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ELRCPartially AllowedCause No 2525 of 2012· [2014] KEELRC 1001 (KLR)

Abisalom Ajusa Magomere v Kenya Nut Company Limited [2014] KEELRC 1001 (KLR)

Industrial Court of Kenya
20 May 2014
LNLinnet Ndolo
1,681 words in judgment
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The bottom line

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Kenya's Industrial Court ruled an employee's summary dismissal unfair because the employer proved no valid reason and skipped the mandatory hearing.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 15 September 1981 and promoted to Senior Security Officer effective 1 January 2003, was summarily dismissed on 4 March 2011 on allegations that he failed to report irregularities at the Respondent's farm, including movement of a lorry, removal of timber and misuse of a tractor. He sued for a declaration of unlawful termination, notice pay, off-day pay, traveling allowance, leave pay, service pay, salary for days worked in March 2011, damages, costs and interest. The Respondent admitted the employment but justified the dismissal as gross misconduct for failure to report irregularities, and did not call any witnesses. The Court framed two issues: substantive and procedural fairness of the dismissal, and entitlement to reliefs. Relying on Sections 43 and 45 of the Employment Act, 2007, it found the Respondent failed to prove a valid reason, since no job description or particulars of the alleged irregularities were produced, suggesting the Claimant was sacrificed amid malpractices involving managers. Under Section 41, the Respondent also failed the procedural fairness threshold; applying Shankar Saklani v DHL, the Court held a hearing is mandatory even for summary dismissal. The dismissal was declared unfair. The Court awarded 12 months' salary as compensation, one month's notice pay, leave pay for 52 days, service pay at 15 days per year for 29 years, and salary for 7 days worked in March 2011, totalling Kshs. 305,145. Claims for off days and traveling allowance were dismissed for want of proof. Costs were awarded to the Claimant with interest at court rates, subject to statutory deductions under Section 49(2).

Key legal issues

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01

Substantive fairness of the summary dismissal

Holding

The Respondent failed to establish a valid reason for termination

Reasoning

The letter of termination accused the Claimant of failing to report irregularities, but the Respondent did not produce his job description to show his responsibilities, and no particulars of the irregularities or his role in preventing them were provided. The Court concluded the Respondent sacrificed the Claimant's job when faced with malpractices involving its managers.

p. 3
02

Procedural fairness of the summary dismissal

Holding

The Respondent failed to comply with Section 41 of the Employment Act, 2007

Reasoning

Section 41 requires the employer to explain the reasons for termination and to hear the employee's representations before dismissal on grounds of misconduct. The Respondent summoned the Claimant and asked questions but gave him no hearing as envisaged by the section; no internal disciplinary procedure was followed despite Section 12 requiring documented disciplinary rules for employers with over 50 employees.

p. 3
03

Quantum of compensation for unfair termination

Holding

12 months' salary awarded as compensation

Reasoning

The Court distinguished authorities limiting compensation to the notice period as being based on the pre-2010 law. Taking into account the Claimant's long service of about 29 years, the Court awarded 12 months' salary as compensation plus one month's salary in lieu of notice.

p. 4
04

Leave pay and service pay

Holding

Leave pay for 52 days and service pay at 15 days' pay per year awarded

Reasoning

The Respondent did not provide leave records to counter the leave claim. There was no evidence the Claimant was a member of NSSF or a registered pension or provident fund or a gratuity or service pay scheme, so service pay was awarded at 15 days' pay per year of service.

p. 4

Legal principles established

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  • Even in cases of summary dismissal, a hearing and notification under Section 41 of the Employment Act is mandatory
  • The employer bears the burden of proving valid reasons for termination, failing which termination is deemed unfair

Court orders

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  1. 1.12 months' salary for unfair termination at Kshs. 124,392
  2. 2.1 month's salary in lieu of notice at Kshs. 10,366
  3. 3.Leave pay of Kshs. 17,968
  4. 4.Service pay at 15 days' pay for 29 years of Kshs. 150,000
  5. 5.Salary for 7 days worked in March 2011 of Kshs. 2,419
  6. 6.Total award of Kshs. 305,145
  7. 7.Costs of the case to the Claimant
  8. 8.Interest at court rates from the date of the award until payment in full
  9. 9.Award subject to statutory deductions under Section 49(2) of the Employment Act, 2007

Authorities

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Legislation

  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 45(2)
  • Employment Act, 2007Section 41(1) and (2)
  • Employment Act, 2007Section 12
  • Employment Act, 2007Section 49(2)
  • Constitution of Kenya, 2010not specified

Cases cited (1)

  • Shankar Saklani Vs DHL Forwarding (K) Limited
    [2012] eKLR
Jurisdiction invoked
Employment Act, 2007 (dispute referred under the Industrial Court's employment jurisdiction)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "Abisalom Ajusa Magomere v Kenya Nut Company Limited [2014] KEELRC 1001 (KLR)", Case Analysis (2014). Cause No 2525 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1001/eng@2014-05-20

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