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ELRCPartially AllowedNot stated in judgment (Memo of Claim filed 20.12.2013)· [2014] KEELRC 1480 (KLR)

Cosmas Ochieng Otieno & 5 others v Equator Bottlers Ltd [2014] KEELRC 1480 (KLR)

Employment and Labour Relations Court
27 November 2014
HWHellen S. Wasilwa
874 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 that firing employees without written reasons or a hearing is unfair, even if you pay their terminal benefits and notice.

What this practically means

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Executive summary

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Six claimants, employed by the respondents as salesmen seconded to distributors, sued through D. A. Oluoch & Associates alleging wrongful and unlawful termination of their employment on 20 September 2013. They contended that after police investigations into allegations that they were plotting to eliminate the respondents' Managing Director (CID File No. 8/2013) cleared them, the respondents pressured them to resign and then terminated them without reasons and without a hearing, and further made illegal deductions from their terminal dues for broken glasses and liquids. The respondents, in their memo of reply filed 21 January 2014, maintained that the employment contracts provided for one month's salary in lieu of notice, that terminal dues were paid, that the deductions reflected acknowledged liabilities, and that the claimants faced criminal charges in Criminal Case No. 336/2013. The court framed three issues: valid reasons, due process, and entitlement to remedies. On the first, the termination letters gave no reasons, contrary to Section 43 of the Employment Act, which requires the employer to prove reasons for termination. On the second, no hearing was accorded as required by Section 41. The court held the claimants were unlawfully and wrongfully terminated. It awarded each claimant 12 months' salary as damages, refunded the 2nd and 5th claimants deductions for broken liquids and empty bottles (Kshs 133,165.15 and Kshs 675,756.00 respectively), ordered issuance of certificates of service, and awarded costs to the claimants. Judgment delivered by Hellen S. Wasilwa, Judge, on 27 November 2014.

Key legal issues

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01

Validity of reasons for termination

Holding

Termination letters gave no reasons, breaching Section 43; termination deemed unfair

Reasoning

The termination letters issued to the claimants contained no reasons for termination. Section 43(1) of the Employment Act places the burden on the employer to prove the reason(s) for termination, failing which the termination is deemed unfair under Section 45. The contract's one-month notice clause did not displace this statutory requirement.

p. 2
02

Procedural fairness (hearing)

Holding

No hearing was accorded, breaching Section 41 of the Employment Act

Reasoning

Section 41 requires an employer to explain the reasons for contemplated termination and to hear the employee's representations, with a representative of the employee's choice present. No such hearing was held, so the terminations were procedurally unfair regardless of the payment of terminal benefits.

p. 2
03

Entitlement to remedies

Holding

Claimants awarded 12 months' salary each as damages; 2nd and 5th claimants awarded deducted amounts; certificates of service and costs granted

Reasoning

Having found both substantive and procedural unfairness, the court assessed compensation at 12 months' gross salary per claimant under the Employment Act. The 2nd and 5th claimants, who proved deductions for broken liquids and empty bottles, were refunded those amounts, and certificates of service and costs were ordered.

p. 2

Legal principles established

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  • An employer bears the burden of proving the reasons for termination; failure to do so renders the termination unfair under Section 45
  • A contractual notice provision does not permit termination without reasons
  • An employer must accord an employee a hearing before terminating employment on grounds of misconduct, poor performance or physical incapacity

Court orders

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  1. 1.Each claimant awarded 12 months' salary as damages for unlawful termination (Kshs 705,037.92; 630,000.00; 594,325.68; 465,613.32; 518,100.00; 1,574,581.68 respectively)
  2. 2.2nd claimant awarded Kshs 133,165.15 and 5th claimant Kshs 675,756.00 being moneys deducted in form of broken liquids and empty bottles
  3. 3.Respondents to issue each claimant with a certificate of service
  4. 4.Respondents to meet costs of the suit

Authorities

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Legislation

  • Employment ActSection 41(1) and (2)
  • Employment ActSection 42(1)
  • Employment ActSection 43(1) and (2)
  • Employment ActSection 44(3) and (4)
  • Employment ActSection 45
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (Employment Act provisions invoked)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Cosmas Ochieng Otieno & 5 others v Equator Bottlers Ltd [2014] KEELRC 1480 (KLR)", Case Analysis (2014). Not stated in judgment (Memo of Claim filed 20.12.2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1480/eng@2014-11-11

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