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ELRCPartially AllowedCause No. 112 of 2015· [2018] KEELRC 1495 (KLR)

Maxwell Agutu Maigo v Kenya National Trading Corporation Limited [2018] KEELRC 1495 (KLR)

Employment and Labour Relations Court
18 June 2018
2,483 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 National Trading Corporation to pay a dismissed manager KSh 3.14 million because it could not prove valid reasons for firing him.

What this practically means

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Executive summary

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The Claimant, formerly Sales and Marketing Manager of the Respondent, sued for wrongful and unlawful dismissal and unpaid terminal benefits after being summarily dismissed with effect from 13 January 2015 following an internal audit into loss of approximately Kshs 3.39 million in cement sales. The Respondent alleged irregular delegation of LPO signing, failure to act on a Bamburi SMS alert, outsourcing of transport, negligence and breach of trust, and counter-alleged the Claimant owed it over Kshs 2.1 million. The court framed three issues: valid reasons, due process, and remedies. On evidence, RW1 admitted the questioned LPOs were signed by Philemon Mutai of the Supply Chain and that there was no evidence linking the LPOs to the Claimant or his department; the SMS alert was never explained or proved. Applying Sections 43(2), 44(6) and 47(5) of the Employment Act 2007, the court held the Respondent failed to discharge the burden of justifying the dismissal. However, under Section 41, due process was accorded, as the Claimant appeared before the Board and was heard. Under Section 45(2), the dismissal was declared unfair and unjustified. Reinstatement was refused as the statutory 3-year window under Section 12 had lapsed. The court awarded 3,141,280/= comprising notice pay, accumulated leave, unpaid salary, gratuity and 8 months' salary as damages for unlawful termination, with costs and interest.

Key legal issues

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01

Whether there were valid reasons to dismiss the Claimant

Holding

No valid reasons were established; the Respondent failed to discharge the burden of proving the grounds for dismissal.

Reasoning

The Respondent alleged irregular delegation of LPO signing, failure to act on an SMS alert from Bamburi, and outsourcing of transport. RW1 admitted the LPOs were not assigned to the Claimant and there was no evidence they were assigned to his department. The LPOs were signed by Philemon Mutai of the Supply Chain, not the Claimant's department, and the SMS was never proved. Under Sections 43(2), 44(6) and 47(5) of the Employment Act, the burden lay on the employer, which it failed to discharge.

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02

Whether due process was followed

Holding

Yes - the Claimant was accorded due process under Section 41 of the Employment Act.

Reasoning

The Claimant was notified of the disciplinary hearing, appeared before the Respondent Board on 17/12/2014, and the minutes presented to Court showed he was given an opportunity to defend himself against the accusations. The procedural requirements of Section 41 of the Employment Act 2007 were therefore satisfied, even though the substantive reasons for dismissal were not proved.

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03

Whether the termination was unfair

Holding

The dismissal was unfair and unjustified because the employer failed to prove valid reasons, even though procedure was fair.

Reasoning

Under Section 45(2) of the Employment Act, a termination is unfair if the employer fails to prove a valid and fair reason and fair procedure. Having found the procedure fair but the reasons invalid, the court declared the dismissal unfair and unjustified and moved to remedies.

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04

Respondent's assertion that the Claimant owed it money

Holding

No finding against the Claimant; the Respondent failed to lead evidence and made no counterclaim.

Reasoning

The Respondent loosely alleged the Claimant owed it about Kshs 2,117,774.57 but led no evidence to prove this and filed no counterclaim. The claim therefore remained unproved and no prayers were made for the amounts pleaded.

p. 3

Legal principles established

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  • The burden of justifying the grounds for termination of employment rests on the employer.
  • For a dismissal to be fair, the employer must prove both valid reasons and a fair procedure.

Court orders

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  1. 1.3 months' salary in lieu of notice = 540,000/= as per the contract dated 17/7/2012
  2. 2.Accumulated leave days admitted by the Respondent in the dismissal letter = 581,940/=
  3. 3.Unpaid salary for October 2014 to 13th January 2015 = 432,940/=
  4. 4.Unpaid gratuity admitted by RW2 = 446,400/=
  5. 5.8 months' salary as damages for unlawful termination = 1,440,000/=
  6. 6.Total award of 3,141,280/= to the Claimant
  7. 7.Respondent to pay costs of the suit plus interest at Court rates with effect from the date of the judgment

Authorities

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Legislation

  • Employment Act 2007Section 43(2)
  • Employment Act 2007Section 44(6)
  • Employment Act 2007Section 47(5)
  • Employment Act 2007Section 41(1) and (2)
  • Employment Act 2007Section 45(2)
  • Employment Act 2007Section 12
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act (Cause filed under the Employment Act 2007)

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, "Maxwell Agutu Maigo v Kenya National Trading Corporation Limited [2018] KEELRC 1495 (KLR)", Case Analysis (2018). Cause No. 112 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1495/eng@2018-06-18

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