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ELRCPartially AllowedELRC Cause (Mombasa), Amended Claim filed 19th May 2015 (originally High Court Civil Suit Number 127 of 2006)· [2018] KEELRC 1046 (KLR)

Billy Muthui Musembi v Total Kenya Limited [Formerly Chevron Kenya Limited, Formerly Caltex Oil [Kenya Limited] [2018] KEELRC 1046 (KLR)

Employment and Labour Relations Court
27 September 2018
JRJames Rika
1,347 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 ordered Kenya Wine Agencies to pay a dismissed employee Kshs. 739,639 because it could not prove his dismissal was fair.

What this practically means

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Executive summary

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The Claimant was employed by the Respondent on 1st July 1991 as a General Clerk, rising to Accounts/Operations Assistant. In July 2000 he was suspended on allegations of forgery and fraudulent accounting, summarily dismissed on 2nd October 2000 on the ground of loss of confidence, and charged in Mombasa CM Criminal Case No. 2728 of 2000 with stealing and forgery, from which he was acquitted on 10th April 2003 after a trial lasting about three years. He sued originally in the High Court at Mombasa (Civil Suit No. 127 of 2006, filed 15th June 2006), and the suit was transferred to the Employment and Labour Relations Court in November 2014, where he filed an Amended Claim seeking damages for wrongful termination, Provident Fund contributions of Kshs. 302,900 and Pension Scheme contributions of Kshs. 318,758. The Respondent pleaded that the dismissal followed loss of confidence after alleged forgery causing it loss. The Respondent did not adduce evidence. The court found no justification for the dismissal, no disciplinary hearing or independent investigation, and no evidence of lawfulness of termination. Holding that the Employment Act 2007 was not in force at termination, the court applied the law then applicable and awarded general damages equivalent to 10 months' gross salary (Kshs. 428,810). On the retirement benefits, the court held employer contributions to a provident fund should not revert to the employer, awarding the full Kshs. 302,900; but only Kshs. 7,929 of the pension claim was proved. Total award: Kshs. 739,639, with costs to the Claimant.

Key legal issues

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01

Lawfulness of summary dismissal

Holding

The dismissal was wrongful; the Respondent adduced no evidence to justify the summary dismissal and there was no disciplinary hearing or independent investigation

Reasoning

The Respondent elected not to adduce evidence. The court could therefore find no justification for the allegations of forgery and fraudulent accounting that led to the suspension and summary dismissal. There was no record of a disciplinary hearing or independent investigation, and the criminal acquittal after a three-year trial contradicted the Respondent's allegations. The assertion that termination was lawful could not be substantiated.

p. 2
02

Applicable legal regime where termination pre-dates the Employment Act 2007

Holding

The Employment Act 2007 did not apply, but the Claimant was still entitled to general damages for breach of contract under the law applicable at the time, and should not be denied a remedy because of the change of statute

Reasoning

The court held that the applicable law is that in force at the time of termination. The Trade Disputes Act Cap 234 would have provided compensation had the claim been presented under that regime. The court refused to let a technical change in statute deprive the employee of a remedy, and awarded general damages equivalent to 10 months' gross salary.

p. 2
03

Entitlement to Provident Fund benefits

Holding

The Claimant was awarded the full Kshs. 302,900, being combined employee and employer contributions; employer contributions should not revert to the employer

Reasoning

The pay slips and Notification of Withdrawal proved the contributions. The court reasoned that provident funds are savings platforms for employees, and it would be illogical to require an employer to contribute if the contribution could be clawed back at the end of employment. Any portion of employer contribution not due to the employee should revert to the pension account, not the employer.

p. 2
04

Pension benefits claim of Kshs. 318,758

Holding

Only Kshs. 7,929 was awarded; the balance of the claim was unsupported

Reasoning

The claimed figure was not explained by any document, evidence or submissions. Pay slips showed monthly contributions of Kshs. 961 and the Notification of Withdrawal conceded a total of Kshs. 7,929. The claimed amount could not be reconciled with the evidence and was described as made in a vacuum.

p. 2

Legal principles established

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  • An employee should not be denied a remedy merely because the Employment Act 2007 was not in force at the time of termination; remedies are granted guided by the law applicable at the time of termination
  • Employer contributions to a provident fund are not recoverable by the employer and the benefit of employer contributions should be available to the employee at the end of employment

Court orders

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  1. 1.The Respondent shall pay to the Claimant damages for wrongful termination at Kshs. 428,810
  2. 2.The Respondent shall pay the Claimant Provident Fund Benefits at Kshs. 302,900
  3. 3.The Respondent shall pay the Claimant Pension Scheme Benefits at Kshs. 7,929
  4. 4.Total award of Kshs. 739,639
  5. 5.Costs to the Claimant

Authorities

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Legislation

  • Employment Act2007 (Act No. 11 of 2007)
  • Trade Disputes ActCap 234 (Laws of Kenya)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction on transfer from High Court Mombasa (Civil Suit No. 127 of 2006 transferred 24th November 2014)

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, "Billy Muthui Musembi v Total Kenya Limited [Formerly Chevron Kenya Limited, Formerly Caltex Oil [Kenya Limited] [2018] KEELRC 1046 (KLR)", Case Analysis (2018). ELRC Cause (Mombasa), Amended Claim filed 19th May 2015 (originally High Court Civil Suit Number 127 of 2006). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1046/eng@2018-09-27

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