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ELRCPartially AllowedCause No. 356 of 2009· [2016] KEELRC 785 (KLR)

Bakery, Confectionary, Food Manufacturing and Allied Workers’ Union (Kenya) v Spin Knit Diary Limited [2016] KEELRC 785 (KLR)

Employment and Labour Relations Court
29 July 2016
HWHellen S. Wasilwa
1,613 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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An employer who fires staff for misconduct without evidence in court must pay them notice, service pay and all accrued dues.

What this practically means

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Executive summary

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The Claimant Union sued on behalf of seven employees (Grievants) of Spin Knit Dairy Limited who were summarily dismissed in July 2007, alleging victimization, wrongful dismissal and denial of a hearing. The dismissals cited gross misconduct, namely fraud in falsifying milk delivery records. The 2nd Grievant was charged with attempted stealing by servant but was discharged after the charges were withdrawn for lack of evidence. A Conciliator appointed by the Minister for Labour found the dismissals were done in bad faith, contrary to natural justice, and recommended conversion to normal termination with full CBA benefits plus 12 months' wages for wrongful termination. The Respondent, through the Federation of Kenya Employers, maintained that the Grievants engaged in fraudulent activities amounting to gross misconduct under Clause 23 of the CBA and that the dismissals were lawful and fair. Applying the repealed Employment Act (Cap 226), which then governed the contracts, the court held that while a summary dismissal for gross misconduct required no hearing, the employer bore the burden of proving the misconduct. The Respondent called no evidence; some Grievants were loaders not involved in issuing milk receipts, one was demonstrably on leave on the alleged date, and the involvement of others was unexplained. The court found the dismissals lacked proper reasons, converted them to normal terminations, and awarded notice pay, service pay at 15 days per year worked, July 2007 salary and leave allowances, totalling Kshs. 202,438.00 for the seven Grievants. The Conciliator's recommendation of 12 months' compensation was not granted. Judgment was delivered in open court on 29th July 2016 by Hellen S. Wasilwa J.

Key legal issues

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01

Whether the Grievants committed gross misconduct justifying summary dismissal

Holding

No - the allegation of fraud in issuing milk delivery receipts was not proved; some Grievants were loaders not issuing receipts, one was on leave on the alleged date, and the Respondent called no evidence

Reasoning

The Respondent alleged fraud in falsifying milk delivery records. Several Grievants were loaders with no role in issuing receipts; CW2 produced a leave form showing he was on leave on the alleged date; the Respondent failed to call any evidence explaining each Grievant's alleged involvement. The 2nd Grievant's criminal charge was withdrawn for lack of evidence. The allegation of gross misconduct therefore failed.

p. 3
02

What remedies flow from the failed summary dismissal

Holding

The dismissal was converted to a normal termination with notice pay, service pay at 15 days per year worked, July 2007 salary and leave allowances, computed per the CBA

Reasoning

The court applied the Conciliator's recommendation that dismissal be reduced to normal termination with full benefits under the CBA. It quantified per-Grievant awards totalling Kshs. 202,438.00, tailoring notice pay (one or two months) and service pay to each Grievant's length of service and CBA entitlements.

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Legal principles established

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  • Under the repealed Employment Act (Cap 226), an employer dismissing for gross misconduct was not obliged to give reasons or a hearing, but the employer must prove the gross misconduct it alleges
  • Where an employer alleges gross misconduct but calls no evidence to prove the employees' involvement, the dismissal is wrongful and will be converted to a normal termination with terminal benefits

Court orders

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  1. 1.The summary dismissal of the Grievants converted to normal termination
  2. 2.Award to each Grievant of one month's salary (or two months per CBA where applicable) in lieu of notice, service pay at 15 days' salary for each year worked, salary for days worked in July 2007, and leave allowance where applicable
  3. 3.Grand total award of Kshs. 202,438.00 to the seven Grievants
  4. 4.Judgment read in open court on 29th July 2016

Authorities

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Legislation

  • Employment Act (repealed)Cap 226
  • Criminal Procedure CodeSection 87(a)
Jurisdiction invoked
Trade dispute reported to the Minister for Labour and referred for determination; claim filed under the repealed Employment Act (Cap 226) regime governing the 2007 dismissals

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, "Bakery, Confectionary, Food Manufacturing and Allied Workers’ Union (Kenya) v Spin Knit Diary Limited [2016] KEELRC 785 (KLR)", Case Analysis (2016). Cause No. 356 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/785/eng@2016-07-29

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