Wilberforce Ojiambo Oundo v Regent Management Limited [2013] KEELRC 915 (KLR)
The bottom line
#A Kenyan court awarded a dismissed CEO over KShs 8 million because his employer could not prove wrongdoing and denied him a fair hearing.
What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent proved a valid reason for summary dismissal
No valid reason was established; the loss of Kshs. 5 Million was not attributable to the Claimant, who never handled the cash, and the financial policies allegedly breached were not produced.
The forensic audit traced the funds to the cashier and another staff member, not the Claimant. The financial policies and standard operating procedures allegedly contravened were never availed to the Court, and evidence showed cash payments were not unusual in the Respondent's operations. Finance department incompetence could not be wholly assigned to the Claimant, who was not trained in finance.
Whether the procedure adopted was fair
The procedure was unfair: documents requested were not supplied, the suspension lapsed and was backdated, salary was withheld pending a criminal case, and the Claimant was not interviewed on the forensic audit findings.
The Claimant was denied supporting documents needed to prepare his defence, kept on unpaid suspension beyond its term, and denied an opportunity to respond to adverse audit findings. Withholding salary contrary to the contract tainted the entire disciplinary process. The concurrent criminal case did not excuse these breaches of fair hearing.
Whether the Industrial Court had jurisdiction over the alleged injurious public notice
The Court's jurisdiction under Section 12(1) of the Industrial Court Act extends to defamation arising from the employment relationship, but the Claimant having pleaded no particulars of defamation, the Court did not pursue the point; it nonetheless found the notice unwarranted and in bad faith.
Section 12(1) covers all disputes emanating from the employment relationship, including alleged defamation. However, since the Claimant did not plead particulars of defamation, the court declined to make findings on that head, though it observed the notice was published during suspension without evidence of breach of suspension conditions.
Whether the Respondent's counterclaims were proved
The counterclaims for the Kshs. 5 Million loss, NHIF business loss, excess entertainment allowance and petty cash failed; only the insurance premium counterclaims succeeded.
The Court found no culpability on the Claimant's part for the loss of Kshs. 5 Million or the NHIF business loss, and the entertainment allowance and petty cash claims were unproved. The two insurance premium counterclaims were proved and ordered recoverable from the Claimant's award.
Legal principles established
#- An employer must prove both the reason for termination and that a fair procedure was followed.
- An employer need not await the outcome of criminal proceedings before completing disciplinary action, but equally cannot hold the employee's rights in abeyance pending the criminal trial.
- An employer can only demand best practice performance from an employee if it embraces the same standard at corporate level.
- An employee on suspension remains innocent until proved otherwise and has a legitimate expectation to respond to adverse findings from an investigation.
- Where an employer fails to provide leave records under Sections 10 and 74 of the Employment Act, the Court invokes Section 10(7) in favour of the employee's claim.
Court orders
#- 1.Award of Kshs. 3,975,720 being 12 months' salary in compensation for unfair termination
- 2.Award of Kshs. 993,930 being 3 months' salary in lieu of notice
- 3.Award of Kshs. 1,236,890 being salary for August to 22nd November 2010 (3 months and 22 days)
- 4.Award of Kshs. 552,183 being pay in lieu of 50 days' leave
- 5.Award of Kshs. 1,375,920 being prorata gratuity at 20% of basic salary (35 months)
- 6.Total award of Kshs. 8,134,643 in favour of the Claimant
- 7.Dismissal of the claim for value of the remaining term of the contract
- 8.Dismissal of the claims for refund of entertainment expenses, leave allowance and general damages
- 9.Dismissal of the Respondent's counterclaims for Kshs. 5,000,000, Kshs. 4,824,000, Kshs. 340,397.80 and Kshs. 2,000
- 10.Recovery of Kshs. 12,473 and Kshs. 117,867 insurance premiums for motor vehicles KAZ 234Z and KBJ 961H from the Claimant's Award
- 11.Costs of the case awarded to the Claimant; no order for interest
- 12.Award subject to statutory deductions in accordance with Section 49(2) of the Employment Act, 2007
- Jurisdiction invoked
- Section 12(1) of the Industrial Court Act - disputes emanating from an employment relationship
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wilberforce Ojiambo Oundo v Regent Management Limited [2013] KEELRC 915 (KLR)", Case Analysis (2013). Cause No 200 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/915/eng@2013-12-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.