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ELRCPartially AllowedSuit No 256 of 2017· [2018] KEELRC 1733 (KLR)

Amos Mathenge Muchai v Bradshaws of Mount Kenya Limited [2018] KEELRC 1733 (KLR)

Employment and Labour Relations Court of Kenya
23 April 2018
3,063 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 that firing an employee without a hearing is unfair, even if the boss suspects misconduct, and awarded him three months' salary.

What this practically means

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Executive summary

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The Claimant, a machinist employed by the Respondent from 17 July 2011, sued for wrongful and unfair termination on 10 June 2017 and unpaid terminal dues, seeking salary arrears, compensation equivalent to twelve months' salary, three months' notice pay, service pay, unpaid leave, interest at 20% and costs. The Respondent defended the claim, alleging the Claimant aided former employees who established a rival firm, Mount Kenya Engineering, including visiting and testing its machines, and counterclaimed for Kshs. 48,000/- being the balance of a Kshs. 50,000/- salary advance. The Claimant admitted receipt of the advance but denied the misconduct allegations, testifying he was dismissed without a hearing and forced to sign for his final dues. The Respondent's director testified on rumours and a decoy's reports but produced no direct evidence of the Claimant's dealings with the rival firm. The court held that although grounds for dismissal may have existed, the Claimant was not accorded the hearing required by Section 41 of the Employment Act, embodying Article 47 procedural fairness, rendering the dismissal unfair. Compensation of three months' salary (Kshs. 82,500/-) and a Certificate of Service were awarded. Service pay was refused as the Claimant was an NSSF contributor; notice pay and unpaid leave claims failed for lack of contractual basis and proof; the 20% interest prayer was refused. Judgment was entered for the Respondent on the counterclaim for Kshs. 48,000/-, set off against the Claimant's award, leaving a net payment of Kshs. 34,500/- to the Claimant. Each party was ordered to bear their own costs.

Key legal issues

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01

Procedural fairness in termination of employment

Holding

The dismissal was unfair and unlawful because the Claimant was not accorded a hearing as required by Section 41 of the Employment Act, notwithstanding possible valid grounds for dismissal.

Reasoning

The Respondent alleged the Claimant assisted former employees who set up a rival business, but placed no evidence before the court to prove the misconduct. Even where grounds for dismissal may have existed, the termination was abrupt and the Claimant was not given the safeguards of Section 41 of the Employment Act, which embody the procedural fairness guaranteed by Article 47 of the Constitution. The dismissal was therefore unfair and compensation was warranted.

p. 3
02

Burden of proof on alleged gross misconduct

Holding

The Respondent failed to prove the alleged subterfuge and dealings with a rival business.

Reasoning

The Respondent alleged the Claimant visited the rival firm's premises and tested its machines, in breach of his contract. The court found that despite these allegations, no evidence was placed before the court establishing the misconduct. Allegations of a breach of contract of employment must be substantiated by evidence, and the Respondent's reliance on rumours and a decoy's reports did not discharge that burden.

p. 3
03

Entitlement to service pay where employee contributes to NSSF

Holding

Service pay is not payable to an NSSF contributor.

Reasoning

The Claimant sought service pay for six completed years of service. The Respondent submitted, and the court accepted, that as a member of the National Social Security Fund the Claimant was a contributory to the scheme and therefore statutorily disentitled to service pay. This disposes of the service pay head without the need for further proof.

p. 3
04

The Respondent's counterclaim for an outstanding loan

Holding

The Claimant was liable for the balance of the Kshs. 50,000/- loan, having repaid only Kshs. 2,000/-.

Reasoning

The Respondent counterclaimed for Kshs. 48,000/- being the balance of an advance loan granted to the Claimant on 29 March 2017, repayable through salary deductions. The Claimant admitted receiving the advance and did not contest owing the money. The court held him liable and set off the amount against the compensation awarded to the Claimant, leaving a net payment of Kshs. 34,500/- to the Claimant.

p. 3

Legal principles established

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  • An employee must be accorded a hearing under Section 41 of the Employment Act before termination, being the procedural fairness encompassed in Article 47 of the Constitution; dismissal without such a hearing is unfair even if grounds may have existed.
  • Service pay is not payable to an employee who is a contributor to the NSSF scheme.

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent for Kshs. 82,500/- (three months' salary as compensation for unfair termination)
  2. 2.Claimant to be issued with a Certificate of Service
  3. 3.Judgment entered for the Respondent against the Claimant on the counterclaim for Kshs. 48,000/-
  4. 4.The sum due to the Claimant offset against the sum due to the Respondent, with the Claimant to receive Kshs. 34,500/-
  5. 5.Each party to bear their own costs

Authorities

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Legislation

  • Constitution of Kenya 2010Article 47
  • Employment Act 2007Sections 35(6)(d), 41, 43, 45, 49

Cases cited (2)

  • Dishon Kamau Muiruri v Kenya Revenue Authority
    Nyeri ELRC 117 of 2014 (unreported)
  • Edwin Jembe Mwamuye v Mombasa Canvas Limited
    [2017] eKLR
Jurisdiction invoked
Original jurisdiction of the Employment and Labour Relations Court under the Employment Act 2007 (Article 162(2) jurisdiction implied; not expressly cited in judgment)

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, "Amos Mathenge Muchai v Bradshaws of Mount Kenya Limited [2018] KEELRC 1733 (KLR)", Case Analysis (2018). Suit No 256 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1733/eng@2018-04-23

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