Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No 2308 of 2012· [2015] KEELRC 1115 (KLR)

Shem Maingo v Kema (EA) Limited [2015] KEELRC 1115 (KLR)

Employment and Labour Relations Court
11 May 2015
2,188 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

#

Even with a valid reason to fire an employee, a Kenyan employer must still follow fair disciplinary procedure or pay compensation.

What this practically means

#

Executive summary

#
The Claimant, employed by the Respondent from March 1993 and rising to General Manager, alleged his employment was terminated on 26th July 2012 by a text message from the Respondent's Chairman, Hon. Manson Nyamweya, without reason or notice. He sought notice pay, service pay, salary for July 2012, leave pay, salary arrears and salary until retirement age. The Respondent alleged he deserted duty on 23rd July 2012 and had operated a rival company, BISDAN (E.A) Limited, in Uganda, and counterclaimed for a laptop and three months' notice pay. The Court framed five issues covering the Claimant's salary, desertion versus termination, the lawfulness and fairness of termination, remedies and the counterclaim. On salary, the employer's payslips were inconsistent, so the Court adopted the Claimant's figure of Kshs.234,845 gross. Following authority that desertion must be evidenced by a show-cause notice, the Court held the employment had been terminated by 26th July 2012. Applying Section 43, it found the Respondent had a valid reason for termination - the Claimant's directorship of a competing company, evidenced by a Registrar of Companies extract and unrebutted. However, applying Section 41, no disciplinary procedure was followed, rendering the termination procedurally unfair. The Court awarded six months' salary in compensation, one month's notice pay, July 2012 salary and prorata leave, totalling Kshs.1,974,655. Claims for salary arrears, salary to retirement age and service pay failed; the counterclaim was dismissed in its entirety. The Respondent was ordered to pay costs, with interest on the award at court rates from the date of the award until payment in full.

Key legal issues

#
01

Claimant's salary at termination

Holding

The Court adopted the Claimant's figure of Kshs.234,845 gross monthly salary as the employer's records were inconsistent

Reasoning

Section 10(2)(h) of the Employment Act requires a written contract to state remuneration, and Section 20 requires itemised pay statements. The payslips showed conflicting basic pay figures with no explanation for the fluctuations, and the Respondent pleaded Kshs.50,000 while its witness said Kshs.63,417. Given the inconsistent and inconclusive employer information, the Court adopted the employee's figure.

p. 3
02

Desertion or termination

Holding

The Claimant's employment was terminated by the Respondent; desertion was a weak defence

Reasoning

The separation was triggered by an SMS from the Respondent's Chairman and a subsequent e-mail asking the Claimant to resign over the alleged rival company, followed by notice to employees that he was no longer employed. Following Abuodha J, an employer asserting desertion must issue a notice to show cause; none was produced, and the Respondent's correspondence showed the employment had ended by 26th July 2012.

p. 4
03

Valid reason for termination

Holding

The Respondent had a valid reason - the Claimant's conflict of interest through BISDAN (E.A) Limited

Reasoning

Under Section 43, the employer must show a valid reason on a balance of probability. The Respondent produced a Registrar of Companies extract from Kampala showing the Claimant as a director of BISDAN (E.A) Limited, a competitor; the Claimant offered only a general denial. The Respondent therefore had reasonable grounds to believe the Claimant was involved in a competing company.

p. 4
04

Procedural fairness of termination

Holding

The termination was procedurally unfair as Section 41 conditions were not met

Reasoning

The accusation amounted to misconduct. Section 41 requires the employer to explain the reasons to the employee in a language they understand, allow a fellow employee or representative to be present, hear and consider explanations, and comply with internal disciplinary rules where there are over 50 employees. There was no evidence any of these conditions were followed.

p. 5
05

Counterclaim

Holding

Both heads of the counterclaim were dismissed for lack of evidence

Reasoning

The claim for Kshs.85,000 for a laptop was unsupported by any evidence. The claim for three months' salary in lieu of notice failed because the Court found the Claimant had not deserted duty as alleged, removing the factual basis for that relief.

p. 5

Legal principles established

#
  • Where an employer's information on an employee's salary is inconsistent or inconclusive, the Court will adopt the figure provided by the employee
  • An assertion of desertion must be evidenced by a notice to show cause why employment should not be terminated on that ground
  • The employer bears the burden of showing a valid reason for termination on a balance of probability
  • The court asks whether the employer acted lawfully and reasonably, not what it would have done in the employer's position

Court orders

#
  1. 1.6 months' salary in compensation for unfair termination of Kshs.1,409,070.00
  2. 2.1 month's salary in lieu of notice of Kshs.234,845.00
  3. 3.Salary for July 2012 of Kshs.234,845.00
  4. 4.Prorata leave for 2012 of Kshs.95,895.00
  5. 5.Total award of Kshs.1,974,655.00 to the Claimant
  6. 6.Respondent to meet the costs of the case
  7. 7.Award to attract interest at court rates from the date of the award until payment in full
  8. 8.Dismissal of the claim for salary arrears for January to June 2012
  9. 9.Dismissal of the claim for salary until retirement age
  10. 10.Dismissal of the Respondent's counterclaim

Authorities

#

Legislation

  • Employment Act, 2007Section 10(2)(h)
  • Employment Act, 2007Section 20
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43

Cases cited (2)

  • Geoffrey Muringi Mwangi Vs Rwaken Investments Limited
    Cause No. 1658 of 2012
  • Paul Waigiri Muriuki Vs Nairobi Water and Sewerage Company Ltd
    [2015] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Shem Maingo v Kema (EA) Limited [2015] KEELRC 1115 (KLR)", Case Analysis (2015). Cause No 2308 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1115/eng@2015-05-11

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