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ELRCPartially AllowedCause No. 2015 of 2012· [2014] KEELRC 947 (KLR)

Thomas Mbulo v Cedars Restaurant Company Limited [2014] KEELRC 947 (KLR)

Industrial Court of Kenya
9 April 2014
1,666 words in judgment
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The bottom line

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A Kenyan court ruled a waiter's firing was unfair because the employer never gave him a hearing, ordered compensation and his employment records.

What this practically means

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Executive summary

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The Claimant, a waiter employed by the Respondent from 6 June 2008, was summarily dismissed on 1 July 2012 after a client at an outside catering job in Runda alleged that drinks had been stolen. No stolen items were found on search, the Claimant was ordered to surrender his uniform and go home without being given a chance to explain, no dismissal letter was issued, and colleagues were not dismissed. The court framed two issues: whether the summary dismissal was unfair, and entitlement to the prayers. Applying Sections 41, 43 and 45 of the Employment Act, the court held the Respondent failed to prove fair procedure and valid reason; no records of the dismissal meeting were produced and RW1 was not present when the Claimant was summoned. Prior warning letters, the latest 11 months old, could not ground a summary dismissal, and even then a hearing was required. The dismissal was unfair. On remedies the court awarded 8 months' salary (Shs. 125,120) as compensation under Section 49(1)(c) rather than the 12 months sought, one month's salary in lieu of notice (Kshs. 15,640), and Shs. 17,725.30 for 34 unaccounted leave days. Severance pay was refused as the Claimant was not made redundant, and the public holiday claim failed for want of proof, salary vouchers showing holiday pay. The Respondent was directed to regularise NSSF remittances and issue a Certificate of Service within 30 days. Costs and interest at court rates were awarded to the Claimant. Judgment delivered on 9 April 2014 by Hon. Lady Justice Maureen Onyango.

Key legal issues

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01

Whether the summary dismissal was fair

Holding

Unfair - the Respondent failed to prove compliance with Section 41 procedure, produced no records of the meeting, never issued a dismissal letter, and the last warning was 11 months old

Reasoning

The employer bears the burden of proving both valid reason and fair procedure under Sections 43 and 45 of the Employment Act. No records of the meeting in the manager's office were produced and no dismissal letter with grounds was issued. RW1 was not present at the dismissal meeting, leaving the Claimant's testimony that he was not heard unchallenged. Prior warnings, being stale, could not justify dismissal without a hearing.

p. 3
02

Entitlement to 12 months' compensation

Holding

Awarded 8 months' salary (Shs. 125,120) under Section 49(1)(c) after considering the circumstances of dismissal and length of service

Reasoning

Section 49(1)(c) caps compensation at twelve months' gross wage, and Section 49(4) sets out factors to consider. The court considered the circumstances of dismissal and the Claimant's length of service (49 months) and found 8 months' salary reasonable.

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03

Annual leave claim

Holding

Awarded Shs. 17,725.30 for 34 unaccounted leave days out of an entitlement of 98 days over 49 months at 2 days per month

Reasoning

The Respondent produced leave forms accounting for 64 leave days (30 paid in lieu, 34 taken). The entitlement was 24 days per year per the General Order (Hotel and Catering Trades) Order, now under Section 63(2) of the Labour Institutions Act. Over 49 months the Claimant earned 98 days, leaving 34 days unpaid.

p. 3

Legal principles established

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  • An employer must explain reasons for termination and give the employee a hearing and an opportunity to be accompanied before summary dismissal, per Section 41 of the Employment Act
  • Under Section 43 the employer must prove the reasons for dismissal, failing which the dismissal is deemed unfair; under Section 45 both validity of reason and fair procedure must be proved
  • An old warning letter cannot found a summary dismissal

Court orders

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  1. 1.Respondent to pay the Claimant 8 months' salary as compensation for unfair dismissal in the sum of Shs. 125,120
  2. 2.Respondent to pay one month's salary in lieu of notice in the sum of Kshs. 15,640
  3. 3.Respondent to pay Kshs. 17,725.30 in respect of accrued leave days
  4. 4.Respondent directed to regularise the Claimant's NSSF remittances within 30 days from the date of the award
  5. 5.Respondent directed to issue a Certificate of Service within 30 days from the date of judgment
  6. 6.Respondent to pay the Claimant's costs of the claim
  7. 7.Interest at court rates from date of judgment

Authorities

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Legislation

  • Labour Institutions ActSection 15(c)
  • Employment ActSection 41
  • Employment ActSection 43
  • Employment ActSection 45
  • Employment ActSection 49(1)(a), 49(1)(c), 49(4)
  • Employment ActSection 40
  • Employment ActSection 51
  • Labour Institutions ActSection 63(2)
  • Regulation of Wages and Conditions of Employment ActGeneral Order (Hotel and Catering Trades) Order (repealed)
  • National Social Security FundNSSF remittance obligations
Jurisdiction invoked
Employment and labour relations dispute under the Employment Act 2007 and Labour Institutions Act 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Thomas Mbulo v Cedars Restaurant Company Limited [2014] KEELRC 947 (KLR)", Case Analysis (2014). Cause No. 2015 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/947/eng@2014-04-09

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