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ELRCDismissedCause No 1822 of 2014· [2016] KEELRC 139 (KLR)

Stephen Ndolo v Nairobi Water & Sewerage Company Limited [2016] KEELRC 139 (KLR)

Employment and Labour Relations Court
9 December 2016
1,603 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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Kenya's Employment Court upheld a cashier's summary dismissal for paying out Kshs. 1.2 million on a forged warrant, confirming employers win when they prove both valid reason and fair procedure.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent in 1999 and serving as Cashier Verification Supervisor, was summarily dismissed on 29th April 2014 after paying out an IOU imprest warrant of Kshs. 1,200,000 to two persons allegedly sent by the Managing Director, one of whom was not an employee and whose warrant was later found to be a forgery. He sued for a declaration of unlawful and unfair dismissal, notice pay, suspension allowances, service pay, twelve months' compensation and general damages. The Court framed two issues: whether the dismissal was lawful and fair, and whether the Claimant was entitled to remedies. Applying Section 43 of the Employment Act and prior authorities on the employer's burden of proof, the Court held that the Respondent had a valid reason for termination, finding that the Claimant, a career cash officer, ought to have exercised more care before releasing a large sum to a person not personally known to him. The Court also found that the procedural fairness requirements of Section 41 were satisfied: the Claimant received a show cause letter, responded, appeared before the Corporate Disciplinary Committee with union representation, and was heard on appeal. The claims for unlawful dismissal, notice pay, suspension allowances and service pay (the Claimant being a contributing member of Lap Trust Pension Scheme) all failed. The entire claim was dismissed with each party bearing their own costs. Judgment delivered at Nairobi on 9th December 2016 by Linnet Ndolo, Judge.

Key legal issues

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01

Whether the Claimant's summary dismissal was lawful and fair

Holding

The dismissal was lawful and fair; the Respondent had a valid reason and complied with the procedural requirements of Section 41 of the Employment Act.

Reasoning

Section 43 requires an employer to prove a valid reason for termination. The Claimant, a career cash officer, paid out an imprest warrant for Kshs. 1,200,000 to a person not personally known to him, which turned out to be a forgery, occasioning financial loss. He failed to exercise due care commensurate with his senior position. The Court also found the disciplinary procedure fair: a show cause letter was issued, responses considered, and the Claimant was heard before the Corporate Disciplinary Committee with union representation and on appeal.

p. 4
02

Whether the Claimant was entitled to the remedies sought

Holding

No remedies were due; notice pay, suspension allowances, service pay and compensation were all refused.

Reasoning

Because the dismissal was found lawful and fair, the claims for notice pay and suspension allowances failed. Service pay was barred by the Claimant's membership of the Lap Trust Pension Scheme, and the general claim for compensation and lost years fell with the finding of validity and procedural fairness.

p. 4

Legal principles established

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  • Under Section 43 of the Employment Act, an employer discharges the burden of proving a valid reason for termination once a reason that would cause a reasonable employer to terminate employment is demonstrated.
  • A senior employee handling large sums of money is expected to exercise a higher degree of care, and failure to do so may constitute gross misconduct justifying summary dismissal.

Court orders

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  1. 1.The Claimant's entire claim is dismissed
  2. 2.Each party to bear their own costs

Authorities

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Legislation

  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 44(4)(g)

Cases cited (2)

  • Jessy Olukutukei v Feed the Children Kenya
    [2014] eKLR
  • Abraham Nyambane Atsiago v Barclays Bank of Kenya
    [2015] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (dispute over unfair termination and terminal dues)

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, "Stephen Ndolo v Nairobi Water & Sewerage Company Limited [2016] KEELRC 139 (KLR)", Case Analysis (2016). Cause No 1822 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/139/eng@2016-12-09

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