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ELRCPartially AllowedCause No 2089 of 2012· [2014] KEELRC 901 (KLR)

Nixon Mandala Malongo v Clifford Okello Rachuonyo & another [2014] KEELRC 901 (KLR)

Industrial Court of Kenya
22 January 2014
MOMaureen Onyango
2,252 words in judgment
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The bottom line

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A Kenyan court ruled an employer's dismissal was unfair because it gave no reasons or hearing, awarding the employee 12 months' salary.

What this practically means

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Executive summary

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The Claimant, employed by the Respondents, advocates, from August 1994 to 23rd August 2012 as a court clerk handling lands registry matters, claimed malicious and unlawful dismissal. He sought notice pay, 12 months' compensation under section 49(1)(c) of the Employment Act, severance pay, damages for the unexpired term of his employment to age 60, a certificate of service with a Kshs.100,000 fine, and general damages. The Respondents alleged summary dismissal for gross misconduct - demanding a Shs.250,000 bribe from a client to influence a land valuation - after verbal warnings, and denied any redundancy. The court collapsed the issues into unfairness of dismissal, entitlement to terminal benefits, and costs. It held that the termination letter gave no reasons and the Claimant was never heard, contrary to the mandatory provisions of section 41 of the Employment Act, and that grounds however compelling cannot be proved without a hearing. Termination was therefore unfair. On remedies, the court found one month's notice pay had already been made and dismissed the further notice claim, applying the Shimba Tourist Services principle limiting damages to notice. It awarded maximum compensation of 12 months' gross salary, Kshs.432,000/=, considering 18 years' service. Severance pay was refused, being payable only on redundancy and unproved. Damages for the unexpired contract term were refused, the Act capping compensation at 12 months. The Respondents were directed to issue a section 51-compliant certificate of service within 30 days. The Respondents were ordered to pay the Claimant's costs.

Key legal issues

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01

Whether the Claimant was unfairly dismissed

Holding

Termination was substantively and procedurally unfair because the letter of termination gave no reasons and the Claimant was never heard, contrary to sections 41, 43 and 45 of the Employment Act

Reasoning

The court found the termination letter did not state reasons and RW2 admitted he saw no need to hear the Claimant. Section 41 is mandatory: an employer must explain the reasons and hear representations before termination on grounds of misconduct. Even compelling grounds cannot cure failure to afford a hearing, as grounds cannot be proved without it. This embodies the rule of natural justice. Termination was therefore unfair ab initio.

p. 3
02

Entitlement to notice pay

Holding

No further notice pay; one month already paid was sufficient, per section 49(1)(a)

Reasoning

Sections 35 and 49(1)(a) provide for one month's notice or pay in lieu unless the contract provides for longer. The Claimant neither pleaded nor proved a longer contractual notice period and admitted receiving one month's salary in lieu. Following the Court of Appeal in Shimba Tourist Services, damages are limited to the notice the employer would have given.

p. 4
03

Compensation for unfair termination

Holding

Maximum 12 months' gross salary awarded, Kshs.432,000/=, considering 18 years' service and the manner of termination

Reasoning

Section 49(1)(c) permits up to 12 months' gross salary for unfair termination. The court considered section 49(4) factors, particularly the Claimant's 18 years of service and the flawed process of termination, and awarded the maximum as prayed.

p. 4
04

Certificate of service

Holding

The certificate issued did not comply with section 51; a compliant one to be issued within 30 days

Reasoning

Section 51 requires issuance of a certificate of service after at least 4 weeks' service and prescribes its particulars. The certificate the Respondents issued did not meet those requirements, so the court directed issuance of a proper certificate within 30 days, but declined the claimed Kshs.100,000 fine.

p. 5

Legal principles established

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  • Section 41 of the Employment Act is mandatory: failure to inform the employee of reasons and afford a hearing renders termination unfair regardless of the merits of the grounds
  • Damages for wrongful termination are limited to what the employer would have paid on proper notice or salary in lieu thereof
  • Severance pay is only payable upon redundancy
  • Employment is not permanent; liability on wrongful termination is limited to the exit clause or statutory compensation

Court orders

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  1. 1.Award of maximum compensation of 12 months' gross salary of Kshs.432,000/= for unfair termination under section 49(1)(c) of the Employment Act
  2. 2.Respondents directed to issue a proper certificate of service in compliance with section 51 of the Employment Act within 30 days
  3. 3.Claim for 3 months' salary in lieu of notice dismissed (one month notice pay already paid)
  4. 4.Claim for severance pay of Kshs.324,000/= dismissed
  5. 5.Claim for damages for loss of employment for unexpired term of contract dismissed
  6. 6.Respondents to pay the Claimant's costs of the case

Authorities

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Legislation

  • Employment Actsection 41(1) and (2)
  • Employment Actsection 42(1)
  • Employment Actsection 45
  • Employment Actsection 43
  • Employment Actsection 35
  • Employment Actsection 49(1)(a)
  • Employment Actsection 49(1)(c)
  • Employment Actsection 49(4)
  • Employment Actsection 44(3) and (4)
  • Employment Actsection 51
  • Industrial Court Actnot specified

Cases cited (6)

  • Shimba Tourist Services Limited v Wilson Mise Kigani
    (1997) eKLR
  • Robert Brown v Livinstone Registrars Limited & 2 others
    (2012) eKLR
  • Shankar Saklani v DHL Global Forwarding (K) Limited
    (2012) eKLR
  • Gilfrine Noah Masio v Mareba Enterprises Limited
    Industrial Court Cause 2007 of 2011
  • Dominic N. Mbithi v Dubai Bank Kenya Limited
    Industrial court case 1259 of 2011
  • Njeru v agip (k) Ltd
    (1986) KLR 480
Jurisdiction invoked
Employment and labour relations jurisdiction under the Employment Act and Industrial Court Act (specific constitutional provision not stated in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Nixon Mandala Malongo v Clifford Okello Rachuonyo & another [2014] KEELRC 901 (KLR)", Case Analysis (2014). Cause No 2089 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/901/eng@2014-01-22

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