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ELRCPartially AllowedIndustrial Cause (Nakuru) — amended plaint filed 9.07.2010· [2014] KEELRC 838 (KLR)

Ann Simon Mukuhe v Telkom Kenya Limited [2014] KEELRC 838 (KLR)

Industrial Court of Kenya
7 March 2014
2,548 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 Telkom Kenya unfairly sacked an employee forced into sales without training, but capped her payout at twelve months' salary.

What this practically means

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Executive summary

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The plaintiff, employed by the defendant on 1.3.1993 as Typist III and confirmed in 1994, was deployed to the Mass Market Department as a sales agent following a retrenchment process, without training or a supporting policy. Charged with failure to attain 70% sales performance, she made written representations citing operational deficiencies (vehicle, DSLAM, SIM replacement, network coverage). By letter dated 27.10.2009, addressed to her as 'Typist', the defendant terminated her employment with one month's pay in lieu of notice, finding her representations inadmissible. She sued for a declaration that the termination was unlawful, damages, terminal benefits and, alternatively, reinstatement — the reinstatement prayer was withdrawn at trial. The court found the termination procedurally unfair for want of a hearing under section 41 of the Employment Act, 2007, and substantively unfair because valid grievances did not constitute fair reasons for dismissal under section 46(h). Relying on its earlier decision in Grace Gacheri Muriithi v Kenya Literature Bureau, the court held it is unfair labour practice to fail to act on reported operational deficiencies and to penalise the employee for losses attributable to them, contrary to Article 41(1) of the Constitution. On remedies, the court awarded the maximum 12 months' gross salary (Kshs.484,632.00 at Kshs.40,386.00 per month) under section 49(1)(c) plus one month's pay in lieu of notice under section 49(1)(a), totalling Kshs.525,018.00. It declined the claimed 18-year lost-income computation, holding that Mughal v Lakmer Techs no longer prevails after section 49 and that the CBA retirement age was 55, not 60. A pre-judgment Notice of Motion to amend the plaint to add a loss-of-income claim was dismissed with costs. Terminal benefits per the CBA and HR policy were declared payable, and the plaintiff was awarded the costs of the suit.

Key legal issues

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01

Whether the termination was procedurally fair under section 41 of the Employment Act, 2007

Holding

The termination was procedurally unfair because although show cause letters were issued, the defendant did not accord the plaintiff a hearing as envisaged in section 41 before termination

Reasoning

The plaintiff was charged with unsatisfactory sales performance and asked to make representations, which she did by letters dated 24.09.2009 and 15.10.2009, but the defendant terminated her without any hearing or disciplinary process envisaged by section 41 of the Employment Act, 2007. Procedural fairness is a statutory prerequisite; its absence alone renders a termination unfair irrespective of the merits of the performance allegations.

p. 3
02

Whether the reason for termination (failure to attain 70% sales target) was valid and fair under section 46

Holding

The reason was not valid: the plaintiff was a typist deployed as a sales agent without training or supporting policy, her appraisals confirmed wrongful deployment, and her reported operational grievances were ignored

Reasoning

The plaintiff was employed and designated as Typist III, confirmed as such, and never retrained for sales. The defendant's own Human Resource circular No. 12 acknowledged typists were doing jobs they were not designated to do. Her complaints about vehicle, DSLAM, SIM replacement and network coverage went unaddressed. Section 46(h) excludes valid, responsible complaints as grounds for dismissal, so the performance-based termination was substantively unfair.

p. 3
03

Whether the plaintiff could recover damages for the unexpired term of employment (18 years to retirement)

Holding

No. The statutory scheme in section 49 of the Employment Act, 2007 displaces the common-law measure in Mughal; the expected duration of employment is only one factor under section 49(4)(f), and the maximum 12 months' gross salary had already been awarded

Reasoning

The court held that Ringera J's measure of damages in Mughal no longer prevails following statutory intervention in section 49. The CBA fixed retirement at 55, not 60, undermining the claimed 18-year computation. Section 49(1)(c)'s 12-month cap is the accepted public policy balancing employer and employee interests, and the plaintiff had abandoned reinstatement, the effective alternative remedy.

p. 4
04

Whether the plaintiff's late application to further amend the plaint should be allowed

Holding

No. The application was dismissed with costs because allowing it would prejudice the defendant (no reopening of the hearing) and it sought to advance the case by instalment after both parties had closed their cases

Reasoning

Although amendments should be liberally allowed per Central Kenya Limited v Trust Bank, the parties had closed cases and were to file submissions per the order of 3.12.2013. The matters sought to be introduced were long known to the plaintiff. Introducing a loss of income claim at that stage, without reopening the hearing, would cause serious prejudice not compensable by costs.

p. 3

Legal principles established

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  • An employer must accord an employee a hearing as envisaged in section 41 of the Employment Act, 2007 before termination; failure to do so renders the termination unfair
  • Valid, responsible employee complaints with foundation do not constitute fair and valid reasons for dismissal under section 46(h) of the Employment Act, 2007
  • Failing to act on reported deficiencies in the employer's operational policies and systems, and penalising the employee for losses attributable to those deficiencies, is unfair labour practice contrary to Article 41(1) of the Constitution and renders a termination so founded unfair
  • Compensation for unfair termination is capped at a maximum of 12 months' gross salary under section 49(1)(c) of the Employment Act, 2007, which is the acceptable public policy; the expected length of continued employment is only a factor under section 49(4)(f), not a measure of damages
  • Amendment of pleadings should be liberally allowed unless it would cause prejudice not compensable by costs; however, a party may not advance its case by instalment after closing its case

Court orders

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  1. 1.Declaration that the termination of the plaintiff's employment by the defendant was unfair and unlawful
  2. 2.Defendant to pay the plaintiff Kshs.525,018.00 less due income tax by 1.4.2014, in default interest at court rates from the date of judgment till full payment
  3. 3.Declaration that the plaintiff is entitled to terminal benefits including pension dues as agreed between the parties and as per the collective agreement and the defendant's human resources policy manual
  4. 4.Defendant to pay the plaintiff's costs of the suit

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 46(h)
  • Employment Actsection 49(1)(a), 49(1)(c), 49(4)(f)
  • Constitution of Kenya, 2010Article 41(1)
  • Civil Procedure Actsections 100 and 3A
  • Civil Procedure RulesOrder 8 Rules 3 and 5

Cases cited (4)

  • Central Kenya Limited –Versus- Trust Bank Limited
    (2000) EALR 365
  • Stephen Ngatia –Versus- Clement Kamau Gitau
    [2013] eKLR
  • Grace Gacheri Muriithi –Versus- Kenya Literature Bureau
    [2012] eKLR
  • Mughal –Versus- Lakmer Techs Limited
    [2002] 1 KLR 191
Jurisdiction invoked
Employment and labour relations jurisdiction (Employment Act, 2007; Article 41(1) of the Constitution)

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, "Ann Simon Mukuhe v Telkom Kenya Limited [2014] KEELRC 838 (KLR)", Case Analysis (2014). Industrial Cause (Nakuru) — amended plaint filed 9.07.2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/838/eng@2014-03-07

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