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ELRCPartially AllowedCause No. 1660 of 2017 (Formerly Machakos HCCC No. 33 of 2000)· [2018] KEELRC 273 (KLR)

Danson Mbubi Mutabi v Konza Ranching & Farming Co-operative Society Limited [2018] KEELRC 273 (KLR)

Employment and Labour Relations Court of Kenya
20 December 2018
3,126 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court awarded a dismissed farm manager Kshs 2.3 million, ruling his employer's failure to give him a hearing made his dismissal unfair.

What this practically means

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Executive summary

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The Claimant, Danson Mbubi Mutabi, sued Konza Ranching & Farming Co-operative Society Limited for terminal benefits arising from his termination in November 1999 after approximately 24 years of service as Farm Manager. He claimed six months' salary in lieu of notice, retirement benefits under Minute 3/75 equivalent to two months' salary per year worked, unpaid leave, rest days, severance pay, part salary and transport costs, totaling Kshs. 7,514,337.90. The Respondent denied the claim, asserting the Claimant was sacked for gross misconduct, negligence and in the public interest, and filed a counterclaim for general and special damages of Kshs. 10,172,198.80 relating to alleged mismanagement, car allowances, wrongful dividend payments and missing lister engines. The Respondent disputed the authenticity of the 1975 minutes said to record the employment terms. The court found that the Respondent failed to prove any written contract of its own while acknowledging the employment relationship, and held that Minute 3/75 formed the employment contract. It found no disciplinary hearing preceded the dismissal and applied the rule that a man should not be condemned unheard, holding the termination unfair. The court awarded the Claimant three months' salary in lieu of notice (Kshs. 129,210) and severance pay at two months' salary per year worked for 24 years (Kshs. 2,067,360), totaling Kshs. 2,325,780, with costs and interest at court rates from the date of filing suit. The other heads of claim and the counterclaim were not granted.

Key legal issues

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01

Whether the 1975 minutes constituted a valid contract of employment

Holding

The court found that the minutes of 25/01/1975 (Minute 3/75) formed the contract of employment between the parties, rejecting the Respondent's objection that minutes could not amount to a written contract, especially as the Respondent failed to prove its own version of the contract.

Reasoning

The Respondent contended the minutes were not authentic and relied on Miguna Miguna v Attorney General for the proposition that only a written contract is enforceable. The court noted the Respondent acknowledged the Claimant was its employee and was dismissed for misconduct, yet failed to prove any written contract of its own. The minutes setting out terms of employment therefore stood as the contract.

p. 4
02

Whether the termination was fair

Holding

The termination was unfair because the Claimant was not given any disciplinary hearing and was condemned unheard.

Reasoning

The court found no indication of any disciplinary hearing leading to the dismissal. Although the Respondent alleged gross misconduct, negligence and public interest grounds, and claimed the Claimant was expelled at the AGM in 2002, the Claimant testified he was never given a hearing. The court applied the natural justice principle that a man should not be condemned unheard and found the termination unfair.

p. 4
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What remedies flowed from the unfair termination

Holding

The Claimant was awarded 3 months' salary in lieu of notice and severance pay calculated at 2 months' salary for each year worked over 24 years, per the terms in Minute 3/75.

Reasoning

The court anchored remedies on the employment terms in Minute 3/75, which provided for notice and retirement benefits equivalent to two months' salary for every year worked. It awarded notice pay of Kshs. 129,210 and severance of Kshs. 2,067,360, totaling Kshs. 2,325,780, plus costs and interest, while declining to grant the other heads claimed.

p. 5

Legal principles established

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  • The rules of natural justice require that a person not be condemned unheard; termination without a hearing is unfair.

Court orders

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  1. 1.Award of 3 months' salary in lieu of notice of Kshs. 129,210/= to the Claimant
  2. 2.Award of severance pay for 24 years served calculated at 2 months' salary for each year worked, being Kshs. 2,067,360/= to the Claimant
  3. 3.Total award of Kshs. 2,325,780/= against the Respondent
  4. 4.The Respondent to pay costs of the suit plus interest at court rates with effect from the date of filing suit

Authorities

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Legislation

  • Evidence Act
  • Employment ActSection 47(5)

Cases cited (5)

  • Owners of Motor Vessel ‘Lillians’ vs Caltex Oil Kenya Ltd
    1989 K.L.R 1
  • Alice Mweru Ngai vs Kenya Power & Lightening Co. Ltd
    HCC Kerugoya ELC 287/14
  • Miguna Miguna v Attorney General
    [2012] eKLR
  • Bamburi Cement Limited V William Kilonzi
    [2016] eKLR
  • Thomas Babu Mwaniki v Nassefu Co-operative Savings & Credit Society Limited
    [2016] eKLR
Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court under the Constitution (matter transferred by consent to the employment court upon its creation); disputed by the Claimant in respect of the counterclaim

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, "Danson Mbubi Mutabi v Konza Ranching & Farming Co-operative Society Limited [2018] KEELRC 273 (KLR)", Case Analysis (2018). Cause No. 1660 of 2017 (Formerly Machakos HCCC No. 33 of 2000). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/273/eng@2018-12-20

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