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ELRCPartially AllowedCause No 258 of 2011· [2014] KEELRC 1415 (KLR)

Kenya National Library Services Board v Beatrice N. Ayoti [2014] KEELRC 1415 (KLR)

Industrial Court of Kenya
26 November 2014
LNLinnet Ndolo
1,840 words in judgment
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The bottom line

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Kenya's Industrial Court ruled employers cannot deduct money from salaries for losses without first giving the employee a fair hearing, though employees must still work proper notice.

What this practically means

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Executive summary

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The Claimant, Kenya National Library Services Board, sued its former Supplies Officer, Beatrice N. Ayoti, seeking Kshs. 374,374.50 as an outstanding surcharge balance and Kshs. 43,193.50 in lieu of one month's notice, after she resigned on 31st January 2008 without giving the requisite notice. The Respondent filed a Reply and Counterclaim seeking refund of Kshs. 90,000 recovered from her salary on account of a surcharge imposed over missing store items, contending the surcharge was effected without notice to her and that some items were missing before she took over the store. The court framed four issues: limitation, breach through resignation, lawfulness of the surcharge, and the counterclaim. On limitation, the court held that the Employment Act, 2007, which came into force on 2nd June 2008, did not apply to a claim accruing on 31st January 2008, so the six-year period under Section 4(1) of the Limitation of Actions Act governed and the claim filed on 23rd February 2011 was within time. On the resignation, the court found that a waiver of notice must be express, and since the Respondent left before her waiver request was answered (and it was later declined), she was liable for one month's salary in lieu of notice. On the surcharge, the court found no evidence the Respondent was ever called to a disciplinary hearing; the surcharge violated the rules of natural justice and was irregular. The counterclaim for Kshs. 90,000 succeeded. The court ordered the Claimant to pay the Respondent Kshs. 46,806.50, the net difference between the refunded surcharge recoveries and the notice amount, with each party bearing their own costs.

Key legal issues

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01

Limitation of actions

Holding

The claim was not statute barred; the Employment Act's three-year limitation did not apply to a cause of action accruing before the Act came into force, so the six-year period under the Limitation of Actions Act applied

Reasoning

The Employment Act, 2007 came into effect on 2nd June 2008 and cannot apply retrospectively to a claim that accrued on 31st January 2008 when the Respondent resigned. The applicable limitation provision is therefore Section 4(1) of the Limitation of Actions Act, which allows six years for contract actions. The claim filed on 23rd February 2011 was within time.

p. 2
02

Breach of contract by resignation without notice

Holding

The Respondent breached her contract by leaving immediately after requesting a waiver of notice which was never granted; she is liable for one month's salary in lieu of notice

Reasoning

Resignation notice is a statutory requirement aimed at smooth closure of the employment relationship. An employee requesting a waiver must await the employer's response; a waiver must be express, not implied. The Respondent requested a waiver on 31st January 2008 and left immediately; her request was later declined by letter dated 18th February 2008, so she is deemed to have resigned without requisite notice.

p. 3
03

Lawfulness of the surcharge

Holding

The surcharge was irregular and unlawful as it was imposed without a disciplinary hearing or opportunity to be heard

Reasoning

The court reviewed the correspondence and minutes produced by the Claimant and found no evidence that the Respondent was called to any disciplinary hearing to determine her culpability. The Respondent's complaints that investigations proceeded without her involvement and that her letters were ignored were unrebutted. Surcharge being a severe disciplinary action, the failure to afford her a hearing violated the rules of natural justice and rendered the surcharge irregular.

p. 4
04

Counterclaim

Holding

The Respondent's counterclaim for Kshs. 90,000 recovered from her salary on account of the surcharge succeeds and is allowed

Reasoning

Following the finding that the surcharge was irregular for breach of natural justice, the amounts already recovered from the Respondent's salary must be refunded. The court followed Fred Makori Ondari, where an unjustified surcharge was reversed, and allowed the counterclaim in full.

p. 4

Legal principles established

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  • An employee who requests a waiver of the notice period must await the employer's response before leaving; a valid waiver must be express and not implied, and an employee who leaves without requisite notice is liable to pay in lieu of notice
  • Surcharge is a severe disciplinary action; before an employer surcharges an employee, the employee must be afforded every opportunity to defend themselves, failing which the surcharge is irregular

Court orders

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  1. 1.The Claimant shall pay to the Respondent the sum of Kshs. 46,806.50 being the difference between Kshs. 90,000 recovered from the Respondent's salary on account of the surcharge and Kshs. 43,193.50 being the equivalent of the Respondent's one month's salary in lieu of notice
  2. 2.Each party will bear their own costs

Authorities

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Legislation

  • Employment ActSection 90
  • Limitation of Actions ActSection 4(1)

Cases cited (2)

  • Carol Adhiambo Olela Vs Asterisk Limited
    [2014] eKLR
  • Fred Makori Ondari Vs The Management Committee of the Ministry of Works Sports Club
    [2013] eKLR
Jurisdiction invoked
Original jurisdiction of the Industrial Court of Kenya over employment and labour relations disputes

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (20)

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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, "Kenya National Library Services Board v Beatrice N. Ayoti [2014] KEELRC 1415 (KLR)", Case Analysis (2014). Cause No 258 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1415/eng@2014-12-01

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