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ELRCPartially AllowedNot stated in the judgment· [2015] KEELRC 879 (KLR)

Dorothy Nchabira Bernard v Solution Sacco Society [2015] KEELRC 879 (KLR)

Employment and Labour Relations Court
26 June 2015
2,148 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a Sacco unfairly suspended, demoted and fired an employee for complaining, awarding her KShs 3 million and her job back.

What this practically means

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Executive summary

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The claimant, employed by the respondent Sacco from 1993 and promoted to FOSA Manager, was suspended for three months in March 2014 over the un-fixing of a fixed deposit account and alleged rudeness to a manager. After a board meeting she was restored to salary, directed to apologise and take leave, and then deployed to Maua Branch as branch manager with a reduced duty allowance of Kshs.8,000 — a position she said was two grades lower. She protested in writing and declined the deployment; the respondent terminated her services with full benefits for that refusal. The suit was determined on pleadings, documents and written submissions. The court framed four issues: regularity of the suspension, whether the deployment was a demotion, fairness of the termination, and remedies. It found the suspension breached clause 19(B) of the terms of service, which permitted suspension only upon an established criminal charge or conviction; the deployment reduced remuneration and rank, amounting to an unapproved and irregular demotion; and the termination was unfair both substantively and procedurally — the reason was the claimant's legitimate grievance, contrary to sections 43 and 46(h) of the Employment Act, and no notice or hearing was given as required by section 41. The absence of any grievance-handling procedure was held to be an unfair labour practice under Article 41 of the Constitution, following Grace Gacheri Muriithi v Kenya Literature Bureau. The court reinstated the claimant as FOSA Manager without loss of grade, salary or benefits, awarded back salary of nine months (Kshs.1,306,071) plus 12 months' compensation (Kshs.1,741,428), totalling Kshs.3,047,499 payable by 1.10.2015, with costs to the claimant.

Key legal issues

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01

Regularity of the suspension

Holding

The suspension was irregular and unfair because it breached clause 19(B) of the respondent's Terms and Conditions of Service, which permits suspension only upon an established criminal charge or conviction likely to lead to dismissal

Reasoning

Clause 19(B) restricted suspension to instances of established criminal charge or conviction for an offence likely to lead to dismissal. The respondent showed no such charge, conviction or offence against the claimant. The suspension was therefore in breach of the contractually applicable clause and unfair.

p. 3
02

Whether the deployment amounted to a demotion

Holding

The deployment to Maua Branch amounted to a demotion since it reduced the claimant's duty allowance by Kshs.4,000 and placed her two grades below her previous position, and it was not approved by the management as required

Reasoning

The court defined promotion and demotion by reference to remuneration attached to the position. Here remuneration reduced by Kshs.4,000 and the claimant was emplaced two grades below her former position. The demotion was also not approved by management as the terms of service required, rendering it irregular and unfair.

p. 3
03

Fairness of the termination

Holding

The termination was unfair both substantively and procedurally: the reason (the claimant's grievance) was not valid under section 43, was prohibited under section 46(h), and no notice or hearing was given under section 41

Reasoning

The claimant raised a legitimate grievance about the suspension and demotion; the respondent treated it as misconduct and terminated her without addressing it. Section 46(h) provides that initiating a complaint against an employer is not a fair reason for dismissal unless the complaint is irresponsible and baseless. No notice or hearing was afforded as required by section 41. The absence of any grievance-handling procedure also amounted to an unfair labour practice under Article 41 of the Constitution.

p. 3
04

Remedies for unfair termination

Holding

The claimant was entitled to reinstatement and to the equivalent of 12 months' gross salary as compensation, given the aggravated unfair labour practices, her long service and lack of contribution to the termination

Reasoning

The respondent did not establish any bar to reinstatement and the claimant had given long dedicated service. The court exercised its discretion to award maximum compensation of 12 months' salary (Kshs.145,119 x 12 = Kshs.1,741,428) owing to the respondent's consistent unfair labour practices during suspension, deployment and termination, and the claimant's non-contribution. Back salary of nine months (Kshs.1,306,071) was awarded to give effect to reinstatement, totalling Kshs.3,047,499.

p. 4

Legal principles established

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  • Failure by an employer to avail a genuine grievance management procedure is an unfair labour practice contrary to Article 41(1) of the Constitution
  • An employee's initiation of a complaint against the employer is not a fair reason for dismissal unless the complaint is irresponsible and without foundation (section 46(h), Employment Act)
  • Demotion is conferment upon an employee of a position carrying lower remuneration than the position previously held

Court orders

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  1. 1.The respondent to pay the claimant Kshs.3,047,499.00 by 1.10.2015, in default interest at court rates from the date of judgment till full payment
  2. 2.The claimant is reinstated into the service of the respondent with effect from 11.09.2014 without break in service in the position of FOSA Manager without reduction in grade, salary, allowances and benefits, reporting to the Chief Executive Officer on 1.07.2015 for appropriate deployment
  3. 3.The respondent to pay the claimant's costs of the suit

Authorities

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Legislation

  • Employment Actsection 46(h)
  • Employment Actsection 43
  • Employment Actsection 41
  • Constitution of Kenya, 2010Article 41

Cases cited (1)

  • Grace Gacheri Muriithi –Versus- Kenya Literature Bureau
    (2012) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007; Article 41 of the Constitution)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Dorothy Nchabira Bernard v Solution Sacco Society [2015] KEELRC 879 (KLR)", Case Analysis (2015). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/879/eng@2015-06-26

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