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ELRCPartially AllowedCause No. 435 of 2013

Kiptui v Kenya Pipeline Company Ltd (Cause 435 of 2013) [2014] KEELRC 905 (KLR)

Industrial Court of Kenya
3 March 2014
MMMonica Mbaru
7,408 words in judgment
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The bottom line

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Kenya Pipeline had to reinstate a fired employee with full back pay because it never gave her notice or a hearing before termination.

What this practically means

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Executive summary

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The claimant, formerly Company Secretary of Kenya Pipeline Company Limited, was suspended on half pay in February 2009 under section 62 of the Anti-Corruption and Economic Crimes Act after being charged in an anti-corruption case. While under suspension she was redeployed to the Pensions Department and received a salary increase, but on 29th June 2012 her employment was terminated by the Board 'in public interest' without notice or a hearing. She claimed unfair termination and sought reinstatement with back pay or, in the alternative, full compensation, plus unpaid telephone allowances and half salary for the suspension period. The respondent defended the termination as justified by the corruption charges, loss of public funds and organisational change outsourcing her position. The respondent called no evidence. The court framed four issues: validity of the reason for termination, the reorganisation defence, fairness of the termination, and remedies. It held that 'public interest' was a vague, unproved ground; that section 41 of the Employment Act mandatorily requires notice and a hearing before termination, including summary dismissal; and that the respondent's reorganisation defence failed for want of evidence under section 40. The termination was found substantively and procedurally unfair. The court found this an exceptional case justifying reinstatement under sections 49 and 50, the termination falling within the three-year rule. Judgment was entered for the claimant: reinstatement with full back salary, allowances and benefits within 30 days, payment of unpaid telephone allowances of Kshs.23,000 per month for the suspension period, mention after 35 days to confirm compliance, and costs to the claimant.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether there was a valid reason for the termination of the claimant
  2. 2.Whether there is a good defence in terms of the respondent reorganisation so as to rely on the provisions of section 40 of the Employment Act
  3. 3.Whether the claimant's termination was unfair in the circumstances of this case
  4. 4.Whether there are any remedies due

Key legal issues

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01

Whether there was a valid reason for termination

Holding

The 'public interest' reason was not proved; the burden lay on the respondent under section 43 and it failed to discharge it

Reasoning

The court held that under section 43(1) the employer must prove reasons for termination. The respondent gave no evidence, called no witnesses, and did not plead or prove the process by which it arrived at a public interest ground. The reasons relied on related to ongoing criminal charges against which the claimant remained innocent, and the suspension mechanism under section 62 of the Anti-Corruption and Economic Crimes Act was already addressing that scenario.

p. 10
02

Whether termination without notice and hearing was procedurally fair

Holding

The termination was procedurally unfair because the claimant was never given notice or a hearing as required by section 41 of the Employment Act

Reasoning

The respondent's Board simply resolved to terminate; it was not pleaded or proved what process was followed, and the respondent did not claim to have given notice or accorded the claimant the right to be heard. Section 41 is mandatory and applies even where summary dismissal is warranted. Even a summary dismissal requires the employee to be accorded a hearing. The respondent compounded matters by electing not to call any evidence.

p. 9
03

Whether the respondent could rely on reorganisation/redundancy under section 40

Holding

No; no evidence of a lawful reorganisation or redundancy process was adduced, so the defence of reorganisation failed and reinstatement was not pre-empted

Reasoning

The respondent asserted the claimant's Pensions position had been outsourced, but adduced no evidence of the process undertaken in the reorganisation, how many employees were affected or whether laid off. Section 40 sets out procedures that must be adhered to. The claimant had been redeployed while under suspension, showing the respondent had capacity and positions to deploy her.

p. 10
04

What remedies were due

Holding

Reinstatement with full back salary, allowances and benefits was granted, within the three-year window under section 49(4), plus unpaid telephone allowances during suspension

Reasoning

Given long and faithful service since 1995 and the exceptional nature of the case, the court found reinstatement appropriate and within the three-year rule. The suspension letter had expressly entitled the claimant to full allowances including telephone allowances, so withholding them was unjustified. Reliance on pending criminal charges to terminate was an unfair labour practice.

p. 11

Legal principles established

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  • Section 41 of the Employment Act is mandatory: an employee must be given notice of the reasons and a hearing before termination, including summary dismissal, failing which the termination is unfair
  • The employer bears the burden of proving valid reasons for termination under section 43(1) of the Employment Act, and failure to do so renders the termination unfair
  • 'Public interest' as a ground of termination must be clearly articulated and proved; a vague public interest ground cannot justify termination
  • In the clearest cases of unfair and unlawful termination, the court may order reinstatement without loss of back salary, benefits and privileges

Court orders

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  1. 1.Reinstatement of the claimant to her position or an equally suitable position with the respondent, with all back salary, allowances, benefits and other legal dues within 30 days from the date of judgment
  2. 2.Payment to the claimant of all unpaid telephone allowances unpaid during the entire period of suspension (17th February 2009 to 29th June 2012) at Kshs.23,000.00 per month
  3. 3.Mention after 35 days to confirm compliance
  4. 4.Costs of the suit awarded to the claimant

The bench

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One judgment of the whole court — no separate or dissenting opinions.

MM
majority

Wrote the judgment

Jurisdiction invoked
Industrial Court jurisdiction over employment and labour relations disputes (Employment Act and labour relations law); original claim for unfair termination

Relief refused

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Payment for time lost out of employment as a separate head

Subsumed in the reinstatement with full back salary and allowances; court granted reinstatement rather than separate compensation for time lost

Costs

Costs of the suit awarded to the claimant

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Section 41 of the Employment Act is couched in mandatory terms. Where an employer fails to follow these mandatory provisions, whatever outcome of the process is bound to be unfair
p. 7Mandatory pre-termination hearing under section 41
I find no such material submitted before this court that establishes there was a public interest reason or ground to justify the termination of the claimant.
p. 10Burden of proving reasons for termination
this reason of public interest remains vague, ambiguous and fails to articulate the provisions of the law that the respondent relied upon to arrive at such a reason
p. 10Vagueness of public interest ground
The claimant is therefore to receive all her unpaid telephone allowances not remitted during the suspension period.
p. 11Allowances during suspension
(a) The claimant Mary Chemweno Kiptui is hereby reinstated to her position or an equally suitable position with the respondent, with all her back salary, allowances, benefits, and any other legal dues within 30 days from the date of this judgement;
p. 11Final orders - reinstatement
(d) Costs of the suit awarded to the claimant
p. 11Final orders - costs

Issues in the judgment

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minor

Internal inconsistency on the date of termination: the memorandum and defence refer to termination on 29th June 2012, but the judgment's remedies section states 'Termination was on 29th June 2013 a time within the three (3) years rule'

minor

The judgment at one point attributes a submission to the claimant that is in substance the respondent's submission on section 43(1): 'The claimant also submitted that they complied with section 43(1) of the Employment Act, there were valid reasons for termination'

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (13)

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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, "Kiptui v Kenya Pipeline Company Ltd (Cause 435 of 2013) [2014] KEELRC 905 (KLR)", Case Analysis (2014). Cause No. 435 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/905/eng@2014-03-03

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