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ELRCPartially AllowedCause No. 107 of 2014· [2015] KEELRC 360 (KLR)

Bilha Fwende Masinde v Subumba Farmers Co-op Society [2015] KEELRC 360 (KLR)

Industrial Court of Kenya
9 October 2015
MOMaureen Onyango
1,501 words in judgment
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The bottom line

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A Kenyan co-operative was ordered to pay a former manager for dismissing her without valid reasons, any investigation, or a fair hearing.

What this practically means

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Executive summary

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The claimant, formerly Secretary Manager of the respondent co-operative society, was suspended on 21st September 2012 and summarily dismissed on 18th December 2012. She alleged the dismissal was malicious, triggered by her refusal to sign a cheque for purchase of land she considered inflated and unapproved by members, and that she was never given a hearing. The respondent maintained she was lawfully dismissed for negligence, insubordination and locking management committee members out of the office. The court framed three issues: whether there was valid reason for dismissal, whether fair procedure was followed, and whether the reliefs sought were due. It found the grounds in the suspension and dismissal letters remained unproved allegations since the claimant was never asked to respond to any charges and no investigation was carried out. On procedure, the claimant was never taken through any disciplinary process and was not invited to the meeting at which her dismissal was decided, contrary to Section 41 of the Employment Act. The dismissal was therefore both substantively and procedurally unfair under Section 45. Reinstatement was refused as impracticable and for lack of exceptional circumstances, the respondent being a small member-owned organisation. The court instead awarded statutory remedies under Section 49: salary in lieu of notice, maximum compensation of 12 months' salary (Shs.42,000) given about 16 years of service, and withheld suspension salary. The respondent was ordered to pay costs, with interest at court rates from the date of judgment. Judgment delivered on 9th October 2015 by Lady Justice Maureen Onyango.

Key legal issues

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01

Substantive fairness of dismissal

Holding

There were no valid reasons for the summary dismissal as the grounds remained unproved allegations

Reasoning

The suspension and dismissal letters listed grounds including negligence and insubordination, but the Claimant was never asked to respond to any of the charges and there was no evidence of any investigation. The grounds therefore remained allegations that were not proved, so the dismissal lacked valid reason under Sections 43 and 45(2) of the Employment Act.

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02

Procedural fairness of dismissal

Holding

The dismissal was procedurally unfair as the Claimant was not accorded a hearing or disciplinary process

Reasoning

Section 41 of the Employment Act requires an employer to explain reasons and hear representations before termination. The Claimant was suspended and dismissed without any disciplinary process, was not invited to the Management Committee meeting that decided her dismissal, and the Respondent's terms and conditions of service did not provide for a disciplinary process.

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03

Reinstatement as a remedy

Holding

Reinstatement refused because it was not practicable and no exceptional circumstances were proved

Reasoning

Section 49(4)(c) and (d) require the court to consider the practicability of reinstatement and the common law principle against specific performance of a contract of service except in very exceptional circumstances. The Respondent is a small member-owned organisation and the Secretary Manager position could not have remained vacant.

p. 4

Legal principles established

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  • An employer must prove valid reason for termination, and the reason must be valid and fair, relating to the employee's conduct, capacity or compatibility or based on operational requirements
  • Unproved grounds of dismissal remain mere allegations where no investigation is carried out and the employee is not asked to respond to the charges
  • Before termination or summary dismissal an employer must hear and consider the employee's representations as required by Section 41 of the Employment Act

Court orders

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  1. 1.Declaration implied that dismissal was unfair
  2. 2.Refusal of reinstatement
  3. 3.Payment of salary in lieu of notice
  4. 4.Payment of 12 months' salary compensation of Shs.42,000
  5. 5.Payment of salary withheld during suspension for 3 months being Shs.11,500
  6. 6.Respondent to pay Claimant's costs
  7. 7.Decretal sum to accrue interest at court rates from date of judgment

Authorities

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Legislation

  • Employment ActSection 43
  • Employment ActSection 45(2)
  • Employment ActSection 41
  • Employment ActSection 42(1)
  • Employment ActSection 44(3) and (4)
  • Employment ActSection 49(1), 49(4)(c) and (d)
  • Co-operative Societies Actnot specified
Jurisdiction invoked
Employment Act, Sections 41, 43, 45 and 49 (Industrial Court jurisdiction over employment disputes)

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, "Bilha Fwende Masinde v Subumba Farmers Co-op Society [2015] KEELRC 360 (KLR)", Case Analysis (2015). Cause No. 107 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/360/eng@2015-10-19

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