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ELRCPartially AllowedMemorandum of Claim dated 13th May 2015· [2018] KEELRC 823 (KLR)

Nicodemus Ochieng Ogutu v Village of Hope – Kenya [2018] KEELRC 823 (KLR)

Employment and Labour Relations Court
25 October 2018
MOMaureen OnyangoMNMathews Nderi Nduma
1,972 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~8 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that firing a teacher for complaining about unpaid NSSF and NHIF deductions was unfair and awarded him damages and refunds.

What this practically means

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Executive summary

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The claimant, a qualified P1 teacher employed by the respondent, a charitable organisation operating a school and orphanage, from 15th September 2014, sued for unfair termination and employment benefits after his contract was terminated by letters dated 20th and 24th April 2015, effective 1st May 2015. He testified that the termination followed his complaint that NSSF and NHIF deductions from his salary had not been remitted, which he discovered when his son was hospitalised and his NHIF card was unusable. The respondent's witness admitted non-remittance and attributed the termination to low funding notified at a staff meeting, but produced no minutes. The court found from the termination letters that the real reason was the claimant's complaint, which under Section 46(h) of the Employment Act is not a fair reason for dismissal, and that no disciplinary process was followed, rendering the termination unfair both substantively under Section 45(2) and procedurally, noting that even low funding would have required compliance with Section 40. On remedies, the court awarded salary underpayments of Kshs.34,360 and house allowance of Kshs.30,120 for 8 months at statutory minimum rates, the difference of Kshs.4,295 in lieu of notice, Kshs.2,500 reimbursement of hospital bills, an order refunding the NSSF and NHIF deductions with interest from the dates of deduction, and compensation of four months' gross salary (Kshs.60,240). The respondent was ordered to issue a certificate of service and to pay the claimant's costs, with interest at court rates from judgment. The suit succeeded on most heads.

Key legal issues

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01

Whether the termination was substantively and procedurally unfair

Holding

The termination was unfair both procedurally and substantively because the reason was the claimant's complaint about non-remittance of statutory deductions and no disciplinary process was followed

Reasoning

The termination letters dated 20th and 24th April 2015 showed the employment ended because the claimant complained about non-remittance of NSSF and NHIF deductions. The respondent admitted non-remittance. The claim of low funding was not borne out by the letters, and no minutes of any staff meeting notifying lay-offs were produced. Under Section 46(h), such a complaint is not a fair reason for dismissal, and no disciplinary process was undertaken, violating Section 45(2).

p. 4
02

Whether the claimant was underpaid contrary to statutory minimum wages

Holding

The claimant was underpaid both basic salary and house allowance and was entitled to the statutory minimum for a P1 teacher

Reasoning

The respondent did not deny underpaying the claimant, only pleading insufficient funds. Statutory provisions prohibit terms less favourable than the statutory minimum and require courts to substitute them. As a qualified P1 teacher, the claimant was entitled to basic salary of Kshs.11,295 plus a separate house allowance under the Teachers Service Commission salary scales.

p. 4
03

Whether the claimant was entitled to reimbursement of his son's hospital bills

Holding

The respondent's failure to remit NHIF deductions denied the claimant the benefit of his NHIF card, entitling him to a refund of Kshs.2,500

Reasoning

The respondent admitted not remitting NHIF deductions from the claimant's salary. When the claimant's son was hospitalised in January 2015, he could not use his NHIF card because of the non-remittance, and he produced the hospital bill and receipts. The court found the respondent directly denied him the card's benefit and awarded the claimed Kshs.2,500.

p. 5
04

What compensation for unfair termination was appropriate

Holding

Four months' gross salary as compensation, i.e. Kshs.60,240

Reasoning

In exercising discretion on compensation, the court took into account that the claimant lost his job for raising a legitimate complaint about non-remitted statutory deductions, the underhand mode in which he discovered the non-remittance, and the unfairness of the termination procedure, and settled on four months' gross salary.

p. 5

Legal principles established

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  • An employee's initiation of a complaint against the employer is not a fair reason for dismissal unless shown to be irresponsible and without foundation
  • Courts must substitute contractual terms less favourable than the statutory minimum with the statutory minimum terms
  • Termination for low funding must nonetheless comply with the procedural requirements of Section 40 of the Employment Act

Court orders

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  1. 1.Award of salary underpayments for 8 months at Kshs.4,295 per month totalling Kshs.34,360
  2. 2.Award of house allowance for 8 months totalling Kshs.30,120
  3. 3.Award of the difference of Kshs.4,295 in lieu of notice
  4. 4.Refund of hospital bills for the claimant's son at Kshs.2,500
  5. 5.Refund to the claimant of the NSSF and NHIF deductions held by the respondent with interest at court rates from the date of deductions till payment in full
  6. 6.Award of 4 months' gross salary as compensation for unfair termination in the sum of Kshs.60,240
  7. 7.The respondent shall issue a certificate of service to the claimant
  8. 8.The respondent shall pay claimant's costs
  9. 9.Interest shall accrue at court rates from date of judgment except for the NSSF/NHIF refund which shall accrue from date of deduction from salary

Authorities

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Legislation

  • Employment ActSections 3(6), 26, 40, 45(2), 46(h)
  • Labour Institutions ActSection 48(1)
  • Teachers Service Commission Act (Revised 2009)First Schedule (salary scales)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Institutions Act over a claim for unfair termination and employment benefits

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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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, "Nicodemus Ochieng Ogutu v Village of Hope – Kenya [2018] KEELRC 823 (KLR)", Case Analysis (2018). Memorandum of Claim dated 13th May 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/823/eng@2018-10-25

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