Jeremiah Mbithi Ngewa v Intex Construction Limited [2014] KEELRC 545 (KLR)
The bottom line
#A Kenyan court cut a sacked accountant's claim from Kshs 847,615 to Kshs 202,961 because his dismissal had a valid reason but followed an unfair procedure.
What this practically means
#Executive summary
#Key legal issues
#Coverage of the Claimant under the CBA
The Claimant was not unionisable and not covered by the CBA; the parties merely borrowed certain clauses such as transfer allowance and gratuity
The Industrial Relations Charter excludes persons performing confidential work such as Accountants from union representation. The CBA did not list Accountants among covered job categories. No trade union dues, agency fees or subscriptions were paid. Borrowing specific CBA clauses in the individual contract does not confer blanket CBA coverage.
Whether termination amounted to redundancy
No redundancy; the claim for severance pay fails
There was no evidence of economic reasons or operational requirements of the employer. The Accountant role was neither phased out nor diminished. Section 40 of the Employment Act was not engaged, so severance pay was without basis.
Validity of the reason for termination
Valid reason existed - the Claimant failed to account for petty cash funds
An audit initially revealed Kshs. 170,000 unaccounted for, reducing to about Kshs. 73,680 after the Claimant produced receipts. The Claimant gave no explanation for the outstanding amount and could not show he handed over complete records. Summary dismissal under Section 44(4)(c) and (g) was warranted; termination was substantively justifiable under Sections 43 and 45.
Fairness of the termination procedure
Procedure was unfair; the minimum standards under Section 41 were not met
The termination letter gave no reason, no formal charges were put, no disciplinary panel was convened, and the Claimant was not advised of his right to be heard with a union representative or workmate. There was no record of a hearing. Compensation of 3 months' salary was awarded for breach of fair procedure.
Legal principles established
#- Employees outside the coverage of a CBA may have specific CBA clauses incorporated into individual contracts by agreement, but such borrowing does not make them unionisable or entitle them to blanket CBA coverage
- Accountants are traditionally excluded from union representation as persons performing work of a confidential nature
- Summary dismissal is justified where an employee fails to account for funds entrusted to him, but fair procedure under Section 41 must still be observed
Court orders
#- 1.The Respondent shall pay to the Claimant 3 months’ salary in compensation for unfair termination at Kshs. 90,000
- 2.1 month salary in lieu of notice at Kshs. 30,000
- 3.Unpaid salary at Kshs. 30,000
- 4.42 days’ annual leave at Kshs. 48,461
- 5.House rent allowance at Kshs. 4,500 - total Kshs. 202,961
- 6.The full amount be paid within 30 days of the delivery of this Award
- 7.The Respondent to avail to the Claimant his Certificate of Service forthwith
- 8.No order on the costs and the interest
- Jurisdiction invoked
- Industrial Court jurisdiction over unfair and unlawful termination under the Employment Act 2007 and Labour Relations Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Jeremiah Mbithi Ngewa v Intex Construction Limited [2014] KEELRC 545 (KLR)", Case Analysis (2014). Cause Number 1713 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/545/eng@2014-04-01
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.