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ELRCPartially AllowedCause No. 100 of 2012· [2014] KEELRC 1314 (KLR)

Collins Osoro Lukhale v AAA Growers Limited [2014] KEELRC 1314 (KLR)

Industrial Court of Kenya
25 September 2014
4,641 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled AAA Growers unfairly fired its accountant without a hearing, awarding him Kshs.1.32 million, but dismissed his racial discrimination claim.

What this practically means

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Executive summary

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The Claimant, an Accountant employed by the Respondent on 7th June 2010 at Kshs.55,000 per month (later Kshs.60,000), was terminated by letter dated 26th August 2011 on the stated ground of poor performance. He claimed unlawful and unfair termination and racial discrimination, alleging he was paid less than an Asian accountant of the same rank, forced to work beyond 5pm while Asian colleagues left early, addressed in abusive language, and replaced by an Asian on higher pay; he also alleged the real reason was his enrolment for evening classes. The Respondent admitted the employment relationship but maintained the termination was for poor performance and lateness, relying variously on sections 40 and 44 of the Employment Act, and denied discrimination. The court framed three issues: unfair termination versus summary dismissal, discrimination, and remedies. It held that even summary dismissal demands compliance with section 41 procedure, that lawfulness is not equated with fairness, and that the Respondent proved no valid reason for termination, rendering it substantively and procedurally unfair. The discrimination claim failed: salary differences flowed from the Claimant's own contract, and the abusive language allegations were not particularised. The court awarded twelve months' gross pay (Kshs.720,000) as compensation for unfair termination and Kshs.600,000 for loss of office representing the unexpired ten months of the two-year contract under section 49(1), awarded costs at 50%, and declined interest.

Key legal issues

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01

Whether the Claimant's termination was unfair or a lawful summary dismissal

Holding

The termination was both substantively and procedurally unfair; the Respondent failed to prove valid reasons and did not follow section 41 procedure

Reasoning

The termination letter cited poor performance. Section 41 requires an employer, before terminating on grounds of poor performance, to explain the reasons to the employee in a language he understands with a representative present. The Respondent gave no hearing and inconsistently relied on sections 40 and 44 (redundancy and summary dismissal) while the letter was a termination for poor performance. Section 43 places the burden of proving reasons on the employer, which it failed to discharge.

p. 6
02

Whether the Claimant was discriminated against on grounds of race

Holding

No discrimination established; the claim on this head failed

Reasoning

Where a person is treated differently from others similarly situated on a specified ground, unfairness is presumed. However, the Claimant's salary was fixed by his own specific contract; he failed to identify which Asian employees left at 5pm; and he did not plead or particularise the alleged abusive language. The court could not infer discrimination on the evidence, though it admonished the Respondent to address any such practices under Article 27 and section 5 of the Employment Act.

p. 7
03

Whether the Claimant was entitled to the remedies sought

Holding

Compensation of twelve months' gross pay for unfair termination and ten months' pay for loss of office under section 49(1) were awarded; damages for discrimination and interest were refused

Reasoning

Having found the termination substantively and procedurally unfair, the court awarded compensation equivalent to the last gross pay of Kshs.60,000 for twelve months under section 49(1)(c). Considering the two-year contract with ten months remaining, an additional Kshs.600,000 was awarded for loss of office. Other terminal dues had already been paid, and the discrimination claim failed, so only 50% costs were awarded with no interest.

p. 7

Legal principles established

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  • An employer must comply with the procedural requirements of section 41 of the Employment Act even where summary dismissal is contemplated
  • Lawfulness of a dismissal is not equated with fairness; natural justice goes beyond lawfulness
  • A fair termination requires both substantive justification and procedural fairness, and the employer bears the burden of proving the reasons for termination

Court orders

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  1. 1.Compensation for unfair termination at Kshs.720,000.00
  2. 2.Loss of office awarded at Kshs.600,000.00
  3. 3.Costs awarded at 50%
  4. 4.No interest awarded

Authorities

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Legislation

  • Employment Act (Cap 226)section 5(2)
  • Employment Act (Cap 226)section 12
  • Employment Act (Cap 226)section 35
  • Employment Act (Cap 226)section 40
  • Employment Act (Cap 226)section 41
  • Employment Act (Cap 226)section 42(1)
  • Employment Act (Cap 226)section 43
  • Employment Act (Cap 226)section 44
  • Employment Act (Cap 226)section 45
  • Employment Act (Cap 226)section 47(1)
  • Employment Act (Cap 226)section 49(1)
  • Constitution of KenyaArticle 27
  • Constitution of KenyaArticle 41

Cases cited (6)

  • Absalom Ajusa Magomere versus Kenya Nut Company Limited
    [2014] eKLR
  • Pravin Bowry versus Ethics and Anti-Corruption Commission
    [2013] eKLR
  • Shankar Saklani versus DHL Global Forwarders (K) Limited
    [2012] eKLR
  • Elizabeth Washeke and 62 Others versus Airtel Kenya Limited and another
    Cause No. 1972 of 2012
  • NEWAHU versus University of Cape Town and Others
    (2003) 24 ILJ
  • Hesbon Ngaruiya Waigi versus Equatorial Commercial Bank Limited
    Cause No. 60 of 2013
Jurisdiction invoked
Employment and labour relations jurisdiction; claim for unfair termination and discrimination under the Employment Act and Article 41 of the Constitution

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (6)

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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, "Collins Osoro Lukhale v AAA Growers Limited [2014] KEELRC 1314 (KLR)", Case Analysis (2014). Cause No. 100 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1314/eng@2014-09-25

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