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ELRCDismissedCause No 41 of 2012· [2015] KEELRC 1104 (KLR)

Jane Karwithia Kwaria v Meru Farmers Sacco Society Limited [2015] KEELRC 1104 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
15 May 2015
2,255 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan bank teller fired over missing cash lost her unfair dismissal claim and was ordered to repay the SACCO Kshs.770,164.

What this practically means

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Executive summary

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The claimant, employed by the respondent SACCO as a teller from 4.05.1987, was summarily dismissed after Kshs.809,000 went missing from her records on 09.05.2012. She attributed the shortage to a customer who allegedly handed her a note containing a powdery substance demanding Kshs.1 million, and said she paid out the money under its influence. The respondent suspended and dismissed her under section 44(4)(g) of the Employment Act, then, after intervention by her advocates, reversed those steps and invited her to a disciplinary hearing before the board on 15.08.2012. The claimant declined to attend; the board dismissed her summarily for gross misconduct with effect from 15.08.2012. She sued for general damages for unfair dismissal or, alternatively, special damages, while the respondent counterclaimed for the missing Kshs.809,000. The court framed three issues: fairness of the dismissal, the claimant's entitlement to her prayers, and the respondent's entitlement on the counterclaim. It found the dismissal was not unfair: due process under section 41 was accorded, and under section 43 there was a genuine reason since the claimant's explanation was ghostly and magical, she concealed the events, and the shortage was solely attributable to her. The court applied its own principles in Mathew Kipchumba Koskei v Baringo Teachers SACCO on the interplay between disciplinary and criminal processes. Only leave pay and nine days' salary were awarded to the claimant; the counterclaim succeeded for Kshs.770,164.00. The claim was dismissed with the claimant to pay the respondent 90% of costs.

Key legal issues

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01

Whether the dismissal was unfair

Holding

The termination was not unfair. The respondent complied with section 41 by reversing the initial steps and offering a hearing, which the claimant declined; and there was a valid reason under section 43 as the shortage was solely attributable to the claimant.

Reasoning

The respondent reversed its earlier administrative steps after the claimant's advocates intervened and gave the claimant notice and a chance to be heard before the board, which she declined to attend. On the reason, the claimant's explanation of the missing Kshs.809,000 was found ghostly and magical, concealing the truth, and she had acknowledged responsibility early. Hence both procedural and substantive fairness under sections 41 and 43 of the Employment Act were satisfied.

p. 3
02

Whether the claimant was entitled to the prayers in the amended memorandum of claim

Holding

The claimant was entitled only to annual leave pay of Kshs.29,874.00 and 9 days' salary of Kshs.8,962.00; damages, provident fund, service pay and notice pay were refused.

Reasoning

Because the dismissal was on account of gross misconduct and not unfair, the claimant could not recover general damages or service pay and notice pay. The collective agreements filed in court bound the parties and denied provident fund entitlements upon gross misconduct. The court noted the respondent admitted the claimant had not collected earned salary and leave, hence the limited award.

p. 4
03

Whether the respondent was entitled to the counterclaim

Holding

Yes - the claimant to pay the respondent Kshs.770,164.00 being the missing cash less Kshs.38,836.

Reasoning

The respondent established by evidence that the loss of Kshs.809,000 was solely attributable to the claimant as the teller. The court therefore allowed the counterclaim as prayed, less Kshs.38,836, yielding Kshs.770,164.00 payable with interest in default by 1.08.2015.

p. 4

Legal principles established

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  • Where an employer's disciplinary case has a criminal element and the employer concludes the administrative process and the employee is exculpated in the criminal process, the employee is entitled to setting aside of the administrative punitive decision and relevant legal remedies.
  • To avoid complexities, where the misconduct amounts to a criminal offence the employer should stay the administrative disciplinary process pending the outcome of the criminal process.

Court orders

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  1. 1.Judgment entered for the respondent against the claimant for the dismissal of the claimant's claim.
  2. 2.The claimant to pay the respondent Kshs.770,164.00 by 1.08.2015 in default interest at court rates payable from the date of judgment till full payment.
  3. 3.The claimant to pay 90% of the respondent's costs of the suit.

Authorities

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Legislation

  • Employment Act, 2007section 44(4)(g)
  • Employment Act, 2007section 41
  • Employment Act, 2007section 43
  • Constitution of Kenya, 2010Articles 47(1) and 50

Cases cited (1)

  • Mathew Kipchumba Koskei –Versus- Baringo Teachers SACCO
    [2013] eKLR, Industrial Cause No. 37 of 2013 at Nakuru
Jurisdiction invoked
Employment and labour relations jurisdiction (Employment Act, 2007; Industrial Court)

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, "Jane Karwithia Kwaria v Meru Farmers Sacco Society Limited [2015] KEELRC 1104 (KLR)", Case Analysis (2015). Cause No 41 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1104/eng@2015-05-15

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