Stephen Mihango Mwangi & 2 others v Eastleigh Mattresses Limited [2014] KEELRC 399 (KLR)
The bottom line
#A Kenyan court ruled employees fired without a hearing win compensation even when the employer had good reasons to dismiss them.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimants deserted duty or were terminated
The Court accepted the Claimants' evidence that their contracts were terminated; the desertion claim was unpersuasive.
The Respondent reported the matter to the police and supplied the Claimants' details; both parties attended Labour Office conciliation meetings shortly after the incident, showing the Claimants were traceable. The 2nd Claimant was part of the family owning the business. The Court found the Respondent could readily have subjected the Claimants to disciplinary process, and therefore rejected the desertion explanation as unpersuasive.
Procedural fairness of termination
Termination was procedurally unfair for breach of Sections 41 and 45 of the Employment Act 2007.
The Respondent gave the Claimants no hearing, taking the stance that they had deserted. The Court held that the Claimants were available through the Labour Office and could have been charged and heard on the offences of irregular use of Reward Cards or desertion. Failure to avail any form of hearing violated the procedural protections of Sections 41 and 45, rendering termination unfair on procedure.
Substantive fairness - valid and fair reasons
There were valid and fair reasons to justify termination; it was substantively fair under Sections 43 and 45.
All three Claimants were involved in irregularly crediting loyalty points contrary to well-known Reward Card terms. The 1st Claimant, a Supervisor, held a card in the name of Rhoda Ndung'u; the 2nd and 3rd Claimants credited a card in the name of Peter Kariuki with points from another person's purchase. All three wrote statements admitting the accusations, justifying termination substantively.
Quantum of compensation for unfair termination
The Court granted 3 months' gross salary to each Claimant instead of the 12 months sought, for the procedural violation only.
Although the Claimants prayed for 12 months' salary each, the Court confined compensation to the procedural violation, since termination was substantively justified. It awarded 3 months' gross salary: Kshs. 48,300 to the 1st Claimant, Kshs. 31,398 to the 2nd, and Kshs. 52,494 to the 3rd.
Annual leave and burden of records
Each Claimant granted 21 days' annual leave pay because the Respondent failed to avail annual leave records.
The Respondent did not avail the Court the Claimants' annual leave records; its witness testified he did not know whether the Claimants went on leave or were paid in lieu. The Respondent also had an attendance register which it did not produce. In the absence of these records, the Court granted each Claimant 21 days' annual leave pay.
Certificate of service
Certificates of service are a statutory right under Section 51 and were ordered issued.
Section 51 entitles every employee who has worked more than 4 consecutive weeks to a certificate of service, whether employment ended voluntarily, consensually or involuntarily. The Respondent had not issued certificates to the Claimants, and the Court ordered that they be issued forthwith.
Legal principles established
#- An employer who alleges desertion but has knowledge of the employees' whereabouts and contact details cannot escape the procedural requirements of a fair hearing before termination.
- Termination may be substantively justified yet procedurally unfair, warranting compensation for the procedural violation alone.
- A certificate of service is a statutory right of every employee, regardless of the manner in which employment ended.
Court orders
#- 1.Respondent to pay, within 30 days of delivery of the Award: 1st Claimant Stephen Mihang'o Mwangi 3 months' gross salary of Kshs. 48,300 in compensation; 1 month basic pay in lieu of notice at Kshs. 14,000; 21 days annual leave at Kshs. 13,003; and 8 days' salary at Kshs. 4,954 - total Kshs. 80,257
- 2.Respondent to pay 2nd Claimant Winnie Muthoni Kariuki 3 months' gross salary of Kshs. 31,398 in compensation; 1 month basic salary in lieu of notice at Kshs. 9,000; 21 days annual leave at Kshs. 8,453; and 2 days' salary at Kshs. 805 - total Kshs. 49,656
- 3.Respondent to pay 3rd Claimant Nelson Wainaina Njuguna 3 months' gross salary of Kshs. 52,494 in compensation; 1 month basic salary in lieu of notice at Kshs. 14,000; 21 days annual leave at Kshs. 14,133; and 2 days' salary at Kshs. 1,346 - total Kshs. 81,973
- 4.Certificates of service to be issued forthwith
- 5.No order on the costs
- Jurisdiction invoked
- Reference to the Industrial Court under the dispute referred from the Labour Office; issue in dispute - unfair and unlawful termination
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Stephen Mihango Mwangi & 2 others v Eastleigh Mattresses Limited [2014] KEELRC 399 (KLR)", Case Analysis (2014). Cause Number 1752 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/399/eng@2014-07-01
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.