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ELRCPartially AllowedCause No. 717 of 2013· [2015] KEELRC 375 (KLR)

Daniel Ouma Orawo v Midrock Water Dlilling Company Limited [2015] KEELRC 375 (KLR)

Employment and Labour Relations Court of Kenya
28 September 2015
2,861 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 who fires an employee to investigate allegations must pay for unfair termination, and hiring the employee back later doesn't erase the mistake.

What this practically means

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Executive summary

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The Claimant, a Senior Water Driller employed by the Respondent from September 2007, was terminated on 11th October 2012 over an alleged theft of property worth Kshs. 21 million. Investigations cleared him and the Respondent recalled him to work on 14th March 2013, agreeing to pay salary arrears of Kshs. 96,900 in two instalments. Having received 50% and an advance, the Claimant refused to resume work until his arrears were settled. He claimed notice pay, leave, gratuity, compensation, overtime, and Sunday and public holiday pay. The court held that the termination, effected so as to enable investigations, was an unfair labour practice contrary to Article 41 of the Constitution and section 41 of the Employment Act; the subsequent recall did not cure it, and terminal dues accrued at the date of termination, with any re-employment to be on fresh terms. Compensation of three months' salary, one month's notice pay and leave pay limited to the statutory 18-month window were awarded. Claims for service pay/gratuity failed as NSSF contributions were paid and there was no redundancy; overtime and Sunday/public holiday claims failed for want of proof; salary arrears were not pleaded; and costs were denied because the demand letter was drawn by a labour consultancy lacking locus standi. Judgment was delivered by M. Mbaru, J, on 28th September 2015 at Nairobi.

Key legal issues

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01

Fairness of the termination of 11th October 2012

Holding

The termination was unfair as it was done to enable investigations without notice or hearing, contrary to section 41 of the Employment Act and Article 41 of the Constitution.

Reasoning

The Respondent admitted wrongly terminating the Claimant over alleged theft. Section 41 requires notice of misconduct and a hearing before termination. Where an employer suspects an employee, suspension pending investigations is permitted, and once cleared the employee must be recalled to answer allegations and give a defence. Terminating in order to investigate subverts due process and constitutes an unfair labour practice; the subsequent recall could not retroactively validate the dismissal.

p. 4
02

Effect of recall/re-employment on terminal dues

Holding

Terminal dues fell due on 11th October 2012; the new employment should have commenced on 14th March 2013 on fresh terms, and the Claimant's failure to report back was separate misconduct.

Reasoning

Once terminated, the contract ended and terminal dues accrued. The agreement to pay arrears for the period away was irrelevant to a contract already terminated. The recall of 14th March 2013 amounted to an offer of fresh employment; the Claimant's refusal to resume without payment of arrears could not be treated as misconduct under the old, terminated contract.

p. 4
03

Annual leave entitlement

Holding

Leave is not earned merely by travelling to the rural home; however, in the absence of employer records, leave was awarded limited to the 18-month statutory window under section 28.

Reasoning

The Claimant could not claim leave simply because he never went to his rural home; time off spent in Nairobi served the same purpose. Nevertheless, the employer bears the duty to keep leave records and none was produced. Section 28 caps retrospective leave claims at 18 months, so leave pay was awarded only within that period.

p. 4
04

Overtime, Sunday and public holiday pay

Holding

Declined for want of proof; the Claimant had to articulate and prove the specific hours and days worked.

Reasoning

The claimed overtime hours of 5400 were unexplained in computation. The Claimant worked in a team, spent up to two months at the head office without a specific role, and the Respondent had a workplace policy on hours with breaks. The burden rested on the Claimant to prove Sunday and public holiday work; picking all Sundays in a calendar year without identifying actual days worked lacks merit.

p. 5
05

Service pay/gratuity

Holding

Not due because the Respondent paid NSSF dues and this was not a redundancy.

Reasoning

Under section 35(6) of the Employment Act service pay is due, but not where the employee is a member of NSSF. Severance pay under section 40 arises only in redundancy, which this was not. The Claimant admitted in cross-examination that NSSF dues were paid.

Legal principles established

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  • Before termination, the provisions of section 41 of the Employment Act must be followed; the employee must be issued with notice of the misconduct and heard.
  • Suspension pending investigations is lawful, but once investigations clear the employee, recall and a hearing under section 41 are required; termination so as to commence investigations is an unfair labour practice.
  • Recall or re-employment does not cure an unfair termination; terminal dues became due at the date of termination and any re-employment should have been on new terms.
  • An employer bears the duty to keep records of leave days taken, but annual leave claims cannot go beyond 18 months under section 28 of the Employment Act.

Court orders

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  1. 1.Judgment entered for the Claimant in compensation of Kshs. 64,884.00
  2. 2.Notice pay at Kshs. 21,628.00
  3. 3.Leave pay at Kshs. 43,256.00
  4. 4.Costs shall not be awarded

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 45(2)
  • Employment Actsection 28
  • Employment Actsection 35(6)
  • Employment Actsection 40
  • Employment Actsection 54
  • Constitution of Kenya, 2010Article 41

Cases cited (5)

  • Moses Ojanji versus Wasso Security Co. Ltd
    Cause No. 2820 of 2012
  • Timothy Anyika Munyeka versus M/S Nairobi Pacific Hotel
    Cause No. 4 of 2013
  • Frederick Odongo Owegi versus CFC Life Assurance Ltd
    [2014] eKLR
  • Amrick Consales versus Mara Ison Technologies Kenya Limited
    Cause No. 2538 of 2012
  • David Kenani versus The AG & Another
    Cause No. 933 of 2013
Jurisdiction invoked
Article 41 of the Constitution and the Employment Act, 2007 (employment and labour relations jurisdiction of the ELRC)

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, "Daniel Ouma Orawo v Midrock Water Dlilling Company Limited [2015] KEELRC 375 (KLR)", Case Analysis (2015). Cause No. 717 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/375/eng@2015-09-28

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