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ELRCPartially AllowedCause Number 606 of 2014· [2015] KEELRC 542 (KLR)

Charles Okello Ngiela v Tsimba Children’s Home [2015] KEELRC 542 (KLR)

Industrial Court of Kenya
11 September 2015
JRJames Rika
1,859 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 an employer cannot hide behind foreign sponsors and must prove misconduct before firing—this employer paid for failing both tests.

What this practically means

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Executive summary

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The Claimant, employed as Manager of Tsimba Children's Home and confirmed on 1 February 2012 at a monthly salary of Kshs. 22,000, was summarily dismissed on 17 August 2012 by the Director accompanied by police officers, on grounds of negligence, abusive language, destruction of property and other unspecified reasons. He sued the Home seeking declarations and monetary relief. The Respondent denied being the employer, asserting its staff were engaged by foreign sponsors, namely the German organization Future For Kids (predecessor to SUPEDU), whose principals Birgit and Dr. Antonis Alexakis had executed the Claimant's contract. The Court first held the Home was properly sued: it enjoyed the Claimant's services, was a registered Community Based Organization, and fitted the definition of 'Employer' under Section 2 of the Employment Act. The Court refused to allow employers to shield themselves from employment liability behind privity of contract or complex business structures, noting this trend is rife even among charitable entities. On fairness, the Respondent produced no evidence substantiating the dismissal grounds under Sections 43 and 45, and there was no hearing as contemplated by Section 41; termination was therefore unfair in substance and procedure. The Court awarded 6 months' salary (Kshs. 132,000) as compensation, arrears for April and August 2012 (Kshs. 44,000), and one month's notice pay (Kshs. 22,000), totalling Kshs. 198,000, payable within 60 days. Claims for driving duties, off days, reimbursements and house allowance failed for want of evidence. A certificate of service was ordered, with each party bearing its own costs.

Key legal issues

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01

Proper employer/Respondent to the claim

Holding

Tsimba Children's Home was properly sued despite the contract having been signed with Future For Kids and the Alexakises; it is an identifiable Employer under Section 2 of the Employment Act

Reasoning

Although the contract and dismissal letter came from Future For Kids and its German principals, they acted as factors of the Home for its benefit. The Home enjoyed the Claimant's services and was a registered Community Based Organization. The Court refused to leave an employee dangling without an employer, rejecting privity-of-contract shielding, and noted employers should not use multiple business forms to escape labour obligations.

p. 3
02

Fairness of termination

Holding

Termination was unfair both in substance and procedure; compensation of 6 months' salary awarded

Reasoning

The dismissal letter cited negligence, abusive language and destruction of property, but the Respondent led no evidence to substantiate these grounds as required by Sections 43 and 45 of the Employment Act. There was no suggestion the Claimant was heard as required by Section 41; the letter merely referenced 'a series of complaints and proven accusations' with no hint of investigation or hearing.

p. 4

Legal principles established

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  • Employees must not be hampered in accessing industrial justice by the legal and business forms adopted by their Employers; an entity that enjoys an employee's services and fits the definition of 'Employer' under Section 2 of the Employment Act may be properly sued even if the contract was executed with a foreign sponsor organization
  • An employer alleging misconduct must substantiate the grounds under Sections 43 and 45 of the Employment Act, and a dismissal without a hearing under Section 41 is procedurally unfair

Court orders

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  1. 1.Declaration that termination was unfair
  2. 2.The Respondent shall, within 60 days, pay to the Claimant 6 months' salary in compensation for unfair termination at Kshs. 132,000; arrears of salary at Kshs. 44,000; and 1 month salary in lieu of notice at Kshs. 22,000 - total Kshs. 198,000
  3. 3.The Respondent shall release to the Claimant his Certificate of Service forthwith
  4. 4.The monetary Award shall be satisfied within 60 days from the date the Award is delivered
  5. 5.Parties to meet their costs of the Claim

Authorities

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Legislation

  • Industrial Court (Procedure) Rules 2010Rule 27(1)
  • Employment Act 2007Section 2 (definition of Employer)
  • Employment Act 2007Sections 41, 43, 45
  • Employment Act 2007Section 51 (certificate of service)
Jurisdiction invoked
Employment and labour relations jurisdiction under Rule 27(1) of the Industrial Court (Procedure) Rules 2010

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, "Charles Okello Ngiela v Tsimba Children’s Home [2015] KEELRC 542 (KLR)", Case Analysis (2015). Cause Number 606 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/542/eng@2015-09-11

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