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ELRCPartially AllowedCause No. 729 of 2014· [2018] KEELRC 380 (KLR)

Seth Nyangweso Liaga v Metal Crowns Limited [2018] KEELRC 380 (KLR)

Employment and Labour Relations Court of Kenya
3 December 2018
DMD. K. Njagi MareteMOMaureen Onyango
2,063 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 Metal Crowns unlawfully fired its employee without a hearing, awarding him 12 months' salary as compensation.

What this practically means

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Executive summary

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The claimant, Seth Nyangweso Liaga, sued Metal Crowns Limited alleging unlawful and wrongful termination of his employment, failure to give notice or pay 12 months' notice and gratuity, breach of sections 40 and 41 of the Employment Act, 2007 for want of a hearing, and failure to settle a Barclays Bank loan he said the respondent had guaranteed. He also alleged racial discrimination by a director, Mr. Gurdip, and sought revocation of that director's work permit. The respondent denied the claim, asserting lawful termination for poor performance after warnings and contending the claimant signed the discharge certificate voluntarily; it further argued the court lacked power to revoke the work permit. The parties adopted written submissions. Framing three issues, the court held that the respondent had not adduced evidence of procedural or substantive fairness under sections 41 and 43 of the Employment Act, had not subjected the claimant to a fair disciplinary process or afforded him a hearing, and that the termination process was opaque. The authority of Kenya Revenue Authority v Manguiya Salim Murgani, relied on by the respondent for the proposition that an exchange of letters can constitute a fair hearing, was distinguished as inapplicable. The court found wrongful, unfair and unlawful termination, and allowed the claim. Noting the claimant had already received terminal benefits including payment in lieu of notice, the court awarded 12 months' compensation of Kshs. 415,536.00 and ordered the respondent to bear the costs. The prayer to revoke the work permit was beyond the court's powers, and the other monetary heads were not granted.

Key legal issues

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01

Whether the termination of the claimant's employment was wrongful, unfair and unlawful

Holding

The termination was wrongful, unfair and unlawful because the respondent failed to demonstrate procedural or substantive fairness under sections 41 and 43 of the Employment Act and never afforded the claimant a hearing.

Reasoning

The court found that the respondent did not adduce evidence of procedural or substantive fairness as required by sections 41 and 43 of the Employment Act, 2007. The claimant was not subjected to a fair disciplinary process nor afforded a hearing; the reason for dismissal was never thrashed out in a proper forum. The authority relied on by the respondent (Kenya Revenue Authority v Manguiya Salim Murgani) on hearings by exchange of letters was held inapplicable because here no process at all was offered. The entire termination process was characterised as opaque.

p. 3
02

Whether the claimant is entitled to the relief sought

Holding

The claimant was entitled to relief, but the court limited the award to 12 months' compensation for unlawful termination since notice pay and terminal benefits had already been paid at separation.

Reasoning

Having succeeded on unlawful termination, the claimant became entitled to relief. However, the court noted he had already received terminal benefits including payment in lieu of notice at separation, and a certificate of service. It therefore allowed the claim but ordered only 12 months' compensation (Kshs. 415,536.00) and costs; the other monetary heads (severance pay, compulsory leave, out-of-work compensation, loan settlement) were not awarded.

p. 3

Legal principles established

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  • The burden is on the employer to demonstrate procedural and substantive fairness under sections 41 and 43 of the Employment Act, and failure to afford the employee a hearing renders the termination wrongful, unfair and unlawful.
  • An exchange of letters may constitute a fair hearing in disciplinary proceedings where circumstances permit, so an oral hearing is not always required.

Court orders

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  1. 1.Award of 12 months' compensation for unlawful termination of employment, Kshs. 34,628 x 12 = Kshs. 415,536.00
  2. 2.The costs of the claim to be borne by the respondent

Authorities

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Legislation

  • Employment ActSection 40
  • Employment ActSection 41
  • Employment ActSection 43
  • Employment ActSection 45
  • Employment ActSection 47(5)
  • Employment ActSection 35
  • Immigration Act

Cases cited (3)

  • Anthony Mkala Chitavi v Malindi Water & Sewarage Co. Ltd
    Industrial Court Cause No. 66 of 2012
  • Kenya Revenue Authority vs. Manguiya Salim Murgani
    (2010) eKLR
  • Fulgence Sunza Masai v Kenya Revenue Authority
    (2014) eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction under Article 162(2) of the Constitution (dispute between employer and employee concerning termination of employment)

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, "Seth Nyangweso Liaga v Metal Crowns Limited [2018] KEELRC 380 (KLR)", Case Analysis (2018). Cause No. 729 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/380/eng@2018-12-03

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