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ELRCPartially AllowedNot stated in judgment· [2017] KEELRC 1690 (KLR)

Francis Mbugua Boro v Smartchip Dynamics Limited [2017] KEELRC 1690 (KLR)

Employment and Labour Relations Court
10 March 2017
RSRadido Stephen
972 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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The Employment and Labour Relations Court at Nakuru (Radido Stephen, Judge) determined a claim by Francis Mbugua Boro against Smartchip Dynamics Ltd arising from his summary dismissal by letter dated 3 February 2014, together with the Respondent's counterclaim for Kshs 39,430/- said to be unaccounted for after the Claimant sold computer items. The Court identified two substantial issues: whether the dismissal was unfair, and the liability for the unaccounted sales. Applying sections 35, 41, 43 and 45 of the Employment Act, 2007, the Court held the dismissal procedurally unfair: the Respondent's letter of 27 October 2014 raised performance and conduct concerns but gave no indication that disciplinary action or termination was being considered, and although the Respondent's director asserted that a hearing was held on 3 November 2014, no attendees were disclosed and no notes were produced, and the dismissal letter made no reference to a hearing. Given this conclusion, the Court did not consider substantive fairness. On the counterclaim, the director's testimony that the Claimant sold the items without accounting for the revenue was not effectively rebutted, and the Claimant was held liable for Kshs 39,430/-. Remedies: pay in lieu of notice failed as it had been paid; gratuity was declined for want of foundation and because the Claimant, as an NSSF contributor, could not claim service pay. The Court awarded compensation equivalent to four months' gross wages (Kshs 65,032/-) for three years of service, ordered a certificate of service within 14 days, allowed the Respondent to deduct the counterclaim sum from the award, and ordered each party to bear own costs.

Key legal issues

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01

Procedural fairness in summary dismissal

Holding

The summary dismissal was procedurally unfair because the show-cause letter did not indicate disciplinary action or termination was being considered, and no proper hearing was conducted or proved.

Reasoning

The letter of 27 October 2014 raised performance and conduct concerns but gave no intimation that disciplinary action or termination was contemplated. The Respondent's director asserted a hearing on 3 November 2014 but disclosed no attendees and produced no notes; the dismissal letter itself made no reference to any hearing. The section 41 safeguards were therefore not met.

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02

Counterclaim for unaccounted sales of Kshs 39,430/-

Holding

The Claimant was liable to the Respondent for Kshs 39,430/- for unaccounted sales of computer items he sold.

Reasoning

The Respondent's director produced records proving the Claimant sold the items but did not account for the revenue. The Claimant's only response was that he sold the items on credit, which did not in any significant manner ward off the testimony. He was therefore held liable for the amount.

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03

Substantive fairness of the dismissal

Holding

Not considered because of the finding on procedural unfairness.

Reasoning

Having concluded that the dismissal was procedurally unfair, the Court found it unnecessary to determine whether the Respondent proved valid and fair reasons for the dismissal under sections 43 and 45 of the Employment Act.

p. 2

Legal principles established

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  • An essential ingredient of procedural fairness under section 41 of the Employment Act is that the employer must clearly inform the employee that disciplinary action and/or termination is being considered while putting the allegations to the employee.
  • A hearing is a mandatory component of procedural fairness under section 41(2) of the Employment Act, 2007.

Court orders

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  1. 1.Finding that the summary dismissal of the Claimant was procedurally unfair
  2. 2.Respondent to pay the Claimant compensation of Kshs 65,032/-
  3. 3.Respondent entitled to deduct Kshs 39,430/- from the award of compensation on account of the counterclaim
  4. 4.Respondent to issue a certificate of service within 14 days
  5. 5.Each party to bear own costs

Authorities

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Legislation

  • Employment Act, 2007section 35
  • Employment Act, 2007section 35(5) and (6)
  • Employment Act, 2007section 36
  • Employment Act, 2007section 41
  • Employment Act, 2007section 41(2)
  • Employment Act, 2007section 43
  • Employment Act, 2007section 44
  • Employment Act, 2007section 45
  • Employment Act, 2007section 47
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the 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 (19)

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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, "Francis Mbugua Boro v Smartchip Dynamics Limited [2017] KEELRC 1690 (KLR)", Case Analysis (2017). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1690/eng@2017-03-10

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