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ELRCPartially AllowedCause No. 686 of 2013· [2015] KEELRC 752 (KLR)

Antony Kioko v Savannah Cement (EPZ) Limited [2015] KEELRC 752 (KLR)

Employment and Labour Relations Court of Kenya
10 July 2015
831 words in judgment
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The bottom line

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A Kenyan court ruled that dismissing an employee over unproven conflict-of-interest suspicions, without a disciplinary hearing, was unfair and awarded him eight months' salary.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent on 3rd July 2012 as Administration Coordinator at a monthly salary of Kshs 180,000, sought maximum compensation of 12 months' salary for alleged unlawful and unfair termination of employment. On 26th March 2013 he was issued a notice to show cause on allegations that he had a relationship with two business entities, Vile and Blind General Suppliers and Jagensons Ventures, and with one Mr Kioko Mwangangi, creating a conflict of interest. His employment was terminated on 8th April 2013. The Claimant denied the allegations, producing incorporation documents and an invitation card to show only a peripheral social contact with one entity. The Respondent contended the Claimant's conduct was a dereliction of duty constituting valid grounds for dismissal, but called no witness, adduced no evidence, and did not table the Internal Audit report it alluded to; the maker of a witness statement did not testify. The court found on a balance of probabilities that the termination was without valid reason and procedurally unfair, contrary to section 45(1) as read with section 45(2)(a) and (c) of the Employment Act, 2007, being based on mere speculation. Awarding compensation under section 49(1) as read with section 49(4), the court took into account the Claimant's tarnished good name, loss of livelihood, absence of alternative employment, age of 46 and dashed career prospects. The court awarded eight months' salary of Kshs 1,440,000 with interest at court rates from the date of judgment until payment in full, plus costs of the suit.

Key legal issues

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01

Validity of the reason for termination

Holding

The Claimant proved on a balance of probabilities that his employment was terminated without a valid reason

Reasoning

The Respondent alleged conflict of interest between the Claimant and two business entities but called no witness, adduced no evidence, and did not table the Internal Audit report it alluded to. The witness statement of Joseph Wachira, who did not testify, contained no concrete evidence of wrongdoing. The Claimant had denied the allegations in response to the show cause letter.

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02

Fairness of the termination procedure

Holding

The termination was procedurally unfair as the Claimant was not called to a disciplinary hearing despite having responded to the show cause notice

Reasoning

Although the Claimant was issued a notice to show cause and responded extensively denying any relationship with the named companies and Mr Kioko Mwangangi, the Respondent did not summon him to a disciplinary hearing before terminating his employment on 8th April 2013. The procedure therefore fell short of the requirements of section 45 of the Employment Act, 2007.

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03

Entitlement to compensation under section 49 of the Employment Act

Holding

The Claimant was entitled to compensation for loss and damage arising from the unlawful and unfair termination

Reasoning

The court considered that the Claimant was falsely accused of impropriety, lost his means of livelihood, had not found alternative employment, was 46 years old with good career prospects in administration and procurement, and that his good name was tarnished based on mere speculation. It awarded eight months' salary amounting to Kshs 1,440,000 with interest and costs.

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Legal principles established

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  • An employer who alleges misconduct must adduce evidence to prove the allegations; termination based on mere speculation without a disciplinary hearing is unfair
  • Unproven allegations of conflict of interest do not constitute a valid reason for termination under section 45 of the Employment Act

Court orders

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  1. 1.Award of eight months' salary as compensation for unlawful and unfair dismissal in the sum of Kshs 1,440,000
  2. 2.Interest at court rates on the award from the date of judgment until payment in full
  3. 3.Respondent to pay the costs of the suit

Authorities

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Legislation

  • Employment Act, 2007section 45(1) as read with section 45(2)(a) and (c)
  • Employment Act, 2007section 49(1) as read with section 49(4)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007

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, "Antony Kioko v Savannah Cement (EPZ) Limited [2015] KEELRC 752 (KLR)", Case Analysis (2015). Cause No. 686 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/752/eng@2015-07-10

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