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ELRCPartially AllowedCause No. 1359 of 2014· [2016] KEELRC 1561 (KLR)

James Mulinge v Freight Wings Limited [2016] KEELRC 1561 (KLR)

Employment and Labour Relations Court of Kenya
16 February 2016
9,664 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~39 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded an employee KShs 5.2 million after his employer fired him for having TB without a fair hearing.

What this practically means

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Executive summary

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The Claimant, a customs, declaration and documentation agent employed by the Respondent from 2004, was summarily dismissed on 19th May 2014 on allegations of fraud and forgery involving Kshs.3,850 in export document transactions, and on the basis of a prior warning for absence. He claimed the dismissal was due to his TB diagnosis, that he was discriminated against on health status, subjected to unfair labour practices, and that the deduction of the disputed sum from his salary followed by dismissal amounted to double punishment, unlike comparators Ligami and Kingoo who only repaid. The Respondent justified the dismissal under section 44(4)(g) of the Employment Act, denied discrimination and asserted confidentiality of medical records. The Court found the dismissal procedurally flawed: no hearing was afforded after investigations as required by section 41(2); no disciplinary policy or audit report was produced; the confidential medical records were disclosed to human resource, evidencing discrimination; and the clearance form dated 30th April 2014 showing resignation reflected the true exit, the dismissal letter being an afterthought to cover discrimination. Holding the summary dismissal wrongful, unfair and a nullity, and the conduct discriminatory contrary to Articles 27 and 41 of the Constitution, the Court entered judgment for the Claimant with declarations of wrongful/unfair dismissal and discrimination, compensation of Kshs.221,916 (12 months' gross salary), damages of Kshs.5,000,000, notice pay of Kshs.18,493 and costs. Claims for salaries to retirement and exemplary damages were refused.

Key legal issues

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01

Whether the summary dismissal was for valid reasons and followed fair procedure

Holding

The summary dismissal was wrongful, unfair and a nullity as the Claimant was never given a hearing after investigations concluded

Reasoning

The Respondent relied on section 44(4)(g) of the Employment Act for summary dismissal on suspicion of a criminal offence. However, after the Claimant replied to the show cause letter and clarified the accounting confusion, no hearing was convened as required by section 41(2). The investigations were not shared with him, no audit report quantifying the alleged loss was produced, and no disciplinary policy manual existed. The flawed, arbitrary process rendered the dismissal a nullity.

p. 10
02

Whether the clearance form dated 30th April 2014 or the dismissal letter of 19th May 2014 reflected the true exit

Holding

The clearance form showing termination on 30th April 2014 upon resignation was the true position; the summary dismissal letter was an afterthought

Reasoning

The clearance form stated the Claimant ceased employment on 30th April 2014 with the reason for separation marked as 'resignation'. Despite Osodo admitting these were errors, no follow-up memos were issued to correct them. The Court found the documents reflected the Respondent's true intent, and the summary dismissal letter was fixed to cover up discrimination.

p. 14
03

Whether the Claimant was discriminated against on grounds of health status

Holding

Yes - the clinic staff disclosed his TB status to human resource, triggering a choreographed process of frustration and dismissal

Reasoning

Despite claims of confidentiality, the Claimant's confidential medical records were filed in the defence and formed the bulk of Osodo's witness statement. Once his TB status became known, audit questions on old transactions suddenly arose, he was isolated, addressed through a window, made to sit outside, and subjected to unsolicited leave and suspension. The process was choreographed to justify dismissal and violated Articles 27 and 41 of the Constitution.

p. 13
04

Whether the deduction from salary plus dismissal amounted to double punishment and discrimination

Holding

Yes - deducting the alleged unaccounted sum from salary and then dismissing him on the same facts was double punishment and discriminatory, unlike comparators Ligami and Kingoo who only repaid

Reasoning

Both parties admitted that Cosmas Ligami and Peter Kingoo, who failed to account for larger sums but without fraud, were merely required to repay. The Claimant had the alleged Kshs.3,850 deducted from his April salary and was then dismissed on the same facts. This differential treatment on account of his health status constituted unfair labour practice and discrimination contrary to Articles 27 and 41.

p. 13
05

Whether terminal dues were paid

Holding

Dues were computed as at 19th May 2014 but the salary deduction of Kshs.3,850 and the payment mode undermined the Claimant; notice pay was legally due though not claimed

Reasoning

The Court found that on a wrongful dismissal the Claimant is legally entitled to notice pay even though not specifically claimed. Compensation under section 49 was assessed at the maximum 12 months' gross salary of Kshs.221,916, and constitutional damages for the discrimination and unfair labour practices were awarded at Kshs.5,000,000.

p. 14

Legal principles established

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  • Section 44(4) of the Employment Act does not give an employer a blanket right to dismiss an employee at will; even in grave misconduct cases the employee must be heard under section 41(2).
  • In discrimination claims the employer bears the burden of proving that the discrimination did not take place as alleged.
  • The right to be heard is the cornerstone of fair labour relations.
  • Employers should not withhold an employee's salary as a disciplinary sanction.
  • Disclosing an employee's confidential medical information to human resource officers and subjecting him to discriminatory treatment constitutes unfair labour practice and discrimination under Articles 27 and 41 of the Constitution.

Court orders

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  1. 1.A declaration that the Claimant was wrongly and unfairly dismissed
  2. 2.A declaration that the Claimant was discriminated against and the Respondent engaged in unfair labour practices against the claimant
  3. 3.Compensation awarded at Kshs.221,916.00
  4. 4.Damages awarded at Kshs.5,000,000.00
  5. 5.Notice pay at Kshs.18,493.00
  6. 6.Costs of the suit awarded to the Claimant

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 27(4); Article 41
  • Employment Actsection 5(3), 5(7), 5(8), 10, 12, 30, 41(1), 41(2), 44(3), 44(4)(g), 47(5), 49
  • Employment and Labour Relations Court Actsection 12

Cases cited (6)

  • GMV versus Bank of Africa Kenya Ltd
    [2013] eKLR
  • Peter Ndungu & 5 others versus Kenya Power and Lighting Co. Ltd
    Cause No.1149 of 2011
  • David Muhoro versus Ol Pejeta Ranching Company
    [2014] eKLR
  • Silas Muturi versus Haggai Multi Cargo Handling Services
    [2013] eKLR
  • Frederick Odongo Owegi versus CFC Life Assurance Ltd
    [2014] eKLR
  • Amrick Consales versus Mara Ison Technologies Kenya Limited
    Cause No. 2538 of 2012
Jurisdiction invoked
Article 162(2) of the Constitution establishing the Employment and Labour Relations Court; Employment and Labour Relations Court Act section 12

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, "James Mulinge v Freight Wings Limited [2016] KEELRC 1561 (KLR)", Case Analysis (2016). Cause No. 1359 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1561/eng@2016-02-16

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