Simon Abere Gichana v Gateway Insurance Company Limited [2015] KEELRC 1228 (KLR)
The bottom line
#A Kenyan court upheld an employee's dismissal for issuing insurance cover before collecting premiums, but awarded him accrued leave and salary dues.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant's summary dismissal was unlawful
The dismissal was justified; there was valid cause as the Claimant issued insurance cover before collection of premiums contrary to the Insurance Act cash-and-carry requirement
The audit found unpaid premiums on certificates issued by the Kisii branch. The Claimant admitted in cross-examination that cover was sometimes given without payment pending settlement. The show cause letter indicated he gave credit facilities without authority, contrary to industry practice and the Insurance Act. The Court therefore found cause for termination, rejecting the claim of wrongful dismissal.
What remedies flow from the termination
Only accrued dues: pay for 80.5 untaken leave days and 21 days worked in February 2011
Although termination was with cause, the employer failed to pay leave days earned and not taken and salary for days worked in February 2011. These are earned dues the Claimant must collect regardless of the lawfulness of dismissal. Other heads (notice pay, damages, retirement pay, erroneous deductions) were not proved or fell away with the finding on cause.
Whether the Respondent is entitled to recover Kshs. 550,193/- on the Counter Claim
Counter Claim dismissed; the Respondent failed to prove the loss on balance of probability
The Respondent's figures were inconsistent - a memo citing 121 certificates versus one citing 88 certificates worth 585,758/-. It was not established which certificates were unpaid, nor which were issued by the Claimant as opposed to his colleague Mary Karanja. The Court however affirmed the principle that a manager who gives cover without payment can be personally liable had it been proved.
Costs of the suit
No order as to costs
The Court found only part of the claim proved and the Counter Claim failed; in the circumstances it exercised discretion to make no order on costs, with each party bearing its own.
Legal principles established
#- An employer who terminates employment for valid cause is not liable for wrongful dismissal but remains liable for accrued and unpaid dues such as untaken leave days and days worked
- In insurance business, if a manager undertakes an underwriting risk without express authority of the insurer and gives cover without payment, the insurance company can look to that official for recompense - but liability must be proved on balance of probability
Court orders
#- 1.Payment to the Claimant of 80.5 days leave pay
- 2.Payment to the Claimant for 21 days worked in February 2011
- 3.No order as to costs
- Jurisdiction invoked
- Original employment and labour relations jurisdiction of the Industrial Court under the Employment Act and the Industrial Court Act (dispute framed as wrongful dismissal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Simon Abere Gichana v Gateway Insurance Company Limited [2015] KEELRC 1228 (KLR)", Case Analysis (2015). Not stated in judgment (Memorandum of Claim filed 25th July 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1228/eng@2015-02-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.