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ELRCPartially AllowedCause No 1016 of 2012 (Consolidated with Cause No 1018 of 2012)· [2014] KEELRC 782 (KLR)

Abdulrahman K. Ramadhan & another v Easy Coach Limited [2014] KEELRC 782 (KLR)

Industrial Court of Kenya
30 January 2014
2,533 words in judgment
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The bottom line

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Kenya's Industrial Court ruled Easy Coach unfairly fired two drivers over fuel pilferage, awarding them compensation because the company proved neither a valid reason nor fair procedure.

What this practically means

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Executive summary

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Two drivers, Abdulrahman K. Ramadhan and Joseph Omondi Omusi, sued Easy Coach Limited for unfair termination and unpaid terminal dues after their employment ended on 18th January 2012 on allegations of fuel pilferage. Their claims were consolidated by consent. The Respondent admitted the employment but argued the 1st Claimant was on probation and that discharge vouchers signed on receipt of terminal benefits extinguished any further liability. The Court rejected both contentions: the contract was never reduced into writing and the probationary period was never set, so the employer could not impute undocumented terms; and, applying Simon Muguku Gichigi v Taifa SACCO Society Limited, a discharge voucher cannot cure an irregular termination. On substance, the Court found the investigations inadequate to link the Claimants to pilferage - there was no evidence of how mechanical faults were excluded, the fuel tanks had tamper-proof seals never shown to be broken, and the drivers had no control over the fueling procedure - so the Respondent failed to prove a valid reason under Section 43. On procedure, service of the show cause letters was unproven and the disciplinary proceedings could not be established, failing Section 41. The terminations were therefore unfair for want of substantive justification and procedural fairness. The Court awarded the 1st Claimant 3 months' salary in compensation and the 2nd Claimant 6 months', plus notice pay shortfalls, leave pay and pay recovered during absence, totaling Kshs. 75,263 and Kshs. 125,253 respectively. Claims for underpayment and overtime were dismissed. Certificates of service and costs were awarded to the Claimants, subject to statutory deductions under Section 49(2).

Key legal issues

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01

Probationary status of the 1st Claimant

Holding

The Respondent's assertion that the 1st Claimant was on probation was rejected because the employment contract was not in writing and the probationary period was never set

Reasoning

Section 2 of the Employment Act defines a probationary contract as one of not more than twelve months' duration, in writing and expressly stating it is for a probationary period. Since the 1st Claimant's contract was not reduced into writing and the probationary period was never set, the employer could not impute undocumented terms in its favour.

p. 3
02

Effect of discharge vouchers signed by the Claimants

Holding

The discharge vouchers did not extinguish the Respondent's liability where the termination itself was irregular

Reasoning

Relying on Simon Muguku Gichigi v Taifa SACCO Society Limited, the Court held that an employer cannot circumvent its obligations by producing a form of discharge executed by the employee; if the law is not followed, no discharge can cure the irregularity. The Court therefore proceeded to examine the substance and procedure of the terminations notwithstanding the vouchers.

p. 3
03

Validity of the reason for termination (fuel pilferage allegations)

Holding

The Respondent failed to prove a valid reason for terminating the Claimants' employment under Section 43 of the Employment Act

Reasoning

The Court found the investigations inadequate to link the Claimants to pilferage: there was no evidence of how mechanical faults or leakages were ruled out, fuel tanks had tamper-proof seals that were never shown to be broken, and the drivers' only role was to deliver vehicles to a manned fueling point. The excessive consumption was a systemic failure, and shifting the burden of identifying culprits to the Claimants was misplaced.

p. 5
04

Procedural fairness of the termination

Holding

The procedure did not meet the threshold set by Section 41 of the Employment Act, 2007

Reasoning

The Claimants denied receiving the show cause letters and the Respondent's witness could not say how or when they were served. The Claimants denied attending disciplinary meetings; no panel member testified and the Claimants had not signed the proceedings, so the Court could not establish that disciplinary meetings took place. Curiously, the summary dismissal letters made no mention of the disciplinary proceedings.

p. 5
05

Claims for underpayment and overtime

Holding

These claims failed; salary was within the minimum wage for bus drivers and standard overtime was paid under the CBA

Reasoning

The Court found the Claimants' salary was within the minimum wage for bus drivers, and that standard overtime was paid as set out in the Collective Bargaining Agreement negotiated between the Respondent and the Claimants' union. The underpayment and overtime claims were therefore dismissed.

p. 5

Legal principles established

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  • The responsibility for drawing employment contracts lies with the employer, and an employer who fails to reduce a contract to writing cannot impute undocumented terms of employment in its favour
  • A discharge voucher cannot cure an employer's failure to follow the law in terminating employment
  • For a termination to pass the fairness test, the employer must prove both a valid reason and a fair procedure under Section 45(2) of the Employment Act
  • An employee cannot be held responsible for a systemic failure within the employer's operations where the employee had no control over the fueling procedure

Court orders

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  1. 1.Award to 1st Claimant Abdulrahman K. Ramadhan: 3 months' salary in compensation for unfair termination Kshs. 44,445; notice pay shortfall Kshs. 11,810; leave pay Kshs. 2,593; pay recovered during time of absence Kshs. 16,415; total Kshs. 75,263
  2. 2.Award to 2nd Claimant Joseph Omondi Omusi: 6 months' salary in compensation for unfair termination Kshs. 90,855; notice pay shortfall Kshs. 1,975; leave pay shortfall Kshs. 8,983; pay recovered during time of absence Kshs. 23,440; total Kshs. 125,253
  3. 3.Both Claimants entitled to certificates of service
  4. 4.Awards subject to statutory deductions in accordance with Section 49(2) of the Employment Act, 2007
  5. 5.Claimants awarded the costs of the case

Authorities

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Legislation

  • Employment ActSection 2 (definition of probationary contract)
  • Employment ActSection 45(2)
  • Employment ActSection 43
  • Employment ActSection 41
  • Employment ActSection 49(2)

Cases cited (1)

  • Simon Muguku Gichigi Vs Taifa SACCO Society Limited
    [2012]eKLR
Jurisdiction invoked
Employment Act, 2007 (unfair termination claims under Sections 41, 43, 45 and 49 of the Employment Act, 2007)

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, "Abdulrahman K. Ramadhan & another v Easy Coach Limited [2014] KEELRC 782 (KLR)", Case Analysis (2014). Cause No 1016 of 2012 (Consolidated with Cause No 1018 of 2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/782/eng@2014-01-30

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