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ELRCPartially AllowedNot stated in the judgment as provided· [2015] KEELRC 294 (KLR)

Kenya Union of Commercial Food and Allied Workers v Kenya Bankers Savings and Credit Society Limited [2015] KEELRC 294 (KLR)

Industrial Court (Employment and Labour Relations Court)
23 October 2015
1,079 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer can fire for a genuine reason, but must still follow a fair process — skipping it made the dismissal unfair and costly.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a messenger from 2004 and dismissed on 20th May 2010 for poor performance and misconduct, sued for compensation for wrongful and unfair dismissal. At the material time he earned Kshs.24,000 per month plus a house allowance of Kshs.3,200. The respondent defended the dismissal, alleging a history of misconduct: a 2005 caution for improper conduct, an admitted 2006 attempt to encash a colleague's cheque, unsatisfactory appraisals in 2007 and 2009, and the delayed delivery of an open envelope that had contained money. It maintained that it complied with the Employment Act and the Collective Bargaining Agreement, and paid the claimant one month's salary in lieu of notice and all terminal dues. The claimant testified he was never called to a disciplinary hearing. The court held that the respondent had a valid and justifiable reason to dismiss, treating the admitted attempt to encash a colleague's cheque as outright theft and the claimant's conduct as demonstrating dishonesty incompatible with employment in a credit-taking institution. However, applying the two-tier test for termination, the court found no evidence that the procedure under section 41(1) of the Employment Act - an explanation in a language the employee understands and the right to make representations - was followed. The dismissal was therefore unfair on procedure only, and the claimant was awarded nominal damages of one month's salary as compensation for unfair termination. There was no order on costs. Judgment was delivered at Nairobi on 23rd October 2015 by Abuodha J. N.

Key legal issues

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01

Justifiable reason for termination

Holding

The respondent had a valid and justifiable reason to terminate the claimant's services based on the claimant's dishonesty, including an admitted attempt to encash a colleague's cheque and mishandling of an envelope containing money.

Reasoning

The claimant admitted in cross-examination that in 2006 he took a colleague's cheque and attempted to encash it, and that in 2005 he was warned about improper conduct. The court accepted the respondent's evidence that the claimant's record of dishonesty and unsatisfactory appraisals justified loss of trust, treating the attempted encashment as outright theft warranting summary dismissal.

p. 2
02

Fair procedure under section 41(1) of the Employment Act

Holding

The dismissal was unfair on account of procedure only because there was no evidence that the claimant was given an explanation or an opportunity to make representations before dismissal.

Reasoning

The court restated the two-tier requirement: valid reason plus fair procedure. Section 41(1) requires an explanation in a language the employee understands and the right to make representations personally or through a representative. On perusal of the pleadings and documents, the court found no evidence or allegation that this procedure was followed prior to dismissing the claimant.

p. 2
03

Remedy for procedurally unfair termination

Holding

Nominal damages of one month's salary were awarded as compensation for the procedural unfairness.

Reasoning

Because the substantive reason for dismissal was valid and only the procedure was flawed, the court limited the award to nominal damages equivalent to one month's salary rather than the maximum compensation available under the Employment Act for unfair termination.

p. 3

Legal principles established

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  • Dismissal or termination from employment is a two-tier process requiring both a valid and justifiable reason and a fair procedure.
  • Section 41(1) of the Employment Act requires that an employee facing termination be given an explanation in a language he understands and be entitled to make representations personally or through a representative.
  • Where a valid reason exists but fair procedure under section 41 was not followed, termination is unfair on procedure only and attracts nominal damages.

Court orders

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  1. 1.The Court finds the dismissal unfair on account of procedure only
  2. 2.The claimant is awarded nominal damages of one month's salary as compensation for unfair termination of services
  3. 3.No order on costs

Authorities

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Legislation

  • Employment Actsection 41(1)
  • Employment Actsection 44
  • Collective Bargaining Agreementclause 24
Jurisdiction invoked
Original employment and labour relations jurisdiction under the Employment Act (section 41) - no specific constitutional provision stated in the judgment

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya Union of Commercial Food and Allied Workers v Kenya Bankers Savings and Credit Society Limited [2015] KEELRC 294 (KLR)", Case Analysis (2015). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/294/eng@2015-10-23

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