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ELRCDismissedCause No. 825 of 2015· [2016] KEELRC 1233 (KLR)

Barrack Omachi v Chandaria Industries Limited [2016] KEELRC 1233 (KLR)

Employment and Labour Relations Court of Kenya
23 March 2016
4,593 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~18 min to read original · ~4 min brief

The bottom line

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A Kenyan court upheld a summary dismissal where a salesman kept client payments, but confirmed employers must still follow fair-hearing steps before firing.

What this practically means

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Executive summary

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The Claimant, formerly employed by the Respondent as a dispatch clerk and later salesman, sued for a declaration that his summary dismissal of 26th February 2015 was unlawful, alleging breach of contract, unfair and discriminatory dismissal, and claiming notice pay, salary arrears, severance pay, exemplary and general damages, costs and interest. He alleged he was not given a hearing, was forced to write a confession admitting receipt of client cash before his 21-to-30-day reconciliation window expired, and was made to authorise recovery from his Sacco. The Respondent defended the dismissal as justified gross misconduct for collecting client payments (Cake Hut Ltd, Anti-Terrorism Police Unit, Bonds Garden Restaurant and Kymms Garden) and failing to remit them, and counter-claimed for Kshs.69,524.00 being the balance owed after deductions from terminal dues and Sacco shares. The Court found the Claimant's account not credible: he did not deny receiving the monies, admitted the confession in evidence, produced no proof of any 21-to-30-day practice, and made no contemporaneous protest to his advocates about a forced confession. His appropriation of client monies amounted to gross misconduct under section 44(4)(g) of the Employment Act and the termination was justified. Notice pay and severance pay were refused; the counter-claim was confirmed. The claim was dismissed in its entirety and judgment entered for the Respondent on the counter-claim for Kshs.69,524.00 with costs, delivered on 23rd March 2016 by M. Mbaru, Judge.

Key legal issues

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01

Whether the summary dismissal was justified

Holding

The dismissal was justified; the Claimant appropriated monies collected from clients, amounting to gross misconduct under section 44(4)(g) of the Employment Act

Reasoning

The Claimant admitted receiving cash from clients and not remitting it, wrote a confession and a letter to his Sacco directing his shares be used to offset the debt. The Court found his evidence of being allowed 21 to 30 days to balance books unsupported, his claim of a forced confession untested by any contemporaneous protest, and the Respondent's witnesses credible. His conduct and culpability under section 45(5) justified termination.

p. 7
02

Whether the Claimant was accorded a fair hearing before dismissal

Holding

The Court found the Claimant was given a chance to explain and chose to proceed without another person present, confessing in writing

Reasoning

The Respondent's witnesses testified that the Claimant was invited to a hearing, was asked to call a union representative or colleague but declined to avoid the matter becoming known, and confessed in writing and undertook to repay. The Court preferred this evidence, finding the Claimant did not deny writing the confession and made no contemporaneous protest about it being forced or dictated.

p. 6
03

Whether the counter-claim for Kshs.69,524.00 was established

Holding

The counter-claim was confirmed; the balance of monies received from clients and not remitted remains owing

Reasoning

An audit after termination established payments from Cake Hut Ltd, Anti-Terrorism Police Unit, Bonds Garden Restaurant and Kymms Garden to the Claimant that were never remitted. Deductions from terminal dues and the Sacco left a balance of Kshs.69,524.00. The Claimant's defence that payment of over Kshs.10,000 showed he owed nothing was dismissed as a sham.

p. 7
04

Entitlement to notice pay, salary arrears and severance pay

Holding

Notice pay and severance pay not due; salary for January and February 2015 is due if unpaid, subject to offset against the monies the Claimant owes

Reasoning

Notice pay does not arise in summary dismissal; severance pay is confined to redundancy under section 40. Salary arrears, if unpaid, remain payable but must be set off against the appropriated monies recoverable under section 19(1)(b) of the Employment Act.

p. 7

Legal principles established

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  • Even in cases warranting summary dismissal, the procedural requirements of section 41 of the Employment Act must be met unless exceptional circumstances make a hearing impossible, and the employer must demonstrate such circumstances
  • Under section 47(5) of the Employment Act, the burden of proving unfair termination rests on the employee while the burden of justifying the grounds for termination rests on the employer
  • An employer may lawfully deduct from wages or terminal dues a reasonable amount for loss of employer property occasioned by the wilful default of the employee under section 19(1)(b) of the Employment Act

Court orders

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  1. 1.The claim is dismissed in its entirety
  2. 2.Judgment is entered for the Respondent in terms of the counter-claim with an award of Kshs.69,524.00 with costs

Authorities

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Legislation

  • Employment Actsection 19(1)(b)
  • Employment Actsection 19(3)
  • Employment Actsection 40
  • Employment Actsection 41
  • Employment Actsection 44
  • Employment Actsection 44(4)(g)
  • Employment Actsection 45
  • Employment Actsection 45(2)(c)
  • Employment Actsection 45(5)(b)
  • Employment Actsection 47(5)

Cases cited (1)

  • Abraham Gumba versus Kenya Medical Supplies Authority [2014] eklr
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (the court applied sections 19, 40, 41, 44, 45 and 47(5) of the Employment Act)

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, "Barrack Omachi v Chandaria Industries Limited [2016] KEELRC 1233 (KLR)", Case Analysis (2016). Cause No. 825 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1233/eng@2016-03-23

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