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ELRCAllowedMemorandum of Claim dated 21st July 2011 (number not stated in judgment)· [2013] KEELRC 838 (KLR)

John Chichir v Kenya Police Staff Sacco Society Ltd [2013] KEELRC 838 (KLR)

Industrial Court (Employment and Labour Relations Court)
24 September 2013
2,490 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, employed by the Respondent SACCO from 1992 and serving as Chief FOSA Cashier, was sent on compulsory leave in December 2010 following the loss of 15 SACCO cheques valued at about Kshs.7 million. After his leave was extended, he was issued a show cause letter on 12th April 2011 alleging involvement in fraudulent transactions, replied denying the allegations, and received a termination letter dated 12th May 2011 backdated to 1st May 2011, citing negligence. He claimed unfair termination, notice pay, 12 months' compensation, a certificate of service, costs and interest. The Respondent denied the claim, relying on internal investigations and the authority of Joseph Muthama Ndambuki v Del Monte (K) Ltd on termination without reason. The court, applying Sections 41, 43, 44, 45, 49 and 51 of the Employment Act and the Respondent's staff policy (which required three warnings, self-defence and a disciplinary committee), found the Respondent had not complied with either the statute or its own policy: the Claimant was never given a hearing, no evidence of investigations or a Board decision was produced, and no warnings were issued. The termination was declared unfair. The court awarded one month's salary in lieu of notice (Kshs.86,000) since none had been paid, maximum compensation of 12 months' gross salary (Kshs.1,032,000) for over 18 years of service, a certificate of service, costs and interest from the date of judgment, totaling Kshs.1,118,000. Judgment was read in open court on 24th September 2013 by Lady Justice Maureen Onyango.

Key legal issues

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01

Procedural fairness of the termination

Holding

The termination was unfair because neither the Employment Act (Section 41) nor the Respondent's staff policy was followed.

Reasoning

The Claimant was only asked to respond to a show cause letter. He was never called to explain the charges or given a hearing under Section 41(1) and (2). The staff policy required three warning letters, an opportunity for self-defence and fair hearing, and handling by a disciplinary committee or the Board. The Respondent produced no evidence of investigations, a Board meeting or the committee's findings. Other employees implicated were not similarly treated.

p. 4
02

Entitlement to one month's salary in lieu of notice

Holding

The Claimant was entitled to Kshs.86,000 as one month's salary in lieu of notice.

Reasoning

Although the termination letter offered one month's salary in lieu of notice, no such salary was actually paid. The letter backdated termination to 1st May 2011, but termination takes effect on notification. The court therefore awarded the notice pay of Kshs.86,000.

p. 4
03

Compensation under Section 49(1)(c)

Holding

The Claimant, having worked for over 18 years, was awarded the maximum 12 months' gross salary of Kshs.1,032,000.

Reasoning

Having found the termination unfair, the court awarded compensation under Section 49(1)(c). The Claimant's long service of more than 18 years, his promotions and good record justified full compensation of 12 months' gross salary at his last salary of Kshs.86,000.

p. 4
04

Certificate of service

Holding

The Claimant was entitled to a certificate of service under Section 51 of the Employment Act.

Reasoning

Section 51 of the Employment Act entitles an employee to a certificate of service, and the Claimant was never issued one. The court accordingly ordered its issuance as part of the judgment.

p. 4

Legal principles established

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  • A letter of termination takes effect on the date the employee is notified of the termination, not an earlier backdated date.
  • An employer considering termination must explain the reasons to the employee and hear any representations, per Section 41 of the Employment Act.
  • Termination without notice or with less notice than the employee is entitled to amounts to summary dismissal under Section 44(1).

Court orders

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  1. 1.Declaration that the termination of the Claimant by the Respondent was unfair
  2. 2.Judgment for the Claimant in the sum of Kshs.1,118,000 (one month's salary in lieu of notice of Kshs.86,000 and 12 months' gross salary compensation of Kshs.1,032,000)
  3. 3.Issuance of a Certificate of Service to the Claimant
  4. 4.Costs of the suit to the Claimant
  5. 5.Interest from the date of judgment

Authorities

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Legislation

  • Employment ActSection 41(1) and (2)
  • Employment ActSection 43
  • Employment ActSection 44(1),(2),(3),(4)
  • Employment ActSection 45
  • Employment ActSection 49(1)(c)
  • Employment ActSection 51
  • Respondent's Staff Policy (Exhibit 'f')Paragraphs 2.4.4, 2.4.5 and 2.4.8

Cases cited (1)

  • Joseph Muthama Ndambuki and others versus Delmote (k) Limited (2012) EKLR
    (2012) EKLR
Jurisdiction invoked
Employment Act, Sections 41, 43, 44, 45, 49 and 51

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, "John Chichir v Kenya Police Staff Sacco Society Ltd [2013] KEELRC 838 (KLR)", Case Analysis (2013). Memorandum of Claim dated 21st July 2011 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/838/eng@2013-09-24

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