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ELRCPartially AllowedCause Number 1536 of 2010· [2014] KEELRC 621 (KLR)

Charles Munyiri Wanderi v Unga Farm Care [E.A.] Limited [2014] KEELRC 621 (KLR)

Industrial Court at Nairobi
25 February 2014
1,161 words in judgment
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The bottom line

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A Kenyan court ruled Unga Farm Care unfairly dismissed its accountant because the company proved neither a valid fraud allegation nor a fair disciplinary process.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as Plant Accountant from April 2009, was summarily dismissed in June 2010 on the allegation that fraud involving inter-company transfers between Nakuru Feeds Limited and Dakar Road Limited, causing a loss of about Kshs. 1,717,275, went undetected due to his incorrect accounting. The parties failed to reach voluntary settlement and asked the Court to determine the dispute on the pleadings and submissions under Rule 21 of the Industrial Court [Procedure] Rules 2010. The Court held that the Respondent bore the onus of proving valid reason and fair procedure but failed: no auditor's report or independent evidence substantiated the alleged fraud, the only material being a statement recorded by the Claimant himself. Procedurally, there was no show-cause letter, no specific charges, no disciplinary hearing and no minutes of any hearing, in breach of Sections 41 and 45 of the Employment Act 2007, and dismissal occurred while investigation was still ongoing. The Court also rejected the Respondent's objection that the Claim offended Rule 4 of the Procedure Rules, and held the award in Okhaalo Otieka Osman v. Universal Corporation Limited (Cause 171 of 2011) inapplicable, since the Claimant did not seek to work until age 60. The Court declared the termination unfair and awarded the Claimant 7 months' gross salary of Kshs. 478,163, payable within 30 days, with no order on costs and interest. His general claim for damages was therefore only partially granted.

Key legal issues

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01

Substantive justification for termination

Holding

The Respondent failed to substantiate the alleged fraud and loss of Kshs. 1,717,275; no auditor's report or evidential material was filed, so there was no valid reason shown

Reasoning

The Respondent alleged fraud uncovered by a thorough audit but produced only a statement recorded by the Claimant himself about investigations he undertook at the Finance Director's request. No audit report or other independent evidence was availed despite having time from 2010 to file proper material. The Court could not conclude on such sketchy material that fraud occurred or that termination was substantively justified.

p. 2
02

Procedural fairness under Sections 41 and 45 of the Employment Act 2007

Holding

Termination was procedurally unfair; no show-cause letter, specific charges, disciplinary hearing or hearing record existed, and dismissal occurred while investigation was ongoing

Reasoning

The Court found no letter informing the Claimant of investigations, no charges communicated, no invitation to a disciplinary hearing, and no minutes of any primary or secondary hearing. The summary dismissal letter itself stated investigation was still ongoing. Although the Claimant was asked to explain and appealed, there was no record of formal hearings, breaching the minimum statutory disciplinary procedure.

p. 2
03

Compliance with Rule 4 of the Industrial Court [Procedure] Rules 2010

Holding

The Statement of Claim complied with Rule 4; the Respondent's objection and reliance on the Okhaalo Otieka Osman award was misplaced

Reasoning

The Court found Rule 4 requires details of the parties and the claim in the Statement of Claim, and the Claimant's pleading satisfied this. The Claimant did not plead a wish to work until age 60, so the award in Cause Number 171 of 2011 had no application or relevance to the dispute.

p. 2

Legal principles established

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  • The employer bears the onus of showing valid reason and fair procedure preceding termination
  • An employer must comply with the minimum statutory disciplinary procedures under Sections 41 and 45 of the Employment Act 2007, including notification of charges and a disciplinary hearing

Court orders

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  1. 1.Declaration that termination of the Claimant's contract of employment was unfair
  2. 2.The Respondent shall pay the Claimant 7 months' gross salary calculated at Kshs. 478,163 within 30 days of delivery of the Award
  3. 3.No order on the costs and interest

Authorities

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Legislation

  • Industrial Court [Procedure] Rules 2010Rule 21
  • Industrial Court [Procedure] Rules 2010Rule 4
  • Employment Act 2007Sections 41 and 45

Cases cited (1)

  • Okhaalo Otieka Osman v. Universal Corporation Limited
Jurisdiction invoked
Industrial Court [Procedure] Rules 2010, Rule 21 (dispute determined on pleadings and submissions)

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, "Charles Munyiri Wanderi v Unga Farm Care [E.A.] Limited [2014] KEELRC 621 (KLR)", Case Analysis (2014). Cause Number 1536 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/621/eng@2014-02-25

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