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ELRCAllowedCause No. 2555 of 2012· [2015] KEELRC 1421 (KLR)

Joseph Isagi Nyando v Imagine Imc Limited [2015] KEELRC 1421 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
19 February 2015
1,581 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~6 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded a driver 12 months' salary because his employer fired him without a fair hearing or proof of misconduct.

What this practically means

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Executive summary

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The Claimant, employed as a Professional Driver by the Respondent from 20/2/2012 and confirmed on 29/6/2012 with his salary reviewed to Kshs.25,000/= per month on 20/7/2012, was summarily dismissed on 1/10/2012 on allegations of insubordination and use of abusive language. He filed his claim in person on 21/12/2012 seeking damages for unlawful termination, house allowance at 15% of salary, and a certificate of service. The Respondent filed a defence admitting employment, asserting lawful dismissal following recorded misconduct and a verbal warning, and contending that the Claimant's salary was consolidated to include house allowance and that all terminal dues were paid. The Respondent, though served with a hearing notice, failed to attend, and the case proceeded ex-parte on 28/1/2015. The court framed two issues: lawfulness of the termination and entitlement to remedies. Applying Sections 43, 44 and 41 of the Employment Act 2007 and Article 50(1) of the Constitution, the court held that the employer bore the burden of proving the reasons for dismissal, that the unsigned and unacknowledged verbal warning remained a mere allegation, and that no hearing was accorded, rendering the dismissal unlawful and unjustified. The court further held that, absent express consolidation in the contract, house allowance was payable separately. The Claimant was awarded one month's salary in lieu of notice (Kshs.25,000/=), house allowance of Kshs.30,000/= for 8 months, and 12 months' salary (Kshs.300,000/=) as damages for unlawful termination, totalling Kshs.355,000/= plus costs, with a Certificate of Service to be issued. Judgment was read in open court on 19th February 2015 by Hellen S. Wasilwa J.

Key legal issues

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01

Whether the summary dismissal of the Claimant was lawful and justified

Holding

The dismissal was unlawful and unjustified: the Respondent failed to prove the alleged misconduct and did not accord the Claimant a hearing as required by Section 41 of the Employment Act 2007, contravening Article 50(1) of the Constitution.

Reasoning

Section 43 of the Employment Act places the burden on the employer to prove reasons for termination. The Respondent alleged insubordination and abusive language but relied only on an unsigned, unacknowledged verbal warning, which the court held to be a mere allegation. Section 41 requires an explanation and a hearing before termination on misconduct grounds; none was accorded. This denial of a hearing also flouted Article 50(1) of the Constitution, so the dismissal could not stand.

p. 3
02

Whether the Claimant was entitled to payment in lieu of notice

Holding

The Claimant was entitled to one month's salary in lieu of notice under the contract and Section 35 of the Employment Act 2007, assessed at Kshs.25,000/=.

Reasoning

The court found that the Claimant received no notice as envisaged under his contract of employment and under Section 35 of the Employment Act 2007, and therefore awarded one month's salary, equivalent to his reviewed monthly salary of Kshs.25,000/=, in lieu of notice.

p. 3
03

Whether the Claimant was entitled to house allowance

Holding

The Claimant was entitled to house allowance at 15% of monthly salary for the 8 months worked, totalling Kshs.30,000/=, because the contract did not consolidate house allowance into the salary.

Reasoning

Section 31(1) and (2) of the Employment Act obliges the employer to provide housing or a rent sum, but exempts contracts that expressly consolidate a housing element into the basic wage. The Claimant's contract was silent on consolidation, so house allowance was payable separately at 15% of the monthly salary of Kshs.25,000/= for the 8 months worked.

p. 3
04

Whether the Claimant was entitled to damages for unlawful termination and a certificate of service

Holding

Having found the termination unlawful, the court awarded 12 months' salary (Kshs.300,000/=) as damages and ordered issuance of a Certificate of Service.

Reasoning

Because the dismissal was found unlawful and unjustified, the court exercised its remedial powers to award the equivalent of twelve months' salary as damages for unlawful termination, and directed that the Claimant be issued with a Certificate of Service, an entitlement the Respondent had also indicated willingness to honour.

p. 4

Legal principles established

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  • In any claim arising out of termination of a contract, the employer bears the burden of proving the reason or reasons for termination; failure to do so renders the termination unfair.
  • Before terminating employment on grounds of misconduct, an employer must explain the reasons to the employee and hear and consider any representations; failure to accord a hearing renders the dismissal unlawful.
  • Where an employer intends that salary encompasses house allowance, this must be expressly stated in the employment contract; otherwise house allowance is payable separately at 15% of salary.
  • An alleged verbal warning not signed or acknowledged by the employee remains a mere allegation incapable of proving misconduct.

Court orders

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  1. 1.Payment of one month's salary in lieu of notice of Kshs.25,000/= to the Claimant
  2. 2.Payment of house allowance for 8 months worked, computed as 15% of monthly salary x 8 x 25,000 = Kshs.30,000/=
  3. 3.Award of 12 months' salary as damages for unlawful termination, i.e. Kshs.300,000/=
  4. 4.Total award of Kshs.355,000/= plus costs of the suit
  5. 5.The Claimant to be issued with a Certificate of Service

Authorities

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Legislation

  • Employment Act 2007Section 43
  • Employment Act 2007Section 44 (including s.44(d))
  • Employment Act 2007Section 41
  • Employment Act 2007Section 35
  • Employment Act 2007Section 31(1) and (2)
  • Constitution of KenyaArticle 50(1)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (claim for unfair 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, "Joseph Isagi Nyando v Imagine Imc Limited [2015] KEELRC 1421 (KLR)", Case Analysis (2015). Cause No. 2555 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1421/eng@2015-02-19

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