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ELRCPartially AllowedCause No. 242 of 2015· [2016] KEELRC 811 (KLR)

Charles Kyalo Mutua v Threeways Shipping Services [K] Limited [2016] KEELRC 811 (KLR)

Employment and Labour Relations Court of Kenya
29 July 2016
JRJames Rika
2,742 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 ruled that suspending an employee and then staying silent counts as unfair dismissal, awarding the worker over Kshs. 667,000.

What this practically means

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Executive summary

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The Claimant, employed as a Supervisor in the Respondent transportation company, was suspended by letter dated 19th November 2013 following the theft of motor vehicle parts at the Respondent's yard. He was never charged with any offence and was instead bonded as a Prosecution Witness against fellow employees. The Respondent asserted his fixed-term contract lapsed on 30th December 2013 while he was on suspension and that he was unreachable; the Claimant maintained he was employed from 2006 on an indeterminate contract and was never terminated or reinstated despite a promise of reinstatement if investigations exonerated him. The Court framed three issues: whether termination occurred, whether it was unfair and unlawful, and the remedies due. It found the Respondent failed to prove employment commenced in January 2011, since the 2011 contract relied upon was with a Ugandan company, Transtrac Limited, whose association with the Respondent was unexplained. The burden under Section 10para 7 of the Employment Act lay on the employer, and the Court adopted the 2006 start date, finding an indeterminate contract. The defences of lapse and unreachability were rejected: the Respondent wrote no letter after suspension, and the Claimant was traceable. There was no hearing and no valid reason; termination was declared unfair and unlawful. The Court awarded notice pay of Kshs. 56,896, 19 days' salary of Kshs. 41,577, and 10 months' salary (Kshs. 568,960) as compensatory award under Section 49 of the Employment Act and Section 12 of the Employment and Labour Relations Court Act, totalling Kshs. 667,433, payable within 30 days. Claims for off days, public holidays and severance pay failed for want of evidence and absence of redundancy. A certificate of service was ordered. No order was made on costs and interest.

Key legal issues

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01

Date of commencement of employment

Holding

The Respondent failed to prove employment commenced in January 2011 and did not disprove the Claimant's assertion that he was employed in 2006; the Court adopted the 2006 date.

Reasoning

Section 10para 7 of the Employment Act places the burden of proving or disproving an alleged term of employment on the employer where no written contract is produced. The contract dated 1st January 2011 was between the Claimant and a Ugandan company, Transtrac Limited, whose association with the Respondent was unexplained. Its zero-month probation and Ugandan place of work corroborated the Claimant's account of earlier employment, leading the Court to conclude the contract was indeterminate, running from 2006 to 19th November 2013.

p. 3
02

Whether the contract lapsed or was terminated

Holding

The contract was an indeterminate contract and was terminated by the Respondent; the lapse defence failed.

Reasoning

The Respondent's defence that the fixed-term contract lapsed on 30th December 2013 depended on the 2011 contract with Transtrac Limited, which the Court could not adopt. No letter communicated anything to the Claimant after suspension, not even notice of non-renewal. The Claimant was reachable, having been traced by Police to give evidence, and had himself enquired about his employment status. The Court therefore found termination, not lapse.

p. 4
03

Fairness and legality of termination

Holding

Termination was unfair and unlawful for want of valid reason and hearing.

Reasoning

The Respondent had the obligation under Sections 43 and 45 of the Employment Act to demonstrate valid reasons for termination and under Section 41 and 45 to afford a hearing. It never tried the Claimant for any employment offence, there was no finding of culpability, and no hearing of any sort was afforded after suspension. The reasons proffered - unreachability and lapse of the fixed period - were not valid. A declaration of unfair and unlawful termination followed.

p. 4
04

Remedies

Holding

Notice pay, 19 days' salary and 10 months' salary as compensatory award allowed; off days, public holidays and severance pay rejected.

Reasoning

Notice pay was pleaded and allowed. No pay slip showed payment for 19 days worked in November 2013, so that prayer was allowed. Off days and public holidays lacked evidential foundation as to numbers and computation. There was no redundancy to justify severance, and the Claimant, being an N.S.S.F member, was ineligible for service pay under Section 35para 6[d]. A compensatory award of 10 months' salary was granted under Section 49 of the Employment Act and Section 12 of the Employment and Labour Relations Court Act, with a certificate of service under Section 51.

p. 5

Legal principles established

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  • Where an employer fails to produce a written contract or written particulars, the burden of proving or disproving an alleged term of employment is on the Employer.
  • Lapse of a contract during an uncommunicated suspension, or an employee's alleged unreachability, do not constitute valid reasons for termination without a hearing.

Court orders

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  1. 1.Declaration that termination was unfair
  2. 2.Respondent to pay notice pay at Kshs. 56,896; 19 days' salary at Kshs. 41,577; and 10 months' salary in compensation for unfair termination at Kshs. 568,960 - total Kshs. 667,433
  3. 3.Total amount to be paid within 30 days of delivery of the decision
  4. 4.Certificate of Service to issue
  5. 5.No order on the costs and interest

Authorities

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Legislation

  • Industrial Court [Procedure] Rules 2010Rule 27[1][a]
  • Employment Act 2007Section 10[2][d]
  • Employment Act 2007Section 10[7]
  • Employment Act 2007Section 41
  • Employment Act 2007Section 43
  • Employment Act 2007Section 45
  • Employment Act 2007Section 40
  • Employment Act 2007Section 49
  • Employment Act 2007Section 51
  • Employment Act 2007Section 35[6][d]
  • Employment and Labour Relations Court Act [previously Industrial Court Act 2011]Section 12
Jurisdiction invoked
Employment and labour relations jurisdiction; Section 12 of the Employment and Labour Relations Court Act [previously Industrial Court Act 2011]; Rule 27[1][a] of the Industrial Court [Procedure] Rules 2010

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, "Charles Kyalo Mutua v Threeways Shipping Services [K] Limited [2016] KEELRC 811 (KLR)", Case Analysis (2016). Cause No. 242 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/811/eng@2016-07-29

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