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ELRCPartially AllowedNot stated in judgment (memorandum of claim dated 31/1/2013, amended 2/5/2013)· [2017] KEELRC 1958 (KLR)

Brutus Nandwa Wa Ambunya v Kenya Wine Agencies Limited [2017] KEELRC 1958 (KLR)

Employment and Labour Relations Court
7 April 2017
MNMathews Nderi Nduma
2,278 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 firing an employee over a warehouse loss based on suspicion alone was unfair, awarding him maximum compensation of Kshs.1.2 million.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 1979 to 2011 and rising to Assistant Warehousing Manager on a monthly salary of Kshs.100,000, challenged the termination of his employment following the disappearance from a bonded warehouse of 37 cases of Amarula and 85 cases of Johnnie Walker Black valued at Kshs.3.95 million. The loss was discovered on his return from annual leave, after he had handed over the warehouse to his supervisor, Mr. Philip Bartay. He was suspended on half pay, dismissed on 1st April 2011, and separately charged with theft, being acquitted on 10th May 2012 after the close of the prosecution case. He sought declarations that the termination was unlawful, reinstatement, salary for the dismissal-to-acquittal period, damages for unserved years to November 2015, and 12 months' salary compensation. The respondent maintained the termination followed a proper disciplinary process and that the criminal acquittal did not preclude dismissal. The court found the claimant had been exonerated by the evidence, that the supervisor bore responsibility for the loss, and that the disciplinary process rested on mere suspicion, violating Section 45 of the Employment Act. It held the disciplinary and criminal processes could run simultaneously and that acquittal did not preclude dismissal, rejecting the claimant's argument on that head. Reinstatement and damages for unserved years were refused, the latter being limited to fixed-term contracts. Awarding maximum compensation under Section 49 in view of the claimant's 32 years of unblemished service, lost retirement expectations and advanced age, the court entered judgment for Kshs.1,200,000 with interest and costs.

Key legal issues

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01

Whether there was a valid reason for termination

Holding

There was no valid reason; the claimant was blamed for a loss that occurred while he was on leave and after handing over to his supervisor, and the disciplinary process rested on suspicion

Reasoning

The claimant handed over the warehouse before going on leave and discovered the loss on return. RW1 did not know when or how the stock left, and security personnel blamed the supervisor, not the claimant. KRA jointly controlled warehouse keys and was not investigated. The disciplinary process was therefore founded on speculation, giving the respondent no valid reason to terminate.

p. 4
02

Whether criminal acquittal precludes employment termination on the same facts

Holding

No; the two processes may run concurrently and acquittal does not preclude disciplinary sanction given the lower standard of proof

Reasoning

The court held that unless employer policy requires awaiting the criminal outcome, disciplinary and criminal processes may run simultaneously. The different standards of proof mean acquittal does not automatically absolve an employee. On the facts, however, the termination was unfair not because the prosecution was pending, but because no cogent evidence supported the allegations.

p. 5
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What remedy is appropriate

Holding

Maximum compensation of 12 months' gross salary under Section 49, being Kshs.1,200,000

Reasoning

Terminal benefits had been paid; reinstatement was unavailable as retirement date had passed; damages for unserved years apply only to fixed-term contracts. Considering Section 49(4) factors - 32 years of unblemished service, heavy responsibility, wrongful framing, lost expectation of salary to retirement and unlikely re-employment at advanced age - maximum compensation was merited.

p. 6

Legal principles established

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  • Termination without a valid reason violates Section 45 of the Employment Act and is unlawful and unfair
  • Disciplinary proceedings and criminal prosecution arising from the same employee conduct may run simultaneously unless the employer's policy provides otherwise
  • A criminal acquittal does not necessarily bar disciplinary sanction due to differing standards of proof

Court orders

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  1. 1.Kshs.1,200,000/= compensation for unlawful and unfair termination
  2. 2.Interest at court rates on the award from date of judgment till payment in full
  3. 3.Costs of the suit to the claimant

Authorities

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Legislation

  • Employment ActSection 45
  • Employment ActSection 49(4)

Cases cited (1)

  • Samuel Chege Gitau and 283 others versus Attorney General
    (2016) eKLR
Jurisdiction invoked
Employment Act, 2007 (Sections 45 and 49)

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, "Brutus Nandwa Wa Ambunya v Kenya Wine Agencies Limited [2017] KEELRC 1958 (KLR)", Case Analysis (2017). Not stated in judgment (memorandum of claim dated 31/1/2013, amended 2/5/2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1958/eng@2017-04-07

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