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ELRCPartially AllowedCivil Appeal No. 123 of 2009 (originally Milimani Chief Magistrate's Court Case No. 3092 of 2006)· [2015] KEELRC 793 (KLR)

David G. Warwathe & another v Kiambu Unity Finance Co-operative Union Limited [2015] KEELRC 793 (KLR)

Employment and Labour Relations Court (High Court transfer)
29 June 2015
1,550 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~6 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that an employer who gives a false reason for firing staff can be liable for unfair termination, even when proper notice was given.

What this practically means

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Executive summary

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This is a first appeal decided by the Employment and Labour Relations Court (file transferred from the High Court by Aburili J on 17 February 2015) against the decision of Chief Magistrate A. O. Muchelule in Milimani CMCC No. 3092 of 2006, which had dismissed the Plaintiffs' claim with costs. The Appellants, former Savings Clerk and Auditor of the Respondent Union employed in 1989 and 1992, were terminated on 30 October 2004 for alleged disloyalty following a board meeting of 26 October 2004. They claimed severance pay, various three-month allowances and general damages, contending they were actually made redundant during restructuring to deny them redundancy benefits. The Respondent maintained that termination complied with clause 29(b) of the Staff Regulations and Section 16 of the repealed Employment Act, with three months' notice or pay in lieu given, and that all terminal dues were paid. The court framed four issues, including entitlement to redundancy payments and adequacy of payments under the contract. It found that while notice requirements were satisfied, the reason given for termination (disloyalty) was false, as the board minutes did not address the terminations; giving invalid reasons rendered the dismissal unfair and wrongful. However, the redundancy claim failed for want of evidence. The court allowed the appeal in part, ordering payment of employer contributions to the provident fund (the Appellants having served 15 and 12 years) and six months' salary as compensation to each Appellant, less statutory deductions, with costs of the appeal to the Respondents.

Key legal issues

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01

Lawfulness of the termination for alleged disloyalty

Holding

The termination was unfair and wrongful because the reason given (disloyalty) was untrue and unsupported by evidence

Reasoning

The termination letters cited disloyalty following a board decision of 26/10/04, but the minutes of that meeting did not address the terminations. Though not obliged to give reasons under clause 29(b) of the Staff Regulations and Section 16 of the repealed Employment Act, once the Respondent gave a reason it had to be valid; a false reason amounted to defamation of the Appellants' character and rendered the dismissal unfair.

p. 3
02

Redundancy entitlement

Holding

Claim for redundancy payments failed for lack of evidence of redundancy

Reasoning

Although the Appellants pleaded they were terminated to avoid redundancy benefits during a restructuring, no evidence supported this assertion. The court therefore declined to award severance pay, confining itself to finding that termination occurred after due notice.

p. 4
03

Provident fund dues

Holding

The Appellants were entitled to 100% employer contribution to the provident fund under clause 28 of the Terms and Conditions of Service

Reasoning

The Appellants had been paid only their own pension contributions and not the employer contribution. Having served for 15 and 12 years respectively, clause 28 of the Terms and Conditions of Service entitled them to full payment of employer contributions.

p. 4

Legal principles established

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  • Where an employer chooses to give reasons for termination, it is obliged to give valid reasons; reasons smacking of falsehood render the termination unfair and wrongful
  • Under the repealed Employment Act and the applicable terms of service, termination on three months' notice or pay in lieu was lawful as to notice

Court orders

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  1. 1.The Appellants be paid employer contribution to the provident fund
  2. 2.1st Claimant to be paid 6 months salary (72,679 x 6 = 436,074/=) less statutory deductions
  3. 3.2nd Claimant to be paid 6 months salary (53,883 x 6 = 323,298/=) less statutory deductions
  4. 4.Respondents to meet costs of this appeal

Authorities

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Legislation

  • Employment ActSection 16
  • Employment Act Chapter 226 (repealed)Chapter 226 Laws of Kenya
On appeal from
Milimani Chief Magistrate's Court
3092/2006
Jurisdiction invoked
Transferred to this court by order of Hon. Justice R.E. Aburili on 17/2/2015 based on jurisdictional considerations (employment and labour relations jurisdiction)

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, "David G. Warwathe & another v Kiambu Unity Finance Co-operative Union Limited [2015] KEELRC 793 (KLR)", Case Analysis (2015). Civil Appeal No. 123 of 2009 (originally Milimani Chief Magistrate's Court Case No. 3092 of 2006). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/793/eng@2015-06-29

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