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ELRCPartially AllowedCause No. 933 of 2013· [2015] KEELRC 1354 (KLR)

David Otunga Kenani v Office Of The Controller And Auditor General & another [2015] KEELRC 1354 (KLR)

Employment and Labour Relations Court of Kenya
2 March 2015
MMM. Mbaru
5,503 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled a long-ago dismissal was unfair because the employee was never given a proper hearing, and awarded him compensation and unpaid dues.

What this practically means

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Executive summary

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The Claimant, employed as Auditor II in the Office of the Controller and Auditor General from 1993, was suspended in September 1999 after being charged with stealing by persons employed in the public service in Criminal Case No. 2698 of 1999. A nolle prosequi was entered in June 2001 and he was discharged. Nonetheless, after show-cause correspondence, he was dismissed from service for gross misconduct by letter of 7th July 2003 on allegations of colluding to occasion a loss of Kshs.1,608,450. His appeal was rejected in 2008 and his application for review was disallowed on 1st March 2011, when his file was closed. He sued in 2013 seeking reinstatement, a declaration of wrongful and unfair dismissal, or alternatively terminal dues with compensation, general damages, costs and interest. The Respondents argued the dismissal followed due process, that the nolle prosequi did not bar administrative action, and that the suit was time-barred under section 3(2) of the Public Authorities Limitation Act. The court held the cause of action accrued only on 1st March 2011 when internal appeal and review remedies were exhausted, so the claim under section 90 of the Employment Act, 2007 was timely. It found both procedural and substantive unfairness: the Claimant was never heard in person as section 41 requires, the appeal and review were decided without hearing him, the Respondents led no evidence, and the criminal discharge could not form a poor record. Reinstatement was refused as impracticable after the lapse of time; general damages were refused for failure to mitigate. The court declared the dismissal unfair, awarded six months' salary as compensation and full terminal dues up to 1st March 2011 with interest, subject to section 49(2) of the Employment Act, with computation to be confirmed at mention, and ordered each party to bear its own costs.

Key legal issues

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01

When the cause of action accrued for limitation purposes

Holding

The cause of action arose on 1st March 2011 when the review application was disallowed and the file closed, not on 7th July 2003 when dismissal was communicated

Reasoning

The dismissal letter allowed an appeal, which was considered and rejected, and a review application was also considered and disallowed on 1st March 2011. Until then the Claimant retained a legitimate hope and expectation of reinstatement and could not say he had exhausted internal remedies. Filing in 2013 was within three years under section 90 of the Employment Act, 2007.

p. 6
02

Whether the termination was procedurally and substantively unfair

Holding

Yes - the Claimant was dismissed without a hearing as required by sections 41 and 45 of the Employment Act, and the appeal and review were decided without calling him

Reasoning

The suspension was only to permit investigations; after the show cause process, the employee must be heard in person with a representative. The appeal in 2008 under the Employment Act required a hearing of the Claimant. No evidence showed poor prior conduct, and the nolle prosequi discharge could not form a proper poor record. The Respondents' failure to call evidence left the employer's process unproven.

03

Whether reinstatement and general damages could be granted

Holding

Reinstatement was refused as the last day at work was 1999; general damages were refused for failure to mitigate; terminal dues to 1st March 2011 and six months' salary compensation were awarded instead

Reasoning

Reinstatement is regulated by section 12 of the Industrial Court Act and cannot be granted given the elapsed time. The court instead awarded terminal dues with increments up to 1st March 2011 and six months' salary as compensation, with interest, since the dues should have been paid when they fell due.

p. 8

Legal principles established

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  • A cause of action in employment does not accrue until internal administrative mechanisms of appeal and review are exhausted; the decision closing the file marks the accrual
  • An employee suspended to allow investigations must be recalled and heard before dismissal, in compliance with section 41 of the Employment Act, which is mandatory
  • Where an employer fails to call evidence on how it handled similar cases, that omission works to the advantage of the employee
  • An employee must mitigate loss by seeking alternative employment pending suit unless on suspension or interdiction

Court orders

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  1. 1.Declaration that the Claimant was unfairly dismissed from his employment
  2. 2.Compensation awarded at six months' salary as at 1st March 2011
  3. 3.Payment of full terminal dues including unpaid salaries up to 1st March 2011
  4. 4.Computation of compensation and salaries based on amounts payable to a similar employee and grade as at 1st March 2011
  5. 5.Interest at current court rates on the amounts due
  6. 6.Amounts subject to section 49(2) of the Employment Act
  7. 7.Mention in 60 days to confirm computation of dues
  8. 8.Each party to bear its own costs

Authorities

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Legislation

  • Penal Codesection 280
  • Employment Act, 2007sections 41, 45(4) and (5), 46, 49(2), 74, 90
  • Employment Act (repealed), Cap 226limitation period of six years
  • Public Service Commission Act, Cap 185right of appeal
  • Public Authorities Limitation Actsection 3(2)
  • Limitation of Actions Actsection 4
  • Industrial Court Actsection 12
  • Constitution of Kenya, 2010Article 41; Article 159

Cases cited (6)

  • Iga versus Makerere University
    Civil Appeal No. 51 of 1971
  • Divecon versus Samani
    [1995-1998] 1 EA 48
  • Republic versus Public Service Commission of Kenya ex Parte James Nene Gachoka
  • Elizabeth Washeke & Others versus Airtel Networks (K) Limited
    Cause No. 1972 of 2012
  • Frederick Odongo Owegi versus CFC Life Assurance Ltd
    [2014] eKLR
  • Amrick Consales versus Mara Ison Technologies Kenya Limited
    Cause No. 2538 of 2012
Jurisdiction invoked
Employment and labour relations jurisdiction of the Industrial Court under section 12 of the Industrial Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (8)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "David Otunga Kenani v Office Of The Controller And Auditor General & another [2015] KEELRC 1354 (KLR)", Case Analysis (2015). Cause No. 933 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1354/eng@2015-03-02

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