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ELRCPartially AllowedCause Number 370 of 2014· [2016] KEELRC 569 (KLR)

Nicholas Alex Otieno v Lustman & Co. [1990] Ltd [2016] KEELRC 569 (KLR)

Industrial Court of Kenya
24 June 2016
JRJames Rika
1,436 words in judgment
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The bottom line

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A Kenyan employment court awarded a cleaner supervisor Kshs. 167,450 after finding his firing unfair because his employer never gave him a hearing.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a Cleaner Supervisor from 20th July 2007, claimed his contract was terminated on 15th January 2014 without justifiable cause and without being heard. He sought a declaration that termination was unfair and unlawful, one month's notice pay, gratuity for six years worked, twelve months' salary as compensation, and costs. The Respondent, in its Statement of Response, alleged the Claimant failed to remit client money, assaulted a workmate, was drunk at work, disobeyed instructions, slept at the workplace, absented himself for three weeks and worked for another company; it prayed for dismissal and counterclaimed Kshs. 5,000 as an outstanding loan. The Respondent and its advocates did not attend the hearing on 11th February 2016, and its case closed without evidence. Rika J found the Claimant's unchallenged evidence established 6½ years of service and a pre-reduction salary of Kshs. 11,050. The Court held that the employer bore the burden under Sections 41 and 45 of the Employment Act to justify termination, but no charges were laid, no disciplinary process was undertaken, and no accusation was put to the Claimant; there was neither substantive justification nor procedural fairness. The Claimant was awarded 10 months' salary (Kshs. 110,500) in compensation, one month's notice pay (Kshs. 11,050), and service pay of Kshs. 45,900 under Section 35(5) as the Respondent had no social security plan. Annual leave pay was refused as not specifically pleaded or proved, and the counterclaim was rejected for want of evidence. Total award of Kshs. 167,450, payable within 30 days, with costs to the Claimant and interest at 14% per annum. Dated and delivered at Mombasa on 24th June 2016.

Key legal issues

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01

Whether termination was substantively and procedurally fair

Holding

Termination was unfair - no valid reasons shown and no procedural fairness preceded it

Reasoning

The Respondent avoided giving evidence and avoided taking responsibility for the termination decision. Several accusations were made in the Statement of Response but none was put to the Claimant; no charges, investigations or disciplinary process followed the alleged assault. The alleged assaulted workmates were not brought before the Court. There was therefore neither substantive justification nor procedural fairness.

p. 3
02

Entitlement to compensation, notice pay and service pay

Holding

Claimant granted 10 months' salary compensation, 1 month notice pay and service pay at 18 days' salary per year

Reasoning

The Claimant's unchallenged evidence established 6½ years of service and a salary of Kshs. 11,050 before reduction to Kshs. 9,500. Since the Respondent had no social security plan, service pay was due under Section 35(5) of the Employment Act at 18 days' salary per completed year, computed at Kshs. 45,900.

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03

Whether the Respondent's counterclaim was proved

Holding

Counterclaim rejected for lack of evidence

Reasoning

The Respondent neither attended the hearing nor gave evidence; its counterclaim for a loan of Kshs. 5,000 was unsupported by any material or evidence and was accordingly rejected.

p. 3

Legal principles established

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  • The employer bears the obligation to show termination was based on valid and fair reasons and that due process under Sections 41 and 45 of the Employment Act was followed
  • Justification for termination is not shown by the number or gravity of accusations where the employee was never charged or heard
  • Service pay is due where the employer has no social security plan buffering the employee

Court orders

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  1. 1.Declaration that termination was unfair
  2. 2.Respondent to pay 10 months' salary in compensation at Kshs. 110,500
  3. 3.One month salary in lieu of notice at Kshs. 11,050
  4. 4.Service pay at Kshs. 45,900
  5. 5.Total award of Kshs. 167,450 payable within 30 days of delivery of the Award
  6. 6.Costs to the Claimant
  7. 7.Interest at 14% per annum from the date of delivery of the Award

Authorities

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Legislation

  • Employment ActSections 41, 45, 35(5)
  • Industrial Court (Procedure) Rules 2010Rule 27(1)(a)
Jurisdiction invoked
Employment and labour relations jurisdiction under Rule 27(1)(a) of the Industrial Court (Procedure) Rules 2010; dispute over unfair and unlawful termination

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, "Nicholas Alex Otieno v Lustman & Co. [1990] Ltd [2016] KEELRC 569 (KLR)", Case Analysis (2016). Cause Number 370 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/569/eng@2016-06-24

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