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ELRCPartially AllowedCause No. 270 of 2017· [2018] KEELRC 149 (KLR)

Fancy Jeruto Cherop & Nancy Jepkemoi Kiyai v Hotel Cathay Limited (Cause 270 of 2017) [2018] KEELRC 149 (KLR)

Employment and Labour Relations Court of Kenya
18 December 2018
MMM. Mbaru
2,382 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court confirmed that even employees accused of deserting duty must be given notice and a hearing before dismissal.

What this practically means

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Executive summary

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Two claimants, formerly an Accountant and a Cashier/Accountant with Hotel Cathay Limited, sued for notice pay, underpayments, house allowance, leave, off days, public holiday pay and compensation following termination of their employment around 22nd December 2016, which they said was without notice or hearing. The respondent alleged the claimants deserted duty, that leave not applied for was forfeited under its policy, and that off days and holiday work were compensated with days off. The court held that desertion amounts to gross misconduct under section 44 of the Employment Act, 2007, but summary dismissal remains subject to section 41: the employer must issue notice, afford the employee a hearing and inform the labour officer. Relying on Standard Group Limited v Jenny Luesby, the court found the respondent had failed to demonstrate compliance or exceptional circumstances, so the terminations were procedurally unfair. The underpayment claims failed because contractual terms were unchanged and wages had increased; the off-day and public holiday claims failed on the claimants' own evidence and work records; and the house allowance claim failed as the wages exceeded the basic minimum under the Wage Orders. Leave could not be forfeited for non-application, following Rajab Barasa v Kenya Meat Commission. The court declared the terminations procedurally unfair, awarded each claimant one month's salary compensation and notice pay, directed computation of leave net of excess off days, ordered certificates of service, and ordered each party to bear own costs.

Key legal issues

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01

Procedural fairness of summary dismissal on allegation of desertion

Holding

Termination was procedurally unfair; the respondent failed to demonstrate adherence to sections 41 and 44 of the Employment Act, including notice and hearing and notification of the labour officer.

Reasoning

Desertion is gross misconduct under section 44, but summary dismissal is subject to section 41(2): the employer must issue notice, allow the employee to state their defence and whereabouts, and inform the labour officer upon summary dismissal. The respondent produced disciplinary minutes of 14 December 2016 but no evidence of notice to the claimants or of steps taken to hear them before dismissal on 22 December 2016 or by letters of 5th and 7th December 2017. No exceptional circumstances were shown. Hence the dismissals were procedurally unfair.

p. 3
02

Remedies for unfair termination

Holding

Each claimant awarded one month's salary as compensation under section 49 and notice pay under section 35.

Reasoning

The failure to ensure procedural fairness rendered the terminations unfair. Compensation under section 49 and notice pay under section 35 follow. The court exercised discretion to award one month's salary each as compensation, plus notice pay, and directed computation of leave with excess off days offset, and certificates of service under section 51.

p. 3
03

Underpayment claims arising from alleged promotion

Holding

Claims for underpayment failed; duties allocated did not change the contractual positions held and wages were already increased.

Reasoning

Each claimant admitted terms and conditions of service were unchanged. The respondent produced employment contracts showing the positions held remained constant while wages increased. Acting in a higher capacity without alteration of contractual terms does not ground an underpayment claim.

p. 3
04

Annual leave and forfeiture policy

Holding

Leave does not lapse for failure to apply; employer to compute leave earned over the entire employment, offsetting excess off days taken.

Reasoning

Section 28 gives every employee a right to annual leave, and the employer has the duty to ensure leave is taken or paid in lieu. The respondent's policy that unclaimed leave is forfeited is contrary to law as held in Rajab Barasa & 4 Others v Kenya Meat Commission. Because claimants took excess off days, the court directed computation at the shop floor netting off the excess days.

p. 3
05

Claims for off days and public holiday work

Holding

Both claims failed on the claimants' own evidence and the respondent's work records showing days taken off.

Reasoning

The 1st claimant did not identify which days she worked without a reliever, and confirmed an 8-hour shift; the 2nd claimant had Sunday off and compensated two days off for holiday work. The respondent produced work records of days each claimant was absent, which the claimants' evidence largely supported, so no pay for rest days or public holidays was due.

p. 3

Legal principles established

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  • An employer alleging desertion must still follow section 41 of the Employment Act: issue notice to the employee, allow them to give their defence, and where summary dismissal follows, notify the labour officer; failure renders the termination procedurally unfair.
  • The employer bears the burden of demonstrating the action it took to address gross misconduct in accordance with the law, including any exceptional circumstances preventing a hearing.
  • A leave-forfeiture policy whereby unapplied leave lapses is not supported in law; the employer must ensure annual leave is taken or pay in lieu.
  • Where wages paid exceed the basic minimum under the Wage Orders, a separate claim for house allowance would amount to unjust enrichment.

Court orders

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  1. 1.1st claimant to be paid compensation at one (1) month salary of Ksh.26,000.00
  2. 2.1st claimant to be paid notice pay of Ksh.26,000.00
  3. 3.2nd claimant to be paid compensation at one (1) month salary of Ksh.32,500.00
  4. 4.2nd claimant to be paid notice pay of Ksh.32,500.00
  5. 5.Respondent to compute leave days earned for the duration of employment for each claimant, taking into account excess days taken as off days
  6. 6.Certificates of service to issue in accordance with section 51 of the Employment Act, 2007
  7. 7.Each party to bear own costs

Authorities

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Legislation

  • Employment Act, 2007section 44
  • Employment Act, 2007section 41(2)
  • Employment Act, 2007section 49
  • Employment Act, 2007section 35
  • Employment Act, 2007section 28
  • Employment Act, 2007section 51

Cases cited (2)

  • Standard Group Limited versus Jenny Luesby
    [2018] eKLR
  • Rajab Barasa & 4 Others versus Kenya Meat Commission
    [2016] e-KLR
Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court over employment disputes (Employment Act, 2007; the claim was filed as a cause in the ELRC)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (13)

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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, "Fancy Jeruto Cherop & Nancy Jepkemoi Kiyai v Hotel Cathay Limited (Cause 270 of 2017) [2018] KEELRC 149 (KLR)", Case Analysis (2018). Cause No. 270 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/149/eng@2018-12-18

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