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ELRCPartially AllowedCause No 522 of 2013· [2016] KEELRC 1367 (KLR)

Josephat Iduka Mwandihi & another v Alamdar Trading Company Limited [2016] KEELRC 1367 (KLR)

Employment and Labour Relations Court
24 March 2016
LNLinnet Ndolo
898 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 employees cannot be summarily dismissed without a hearing and proof of misconduct, even for suspected theft.

What this practically means

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Executive summary

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Two employees of Alamdar Trading Company Limited - a driver and a loader - sued for compensation for unlawful termination and terminal dues after being verbally and summarily dismissed on 8th November 2012 following a report that goods delivered on 7th November 2012 from the Industrial Area Branch to the Head Office on Kijabe Street were missing. The Respondent maintained that the Claimants failed to account for goods entrusted to them, amounting to gross misconduct justifying summary dismissal. The Court framed two issues: whether the termination was justifiable and fair, and whether the Claimants were entitled to the remedies sought. The Court held that although the accusation fell within gross misconduct, the Respondent was bound by the mandatory procedure in Section 41 of the Employment Act, 2007, which allows an employee to test accusations and mount a defence; the Claimants were dismissed verbally without a hearing. Further, although the Respondent alleged standard practice of documenting deliveries, it produced no documentation showing the movement of the missing generator, so the Court could not authenticate its pleadings and testimony and found no valid reason for termination under Section 43. The summary dismissal was therefore substantively and procedurally unfair. The Court awarded the 1st Claimant three months' salary (Kshs.39,000) and the 2nd Claimant four months' salary (Kshs.40,000) in compensation, plus one month's salary in lieu of notice each, considering length of service and the Respondent's conduct. The Claimants received costs, with interest on the awards at court rates from the date of the award until payment in full.

Key legal issues

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01

Whether the summary dismissal of the Claimants was substantively justified

Holding

The Respondent failed to establish a valid reason for termination under Section 43 of the Employment Act, 2007

Reasoning

The Respondent alleged that a generator entrusted to the Claimants for delivery was missing. Although the Respondent claimed that all deliveries were documented, it produced no documentation evidencing the movement of the generator. Without such documentation, the Court could not authenticate the Respondent's pleadings and testimony, and therefore the alleged gross misconduct was not proved.

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02

Whether the termination was procedurally fair

Holding

The termination was procedurally unfair as the Claimants were not subjected to the mandatory Section 41 disciplinary procedure

Reasoning

Section 41 of the Employment Act, 2007 sets out the mandatory procedure in misconduct cases, enabling an employee facing discipline to test the veracity of accusations and offer a defence. The Claimants were verbally dismissed by a supervisor without being heard. The Respondent therefore breached this mandatory provision.

p. 1
03

What remedies the Claimants are entitled to

Holding

Compensation of 3 months' salary for the 1st Claimant and 4 months' salary for the 2nd Claimant, plus one month's salary in lieu of notice each

Reasoning

Having found the summary dismissal substantively and procedurally unfair, the Court awarded equivalent of gross monthly pay in compensation, taking into account the Claimants' respective lengths of service and the Respondent's conduct in the termination process, together with notice pay.

p. 2

Legal principles established

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  • Section 41 of the Employment Act, 2007 prescribes a mandatory procedure in cases of misconduct, including gross misconduct, to allow an employee to test the accusations and offer a defence
  • An employer alleging misconduct must establish a valid reason for termination under Section 43 and must follow the Section 41 procedure; failure on either ground renders dismissal substantively and procedurally unfair

Court orders

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  1. 1.Award of 3 months' salary (Kshs.39,000) to 1st Claimant in compensation for unfair termination
  2. 2.Award of 4 months' salary (Kshs.40,000) to 2nd Claimant in compensation for unfair termination
  3. 3.Award of 1 month's salary in lieu of notice to each Claimant (Kshs.13,000 and Kshs.10,000 respectively)
  4. 4.Total awards: Kshs.52,000 to 1st Claimant and Kshs.50,000 to 2nd Claimant
  5. 5.Costs of the case to the Claimants
  6. 6.Interest on the award amounts at court rates from the date of the award until payment in full

Authorities

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Legislation

  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (cause for unlawful termination and terminal dues)

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, "Josephat Iduka Mwandihi & another v Alamdar Trading Company Limited [2016] KEELRC 1367 (KLR)", Case Analysis (2016). Cause No 522 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1367/eng@2016-03-24

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