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ELRCPartially AllowedCause No. 866 of 2013· [2015] KEELRC 1 (KLR)

Reuben Ikatwa & 17 others v Commanding Officer British Army Training Unit Kenya & another [2015] KEELRC 1 (KLR)

Employment and Labour Relations Court of Kenya
2 November 2015
NMNzioki wa Makau
15,025 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 upheld BATUK's dismissals over fraudulent expense claims, but ordered full gratuity payment because the employer ignored its own procedures.

What this practically means

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Executive summary

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Eighteen Locally Engaged Civilians (drivers and mechanics) employed by the British Army Training Unit Kenya (BATUK) sued the Commanding Officer and BATUK for unlawful and wrongful summary dismissal. They were dismissed in March 2013 following an internal audit which allegedly unearthed fraudulent subsistence allowance claims supported by irregular receipts from Upways Hotel, and following a mass walkout to the Laikipia County Labour Office over grievances including threatened redundancies and the conduct of Major Strudwick, whom they had petitioned for removal. The Respondents counterclaimed for refund of the sums allegedly fraudulently claimed. The Court framed two issues: whether there was just cause for dismissal and whether fair procedure was followed. It held that there was basis for termination since the employees did not properly account for expenditure received and some receipts were fraudulent; the incomplete police investigation and the hotel staff's involvement were no bar to discipline. Procedurally, the employees were accorded a modicum of fair trial under Section 41, but the participation of Maj. Strudwick as prosecutor tainted the process, and the forfeiture of gratuity did not follow BATUK's own procedures, entitling qualifying Claimants to gratuity in full. The mass walkout was held to be an unlawful, unprotected strike which no ILO Convention or Kenyan law could protect. The counterclaim was dismissed because the Respondent failed to prove the precise sums lost, the Court declining to calculate the loss. Each party was ordered to bear its own costs.

Key legal issues

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01

Whether the Respondent had just cause to dismiss the Claimants

Holding

There was basis for termination as the employees did not properly account for expenditure received; some receipts produced were fraudulent and the failure to account justified dismissal

Reasoning

The Court found that an internal audit revealed irregular subsistence claims supported by fraudulent receipts from Upways Hotel, some of which were proved not to have been issued by the hotel. The police investigation being incomplete or the fraudulent receipts having originated from hotel staff did not excuse the employees, whose claims were supported by irregular receipts and who failed to account for expenditure. Section 44 of the Employment Act permits summary dismissal on grounds of gross misconduct.

p. 11
02

Whether the Respondent followed fair procedure in dismissing the Claimants

Holding

The Claimants were accorded a modicum of fair trial under Section 41, but the participation of Maj. Strudwick as prosecutor, who had been the subject of a petition by the employees, tainted the process; the forfeiture of gratuity was not procedural

Reasoning

Each Claimant received notification of the disciplinary meeting and was permitted a representative of their choice, satisfying Section 41. However, Maj. Strudwick, whom the employees had petitioned to be removed, acted as prosecutor in the process, which the Court found objectionable since an independent officer could have undertaken the role. The Court also found that the revocation of gratuity did not follow the Respondent's own procedures requiring reference to the HQ Land Welfare Centre, so the forfeiture was unlawful even if the termination warranted sanction.

p. 11
03

The lawfulness of the mass walkout and the applicability of ILO Conventions

Holding

The mass walkout was unlawful as the law was not complied with; no strike conducted in that manner could be protected by ILO Conventions or Kenyan labour laws

Reasoning

The Court held that the mass walkout by staff to the Nanyuki Labour Office was an unlawful industrial action taken without compliance with the law governing strikes. The Works Council was misled to think it could call a strike as it did. The international conventions and recommendations relied on by the Claimants protect lawful industrial action, not illegal action; Kenyan labour is misguided in thinking illegal action can be protected by the law.

p. 11
04

The Respondent's counterclaim for refund of fraudulently claimed subsistence allowances

Holding

The counterclaim was dismissed because the Respondent failed to prove the precise sums due from each Claimant

Reasoning

Although some receipts were proved fraudulent, the Respondent could not establish with precision the sums lost per Claimant; there were discrepancies between the amounts claimed in the counterclaim and the receipts produced in proof of the loss. The Court declined to calculate the Respondent's loss for it, and dismissed the counterclaim with each party bearing its own costs.

p. 11

Legal principles established

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  • An employer is entitled to dismiss for good cause even where the criminal process is not pursued or is incomplete; a parallel criminal investigation is no bar to workplace disciplinary process
  • The right to assemble and participate in union activities does not extend to a right to unlawful industrial action; an unprotected strike or walkout cannot be protected by ILO Conventions or Kenyan labour laws
  • An employer who fails to follow its own procedures in forfeiting gratuity cannot revoke gratuity, and employees who qualify are entitled to payment in full

Court orders

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  1. 1.The Claimants who qualified for gratuity are entitled to receive the gratuity payment in full as the Respondent did not follow its own procedures to revoke gratuity
  2. 2.For the Respondent there will be no recovery for the sums alleged to have been lost
  3. 3.The Respondent's counterclaim is dismissed
  4. 4.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 42(1)
  • Employment ActSection 42(2)
  • Employment ActSection 44
  • Employment ActSection 47
  • Employment ActSection 80
  • ILO Convention 87 on Freedom of Association and Protection of the Right to Organize
  • ILO Workers' Representatives Convention 135
  • ILO Recommendation 143 Concerning Protection and Facilities to be Afforded to Workers' Representatives in the Undertaking

Cases cited (8)

  • Sarah Wanyaga Muchiri v Henry Kathii & Another
    [2014] eKLR
  • British Leyland UK Ltd v Swift
    [1981] IRLR 91
  • Banking Insurance and Finance Union (Kenya) v Consolidated Bank of Kenya Limited
    [2014] eKLR
  • Whencelause Gilbert Jumba Swinnerstone v Ryce East Africa Limited
    [2014] eKLR
  • Charles Bosire v Medicins Sans Frontieres (Holland)
    Industrial Cause No. 635 (N) of 2009
  • James Mugera Igati v Public Service Commission Kenya
    [2014] eKLR
  • Jaspher Basweti Mairongi v Tusker Mattresses Limited
    [2014] eKLR
  • Ismail Hassan v Kenya Ports Authority
    [2013] eKLR
Jurisdiction invoked
Constitutional and statutory jurisdiction of the Employment and Labour Relations Court over employment disputes between Locally Engaged Civilians and BATUK, governed by the Employment Act

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, "Reuben Ikatwa & 17 others v Commanding Officer British Army Training Unit Kenya & another [2015] KEELRC 1 (KLR)", Case Analysis (2015). Cause No. 866 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1/eng@2015-11-02

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