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ELRCPartially AllowedCause No. 82 of 2015· [2016] KEELRC 146 (KLR)

Joachim Kimoja v Equator Bottlers Limited [2016] KEELRC 146 (KLR)

Employment and Labour Relations Court
17 November 2016
1,324 words in judgment
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The bottom line

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Kenya's Employment Court ruled a Human Resource Manager's dismissal unfair because his employer gave no hearing and no valid reason, awarding six months' salary plus a withheld bonus.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as Human Resource Manager from February 2012, received a letter of termination effective 21st February 2015 setting out terminal dues but giving no reasons. He attributed his dismissal to the arrest and charging of Italian expatriate technicians who worked at the Respondent's factory without permits, and contended that the Managing Director, not he, invited the technicians, and that he was never given a hearing. The Respondent maintained that procurement of visas and permits was the responsibility of the Human Resource Department under the Claimant. The court framed two issues: whether the termination was unfair, and whether the Claimant was entitled to the remedies sought. Relying on sections 41, 43 and 45 of the Employment Act, the court found that the Respondent produced no minutes of a disciplinary hearing or invitation to one, and that the termination letter stated no grounds. RW1 admitted the technicians were invited by the Managing Director without the letter being copied to Human Resources, and that the Claimant was diligent. The termination was held unfair both for want of fair process and lack of valid reason. On remedies, the court awarded six months' gross salary (Shs.1,844,552.94) under section 49(1)(c), rejecting the maximum 12 months sought but finding compensation based on gross pay. It also awarded the withheld performance bonus of Shs.42,336.00, there being no explanation for the deletion of the Claimant's name from the bonus list. The Respondent was ordered to pay costs, with interest on the decretal sum at court rates from the date of judgment.

Key legal issues

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01

Whether the termination was procedurally fair under section 41 of the Employment Act

Holding

The termination was procedurally unfair because the Claimant was not given a hearing

Reasoning

The Respondent produced no minutes of a disciplinary hearing or invitation to the Claimant to attend such a meeting, and the termination letter did not refer to any meeting or state the grounds of termination. Section 41 requires an employee to be given a hearing in the presence of a union official or fellow employee of his choice, which was not done.

p. 4
02

Whether there was a valid reason for termination under sections 43 and 45

Holding

There was no valid reason; the Claimant was not responsible for obtaining work permits for the expatriate technicians

Reasoning

RW1, the Respondent's Human Resource Assistant, admitted in cross-examination that the Claimant was diligent, that he was unaware of the coming of the technicians from Italy, and that the Managing Director invited them without copying the letter to the Human Resource Department. The Claimant was therefore neither involved in the invitation nor in processing the work permits, so the reason was neither valid nor fair.

p. 4
03

The appropriate compensation under section 49(1)(c) of the Employment Act

Holding

Six months' gross salary of Shs.1,844,552.94 was reasonable compensation

Reasoning

The Claimant worked for three years diligently with no disciplinary record, and was terminated without valid reason or fair procedure. The court considered the section 49(4) factors and the conduct of the employer, and fixed compensation at six months. Compensation under section 49(1)(c) is based on gross pay, computed from the January 2015 payslip showing a gross of Shs.307,521.

p. 4
04

Whether the Claimant was entitled to the withheld performance bonus

Holding

The Claimant earned and was entitled to the performance bonus of Shs.42,336.00

Reasoning

RW1 admitted that all employees working under the Claimant were paid the performance bonus for September to December 2014, that the Claimant's name appeared in the printed payment list but was cancelled by hand, and that there was no explanation for the deletion nor anything to show the Claimant did not perform.

p. 5

Legal principles established

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  • An employer must prove both a valid reason and fair procedure, including a hearing under section 41 of the Employment Act, for a termination to be fair
  • Compensation under section 49(1)(c) is calculated on gross pay and the court must consider the factors in section 49(4) before awarding a just remedy
  • Where an employee's name is deleted from a performance bonus list without explanation, the employee is deemed to have earned the bonus

Court orders

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  1. 1.A declaration that the termination of the Claimant's employment was unfair
  2. 2.Compensation of six months' salary at Shs.1,844,552.94 under section 49(1)(c) of the Employment Act
  3. 3.Payment of withheld performance bonus of Shs.42,336.00
  4. 4.Respondent to pay Claimant's costs of the suit
  5. 5.Decretal sum to attract interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 45
  • Employment Actsection 49(1)(c)
  • Employment Actsection 49(4)

Cases cited (4)

  • ASENATH DONELA HOCH v THE PRINCIPAL WOMEN'S INSTITUTE FOR SECONDARY EDUCATION & RESEARCH KISUMU
    ELRC Cause No. 95 of 2014
  • HEMA HOSPITAL v DR. WILSON MAKONGO MARWA
    Kisumu Court of Appeal Case No. 72 of 2014
  • D.K. NJAGI MARETE v TEACHER'S SERVICE COMMISSION
    [2013] eKLR
  • ABRAHAM GUMBA v KENYA MEDICAL SUPPLIES AUTHORITY
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes; remedies under sections 41, 43, 45 and 49 of the Employment Act

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, "Joachim Kimoja v Equator Bottlers Limited [2016] KEELRC 146 (KLR)", Case Analysis (2016). Cause No. 82 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/146/eng@2016-11-17

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