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ELRCPartially AllowedCause No. 128 of 2011· [2016] KEELRC 1422 (KLR)

Charles Muturi Mwangi v Invesco Assurance Company Limited [2016] KEELRC 1422 (KLR)

Employment and Labour Relations Court
15 March 2016
4,568 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 leaving an employee suspended indefinitely, with no hearing or written decision, counts as unfair termination entitling them to full remaining contract salary.

What this practically means

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Executive summary

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The Claimant, employed as Marketing General Manager by the Respondent assurance company from June 2006 on a three-year fixed contract at Kshs 400,000/= monthly salary, was suspended with immediate effect on 14 December 2007 by the CEO pending an investigation into marketing funds. He was never subjected to any disciplinary hearing, show-cause notice or written termination, and he was never paid during the suspension. In February 2008 a Statutory Manager was appointed over the Respondent; the Claimant's position was never addressed and his contract expired on 5 May 2009. He filed suit on 2 February 2011 seeking release of an investigation report, clearance, apology, reinstatement, unpaid salaries and allowances, and interest. The Respondent argued the claim was time-barred under Section 90 of the Employment Act, that the Claimant was summarily dismissed for gross misconduct (diverting marketing float), and that anticipatory salaries would be unjust enrichment. The court framed three issues and held that limitation time ran only from expiry of the contract on 5.5.2009, so the claim was within the three-year period. It found the Claimant remained a suspended employee through the statutory management period, that the suspension process was procedurally flawed as no show-cause or hearing preceded it, and that the indefinite suspension was unfair and amounted to a termination. The court awarded Kshs 6,680,000/= being salary for the unexpired contract period, plus Kshs 100,000/= leave allowance for 2009, less statutory deductions, with costs and interest. Claims for medical expenses and club membership were disallowed as unproven. Judgment delivered on 15 March 2016 by Hellen S. Wasilwa J.

Key legal issues

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01

Limitation - whether the claim filed on 2/2/2011 was time barred under Section 90 of the Employment Act, 2007

Holding

The claim was not time barred; limitation ran from expiry of the contract on 5.5.2009.

Reasoning

The Claimant was suspended on 14/12/2007 and never reinstated or terminated in writing. The Statutory Manager appointed in February 2008 was responsible for managing all employees but never addressed the Claimant's position. The contract expired on 5.5.2009, so the 3-year limitation period under Section 90 ran from that date, and the claim filed on 2/2/2011 was within time.

p. 8
02

Status of the Claimant after the Respondent was placed under Statutory Management

Holding

The Claimant remained a suspended employee until his contract expired on 5.5.2009.

Reasoning

Appointment of a Statutory Manager did not terminate employment. The Manager was to manage the company's affairs including employees on duty or suspension, and should have communicated the Claimant's position. Since no communication occurred, the Claimant remained on suspension until expiry of the contract.

p. 8
03

Fairness of the suspension and available remedies

Holding

The suspension was unfair and unjustified and amounted to a termination; Claimant awarded salary for the remainder of the contract plus leave allowance.

Reasoning

The contract had no disciplinary process provisions, and no show-cause or hearing preceded the suspension. The suspension remained pending indefinitely until the contract expired, far exceeding the Court's 6-month benchmark. The Claimant was therefore awarded unpaid salary for the remainder of the contract period and one year's leave allowance, less statutory deductions.

p. 9

Legal principles established

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  • A disciplinary process must notify the employee in writing of alleged misconduct and give an opportunity to be heard before suspension or interdiction; failure renders the process flawed.
  • A reasonable disciplinary process should not exceed 6 months unless there are valid reasons to extend it.
  • An indefinite, uncommunicated suspension amounts to a constructive termination, and limitation time runs from the expiry of the contract.

Court orders

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  1. 1.Award of unpaid salary for the remainder of the contract period from 14.12.2007 to 5.5.2009, being 16 months 21 days at Kshs 400,000/= per month, total Kshs 6,680,000/= less statutory deductions
  2. 2.Award of leave allowance of Kshs 100,000/= for year 2009
  3. 3.Costs of the suit to the Claimant
  4. 4.Interest on the award

Authorities

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Legislation

  • Employment ActSection 90
  • Employment ActSection 49
  • Industrial Relations Act2007 (factors on mitigation)

Cases cited (17)

  • McClelland vs Northern Ireland General Health Services Board
    [1957] 1 WLR 594
  • Mary Nyangari Ratemo & 9 Others vs Kenya Police Staff Sacco Limited – Utumishi Investment
  • Joseph Mutuura Mberia vs The Council JKUAT
  • Mulwa Msanifu Kombo vs Kenya Airways
  • Paul Ngeno vs Pyrethrum Board of Kenya
  • Elizabeth Ngina vs East African Safaris Air Express
  • Gedo Abdulahi Mohammed vs Commissioner of Police
  • Njonjo M. Itotia vs Kenya Chamber of Commerce
  • Julius Gatete Ihomba vs Well Fargo Limited
  • Patrick Lumumba Maikava Vs KPA
    [2012] eKLR
  • D.K Marete vs The Teachers Service Commission
  • Mariah Kagai Ligaga vs Coca Cola East Africa Limited
  • Menginya Salim Murgani vs Kenya Revenue Authority
  • Engineer Francis N Gachuru vs The Energy Regulatory Commission
  • Addah Adhiambo vs ARD INC
  • Alphonce Mghanga Mwachanya vs Operations 680 Limited
  • Kenya Union of Employees of Voluntary and Charitable Organizations vs Nairobi Pentecostal Church Christ is the Answer
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Industrial Court Act/Industrial Relations Act, 2007 and Employment Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Charles Muturi Mwangi v Invesco Assurance Company Limited [2016] KEELRC 1422 (KLR)", Case Analysis (2016). Cause No. 128 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1422/eng@2016-03-15

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