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ELRCAllowedCause No. 81 of 2015· [2016] KEELRC 750 (KLR)

Nicholas Ojiema Okudo v Equator Bottlers Limited [2016] KEELRC 750 (KLR)

Employment and Labour Relations Court
14 July 2016
MOMaureen Onyango
1,030 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 awarded a security officer 12 months' salary for unfair termination, even though he had worked only nine months, because his dismissal was mishandled.

What this practically means

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Executive summary

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The claimant, employed as a Security Officer by the respondent from 8th February 2013, had his employment terminated by letter dated 20th September 2013. The letter cited section 36 of the Employment Act (pay in lieu of notice) but assigned no reasons. At trial the claimant explained that he was terminated after a criminal case against sales employees accused of threatening the Managing Director's life was dropped for insufficient evidence; the respondent's witness attributed the termination to the respondent's loss of faith in the claimant for allegedly failing to gather sufficient evidence. The court framed one issue: whether the termination was unfair. It found no disciplinary process was conducted as required by section 41 of the Employment Act and no reason was stated in the termination letter, from which it inferred there were no valid reasons and fair procedure was not complied with. On remedies, the respondent urged loss-based, proportionate compensation, relying on Hema Hospital v Makongo, D.K. Njagi Marete v TSC, CMC Aviation and BIFU v Ukulima SACCO. The claimant relied on the Gachuri and Cosmas Ochieng cases. The court, describing the case as one where the Managing Director's wrath fell on an innocent victim treated in a most inhuman way, awarded maximum compensation of 12 months' salary (Shs.660,072) despite only nine months of service, plus costs, with interest at court rates unless paid within 30 days. The claim was allowed in full.

Key legal issues

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01

Whether the termination of the Claimant's employment was unfair

Holding

The termination was unfair because there was no disciplinary process under section 41 of the Employment Act and the termination letter assigned no reason, implying absence of valid reasons and failure of fair procedure.

Reasoning

The court examined the termination letter, which cited only section 36 of the Employment Act on pay in lieu of notice without stating any grounds. No disciplinary hearing was conducted as required by section 41. The inference drawn was that no valid reason existed and that the respondent disregarded fair procedure. The claimant was blamed for the failed prosecution of employees who threatened the Managing Director despite not being part of the investigation team, which the court found most inhuman and contrary to fair labour practices.

p. 2
02

What compensation under section 49 of the Employment Act was appropriate

Holding

Maximum compensation of 12 months' salary (Shs.660,072) was awarded despite only 9 months of service, because of the inhuman manner of termination.

Reasoning

The respondent relied on authorities urging proportionate, loss-based compensation rather than punitive awards. The court acknowledged these but distinguished this case as unusual: an innocent security officer was victimised for the failure of a criminal case he had no role in, was not given the termination letter, and was simply told to clear and leave. This uncontroverted conduct justified the maximum award notwithstanding the short service period.

p. 3

Legal principles established

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  • Termination without a disciplinary process and without stated reasons is unfair for want of valid reason and fair procedure
  • Length of service does not bar maximum compensation where the manner of termination warrants it

Court orders

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  1. 1.Respondent to pay the Claimant 12 months' salary as compensation for unfair termination in the sum of Shs.660,072
  2. 2.Respondent to pay the Claimant's costs
  3. 3.Decretal sum to attract interest at court rates unless paid within 30 days

Authorities

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Legislation

  • Employment Actsection 36
  • Employment Actsection 41
  • Employment Actsection 49

Cases cited (6)

  • Hema Hospital v Dr. Wilson Makongo Marwa
    Civil Appeal No. 72 of 2014
  • D. K. Njagi Marete v Teachers Service Commission
    [2013] eKLR
  • CMC Aviation v Mohammed Noor
    [2015] eKLR
  • Banking Insurance & Finance Union v Ukulima SACCO Society Limited
    ELRC Cause No. 1109 of 2011
  • Engineer Francis N. Gachuri v Energy Regulatory Commission
  • Cosmas Ochieng and 5 others v Equator Bottlers Limited
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (sections 41, 45, 49 and 36 invoked)

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 Ojiema Okudo v Equator Bottlers Limited [2016] KEELRC 750 (KLR)", Case Analysis (2016). Cause No. 81 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/750/eng@2016-07-14

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