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ELRCPartially AllowedMemorandum of Claim dated 17th May 2013, filed 22nd May 2013· [2018] KEELRC 296 (KLR)

Samuel Kigima Kamau v Invesco Assurance Company Limited [2018] KEELRC 296 (KLR)

Employment and Labour Relations Court
30 November 2018
3,168 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled Invesco unfairly dismissed its branch manager because it never gave him a proper hearing or proved misconduct, awarding him over Kshs 1.7 million.

What this practically means

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Executive summary

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The claimant, a former Manager at the respondent's Naivasha Branch, sued for damages for wrongful and unlawful dismissal and payment of dues. He was employed in July 2010, confirmed in December 2010, issued a notice to show cause on 28th November 2012 over alleged loss of Kshs.3,802,220 at the branch, suspended on 2nd December 2012 by a letter titled 'Addendum to Notice for Termination', and summarily dismissed by letter dated 8th February 2013. The respondent justified the dismissal on grounds of loss of funds under the claimant's watch. The court framed two issues: whether the dismissal was fair and whether the claimant was entitled to the orders sought. It held that fair dismissal requires both fair procedure under Section 41 and justification under Section 43 of the Employment Act. The respondent had no structured disciplinary procedure, did not hear the claimant's representations, and a show cause letter does not satisfy Section 41. It also failed to make specific allegations or to discharge its burden under Sections 45(2) and 47(5) to justify the termination; RW1 could not explain the variance between the pleaded loss and the audit figure. The dismissal was found unfair both procedurally and substantively. The court awarded pay in lieu of notice (Kshs.373,287), withheld salary up to 26th February 2013 (Kshs.488,828.20), 35 leave days (basic salary Kshs.103,653.85 basis), and six months' gross salary as compensation (Kshs.746,574). The PTICL claim failed as the claimant confirmed payment. The respondent was ordered to pay costs, interest at court rates from judgment, and to issue a certificate of service.

Key legal issues

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01

Whether the summary dismissal was procedurally fair under Section 41 of the Employment Act

Holding

The dismissal was procedurally unfair; the respondent gave no opportunity for representations and had no structured disciplinary procedure, and the claimant did not know to whom or through what forum to appeal.

Reasoning

The claimant was issued a show cause letter, responded within seven days, but before the seven days elapsed was sent an 'Addendum to Notice for Termination' suspending him. Section 41 requires the employer to explain reasons and hear representations in the presence of a colleague or union official. No such hearing occurred. The appeal route to 'management' was unclear given the dismissal letter came from the CEO and no disciplinary procedure existed.

p. 4
02

Whether the respondent justified the grounds for termination under Sections 43, 45 and 47(5)

Holding

The respondent failed to discharge its burden of justifying the grounds; no specific allegations of impropriety were made and no evidence of investigation or culpability was adduced.

Reasoning

The show cause letter referred vaguely to loss of Kshs.3,802,220 through the claimant's 'acts of commission or omission' of a criminal nature, without specific allegations. The claimant's response explained reporting structures exonerating him of direct handling of funds. RW1 could not explain the variance between the alleged loss and the audit figure of Kshs.3,357,821. The dismissal was substantively unfair.

p. 4
03

Entitlement to leave days claimed

Holding

The respondent failed to produce leave records as required by Sections 10(3)(a)(i) and 74(1)(f), so 35 leave days were awarded on the claimant's basic salary.

Reasoning

The employer bears the duty of keeping employment records including annual leave records sufficient to calculate entitlements precisely. RW1 admitted having no evidence the claimant went on leave, so the burden under Section 10(7) was not discharged.

p. 5

Legal principles established

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  • Fair dismissal requires both fair procedure under Section 41 and valid justification under Section 43 of the Employment Act.
  • A show cause letter does not satisfy the mandatory hearing requirements of Section 41 of the Employment Act.
  • It is insufficient for an employer merely to allege misconduct; internal investigations must verify the misconduct before termination.

Court orders

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  1. 1.Payment of Kshs.373,287 in lieu of three months' notice
  2. 2.Payment of withheld salary of Kshs.488,828.20 up to 26th February 2013
  3. 3.Payment for 35 leave days based on basic salary at Kshs.103,653.85
  4. 4.Compensation of six months' gross salary in the sum of Kshs.746,574
  5. 5.Respondent to pay claimant's costs of the suit
  6. 6.Interest on the decretal sum at court rates from the date of judgment
  7. 7.Respondent to issue a certificate of service to the claimant

Authorities

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Legislation

  • Employment Act, 2007Section 44
  • Employment Act, 2007Section 44(1)
  • Employment Act, 2007Section 44(3)
  • Employment Act, 2007Section 44(4)
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 43(2)
  • Employment Act, 2007Section 45(1)
  • Employment Act, 2007Section 45(2)
  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Section 49(1)
  • Employment Act, 2007Section 49(2)
  • Employment Act, 2007Section 49(4)
  • Employment Act, 2007Section 50
  • Employment Act, 2007Section 51
  • Employment Act, 2007Section 10(3)(a)(i)
  • Employment Act, 2007Section 10(7)
  • Employment Act, 2007Section 74(1)(f)
  • Employment Act, 2007Section 12

Cases cited (6)

  • Agnes Kavata Mbiti –v- Housing Finance Company Limited
    [2017] eKLR
  • Nicholus Muasva Kvula v FarmChem Limited
    Industrial Cause No. 1992 of 2011; (2012) LLR 235 (1CK)
  • Pamela K. Butalanyi v University Council for the Kenya Polytechnic University College
    [2015] eKLR
  • Mary Chemweno Kiptui v Kenya Pipeline Company Limited
    [2014] eKLR
  • Julimatt Enterprises Limited -vs- V.M.K
    Civil Appeal No. 262 of 2014
  • Donald Odeke –V- Fidelity Security Limited
    Cause No. 1998 of 2011
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (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 (2)

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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, "Samuel Kigima Kamau v Invesco Assurance Company Limited [2018] KEELRC 296 (KLR)", Case Analysis (2018). Memorandum of Claim dated 17th May 2013, filed 22nd May 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/296/eng@2018-11-30

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