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ELRCDismissedCause No. 330 of 2014· [2018] KEELRC 115 (KLR)

Peter Masila Ngengya v Meya Agri Traders Limited [2018] KEELRC 115 (KLR)

Employment and Labour Relations Court of Kenya at Nakuru
6 December 2018
MMM. Mbaru
2,966 words in judgment
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The bottom line

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A Kenyan court upheld an accountant's summary dismissal for negligence, ruling that even without criminal guilt, professional carelessness can justify losing your job.

What this practically means

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Executive summary

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The claimant, employed as Chief Cashier from 20th January 2003, was arrested on 27th April 2013 and charged with theft by servant in Nakuru Criminal Case No.940 of 2013 following an audit which uncovered overdrawing of over Ksh.11 million occasioned by fraud. He was issued with a letter of summary dismissal dated 1st May 2013. The criminal case against him was withdrawn/he was acquitted after it emerged the Finance Manager, Joseph Kangethe, had defrauded the respondent. The claimant sought 12 months' compensation, notice pay, public holiday pay, annual leave, gratuity, lost years, Saturday off pay, criminal case advocates' fees and typed proceedings costs. The respondent maintained he was negligent in cashing large cheques for Kangethe without written authority or supporting documentation, and that dismissal was lawful and justified. The court framed two issues: whether the summary dismissal was unfair, and whether the remedies sought were due. It held that although the claimant was not criminally liable, he breached his duty of diligence as a senior accountant by making huge cash payments without supporting documents or directorial authority, amounting to a fundamental breach justifying summary dismissal under section 44 of the Employment Act, with the procedural safeguards of section 41(2) substantially met. All monetary claims failed; the only relief granted was an order that the claimant be issued a Certificate of Service under section 51, with earned leave days left for the parties to resolve outside the proceedings. Each party was ordered to bear its own costs. Judgment dated and delivered at Nakuru on 6th December 2018 by M. Mbaru J.

Key legal issues

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01

Whether the summary dismissal was unfair

Holding

The summary dismissal was fair and justified as the claimant's negligence in cashing cheques for a fraudster, without supporting documentation or authority, amounted to a fundamental breach going to the foundation of the employment contract.

Reasoning

The audit revealed losses of over Ksh.11 million through fraud. The claimant, a senior and experienced accountant, cashed large cheques for Kangethe based on a supposed verbal instruction 'through the window panes', without written authority or supporting documents. The claimant was confronted with the audit findings and failed to give satisfactory explanations. A diligent accountant must confirm supporting documentation before payment. The dismissal had genuine reason and valid grounds and followed the statutory procedural requirements.

p. 3
02

Whether the remedies sought are due

Holding

All monetary remedies are refused; only a Certificate of Service is ordered, and leave days worked can be addressed between the parties outside the proceedings.

Reasoning

Since the dismissal was valid, notice pay and compensation are not due. Gratuity is not contractual; lost years cannot be visited on a lawful dismissal; holiday and Saturday work claims were not particularised or are not compensable absent agreement; criminal case costs do not arise from employment. Payment for earned leave days remains payable and parties may address it outside the proceedings.

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Legal principles established

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  • An employer may dismiss summarily under section 44 of the Employment Act for fundamental breach or gross misconduct, but must still afford the employee notice and a hearing, however short, per section 41(2).
  • Gratuity does not automatically accrue; it must be a benefit set out in a collective agreement, contract or other private treaty.
  • The only record an employer is legally required to issue at the end of employment is a Certificate of Service under section 51 of the Employment Act.

Court orders

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  1. 1.The claims by the claimant are found without basis and are dismissed
  2. 2.The claimant shall be issued with his Certificate of Service in accordance with section 51 of the Employment Act, 2007
  3. 3.Each party shall bear own costs

Authorities

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Legislation

  • Employment Act, 2007section 44
  • Employment Act, 2007section 41(2)
  • Employment Act, 2007section 41(1)
  • Employment Act, 2007section 51

Cases cited (1)

  • Titus Musau Ndivau & another versus Waridi Limited
    Cause No.903 of 2012
Jurisdiction invoked
Employment and labour relations dispute 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 (3)

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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, "Peter Masila Ngengya v Meya Agri Traders Limited [2018] KEELRC 115 (KLR)", Case Analysis (2018). Cause No. 330 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/115/eng@2018-12-06

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