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ELRCPartially AllowedStatement of claim dated 7th May 2012· [2014] KEELRC 564 (KLR)

Bernayo Tsiambo Mbayachi v Mukoya Gas Stores [2014] KEELRC 564 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
21 March 2014
1,564 words in judgment
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The bottom line

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A Kenyan court ruled that firing a six-year employee without notice or a hearing was unfair, awarding him compensation, severance pay, notice pay and costs.

What this practically means

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Executive summary

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The Claimant, employed as a salesman by the Respondent in April 2005 at a monthly salary of Kshs. 10,000, was terminated on 2nd August 2011 allegedly for unsatisfactory work. He claimed terminal benefits, salary in lieu of notice, severance pay, leave pay, house allowance and maximum compensation for unfair dismissal, plus a certificate of service. The Respondent's witnesses alleged the Claimant absconded, worked for a competitor (Umbrella Gas), and walked out throwing his keys. The Court found the Claimant had served six years, was unregistered with NSSF/NHIF, and that the Respondent failed to justify the summary dismissal under Section 37(5) of the Employment Act. The dismissal violated Sections 45(1) and (2) for lack of valid reason and fair procedure, as no notice or hearing preceded it. Severance pay at 15 days' salary per completed year (Kshs. 30,000) was allowed, applying the guideline derived from Section 40. The leave claim was refused on the benefit of doubt given to the Respondent's sales record book; house allowance and underpayment claims were dismissed as the salary was gross. The Court awarded one month's notice pay (Kshs. 10,000) and 10 months' salary (Kshs. 100,000) as compensation, considering the sudden termination, the Claimant's eviction, and the absence of a certificate of service. Total award: Kshs. 140,000 with interest from judgment date. The Respondent was ordered to issue a certificate of service within 10 days and to pay the costs of the suit. Judgment delivered at Nairobi on 21st March 2014 by Mathews N. Nduma, Principal Judge.

Key legal issues

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01

Whether the summary dismissal was fair

Holding

The dismissal violated Sections 45(1) and (2) of the Employment Act - no valid reason and no fair procedure

Reasoning

The Claimant established on a balance of probability that he was summarily dismissed on 2nd August 2011. The Respondent failed to justify the dismissal under Section 37(5). No notice or hearing preceded the termination, and allegations of absconding were not supported by any letter. The co-worker's evidence that the Claimant threw keys was unconvincing since the boss had already told him to go home.

p. 4
02

Compensation for unfair dismissal

Holding

10 months' salary awarded as compensation (Kshs. 100,000)

Reasoning

The Claimant had served six years diligently. The sudden nature of the termination left him unprepared to mitigate its effects. He suffered eviction from his house, his brothers were dismissed for supporting him, and he was not issued a certificate of service to enable him secure alternative work quickly.

p. 4
03

Severance pay entitlement

Holding

Claimant entitled to severance pay at 15 days' salary per completed year of service

Reasoning

The Claimant worked for six years and was not registered with NSSF. The Court applied the practice and guideline derived from Section 40 of the Employment Act, pegging severance at 15 days' salary for each completed year, allowing the claimed Kshs. 30,000.

p. 3

Legal principles established

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  • An employer bears the burden of justifying a summary dismissal under Section 37(5) of the Employment Act.
  • Severance pay is pegged at 15 days salary for each completed year of service, derived from Section 40 of the Employment Act.
  • Where an employer is bound by law to keep leave records and fails to produce them, the court may draw adverse inferences, but may still give the employer benefit of doubt where other records support leave being taken.

Court orders

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  1. 1.Respondent to pay compensation for unfair dismissal of Kshs. 100,000
  2. 2.Respondent to pay one month salary in lieu of notice of Kshs. 10,000
  3. 3.Respondent to pay severance pay of Kshs. 30,000
  4. 4.Total award of Kshs. 140,000 with interest at court rates from the date of judgment to payment in full
  5. 5.Respondent to issue a certificate of service to the Claimant within 10 days from date of judgment
  6. 6.Respondent to pay the costs of the suit

Authorities

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Legislation

  • Employment ActSection 35
  • Employment ActSection 37(5)
  • Employment ActSection 40
  • Employment ActSections 45(1) and (2)
Jurisdiction invoked
Employment and labour relations jurisdiction under Article 162(2) of the Constitution (Employment Act claims)

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, "Bernayo Tsiambo Mbayachi v Mukoya Gas Stores [2014] KEELRC 564 (KLR)", Case Analysis (2014). Statement of claim dated 7th May 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/564/eng@2014-03-21

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