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ELRCPartially AllowedCause No. 489 of 2015· [2018] KEELRC 1933 (KLR)

Samuel Justus Ogweno v Sarova Whitesands Beach Resort [2018] KEELRC 1933 (KLR)

Employment and Labour Relations Court
28 May 2018
OMONESMUS N. MAKAULNLINNET NDOLO
3,905 words in judgment
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The bottom line

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A Kenyan hotel proved its employee leaked business secrets, but still lost the case partly because it skipped a proper hearing, paying nearly Kshs.1 million.

What this practically means

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Executive summary

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The claimant, employed by the respondent hotel from 1994 until his summary dismissal on 20 May 2015, sued for Kshs.7,275,948 alleging unfair termination. The respondent admitted the dismissal but justified it as gross misconduct - namely, sharing confidential business leads, client contacts and marketing strategies with Diana Amayi, a sales officer of a competitor hotel - and counterclaimed for loss of sales revenue. The court framed two issues: substantive and procedural fairness of the dismissal, and the reliefs. On substance, the court found the respondent proved on a balance of probability that the claimant shared business leads with a competitor without authority, amounting to betrayal of trust and gross misconduct justifying summary dismissal under sections 43(1) and 44(4) of the Employment Act. On procedure, however, the respondent failed to prove compliance with section 41: no minutes of the alleged hearing, no invitation letter, and no show cause letter were produced. The court held that a section 41 hearing must be oral unless the employee chose otherwise, and the burden of proving such waiver lay on the employer. The dismissal was therefore procedurally unfair. Under section 49 the court awarded one month's notice pay, three months' compensation (reduced for the claimant's contributory misconduct), 21 leave days, two months' commission, and gratuity computed on his last salary under the CBA - a total of Kshs.994,513.45 with costs and interest. Severance pay was refused as there was no redundancy, and the counterclaim was dismissed for lack of evidence of actual loss, with no order as to costs.

Key legal issues

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01

Whether the summary dismissal was substantively fair

Holding

Yes - the respondent proved on a balance of probability that the claimant shared confidential business leads with a competitor

Reasoning

The screenshots from the claimant's phone showed continuous sharing of client contacts and business leads with Miss Diana Amayi of Nyali Beach Hotel between 2012 and 2013 without authority. The claimant did not contest the screenshots. Under section 43(1) and 44(4) of the Employment Act, the employer genuinely believed the claimant committed gross misconduct amounting to betrayal of trust, justifying summary dismissal.

p. 3
02

Whether the dismissal was procedurally fair

Holding

No - the employer failed to prove a fair hearing under section 41

Reasoning

No minutes of the alleged disciplinary hearing were produced, no invitation letter or show cause letter was exhibited, and the dismissal letter did not refer to any meeting. The court held that a section 41 hearing must be oral unless the employee chose otherwise, and the burden of proving such waiver lay on the employer. The claimant was therefore not accorded a fair hearing.

p. 4
03

Whether the reliefs sought should be granted

Holding

Partially - notice pay, 3 months' compensation, leave, commission and gratuity awarded; severance and 12 months' compensation refused

Reasoning

Under section 49 the court considered the claimant's long service but reduced compensation to 3 months' pay because he contributed to his dismissal through misconduct. Leave days, commission and gratuity were admitted in the dismissal letter. Severance was refused as termination was not redundancy.

p. 4
04

Whether the counterclaim for loss of business should succeed

Holding

No - dismissed for lack of evidence

Reasoning

Although breach of confidentiality was proved, the email by Diana Amayi and screenshots alone did not discharge the respondent's burden on a balance of probability. There was no evidence that what was in the screenshots would have resulted in actual business to the respondent or that such business went to the alleged competitors.

p. 5

Legal principles established

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  • Termination is unfair where the employer fails to prove a valid and fair reason and a fair procedure under section 45(2) of the Employment Act
  • The pre-dismissal hearing contemplated by section 41 of the Employment Act must be oral unless the employee chooses another form
  • Where an employee denies choosing a written hearing, the burden of proving waiver of an oral hearing lies on the employer

Court orders

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  1. 1.Award of Kshs.84,953 being one month salary in lieu of notice
  2. 2.Award of Kshs.254,859 being 3 months' gross pay as compensation for unfair termination under section 49 of the Employment Act
  3. 3.Award of Kshs.68,160.10 for 21 accrued leave days
  4. 4.Award of Kshs.360,000 being 2 months' commission
  5. 5.Award of gratuity of Kshs.226,541.35 computed at 1/3 of gross pay for 8 years
  6. 6.Total award of Kshs.994,513.45 to the claimant, subject to applicable statutory deductions
  7. 7.Claim for severance pay dismissed as termination was not by redundancy
  8. 8.Counterclaim dismissed for lack of evidence with no order as to costs for the counterclaim
  9. 9.Costs of the suit to the claimant with interest from the date of filing suit until payment in full

Authorities

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Legislation

  • Employment Actsection 45(2)
  • Employment Actsection 43(1)
  • Employment Actsection 44(4)
  • Employment Actsection 41
  • Employment Actsection 49
  • Employment Actsection 51
Jurisdiction invoked
Article 162(2)(a) of the Constitution; Employment and Labour Relations Court Act (employment dispute under the Employment Act)

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, "Samuel Justus Ogweno v Sarova Whitesands Beach Resort [2018] KEELRC 1933 (KLR)", Case Analysis (2018). Cause No. 489 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1933/eng@2018-05-28

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