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ELRCPartially AllowedCause No. 1575 of 2014· [2018] KEELRC 202 (KLR)

John Gichuru Ngunju v Kenya Hospital Association Limited t/a the Nairobi Hospital [2018] KEELRC 202 (KLR)

Employment and Labour Relations Court
5 December 2018
HWHellen S. Wasilwa
2,976 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Nairobi Hospital was ordered to pay a former Chief Accountant over Kshs. 5 million because it could not prove he received a show cause letter before dismissal.

What this practically means

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Executive summary

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The claimant, employed as Chief Accountant on 16th July 2012, was summarily dismissed by the respondent hospital by letter dated 14th August 2014 for failing to attend a meeting with the Finance Director despite allegedly confirming attendance. He claimed unfair and unlawful termination, alleging he was never served with the show cause notice of 13th August 2014 and was denied a hearing, and sought damages for unfair termination, three months' notice pay, salary earned, outstanding leave, general and exemplary damages, medical costs, a certificate of service, costs and interest. The respondent justified the dismissal as insubordination and cited the claimant's alleged role in fraudulent transactions resulting in a loss of over Kshs. 92 million, and also filed an unfiled counterclaim for non-payment of filing fees. The court framed two issues: whether the dismissal was unfair and unjustified, and whether the claimant was entitled to the prayers sought. Relying on Sections 41, 43 and 45 of the Employment Act, the court found the respondent failed to prove service of the show cause notice - the alleged phone invitation was relayed by a third party who never testified, no call data was produced, and the delivery book was not availed. The dismissal was declared unfair and unjustified. On remedies, the court awarded three months' notice pay of Kshs. 1,267,712, Kshs. 190,838.40 for 14 days' salary in August 2014, Kshs. 162,527.20 for 10 outstanding leave days, and 8 months' salary (Kshs. 3,380,560) as compensation, totaling Kshs. 5,001,637.6, plus a certificate of service. Costs and interest at court rates from the date of judgment were awarded to the claimant. General and exemplary damages and the medical claim were not granted.

Key legal issues

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01

Whether the dismissal of the Claimant was unfair and unjustified

Holding

The dismissal was unfair and unjustified - no valid reason was proved and no fair hearing under Section 41 was accorded

Reasoning

The dismissal letter cited failure to attend a meeting with the Finance Director. Proof of service of the show cause memo of 13th August 2014 rested on hearsay evidence of a phone call by a third party who never testified, and no call data or delivery book was produced. The Finance Director who allegedly spoke to the Claimant never testified. Under Sections 41, 43 and 45 of the Employment Act the employer must prove valid reason and fair procedure; neither was proved.

p. 4
02

Whether the Claimant was entitled to the prayers sought

Holding

Partially: notice pay, 14 days salary for August 2014, 10 days' leave pay, 8 months' compensation and a certificate of service were awarded; other heads were not granted

Reasoning

The court applied the appointment letter's contractual notice term of 3 months, computed the earned salary and outstanding leave as claimed, and exercised its discretion under the Employment Act to award 8 months' salary as compensation for the unfair termination, but did not grant general/exemplary damages or the medical claim.

p. 5

Legal principles established

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  • An employer bears the burden of proving both valid reason and fair procedure for termination; failure to prove service of a show cause notice means no fair hearing was accorded
  • Evidence of a disciplinary meeting invitation from a third party, without call data or a delivery book, does not prove service

Court orders

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  1. 1.Declaration that the Claimant's dismissal was unfair and unjustified
  2. 2.Respondent to pay Kshs. 1,267,712 being 3 months' salary in lieu of notice
  3. 3.Respondent to pay Kshs. 190,838.40 being 14 days salary for August 2014 and Kshs. 162,527.20 for 10 outstanding leave days
  4. 4.Respondent to pay Kshs. 3,380,560 being 8 months' salary as compensation for unfair termination
  5. 5.Respondent to issue a certificate of service
  6. 6.Respondent to pay costs of the suit plus interest at Court rates from the date of judgment

Authorities

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Legislation

  • Employment Act 2007Section 41
  • Employment Act 2007Section 43
  • Employment Act 2007Section 44(4)(e)
  • Employment Act 2007Section 45(2)
  • Industrial Court (Procedure) Rules 2010Rule 14(1)
  • Constitution of Kenya 2010Article 41
  • Constitution of Kenya 2010Article 47

Cases cited (3)

  • Republic v Chief Justice of Kenya and 6 Others ex parte ole Keiuwa
    (2010) 1 KLR 428
  • General Medical Council v Sparckman
    (1943) 2 ALL ER 337
  • Abraham Gumba v Kenya Medical Supplies Authority
    [2014] eKLR
Jurisdiction invoked
Article 162(2) of the Constitution establishing the Employment and Labour Relations Court (as the court seized of an employment cause under its statutory mandate)

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, "John Gichuru Ngunju v Kenya Hospital Association Limited t/a the Nairobi Hospital [2018] KEELRC 202 (KLR)", Case Analysis (2018). Cause No. 1575 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/202/eng@2018-12-05

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