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ELRCPartially AllowedIndustrial Cause (number not stated in judgment; referenced authorities include Industrial Cause No 33 of 2012)· [2015] KEELRC 1209 (KLR)

James Nthenge v Olive Gardens Limited [2015] KEELRC 1209 (KLR)

Industrial Court of Kenya
23 March 2015
NMNzioki wa Makau
935 words in judgment
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The bottom line

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Kenya's Industrial Court ruled a barman's dismissal unfair because he was never given a hearing, awarding him nine months' pay despite his employer having valid reasons.

What this practically means

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Executive summary

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The Claimant, hired on 6th January 2011 as an assistant barman on a three-year fixed-term contract at Kshs. 15,000/- per month, sued after his employment was terminated on 1st October 2011. He sought one month's salary in lieu of notice, the balance of contract income, unpaid leave, 12 months' compensation, general damages for breach, a certificate of service and costs. The Respondent denied the claims, asserting the termination for neglect of duty was justified and notice given. The Claimant testified he received a termination letter without reasons and was never given a hearing; the Respondent called no evidence and relied on its documents. Applying Section 41(1) of the Employment Act, the court held that an employer must explain the reasons for termination to an employee, who is entitled to have a fellow employee or union representative present, before terminating on grounds of misconduct, poor performance or incapacity. Since this procedural fairness was not availed, the termination was unfair even if substantively justified. On remedies, the court declined to award the balance of the fixed-term contract since the Claimant had rendered no services beyond the termination date, and held that general damages are inapplicable to employment contracts. The Claimant was awarded compensation under Section 49 capped at nine months' salary, being Kshs. 135,000/-, together with a certificate of service and costs of the suit. Judgment dated and delivered at Nairobi on 23rd March 2015 by Nzioki wa Makau, Judge.

Key legal issues

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01

Whether the summary dismissal complied with Section 41 of the Employment Act

Holding

The termination was procedurally unfair because the Claimant was not given a hearing or explanation as required by Section 41.

Reasoning

The Claimant testified he received a termination letter with no reason and was not given a hearing. The Respondent did not call evidence, so the procedural requirements of Section 41 were not met. Even where substantive grounds exist, failure to follow the mandated procedure renders the termination unfair under the Employment Act.

p. 2
02

The appropriate remedy for the unfair termination

Holding

Compensation under Section 49 capped at 9 months' salary (Kshs. 135,000/-), plus certificate of service and costs; no balance-of-contract damages or general damages.

Reasoning

Compensation is the statutory remedy for unlawful termination under Section 49. Recovery of the balance of the fixed-term contract is unavailable where the employee has not rendered services beyond termination, and general damages do not apply to employment contracts.

p. 2

Legal principles established

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  • An employer must, before terminating employment for misconduct, poor performance or physical incapacity, explain the reasons to the employee in a language the employee understands, per Section 41(1) of the Employment Act.
  • Termination without adherence to Section 41 procedural fairness is unfair even if the substantive grounds for dismissal are justified.

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent for Kshs. 135,000/- as compensation
  2. 2.Issuance of a Certificate of Service
  3. 3.Costs of the suit to the Claimant

Authorities

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Legislation

  • Employment ActSection 47(1)
  • Employment ActSection 46
  • Employment ActSection 43
  • Employment ActSection 41(1)
  • Employment ActSection 42(1)
  • Employment ActSection 47(5)
  • Employment ActSection 49
  • ILO Convention 158Article 4

Cases cited (4)

  • Davies Kamau v Olive Gardens
    Industrial Cause No 33 of 2012
  • Samson Mwangi Gaita v Kensalt Limited
    [2013] eKLR
  • Moses Kaunda Moro v CMC Motors Group Limited
    [2013] eKLR
  • Loice Rose Obengo v Nyanza Reproductive Health Society
    [2013] eKLR
Jurisdiction invoked
Employment Act, ss. 41, 43, 46, 47, 49

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, "James Nthenge v Olive Gardens Limited [2015] KEELRC 1209 (KLR)", Case Analysis (2015). Industrial Cause (number not stated in judgment; referenced authorities include Industrial Cause No 33 of 2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1209/eng@2015-03-23

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