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ELRCPartially AllowedCause No 312 of 2017· [2018] KEELRC 532 (KLR)

Shadrack Mwaniki Ngaru v Aegis Construction Limited [2018] KEELRC 532 (KLR)

Employment and Labour Relations Court
13 November 2018
NMNzioki wa Makau
1,106 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer who fires a worker without a valid reason and a fair hearing must pay notice, leave and compensation under the Employment Act.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a puncture repairer from 4th August 2014 at a basic salary of Kshs. 20,000/-, sued for unfair termination following his summary dismissal on 1st July 2017. He pleaded that he was neither served with notice to show cause nor heard before termination, and sought compensation, salary arrears for June 2017, salary in lieu of notice and unpaid leave for two years. The Respondent entered appearance but filed no defence and adduced no evidence at the hearing, though it cross-examined the Claimant through an advocate and filed submissions contending that the Claimant quit voluntarily and had not proved his case on a balance of probabilities. The court found the employment relationship proved by the Site Administrator's letter of 5th May 2017 - which cited incompetence, rudeness and arrogance - and by bank statements showing monthly salary deposits averaging about Kshs. 20,713/-. Relying on Section 41 of the Employment Act, the court held that the employer must have both a valid reason and follow due process, i.e. substantive and procedural fairness, and that the Claimant was never accorded the hearing Section 41 mandates. With the Respondent's failure to rebut, the Claimant proved his case and judgment was entered: salary in lieu of notice (Kshs. 20,000/-), leave pay for two years (Kshs. 40,000/-), eight months' salary compensation (Kshs. 160,000/-), costs, interest at court rates, statutory deductions on the compensation under Section 49(1)(c), and a certificate of service under Section 50.

Key legal issues

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01

Existence of employment relationship

Holding

The employment relationship was established despite the absence of a written contract, on the basis of the Site Administrator's letter and bank statements showing regular salary deposits.

Reasoning

The Claimant produced no letter of employment or payslips, but the letter of 5th May 2017 from the Site Administrator referred to him by name and ID as a puncture repair man and confirmed his date of joining. Bank statements showed monthly deposits varying between Kshs. 16,598 and Kshs. 21,438, averaging about Kshs. 20,713 after statutory deductions. The Respondent filed no defence or evidence, so these facts stood uncontested.

p. 1
02

Procedural and substantive fairness of the termination

Holding

The termination was unfair because the Claimant was not accorded the hearing contemplated by Section 41 of the Employment Act before dismissal on grounds of alleged incompetence and misconduct.

Reasoning

The 5th May 2017 letter gave the alleged grounds (incompetence, rudeness, arrogance, disrespect), engaging Section 41 of the Employment Act. The employer was bound to explain the reasons to the employee and hear his representations before termination. No such hearing took place, and the Respondent filed no pleadings or evidence to rebut the Claimant's account, leaving his testimony uncontroverted. He therefore proved his case on a balance of probabilities.

p. 2

Legal principles established

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  • Termination of employment requires both substantive fairness (a valid reason) and procedural fairness (a hearing under Section 41 of the Employment Act).

Court orders

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  1. 1.Salary in lieu of notice Kshs. 20,000/-
  2. 2.Leave pay for 2 years Kshs. 40,000/-
  3. 3.8 months salary compensation Kshs. 160,000/-
  4. 4.Costs of the suit to the Claimant
  5. 5.Interest on the sums in (a), (b) and (c) at court rates from date of judgment till payment in full
  6. 6.The compensation sum to be subject to statutory deductions in terms of Section 49(1)(c) of the Employment Act
  7. 7.A certificate of service in terms of Section 50 of the Employment Act

Authorities

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Legislation

  • Employment ActSection 41(1) and (2)
  • Employment ActSection 42(1)
  • Employment ActSection 44(3), (4) and (a-e)
  • Employment ActSection 49(1)(c)
  • Employment ActSection 50

Cases cited (1)

  • Dan Owuor Ongado v Lake Basin Development Authority
    [2018] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (Employment Act)

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, "Shadrack Mwaniki Ngaru v Aegis Construction Limited [2018] KEELRC 532 (KLR)", Case Analysis (2018). Cause No 312 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/532/eng@2018-11-13

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