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ELRCPartially AllowedCause No 155 of 2013· [2013] KEELRC 882 (KLR)

Johnson Jadhan Othieno Okumu v Pwani Oil Products Limited [2013] KEELRC 882 (KLR)

Industrial Court of Kenya
8 November 2013
RSRadido Stephen
2,859 words in judgment
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The bottom line

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A Kenyan employer must prove both a valid reason and a fair process before firing an employee; suspicion alone is not enough.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as an Operator-Boiler Grade 2 from 18 April 2011 on a two-year renewable contract, was summarily dismissed by letter dated 2 February 2013 pursuant to section 44(4)(g) of the Employment Act on suspicion of stealing a roll of 95mm cable at the Respondent's Jomvu water treatment plant. He claimed compensation for wrongful summary dismissal, unpaid salary for four days in February 2013, unpaid leave allowance for six days, damages equivalent to twelve months' wages and one month's salary in lieu of notice. The Respondent denied employment and liability, asserting the Claimant was reasonably suspected of theft after remaining at the plant beyond his shift and being implicated by fellow employees. The Court found the Claimant was an employee on the terms of his unchallenged offer letter, holding that under the Employment Act the burden of proving reasons for termination, their validity and fairness, and justifying the dismissal rests on the employer. The Respondent failed to establish procedural fairness under section 41: no notice, no representative, no minutes, and no hearing and consideration of representations. Substantively, the Claimant's explanation for remaining beyond his shift was plausible and unchallenged; the implicating employees were not called, the investigation report was not produced, and the Claimant was never confronted with the accusations. The dismissal was held both procedurally and substantively unfair. The Court awarded one month's salary in lieu of notice (Kshs 17,500/-) and three months' gross wages as damages (Kshs 52,500/-), totaling Kshs 70,000/-, considering the contract's imminent expiry and absence of renewal expectations. The prayers for unpaid salary and leave were dismissed as acknowledged paid, and each party was ordered to bear its own costs, the Court noting costs do not follow the event in the Industrial Court.

Key legal issues

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01

Whether the Claimant was an employee of the Respondent

Holding

The Claimant was an employee on the terms of the offer of employment letter, which was not challenged by the Respondent

Reasoning

The Respondent denied employment through bare denials and putting the Claimant to strict proof. The Court held that under the Employment Act framework the burden lies on the employer, not the claimant. The Claimant produced his offer of employment letter, which the Respondent did not challenge, establishing employment on the terms and conditions set out in that letter.

p. 3
02

Whether the dismissal was procedurally unfair

Holding

The dismissal was procedurally unfair because the Respondent failed to establish compliance with the essential ingredients of section 41 of the Employment Act

Reasoning

The Human Resource Executive, whose function ordinarily handles disciplinary processes, only came in to calculate final dues; no minutes were kept; the disciplinary policy was not given to the Claimant; and there was no evidence the Claimant was informed of his right to have a colleague or representative present. The Court preferred the Claimant's testimony and found notification, representation and hearing requirements were not met.

p. 4
03

Whether the dismissal was substantively unfair

Holding

The dismissal was substantively unfair; the Respondent failed to prove the Claimant was reasonably involved in theft of the cable or that the reason was valid and fair

Reasoning

The Claimant's explanation for remaining beyond his shift - waiting for his reliever who reported at about 1900 hours - was plausible and unchallenged despite the existence of a clocking system. The employees who implicated him were not called to testify, their statements were not produced, the investigations report was not produced in court, and the Claimant was not confronted with his accusers. Dismissal on grounds of gross misconduct was therefore not justified.

p. 4
04

Appropriate remedies for the unfair dismissal

Holding

One month's salary in lieu of notice (Kshs 17,500/-) and three months' gross wages as damages (Kshs 52,500/-) awarded

Reasoning

The employment letter provided for termination by one month's notice or pay in lieu. For compensation under section 49(4), the Court considered the length of service the employee expected to serve: the Claimant was on a two-year renewable contract due to end on 17 April 2013, with no evidence of expectation of renewal, warranting three months' gross wages rather than the twelve months sought.

p. 5

Legal principles established

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  • In an unfair termination/wrongful dismissal cause, the employer bears the legal burden of proving the reasons for termination, that the reasons are valid and fair, and of justifying the grounds for dismissal
  • The procedural fairness process under section 41 of the Employment Act does not amount to a mini-court hearing, but a prudent employer should keep records of disciplinary proceedings
  • Investigative and disciplinary processes are distinct; an employer must satisfy the essential ingredients of procedural fairness - notification and explanation of reasons, representation, and hearing and consideration of representations before dismissal
  • Implication of an employee by fellow employees, without calling those employees to testify or confronting the accused employee with their statements, does not prove reasonable suspicion justifying dismissal
  • Costs do not automatically follow the event in the Industrial Court

Court orders

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  1. 1.Award of one month salary in lieu of notice of Kshs 17,500/-
  2. 2.Award of three months gross wages as damages for unfair dismissal of Kshs 52,500/-
  3. 3.Total award of Kshs 70,000/- to the Claimant
  4. 4.Dismissal of the prayers for unpaid salary for February 2013 and unpaid leave allowance
  5. 5.Each party to bear its own costs

Authorities

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Legislation

  • Employment Actsection 44(4)(g)
  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 45
  • Employment Actsection 47(5)
  • Employment Actsection 49(4)
Jurisdiction invoked
Employment Act (unfair termination/wrongful dismissal cause under the Industrial Court's jurisdiction)

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, "Johnson Jadhan Othieno Okumu v Pwani Oil Products Limited [2013] KEELRC 882 (KLR)", Case Analysis (2013). Cause No 155 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/882/eng@2013-11-08

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