Josephat Githingiri Githui v Nakumatt Holdings Limited [2015] KEELRC 831 (KLR)

Industrial Court (Employment and Labour Relations Court)

19 June 2015

ANAbuodha J. N.

1,542 words in judgment

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The bottom line

A Kenyan employer can fire an employee for a valid reason yet still owe compensation if it skips a fair hearing before dismissal.

What this practically means

Executive summary

The claimant, formerly employed by the respondent as a shop assistant from 1997 and later as a cashier, alleged that after injuring his back at work in April 2010 he was refused work by his manager, transferred, demoted and warned, before being summarily dismissed on 14th June 2010 for gross misconduct involving fraud - the alleged cashing of credit notes worth Kshs.10,300 at his till. He sought a declaration that the termination was wrongful, null and void, damages equivalent to 12 months' pay, June 2010 salary, unpaid salary increment and three months' salary in lieu of notice. The respondent defended the dismissal as grounded on fraud and gross negligence, and relied on section 43(2) of the Employment Act, contending the employer need only genuinely believe the reasons for termination. The court held that the respondent had a justifiable cause to terminate: although the loss was not sufficiently proved, the claimant's admission that he processed the impugned credit notes amounted to a breach of the trust reposed in him. However, applying section 41(2) of the Employment Act, the court found the claimant was never subjected to a disciplinary hearing or called to show cause before dismissal, rendering the termination procedurally unfair. The claim was therefore partially allowed: the court awarded six months' salary as compensation for unfair dismissal, subject to set-off of any loans and salary advances owed to the respondent. The other heads of claim were not granted. No costs order appears in the judgment.

Key legal issues

Whether the respondent had a justifiable reason for termination

Holding

Yes - the claimant's admission that he processed the impugned credit notes amounted to a breach of the trust reposed in him by the employer

Reasoning

The court reasoned that employment contracts rest on mutual trust: the employer trusts the employee to practise honesty and safeguard the employer's property. The claimant admitted processing the credit notes contrary to the circular that credit notes could not be exchanged for other items. Although the loss of Kshs.10,300 was not sufficiently proved, the admission itself constituted breach of trust justifying termination.

p. 3

Whether the procedure followed in dismissing the claimant was fair

Holding

No - the claimant was not subjected to any disciplinary hearing or called to show cause before dismissal, contrary to section 41(2) of the Employment Act

Reasoning

The court found nothing in the memorandum of response, supporting documents or oral evidence showing the claimant faced a disciplinary hearing before dismissal. He was transferred to allow investigations and then issued with a dismissal letter without being called to respond to the investigation findings. Procedural fairness is distinct from substantive justification, so unfair procedure rendered the dismissal unfair despite valid reasons.

p. 3

Legal principles established

Dismissal from employment has two stages: the reason for termination and the procedure adopted; an employer with justifiable reasons may still be liable in damages if unfair procedure is followed
Section 41(2) of the Employment Act requires an employer to accord an employee a chance to make representations before termination or summary dismissal on grounds of misconduct

Court orders

1.Award of 6 months' salary as compensation for unfair dismissal
2.The compensation is subject to any liabilities owed to the respondent on account of loans and salary advances drawn by the claimant while in employment

Authorities

Legislation

Employment Actsection 41(1) and (2)
Employment Actsection 43(2)

Jurisdiction invoked: Original employment and labour relations jurisdiction (Employment Act; Employment and Labour Relations Court)

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Josephat Githingiri Githui v Nakumatt Holdings Limited [2015] KEELRC 831 (KLR)", Case Analysis (2015). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/831/eng@2015-06-19

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