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ELRCDismissedMemorandum of Claim dated 9th March 2011 (filed 14th March 2011)· [2014] KEELRC 278 (KLR)

Daniel Songa Sila v Property Development & Management Limited [2014] KEELRC 278 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
24 September 2014
MNMathews N. Nduma
1,405 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court upheld an employee's summary dismissal for fraud, ruling his criminal acquittal did not matter because workplace charges use a lower standard of proof.

What this practically means

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Executive summary

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The Claimant, Daniel Songa Sila, was employed by the Respondent as Office Manager on 5th January 1993 on a monthly salary of Kshs.15,180. In 2005 he was entrusted with three bank cheques totalling over Kshs.2 million to pay land rates on behalf of the Respondent's clients to the Nairobi City Council. The payments were never credited to the clients' accounts; investigations revealed two cheques had been used to pay rates for third parties and the third could not be traced. When questioned by senior company officials on 10th August 2006, the Claimant admitted handing the cheques to strangers who promised him receipts and money, and he received Kshs.30,000. He was summarily dismissed the same day and later charged with forgery in Nairobi Criminal Case No. 1472 of 2006. He sued for terminal benefits and compensation totalling Kshs.866,190. The court found on a balance of probabilities that he fundamentally breached his contractual obligations by participating in the fraudulent diversion of the cheques, that the summary dismissal was lawful, and that the employer afforded him an opportunity to be heard before dismissal, satisfying fair procedure. The court held that his eventual acquittal in the criminal case would be immaterial, as disciplinary charges are proved on a balance of probabilities. It further found he was paid all salary due, had exhausted his leave, and had received his pension entitlements under NSSF. The entire claim was dismissed with costs to the Respondent.

Key legal issues

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01

Lawfulness and fairness of the summary dismissal

Holding

The summary dismissal was lawful and effected through a fair procedure; the Claimant fundamentally breached his contractual obligations by participating in fraudulent diversion of cheques entrusted to him.

Reasoning

The court accepted the unchallenged evidence of RW1 that the cheques meant for the City Council were used to pay third parties' rates and that the Claimant, when questioned before dismissal, admitted handing the cheques to strangers for reward. It found the Claimant's breach fundamental under section 44(3) of the Employment Act, established on a balance of probabilities, and held that the employer afforded him a chance to explain before dismissing him, satisfying fair procedure.

p. 3
02

Effect of related criminal proceedings on the disciplinary outcome

Holding

The outcome of the criminal case was immaterial; the disciplinary charges were proved on a balance of probabilities.

Reasoning

The court drew the established distinction between the criminal standard of proof (beyond reasonable doubt) and the civil standard (balance of probabilities) applicable to workplace disciplinary processes. It also cautioned employees against delaying termination claims pending the outcome of criminal proceedings, noting this often results in claims filed out of time and defeated by laches.

p. 3

Legal principles established

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  • An employer may summarily dismiss an employee who, by his conduct, has fundamentally breached his contractual obligations; such dismissal, if preceded by an opportunity to be heard, is lawful and fair.
  • An employee's acquittal in criminal proceedings does not invalidate a lawful dismissal based on the same facts, since disciplinary charges are proved on a balance of probabilities, a lower standard than the criminal standard.
  • Delaying an employment claim pending conclusion of related criminal proceedings is ill advised and may result in the claim being caught by laches.

Court orders

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  1. 1.The entire claim is dismissed with costs to the Respondent

Authorities

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Legislation

  • Employment ActSection 44(1)
  • Employment ActSection 44(3)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over termination and dismissal matters under the Employment Act, Cap 226 (as referred to in the judgment)

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, "Daniel Songa Sila v Property Development & Management Limited [2014] KEELRC 278 (KLR)", Case Analysis (2014). Memorandum of Claim dated 9th March 2011 (filed 14th March 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/278/eng@2014-09-24

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