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ELRCPartially AllowedCause No 263 of 2016· [2018] KEELRC 1803 (KLR)

Nyaga v Nyaga t/a Nyandarua Restaurant & Venezza Shop (Cause 263 of 2016) [2018] KEELRC 1803 (KLR)

Employment and Labour Relations Court
15 May 2018
3,236 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that even a suspected thief must get notice and a hearing before dismissal, and agreements signed in police custody are void.

What this practically means

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Executive summary

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The Claimant sued her employer, a sole proprietor running a shop and restaurant at which she worked from March 2015 to August 2016, claiming unfair termination, non-payment of terminal benefits and unpaid overtime. She testified she was arrested and held in police custody for three days over an alleged theft of Kshs. 175,000/-, signed a repayment agreement to secure release, and was then verbally dismissed without her July salary. She claimed underpayment, house allowance, notice pay, leave dues, service pay and up to 12 months' compensation. The Respondent defended the dismissal as lawful summary dismissal for gross misconduct under Section 44(4)(g) of the Employment Act and counterclaimed for Kshs. 175,000/- on the strength of the Claimant's alleged admission and repayment undertakings. The court found the Claimant was in law a shop assistant entitled to Kshs. 11,279.50 monthly inclusive of house allowance under the applicable Regulation of Wages Order, making her Kshs. 8,000/- pay a gross underpayment. It held the repayment agreements were procured under duress while she was in custody and were void, and that the agreement signed by her father could not bind her. Although the Respondent had reason to terminate for cause, the court held the Claimant was entitled to notice and, in any event, to the Section 41 procedural safeguards. The suit was partially allowed: the underpayment differential, one month's notice pay and two months' salary as compensation were awarded; the counterclaim was dismissed; and each party was ordered to bear its own costs.

Key legal issues

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01

Whether the summary dismissal was fair despite the alleged theft

Holding

The dismissal was unfair because the Respondent, though having reason to terminate for cause, failed to give notice or follow the Section 41 hearing procedure.

Reasoning

The court accepted the Respondent had grounds related to the alleged loss, but held that the Respondent acknowledged investigations had preceded the termination and should instead have paid a month's salary in lieu of notice and dismissed for cause. Alternatively, even where summary dismissal is justified, the Section 41 safeguards (notice, explanation, hearing) remained available and were not undertaken. The Claimant therefore proved unfair termination.

p. 5
02

Whether the repayment agreements/admission of theft could support the counterclaim

Holding

The agreements were void, having been signed under duress while the Claimant was in police custody; the father's agreement could not bind her.

Reasoning

Relying on Paola Da Fano v Salim Abdalla Bakshwein and the duress principle in Hellen Wangari Wangechi v Carumera Muthoni Githua, the court found the Claimant confessed and signed a repayment agreement while in custody for three days, so the alleged admission was not freely made. The second agreement signed by her father could not bind her. No evidence of the theft itself was availed, so the counterclaim failed.

p. 4
03

Whether the Claimant was underpaid

Holding

The Claimant was a shop assistant entitled to Kshs. 11,279.50 per month inclusive of house allowance; payment of Kshs. 8,000/- was gross underpayment.

Reasoning

The court found on the evidence that the Claimant handled sales at the shop and the Mpesa account, making her a shop assistant rather than a saleslady or cashier. The applicable Regulation of Wages Order for the relevant period prescribed Kshs. 11,279.50 inclusive of house allowance for a shop assistant. She was awarded the difference between that figure and her actual pay.

p. 5

Legal principles established

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  • An admission or repayment agreement signed while a person is in police custody is procured under duress and is void.
  • Even where grounds for summary dismissal exist, the employer must still comply with the procedural safeguards under Section 41 of the Employment Act, including notice and a hearing.

Court orders

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  1. 1.Payment to the Claimant of the difference between her monthly pay of Kshs. 8,000/- and the prescribed wage of Kshs. 11,279.50 per month for the period of service (underpayment)
  2. 2.Payment of one month's salary in lieu of notice
  3. 3.Compensation by payment of 2 months' salary for the unfair dismissal
  4. 4.Dismissal of the Respondent's counterclaim
  5. 5.Each party to bear their own costs

Authorities

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Legislation

  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43(1)
  • Employment Act, 2007Section 44(1)
  • Employment Act, 2007Section 44(4)(g)
  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Section 31
  • Penal CodeSection 281
  • Regulation of Wages Order, 2013Wage rates for shop assistant
  • Regulation of Wages (General Amendment) Order, 2015Wage rates

Cases cited (7)

  • Paola Da Fano v Salim Abdalla Bakshwein
    [2013] eKLR
  • Hellen Wangari Wangechi v Carumera Muthoni Githua
    [2015] eKLR
  • Erick Karanja Gakonyo v Samson Gathimba
    [2011] eKLR
  • Kenya Plantation and Agricultural Workers Union v James Finlays (K) Limited
    [2013] eKLR
  • Judicial Service Commission v Gladys Boss Shollei
    [2014] eKLR
  • Francis Nyongesa Kweyu v Eldoret Water and Sanitation Company Limited
    [2017] eKLR
  • Gilbert Kipkorir v Super Expo Limited
    [2016] eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court (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, "Nyaga v Nyaga t/a Nyandarua Restaurant & Venezza Shop (Cause 263 of 2016) [2018] KEELRC 1803 (KLR)", Case Analysis (2018). Cause No 263 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1803/eng@2018-05-15

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