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ELRCPartially AllowedMombasa Cause No. 455 of 2013· [2014] KEELRC 526 (KLR)

David Gichana Omuya v Mombasa Maize Millers Ltd [2014] KEELRC 526 (KLR)

Industrial Court of Kenya
11 April 2014
RSRadido Stephen
3,202 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that firing an employee without explaining why and hearing their side is unfair, awarding six months' pay as compensation.

What this practically means

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Executive summary

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The Claimant, an advocate, was re-employed by the Respondent as a company lawyer with effect from 1 March 2007 and his services were terminated on 6 June 2011 on the ground that the company had lost confidence in his way of working, with payment of terminal dues of Kshs 459,997/-. He claimed a declaration that the termination was unlawful, two months' pay in lieu of notice and compensation. The court framed two issues: whether the termination was unlawful and the appropriate relief. On procedural fairness, the court found the Respondent failed to demonstrate compliance with section 41 of the Employment Act, as it neither notified the Claimant of the reasons nor afforded him an opportunity to respond before termination. On substantive fairness, the Respondent's Response consisted of bare denials and it failed to prove that loss of confidence was a valid and fair reason under sections 43 and 45. The court rejected the dismissal-at-will doctrine invoked by the Respondent, holding that the Employment Act, 2007 confers security of tenure on ordinary workers and requires employers to justify grounds for termination. The Mwachanya decision relied on by the Claimant for maximum compensation was distinguished because it involved a fixed-term contract. The court declared the termination unfair and awarded six months' compensation of Kshs 465,972/-. The claim for two months' pay in lieu of notice was declined as the Claimant had been paid one month's notice pay, and the claim for general damages was dismissed for lack of any contractual or statutory basis. Each party was ordered to bear its own costs.

Key legal issues

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01

Procedural fairness under section 41 of the Employment Act

Holding

Termination was procedurally unfair as the Respondent failed to notify the Claimant of the reasons and give him an opportunity to respond

Reasoning

Section 41 obliges an employer to notify and explain reasons for termination in a language the employee understands and to hear representations. Compliance is not a mechanical checklist but the essentials must be met. The Respondent adduced no evidence of notification or hearing; its HR officer was unaware of the circumstances and the second witness did not attend court.

p. 4
02

Substantive fairness under sections 43 and 45 of the Employment Act

Holding

The Respondent failed to prove that the reason for termination (loss of confidence) was valid and fair

Reasoning

Sections 43 and 45 place the burden on the employer to prove valid and fair reasons. The Response was bare denials, and the ground of loss of confidence in the termination letter was never elaborated in pleadings or testimony. The court rejected the common-law master-servant dismissal-at-will position, holding it superseded in Kenya by the Employment Act, 2007.

p. 5
03

Appropriate compensation for unfair termination

Holding

Six months' gross wages awarded as compensation under section 49(1)(c)

Reasoning

The award is discretionary, guided by the thirteen factors in section 49(4). The Claimant served four years under the second contract, received terminal dues of Kshs 459,997, and as an advocate had a reasonable opportunity to secure alternative employment. Legal expenses reasonably incurred were considered. The Mwachanya case on twelve months was distinguishable as it involved a fixed-term contract.

p. 6

Legal principles established

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  • An employer must comply with section 41 of the Employment Act by notifying the employee of the reasons for termination and hearing representations before termination
  • Since the Employment Act, 2007, an employer cannot dismiss at will; the employer must prove valid and fair reasons for termination even where notice or pay in lieu is given
  • Bare denials in a Response do not meet the threshold expected of an employer defending an unfair termination claim

Court orders

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  1. 1.Declaration that the termination of the Claimant was unfair
  2. 2.Award of six months compensation of Kshs 465,972/-
  3. 3.Claim for two months pay in lieu of notice declined
  4. 4.Claim for general damages for wrongful termination dismissed
  5. 5.Each party to bear its costs

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 45
  • Employment Actsection 45(2)
  • Employment Actsection 47(5)
  • Employment Actsection 35
  • Employment Actsection 49(4)
  • Employment Actsection 49(1)(c)
  • Industrial Court (Procedure) Rules, 2010Rule 13

Cases cited (7)

  • Anthony Mkala Chitavi v Malindi Water & Sewerage Co. Ltd
    Mombasa Cause No. 64 of 2012
  • Meshack Kiio Ikulume v Prime Fuels Kenya Ltd
    Mombasa Cause No. 196 of 2013
  • Reuben Mwamboga v Bahnhof Bar & Restaurant
    Mombasa Cause No. 159 of 2013
  • Alphonce Sulpice Mzenge v Mombasa Air Safari Ltd
    Mombasa Cause No. 110 of 2013
  • Alphonce Maghanga Mwachanya v Operation 680 Ltd
    Mombasa Cause No. 146 of 2012
  • Ridge v Baldwin
    (1963) 2 All ER 66
  • Western Excavating (ECC) Ltd v Sharp
    (1977) EWCA Civ 2
Jurisdiction invoked
Industrial Court jurisdiction under the Industrial Court Act in a claim for unfair termination under the Employment Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "David Gichana Omuya v Mombasa Maize Millers Ltd [2014] KEELRC 526 (KLR)", Case Analysis (2014). Mombasa Cause No. 455 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/526/eng@2014-04-11

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