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ELRCPartially AllowedCause No. 1647 of 2013· [2018] KEELRC 288 (KLR)

Ruth Wakio Mbaga v Kache Limited [2018] KEELRC 288 (KLR)

Employment and Labour Relations Court
17 December 2018
HWHellen S. Wasilwa
1,233 words in judgment
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The bottom line

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A Kenyan court ruled that even when an employee is suspected of theft, firing them without a hearing makes the dismissal unfair and payable.

What this practically means

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Executive summary

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The claimant sued the respondent seeking damages for wrongful and unfair termination of employment. She averred that she was employed from December 2005 as a Sales Assistant, was issued a new appointment letter in October 2010 reducing her salary from Kshs. 20,000 to Kshs. 15,000, and was orally suspended on 11th October 2011 after a theft at the respondent's premises, subsequently arrested and charged with stealing, charges later withdrawn on 12th November 2012. She claimed she was denied notice, a hearing and terminal dues. The respondent admitted engaging her on a casual basis from 2005 to 2008, formal employment only in 2010, and contended that she could not account for missing stock and was implicated in credit card fraud, urging dismissal of the claim. The court found that although the respondent had a valid reason for summary dismissal under Section 44 of the Employment Act, since the claimant was suspected of theft, arrested and charged, she was nevertheless denied the fair disciplinary process required under Section 41, rendering the dismissal unfair under Section 45(2). The court awarded one month's notice pay, six months' compensation for unfair termination, one month's salary and house allowance limited to three years as the earlier years were time barred, with costs and interest. Reliefs for service pay, leave, and the full house allowance claim were not granted. This was a first-instance decision; no decision below was reviewed.

Key legal issues

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01

Valid reason for summary dismissal

Holding

The respondent had a valid reason for dismissal because the claimant was suspected, on reasonable grounds, of involvement in theft at the respondent's shop, was arrested and charged.

Reasoning

The court applied Section 44 of the Employment Act, which permits summary dismissal where an employee commits or on reasonable and sufficient grounds is suspected of having committed a criminal offence against or to the substantial detriment of the employer or the employer's property. Since the claimant was suspected of involvement in the theft at the shop, arrested and even charged, the court found the respondent had a valid reason warranting dismissal.

p. 2
02

Procedural fairness in termination

Holding

The dismissal was procedurally unfair because the claimant was denied the fair disciplinary process envisaged under Section 41 of the Employment Act.

Reasoning

The claimant was orally suspended while in hospital, advised to consider herself terminated without notice, without a hearing and without payment of dues. Although the employer had a valid reason under Section 44, the court held that the absence of notice and hearing under Section 41 rendered the termination unfair under Section 45(2), entitling the claimant to compensation.

p. 2

Legal principles established

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  • Even where an employer has a valid reason for summary dismissal based on suspected commission of a criminal offence against the employer's detriment, the employee remains entitled to a fair disciplinary process under Section 41 of the Employment Act, and its denial renders the dismissal unfair under Section 45(2).

Court orders

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  1. 1.Respondent to pay 1 month's salary in lieu of notice of Kshs. 15,000
  2. 2.Respondent to pay 6 months' salary as compensation for unfair termination (6 x 15,000 = Kshs. 90,000)
  3. 3.Respondent to pay salary for October 2012 of Kshs. 15,000
  4. 4.Respondent to pay house allowance for 3 years preceding dismissal (15% x 15,000 x 3 = Kshs. 6,750), earlier years being time barred
  5. 5.Respondent to pay costs of the suit plus interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment ActSection 9
  • Employment ActSection 10(7)
  • Employment ActSection 41
  • Employment ActSection 44
  • Employment ActSection 45(2)
  • Employment Act 2007Section 45(2)

Cases cited (1)

  • Loice Otieno Vs Kenya Commercial Bank Limited
    Industrial Court Case No. 1050 of 2011 Nairobi
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over claims of wrongful and unfair termination of employment (Employment Act, 2007)

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, "Ruth Wakio Mbaga v Kache Limited [2018] KEELRC 288 (KLR)", Case Analysis (2018). Cause No. 1647 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/288/eng@2018-12-17

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