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ELRCPartially AllowedCause Number 221 of 2014· [2015] KEELRC 896 (KLR)

John Charo Ngumbao v Amani Tiwi Beach Resort [2015] KEELRC 896 (KLR)

Industrial Court of Kenya
19 June 2015
1,901 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, employed as Executive Sous Chef on a 3-month written contract from 1st September 2012 to 30th November 2012, continued working for a further 5 months on an oral contract at a higher salary of Kshs. 78,418 gross. His employment was terminated by letter dated 15th May 2013, effective 22nd May 2013, on grounds of lack of professionalism, following e-mail warnings about improper performance including serving apples and mini butter to management staff contrary to instructions, poor food preparation and presentation, late service and failure in his supervisory role. He claimed 1 month's salary in lieu of notice and 12 months' salary as compensation for unfair and unlawful termination. The court held that the orally renewed contract was independent of the first written contract, whose express terms precluded renewal, so its terms did not govern the second engagement. The court found the termination was substantively justified, amounting to gross misconduct under Section 44para 4 of the Employment Act 2007, disentitling the Claimant to notice pay. However, the Respondent breached Section 41 by failing to formally put the charges to the Claimant or allow him to defend himself, wrongly treating the warning e-mails as a form of hearing. The 12 months' compensation claim was held disproportionate given the substantive justification and only 5 months of service. The court awarded the Claimant 1 month's gross salary of Kshs. 78,418 as compensation for the procedural breach and made no order on costs and interest.

Key legal issues

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01

Whether the terms of the first written contract governed the subsequent oral contract

Holding

The second oral contract was independent of the first; the first contract's terms could not be adopted to the second

Reasoning

The first 3-month contract expressly stated it may not be renewed on expiry. The parties did not intend continuity, so any renewal after 30th November 2012 was a fresh, independent arrangement whose terms stood apart from the first contract. It was therefore wrong to import the first contract's terms, including its termination clause, into the oral 5-month contract.

p. 3
02

Whether termination was substantively justified

Holding

Yes - poor performance amounting to gross misconduct under Section 44para 4 provided valid grounds

Reasoning

The Claimant was warned on several occasions about serving apples and mini butter to management staff contrary to instructions, poor food preparation and presentation, late service and failure in his supervisory role. The chain of warnings and the eventual ground of lack of professionalism gave the employer adequate justification, equating to careless, negligent and improper performance justifying summary dismissal.

p. 3
03

Whether the Claimant was accorded procedural fairness

Holding

No - Section 41 procedure was breached; the charges were never formally put to him

Reasoning

There was no evidence the Claimant was heard in the manner prescribed by Section 41 of the Employment Act. The charges were not formally put to him and he was not required to defend himself. The employer wrongly treated the warning e-mails as a form of hearing and issued the termination letter without further process.

p. 4
04

What compensation was appropriate

Holding

1 month's gross salary of Kshs. 78,418 for the procedural breach only

Reasoning

Given valid grounds for dismissal, notice pay was unavailable. The 12 months' compensation claim was disproportionate because the Claimant was severally warned, had worked only 5 months, and the breach was one of procedure only. One month's salary was granted for the procedural misstep.

p. 4

Legal principles established

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  • A renewal after expiry of a fixed-term contract is independent of the first contract and its terms do not carry over to an orally renewed contract
  • The employer bears the burden of proving the reason for termination under Sections 43 and 45 of the Employment Act
  • Warning letters do not substitute for the procedural hearing required by Section 41 of the Employment Act
  • The employer must maintain proper employment records including pay statements

Court orders

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  1. 1.Declaration that termination was based on valid ground but lacked procedural fairness
  2. 2.Claimant granted 1 month gross salary at Kshs. 78,418 in compensation for breach of fair procedure
  3. 3.No order on the costs and interest

Authorities

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Legislation

  • Industrial Court [Procedure] Rules 2010Rule 27 [1] [a]
  • Employment Act 2007Sections 41, 43, 44 [4], 45
Jurisdiction invoked
Industrial Court [Procedure] Rules 2010, Rule 27 [1] [a]

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, "John Charo Ngumbao v Amani Tiwi Beach Resort [2015] KEELRC 896 (KLR)", Case Analysis (2015). Cause Number 221 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/896/eng@2015-06-19

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