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ELRCPartially AllowedMemorandum of Claim dated 18th October 2012 (Industrial Cause)· [2014] KEELRC 893 (KLR)

Benjamin Mwanzia Musyoka & 9 others v Cosmos Limited [2014] KEELRC 893 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
21 March 2014
2,371 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Ten Kenyan workers fired over thefts they had nothing to do with won 10 months' salary each because the employer had no real proof.

What this practically means

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Executive summary

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Ten employees of the Respondent, employed on dates ranging from 1994 to 2004 in store, laboratory and production roles, had their employment terminated on 16th December 2010 following a series of night break-ins and thefts of Pseudoephedrine HCL and Ephedrine HCL USP from the raw materials stores during 2010. The employer suspected employee complicity but had no direct evidence; no one was arrested, no employee was taken to police, entry was by forced break-in while the Claimants were off duty, and outsourced night guards made no arrests. After the Claimants failed to name culprits when asked to volunteer information, they were suspended and then terminated; some were paid two months' notice and gratuity, others seven days' notice, and all signed discharge letters. The court held that under Section 47(5) of the Employment Act, once an employee establishes a prima facie case of unfair termination the burden of justification shifts to the employer, which the Respondent failed to discharge. The termination was on mere suspicion and constituted collective punishment akin to mob justice, contravening Sections 41 and 45. The discharge letters did not bar suit as they were signed under compulsion. Each Claimant was awarded compensation equivalent to ten months' salary under Section 49(1)(c), with specific figures for each Claimant, plus interest at court rates from the date of judgment and costs. The Respondent was ordered to issue replacement certificates of service within 14 days recognizing the full periods of service and the Claimants' good conduct, the references to 'services not required' being held demeaning.

Key legal issues

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01

Validity of the reason for termination

Holding

The reason - mere suspicion of complicity in break-ins with no direct evidence - was not a valid or fair reason

Reasoning

No employee was arrested, taken to police or caught with stolen items; entry was by forced break while guards were on duty and the Claimants were off duty. None had prior misconduct records. The Respondent produced no evidence in court linking any Claimant to the thefts. Suspicion born of the employer's failure to catch the real culprits cannot amount to a valid reason under Section 45(2)(a).

p. 4
02

Fairness of the procedure adopted

Holding

The collective punishment of all ten employees contravened Section 41 of the Employment Act

Reasoning

The Claimants were required to volunteer information identifying culprits and, when none did, were all terminated regardless of individual culpability. The court characterized this as collective punishment akin to mob justice. The employer punished employees for matters of which they demonstrably had no knowledge, in disregard of the law and rules of fairness.

p. 5
03

Effect of the discharge letters signed by the Claimants

Holding

The discharge did not extinguish the Claimants' right to sue as it was signed under compulsion and its purpose was not explained

Reasoning

The 9th Claimant testified that payment of terminal benefits was conditional upon signing the discharge and that the Claimants were coerced into compromising their right to sue. The purpose of the discharge was not explained to them, so the Respondent could not rely on it to defeat the claims.

p. 5
04

Entitlement to compensation and a proper certificate of service

Holding

The Claimants were entitled to substantial compensation of ten months' salary each and a proper certificate of service

Reasoning

Having served diligently for long periods with clean records, and having been wrongfully branded thieves, substantial awards of ten months' salary each were appropriate under Section 49(1)(c). The certificate stating 'services not required' was demeaning and reduced their employment prospects, warranting replacement certificates acknowledging good conduct.

p. 6

Legal principles established

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  • Once an employee establishes a prima facie case of wrongful or unfair termination, the burden of justifying the grounds for termination rests with the employer
  • Termination of employees on mere suspicion, without direct evidence linking them to misconduct and without fair procedure, constitutes unfair termination under Section 45 of the Employment Act

Court orders

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  1. 1.Compensation for wrongful and unfair termination equivalent to ten (10) months salary each, awarded as follows: 1st Claimant Kshs.117,825; 2nd Claimant Kshs.40,000; 3rd Claimant Kshs.230,628; 4th Claimant Kshs.75,384; 5th Claimant Kshs.223,672; 6th Claimant Kshs.117,825; 7th Claimant Kshs.59,885; 8th Claimant Kshs.117,709; 9th Claimant Kshs.358,363; 10th Claimant Kshs.223,672
  2. 2.The Respondent to issue proper replacement certificates of service within 14 days from the date of judgment recognizing the entire periods served and acknowledging the Claimants' good conduct
  3. 3.Interest at court rates on the decretal amount from the date of judgment
  4. 4.Costs of the suit to be paid by the Respondent

Authorities

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Legislation

  • Employment ActSection 47(5)
  • Employment ActSection 45(1)
  • Employment ActSection 45(2)
  • Employment ActSection 49(1)(c)
  • Employment ActSection 41
Jurisdiction invoked
Employment Act, Sections 41, 45(1), 45(2), 47(5) and 49(1)(c)

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, "Benjamin Mwanzia Musyoka & 9 others v Cosmos Limited [2014] KEELRC 893 (KLR)", Case Analysis (2014). Memorandum of Claim dated 18th October 2012 (Industrial Cause). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/893/eng@2014-03-21

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