Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedNot stated in judgment· [2018] KEELRC 1787 (KLR)

Joyce Wambui Karuu v Kenya Nut Company Limited [2018] KEELRC 1787 (KLR)

Employment and Labour Relations Court
26 January 2018
MOMaureen Onyango
2,338 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

#

What this practically means

#

Executive summary

#
The claimant, a Supervisor in the respondent's general store employed from 2nd January 1993 and earning Kshs. 30,748/= monthly, was summarily dismissed after an audit found store records did not tally with physical goods, allegedly because she did nothing while another employee, Mercy, removed goods without authority. She sought compensation for loss of future earnings of Kshs. 367,176/=, service pay for 18 years of Kshs. 367,176/=, costs and interest. The respondent defended the dismissal as summary dismissal for gross misconduct following investigations. The respondent's Human Resource Officer, Rebecca Maina, admitted there was no proof of a disciplinary hearing or that the claimant was given a chance to defend herself, and confirmed the claimant was absent when the goods were removed. The court framed two issues: whether the summary dismissal was fair, and whether the claimant was entitled to the remedies sought. Applying Sections 41, 44(4) and 47(5) of the Employment Act, the court held the dismissal unfair: the employer failed to justify the grounds for termination because the claimant was never subjected to a disciplinary hearing, and the alleged misconduct was perpetrated by another employee while the claimant was on annual leave. On remedies, the court declined service pay as the claimant was a member of NSSF and a pension scheme (Section 35(5) and (6)), and declined compensation for loss of future earnings following the authorities cited, holding remedies must be proportionate and not enrich the employee. Treating the claim for loss of earnings as compensation for unfair termination, the court awarded maximum compensation of 12 months' salary, Kshs. 368,976/=, ordered the respondent to pay the claimant's costs, awarded interest at court rates unless paid within 30 days, and directed deduction of the Kshs. 56,007/= already paid through the Labour Office.

Key legal issues

#
01

Whether the summary dismissal was fair

Holding

The summary dismissal was unfair because the claimant was not subjected to any disciplinary hearing or given an opportunity to defend herself, and the alleged misconduct was perpetrated by another employee while the claimant was on annual leave.

Reasoning

Section 44(4) permits summary dismissal for wilful neglect or careless performance of duty, but Section 41 mandates an explanation of reasons and a hearing before dismissal. The respondent's witness admitted there was no evidence of a disciplinary process, the dismissal letter did not refer to any, and the claimant denied being heard. The burden of justifying termination rests on the employer under Section 47(5). Further, the claimant was on leave when the goods were removed by the stores clerk Mercy.

p. 3
02

Entitlement to service pay

Holding

The claimant is not entitled to service pay because she was a member of NSSF and a pension scheme.

Reasoning

Section 35(5) as read with Section 35(6) of the Employment Act excludes from service pay entitlement any employee who is a member of a registered pension or provident fund scheme, a gratuity or service pay scheme under a collective agreement, a more favourable employer scheme, or the National Social Security Fund. The claimant's payslip showed membership of both NSSF and a pension scheme.

p. 3
03

Entitlement to compensation for loss of future earnings

Holding

The claimant is not entitled to compensation for loss of future earnings; instead she was awarded the maximum 12 months' compensation under Section 49(1)(c).

Reasoning

Following Elizabeth Wakanya Kibe v Telkom Kenya Ltd, Engineer Francis N. Gachuri v Energy Regulatory Commission, D. K. Njagi Marete v Teachers Service Commission and Menginya Salim Murgani v Kenya Revenue Authority, employment remedies must be proportionate to economic injury and not constitute unjust enrichment; damages to date of retirement are not available. The court treated the claim for loss of earnings as a claim for compensation for unfair termination, and considering her 18 years of service awarded the maximum 12 months' salary of Kshs. 368,976/=, less the Kshs. 56,007/= already paid.

p. 4

Legal principles established

#
  • Before summarily dismissing an employee for gross misconduct, the employer must take the employee through the disciplinary process in Section 41 of the Employment Act, including explaining the reasons and hearing representations.
  • The burden of justifying the grounds for termination rests on the employer; failure to subject the employee to a disciplinary hearing means the employer has not discharged that burden.
  • An employee who is a member of NSSF or a registered pension scheme is not entitled to service pay under Section 35(5) and (6) of the Employment Act.
  • There is no provision for payment of damages for loss of future earnings to date of retirement in unfair termination; remedies must be proportionate to the economic injury suffered.

Court orders

#
  1. 1.Declaration that the summary dismissal of the claimant was unfair
  2. 2.Maximum compensation of 12 months' salary in the sum of Kshs. 368,976/= awarded to the claimant
  3. 3.Respondent to pay claimant's costs of the suit
  4. 4.Decretal sum to attract interest at court rates unless paid within 30 days from date of judgment
  5. 5.Respondent to deduct from the amount awarded the sum of Kshs. 56,007/= already paid to the claimant

Authorities

#

Legislation

  • Employment ActSection 44(4)
  • Employment ActSection 41(1) and (2)
  • Employment ActSection 47(5)
  • Employment ActSection 35(5) and (6)
  • Employment ActSection 49(1)(c)
  • Retirement Benefits ActRegistered pension or provident fund scheme (referred to in Section 35(6)(a))

Cases cited (4)

  • Elizabeth Wakanya Kibe –vs– Telkom Kenya Ltd
    (2014) eKLR
  • Engineer Francis N. Gachuri –vs– Energy Regulatory Commission
    Industrial Cause No. 203 of 2011
  • D. K. Njagi Marete –vs– Teachers Service Commission
    Industrial Cause No. 379 of 2009
  • Menginya Salim Murgani –vs– Kenya Revenue Authority
    Civil Case No. 1139 of 2002
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination and wrongful dismissal claims under the Employment Act

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Joyce Wambui Karuu v Kenya Nut Company Limited [2018] KEELRC 1787 (KLR)", Case Analysis (2018). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1787/eng@2018-01-26

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