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ELRCPartially AllowedCause No. 363 of 2014· [2016] KEELRC 15 (KLR)

David Maina Ndirangu v Tusker Mattresses Ltd [2016] KEELRC 15 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
25 November 2016
MMM. Mbaru
3,350 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 that forcing an employee to 'resign' counts as unfair dismissal, awarding him KShs 3.9 million in compensation and costs.

What this practically means

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Executive summary

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The Claimant, employed from 2006 and promoted in 2013 to General Manager Finance and Administration at Kshs.300,000 gross pay, claimed he was summoned on 21st February 2014 to the managing director's office and directed to resign on grounds of restructuring, under threat of dire consequences, without notice, reasons or a hearing. He sought a declaration of unlawful termination, compensation of up to three years' pay, notice pay, costs, interest and a Certificate of Service. The Respondent denied dismissing him, contending he resigned voluntarily, and further alleged his employment letters were fraudulent and that he engaged in underhand dealings amounting to a conflict of interest. The court framed two issues: whether the Claimant was summarily dismissed or resigned, and what remedies were due. Holding that the employer is custodian of work records and bore the burden of documenting and producing the minutes of the 21st February 2014 meeting, the court noted the Respondent produced none, never replied to the Claimant's 'Offer to resign' email, and did not call the managing director. It accepted the Claimant's version that he was forced to resign, holding that a coerced resignation amounts to an unfair labour practice contrary to section 45 of the Employment Act read with Article 41 of the Constitution. The belated allegations of fraud and misconduct failed for want of any show cause or disciplinary notice and compliance with sections 41 and 44. The court found unfair termination, awarded compensation of Kshs.3,600,000 (twelve months' gross pay under section 49), notice pay of Kshs.300,000 with interest, and costs. The three-year compensation claim was declined and the Certificate of Service claim marked settled.

Key legal issues

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01

Whether the Claimant resigned voluntarily or was summarily dismissed

Holding

The court found the Claimant was forced to resign and was in effect summarily dismissed; the email headed 'Offer to resign' was a response to a directive to resign following a meeting, not a voluntary resignation.

Reasoning

Both parties admitted a meeting on 21st February 2014 after which the Claimant left employment. The Claimant's email followed a directive to resign and asked only for time to absorb the shock and hand over. The Respondent did not reply to the email or produce minutes of the meeting, and did not call the managing director who presided over it. The court therefore accepted the Claimant's version that he was forced to resign.

p. 5
02

Whether the termination was unfair under sections 41, 43 and 45 of the Employment Act

Holding

The termination was unfair: no valid reasons were proved, no hearing was accorded, and the Respondent failed to discharge its burden under sections 43 and 47(5).

Reasoning

Section 43 requires the employer to prove reasons for termination failing which it is deemed unfair. The Respondent led no evidence of a disciplinary process, show cause notice or hearing. Its belated allegations of forged employment records and conflict of interest were raised for the first time in defence without any prior disciplinary record, and could not justify a dismissal already effected without due process.

p. 6
03

What remedies are due

Holding

The Claimant received the maximum 12 months' gross pay compensation (Kshs.3,600,000) under section 49 plus notice pay of Kshs.300,000 with interest; the Certificate of Service claim was marked settled.

Reasoning

Noting the Respondent's conduct in effecting summary dismissal and the Claimant's diligent service with no record of indiscipline, section 49 permitted the maximum 12 months' gross pay compensation. The court, however, awarded the full 12 months rather than the conventional one month, holding the Claimant's gross pay at termination was Kshs.300,000. Notice pay flowed from the unjustified summary dismissal under clause 11.2.2 of the contract.

p. 6

Legal principles established

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  • The employer is the legal custodian of work records and bears the burden of producing them, including records of meetings preceding termination; failure to produce them weighs against the employer.
  • Forcing an employee out of employment through a coerced resignation amounts to an unfair labour practice and is not justified under section 45 of the Employment Act.
  • Even in cases of gross misconduct, an employer is mandatorily required to give reasons, a hearing and a chance to be heard.
  • Allegations of misconduct never brought to the employee's attention through a show cause or disciplinary notice during employment cannot be raised at the last minute to justify a dismissal effected without due process.

Court orders

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  1. 1.A declaration that the Claimant was unfairly dismissed by the respondent
  2. 2.Compensation awarded at Kshs.3,600,000.00
  3. 3.Notice pay of Kshs.300,000.00
  4. 4.Costs of the suit to the Claimant
  5. 5.Interest payable on the notice pay of Kshs.300,000.00

Authorities

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Legislation

  • Employment Actsection 41(1)
  • Employment Actsection 41(2)
  • Employment Actsection 43(1)
  • Employment Actsection 44(3) and (4)
  • Employment Actsection 45
  • Employment Actsection 47(5)
  • Employment Actsection 49
  • Employment Actsection 10(6) and (7)
  • Constitution of Kenya, 2010article 41

Cases cited (6)

  • Mary Chemweno Kiptui versus Kenya Pipeline Co. ltd
    [2014] eKLR
  • Shankar Saklani versus DHL Global Forwarding (K) Limited
    [2012] eKLR
  • Jonathan Macharia & 24 Others versus Bulk Warehouse Management & 2 Others
    [2013] eKLR
  • Frederick Kariuki Kamau versus bank of Baroda
    [2015] eKLR
  • Martin Vindija Nyambuku versus Mbukoni Logistics Limited
    [2016] eKLR
  • Linus Barasa Odhiambo versus Wells Fargo Limited
    {2012] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under Article 162(2) of the Constitution (employment and labour relations dispute); claims founded on the Employment Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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 Maina Ndirangu v Tusker Mattresses Ltd [2016] KEELRC 15 (KLR)", Case Analysis (2016). Cause No. 363 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/15/eng@2016-11-25

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