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ELRCPartially AllowedCause Number 197 of 2014· [2015] KEELRC 1331 (KLR)

Lucas Buko Stephen v Devki Steel Mills Limited [2015] KEELRC 1331 (KLR)

Industrial Court of Kenya
13 March 2015
JRJames Rika
1,646 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Even when an employee is caught stealing, Kenyan employers must still hold a proper hearing or the dismissal risks being ruled unfair.

What this practically means

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Executive summary

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The Claimant, a Furnace Charger employed by Devki Steel Mills Limited from October 2010 (with an interruption following a May 2013 plant closure and re-employment in August 2013), was summarily dismissed on 15th February 2014 after being caught carting scrap metal from the factory. He claimed one month's salary in lieu of notice, accrued annual leave pay for 2012 and 2013, twelve months' salary as compensation for unfair termination, a certificate of service, costs and interest. The Respondent maintained the dismissal was for gross misconduct, that the Claimant admitted the theft in writing, that he was heard on 15th February 2014, and that his leave was paid out as reflected in payroll records. The court found the reason for termination - theft of scrap metal - valid and fair, noting the employer was entitled to treat the matter as an employment offence without resorting to criminal proceedings. However, the court found the process procedurally unfair under Sections 41 and 45 of the Employment Act 2007: there was no record of a hearing, no written charges or notice, and no panel constituted. The court held that even an admitted offence requires a hearing and opportunity to mitigate. Termination was declared unfair on procedure only; the Claimant was awarded one month's salary as compensation, a certificate of service, and all other prayers, including notice pay and annual leave, were rejected.

Key legal issues

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01

Validity of the reason for termination

Holding

The Respondent proved a valid and fair reason for termination - the Claimant's theft of scrap metal.

Reasoning

The Claimant was caught in the act of stealing scrap metal, conceded the offence and wrote a letter of apology. His claim in court that the metal was not stolen was disbelieved. The employer had discretion whether to press criminal charges and opting not to did not legitimise the conduct. The Respondent thus discharged its burden under the Employment Act 2007 of justifying the reason for dismissal.

p. 3
02

Procedural fairness of the dismissal

Holding

Termination was procedurally unfair - no proper hearing was conducted as required by Sections 41 and 45.

Reasoning

There was no record of a hearing, no written charges, no written notice of the hearing, no advice of the right to be accompanied by a union representative or workmate, and no evidence of a hearing panel. Summary dismissal followed almost immediately after the offence. Even in cases of admitted gross misconduct, the employee must be heard and allowed to mitigate, failing which the termination is procedurally unfair.

p. 3
03

Terminal benefits - notice pay and annual leave

Holding

Notice pay refused as the Claimant committed gross misconduct under Section 44(4); annual leave claim rejected as payroll showed leave was encashed.

Reasoning

The Claimant's admitted theft constituted gross misconduct justifying summary dismissal, disentitling him to notice pay. Payroll summaries showed Kshs. 3,698 in leave encashment for December 2013 and payment for 7 pending leave days in June 2013, contradicting his assertion that he was denied annual leave. Only one month's salary as compensation for procedural unfairness and a certificate of service were awarded.

p. 3

Legal principles established

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  • An employee must be accorded a fair hearing before termination even where the offence has been admitted; admission does not dispense with the procedural requirements of Sections 41 and 45 of the Employment Act.
  • An employer's election not to pursue criminal proceedings does not absolve the employee of wrongdoing at the workplace level.

Court orders

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  1. 1.Declaration that termination of the Claimant's contract of employment was unfair on account of procedure
  2. 2.The Respondent shall pay to the Claimant 1 month salary in compensation for unfair termination at Kshs. 12,468
  3. 3.Certificate of Service to issue
  4. 4.Other prayers are rejected

Authorities

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Legislation

  • Industrial Court (Procedure) Rules 2010Rule 27(1)(a)
  • Employment Act 2007Sections 41, 43, 44(4), 45, 51
Jurisdiction invoked
Industrial Court [Procedure] Rules 2010, Rule 27(1)(a); dispute over unfair and unlawful termination under the Employment Act 2007

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, "Lucas Buko Stephen v Devki Steel Mills Limited [2015] KEELRC 1331 (KLR)", Case Analysis (2015). Cause Number 197 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1331/eng@2015-03-13

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