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ELRCPartially AllowedCause No. 251 of 2015· [2016] KEELRC 806 (KLR)

Peter Kanyeki Karuga v Horizon Contact Centers Limited [2016] KEELRC 806 (KLR)

Employment and Labour Relations Court of Kenya
26 July 2016
HWHellen S. Wasilwa
1,630 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer must prove both a valid reason and a fair disciplinary hearing before dismissing an employee, or pay up to twelve months' salary.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Nairobi, per Hellen S. Wasilwa J, delivered an undefended judgment in a claim for unfair and wrongful termination. The Claimant, a Customer Service Agent employed from November 2011 and confirmed on permanent terms from April 2012, was summarily dismissed on 20th May 2014 following an incident in which a colleague accidentally disconnected a power cable, shutting down computers. He sought declarations that his termination breached Sections 45 and 31 of the Employment Act 2007, a certificate of service, twelve months' salary as compensation, May 2014 salary, one month's pay in lieu of notice, overtime for unpaid public holidays, accrued leave pay, refunds of salary deductions and house allowance. The Respondent did not appear. The court framed two issues: whether there were valid reasons for dismissal and whether due process was followed. It found the dismissal letter cited insubordination without details and that no formal disciplinary hearing under Section 41 was held; accordingly there were no valid reasons and due process was not followed, rendering the dismissal unfair and unjustified under Section 45(2). The court awarded one month's notice pay, May 2014 salary, twelve months' compensation, 28 days' accrued leave, house allowance at 15% for 25 months, a certificate of service and costs - a total of Kshs. 325,550. The overtime and illegal deductions claims were not included in the final award.

Key legal issues

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01

Whether there were valid reasons to warrant dismissal of the Claimant

Holding

There were no valid reasons for summary dismissal; the insubordination alleged was not enumerated or proved

Reasoning

The dismissal letter cited insubordination but did not detail it. The Claimant explained the 2nd May 2014 incident and the court found it unclear whether he was insubordinate or the Respondent misunderstood him. The incident, involving an accidental power cable disconnection, was not of a gravity warranting summary dismissal, and there was no proof of what actually happened.

p. 4
02

Whether due process was followed

Holding

Due process was not followed; no formal disciplinary hearing was held as envisaged under Section 41 of the Employment Act

Reasoning

The Claimant was invited to a meeting and then informed a decision to summarily dismiss him had already been reached. There was no formal disciplinary hearing in accordance with Section 41, and no explanation was given in the presence of another employee. The failure of both substance and procedure rendered the dismissal unfair and unjustified under Section 45(2).

p. 4

Legal principles established

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  • Summary dismissal requires a valid and fair reason proved by the employer and compliance with the fair procedure in Section 41 of the Employment Act, including a formal disciplinary hearing
  • A termination is unfair where the employer fails to prove a valid and fair reason and that fair procedure was followed

Court orders

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  1. 1.1 month's salary in lieu of notice of Kshs. 17,000
  2. 2.Claimant's salary for May 2014 of Kshs. 17,000
  3. 3.12 months' salary as compensation for unlawful termination of Kshs. 204,000
  4. 4.28 days accrued leave pay of Kshs. 23,800
  5. 5.House allowance of Kshs. 63,750 (15% of 17,000 x 25 months)
  6. 6.Issuance of a Certificate of Service
  7. 7.Costs of the suit

Authorities

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Legislation

  • Employment Act 2007Section 45
  • Employment Act 2007Section 45(2)
  • Employment Act 2007Section 41(1)
  • Employment Act 2007Section 41
  • Employment Act 2007Section 43
  • Employment Act 2007Section 49
  • Employment Act 2007Section 49(4)
  • Employment Act 2007Section 50
  • Employment Act 2007Section 51
  • Employment Act 2007Section 31
  • Employment Act 2007Sections 10, 12 (as referred to in the cited authority)

Cases cited (1)

  • Aphonce Maghanga Mchwanya vs. Operation 680 Limited [2013] eKLR
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (Sections 41, 43, 45, 49 and 51 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, "Peter Kanyeki Karuga v Horizon Contact Centers Limited [2016] KEELRC 806 (KLR)", Case Analysis (2016). Cause No. 251 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/806/eng@2016-07-26

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