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ELRCPartially AllowedCause No. 1389 of 2013 (consolidated with Cause No. 1190 of 2013)· [2016] KEELRC 1505 (KLR)

Kenya Union of Commercial Food and Allied Workers v Sanpac Africa Limited [2016] KEELRC 1505 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
18 March 2016
1,826 words in judgment
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The bottom line

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What this practically means

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Executive summary

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Two grievants, Stephen Omondi Meda (mechanic attendant, Kshs 10,401 monthly) and Bidad Kimani Njeri (electrician, Kshs 15,664 monthly), each with about two years' service, were summarily dismissed on 26 September 2011 over the alleged theft of a floodlight and a blow mould from the respondent's premises. They denied involvement, pointing out that the items were large, the store was under the manager's key, and the guarded premises required manager-signed gate passes for any vehicle exit. They were arrested, charged, then released without prosecution and refused re-entry to work. The claimant union sought notice pay, prorata leave, gratuity, compensation of up to twelve months' salary and, alternatively, reinstatement for Meda. The respondent maintained the dismissals were for a valid reason under section 44(4)(f) and (g) of the Employment Act and later offered computed terminal benefits. The court found the respondent presented no evidence linking the grievants to the theft, calling the allegations pure conjecture, and held the claimant had discharged its burden under section 47(5). The absence of any show-cause notice or disciplinary hearing violated section 41, rendering the termination both substantively and procedurally unfair under sections 43 and 45. Awarding compensation under section 49, the court granted each grievant compensation computed at eight months' salary, notice pay and two years' severance pay, totalling Kshs 161,382 for Njeri and Kshs 105,918 for Meda, with certificates of service within fourteen days, interest at court rates from filing, and costs to the claimant. Reinstatement was declined as impractical.

Key legal issues

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01

Whether the respondent had a valid reason to terminate the grievants' employment

Holding

No valid reason existed; the respondent failed to prove any nexus between the grievants and the alleged theft

Reasoning

The stolen items were large, stored under a manager's key, and the premises were guarded 24 hours with mandatory gate passes signed by the manager. The respondent presented no evidence linking the junior employees to the theft; the allegations were pure conjecture. Under section 43 of the Employment Act the employer bears the burden of proving the reasons for termination, and having failed, the termination is deemed unfair under section 45.

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02

Whether the termination followed a fair procedure

Holding

No; the grievants were never subjected to any internal disciplinary process

Reasoning

Neither grievant was asked to show cause, no charges were laid and no disciplinary hearing took place, violating section 41 of the Employment Act. The respondent instead relied on police investigations, and when the criminal matter did not proceed, the employees were simply refused re-entry to work without termination letters. The termination was therefore procedurally unfair as well as substantively unjustified.

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Whether the grievants are entitled to the reliefs sought

Holding

Partially; compensation under section 49(1)(c) plus notice pay and severance pay were awarded, but reinstatement was refused and compensation was scaled below the 12-month maximum

Reasoning

The claimant discharged its burden under section 47(5) to show on a balance of probability that an unfair termination occurred. Considering the two years of service, the wrongful theft accusations, the arrest and prosecution that never materialised, absence of a hearing and loss of career prospects, the court awarded compensation equivalent to eight months' salary (having stated six months), plus notice pay and unpaid severance. Reinstatement was impractical given the baseless allegations.

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Legal principles established

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  • In any claim arising out of termination of a contract, the employer is required to prove the reason or reasons for the termination, failing which the termination is deemed unfair
  • An employer must subject an employee to a disciplinary process, including notice to show cause and a hearing, before termination, per section 41 of the Employment Act
  • An employee who is simply suspected of theft, with no evidence of any link to the loss, cannot lawfully be terminated; suspicion is not a valid reason

Court orders

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  1. 1.Compensation of six months' salary for unlawful and unfair termination (awarded as 8 months in the computation) to each grievant
  2. 2.Payment in lieu of notice: Kshs 15,664 to Bidad Kimani Njeri and Kshs 10,401 to Stephen Omondi Meda
  3. 3.Severance pay for two years: Kshs 20,406 to Bidad Kimani Njeri and Kshs 12,309 to Stephen Omondi Meda
  4. 4.Total awards: Kshs 161,382 (Bidad Kimani Njeri) and Kshs 105,918 (Stephen Omondi Meda)
  5. 5.Respondent to provide certificates of service to the grievants within 14 days from date of judgment
  6. 6.Awards to attract interest at court rates from date of filing suit till payment in full
  7. 7.Respondent to pay claimant's costs of the suit

Authorities

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Legislation

  • Employment Act, 2007section 43(1)
  • Employment Act, 2007section 44(4)(f) and (g)
  • Employment Act, 2007section 41
  • Employment Act, 2007section 45(1) and (2)
  • Employment Act, 2007section 47(5)
  • Employment Act, 2007section 49(1)(c) and 49(4)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment cause)

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, "Kenya Union of Commercial Food and Allied Workers v Sanpac Africa Limited [2016] KEELRC 1505 (KLR)", Case Analysis (2016). Cause No. 1389 of 2013 (consolidated with Cause No. 1190 of 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1505/eng@2016-03-18

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