summary dismissal was therefore unfair under Section 45. The Court awarded one month's salary as compensation, one month's notice pay, and the salary for the month worked, totaling Kshs. 45,000, refused the claimed twelve months' compensation, barred recoveries from the award save statutory tax, made payment conditional on handover of company property, and ordered each party to bear their own costs.

Key legal issues

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01

Whether a probationary contract can be inferred absent contractual provision

Holding

No probationary contract can be inferred; the Claimant's one month of service did not place him on probation

Reasoning

The pleadings showed service from 18th August 2009 to 18th September 2009. The written submission that the Claimant was on probation could not stand because the contract itself made no reference to probation, and Sections 2 and 42 of the Employment Act require a probationary contract to be established, not assumed by inference.

p. 2
02

Whether the Section 45(3) thirteen-month service threshold bars the claim

Holding

The threshold does not bar the claim, the Court following Lenaola J's declaration that Section 45(3) is unconstitutional insofar as it denies employees with less than thirteen months' service the right to sue for unfair termination

Reasoning

The Court acknowledged the 13-month continuous service requirement in Section 45(3) but was persuaded by Samuel G. Momanyi v the Hon. Attorney General & SDV Transami Kenya Ltd, where Lenaola J declared the provision unconstitutional insofar as it denies short-service employees access to the Court for unfair termination claims. The Claimant could therefore maintain the claim.

p. 2
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Whether the summary dismissal was fair under Sections 41 and 45 of the Employment Act

Holding

The dismissal was unfair: the alleged cash shortage was not proved and the Claimant was not heard before dismissal

Reasoning

Under Section 45(2) the employer must prove a valid and fair reason and fair procedure. The Respondent's daily cashiering report system was described, but no evidence established the alleged Kshs. 2,540 shortage, so the allegation could not be verified. There was likewise no evidence of a hearing as required by Section 41(1) and (2). Both substantive and procedural fairness failed.

p. 3

Legal principles established

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  • A probationary contract cannot be inferred where the employment contract makes no reference to a probation period
  • An employer must prove both a valid reason and fair procedure for termination; absence of evidence of the alleged shortage and of a hearing renders dismissal unfair

Court orders

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  1. 1.Award of one month's salary in compensation for unfair termination (Kshs. 15,000)
  2. 2.Award of one month's salary in lieu of notice (Kshs. 15,000)
  3. 3.Award of salary for the month worked (Kshs. 15,000)
  4. 4.Total award of Kshs. 45,000, with no recoveries by the Respondent except statutory tax, subject to the Claimant handing over all Respondent assets in his possession
  5. 5.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSections 2 and 42 (probationary contracts)
  • Employment ActSection 45(3) (13 months' continuous service threshold)
  • Employment ActSection 45(2) (unfair termination)
  • Employment ActSection 41(1) and (2) (hearing before termination)

Cases cited (1)

  • Samuel G. Momanyi Vs. the Hon. Attorney General & SDV Transami Kenya Ltd
    [2012] eKLR
Jurisdiction invoked
Industrial Court of Kenya jurisdiction under the Employment Act, 2007 (unfair termination 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, "Benedict Musyoka Mutie v Payless Car Hire & Tours Limited [2013] KEELRC 813 (KLR)", Case Analysis (2013). Cause No 1045 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/813/eng@2013-10-03

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