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ELRCPartially AllowedCause No 2264 of 2012· [2018] KEELRC 1998 (KLR)

Moreen Anne Taaka v Naku Sacco Society Limited & 4 others [2018] KEELRC 1998 (KLR)

Employment and Labour Relations Court
11 May 2018
1,512 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 suspending an employee indefinitely without ever recalling or firing them formally counts as unfair termination under the Employment Act.

What this practically means

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Executive summary

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The claimant, employed by the 1st respondent co-operative society (a SACCO) as a Teller from 1st October 2012 at Kshs.27,000 per month, sued the SACCO and its Board members alleging that her employment was unlawfully terminated through an indefinite suspension in violation of Sections 41, 43, 44(2) and 45 of the Employment Act. She sought declarations, notice pay, salary arrears, leave pay, severance, service pay, gratuity, 12 months' compensation and a certificate of service. The respondents pleaded that she was dismissed for refusing to cooperate with forensic auditors investigating fraud in the SACCO's FOSA and that the dismissal followed the Staff Policy. RW1, the Chief Executive Officer James Muchira Chege, confirmed under cross-examination that the claimant was never recalled from suspension, never subjected to a disciplinary hearing and never issued a warning. The court framed two issues: whether the dismissal was unfair and whether the claimant was entitled to the remedies sought. Holding that suspension is not provided for under the Employment Act and could only apply if provided for in the terms of service, and that the claimant was never recalled or issued a termination letter, the court found the suspension was a disguised termination effected without compliance with Section 41, and declared the termination unfair. On remedies, the court awarded Kshs.27,000 notice pay, Kshs.31,500 leave pay, two months' salary as compensation given the short service and the claimant's contribution to the termination, a certificate of service, and half of the taxed costs. Severance pay, service pay and gratuity were dismissed for want of proof.

Key legal issues

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01

Whether the indefinite suspension amounted to unfair termination

Holding

Yes - the suspension was a disguised termination effected without compliance with Section 41 of the Employment Act

Reasoning

The claimant was suspended indefinitely by letter dated 10th August 2012. The respondent's Staff Policy did not provide for suspension, and suspension is not provided for under the Employment Act, so it could only be resorted to if provided for in the terms of service. The claimant was never recalled from suspension, never issued a letter of termination and never subjected to a disciplinary hearing. The court therefore found the suspension was a disguised termination effected without the Section 41 procedure and declared the termination unfair.

p. 3
02

What remedies flow from the unfair termination

Holding

Notice pay, leave pay, two months' compensation, certificate of service and half taxed costs; severance, service pay and gratuity refused for want of proof

Reasoning

The court awarded one month's salary in lieu of notice and pay in lieu of 35 days' untaken annual leave. Severance pay was refused because the claimant was not declared redundant. Service pay and gratuity were refused for want of proof of entitlement. Compensation was limited to two months' salary given the short 20-month service and the claimant's own contribution through refusal to cooperate with auditors investigating fraud or record a police statement. A certificate of service was ordered under Section 51.

p. 3

Legal principles established

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  • Suspension of an employee is permissible only if provided for in the terms of service, as it is not provided for under the Employment Act
  • An indefinite suspension from which the employee is never recalled and never issued a termination letter amounts to a disguised termination which must comply with Section 41 of the Employment Act

Court orders

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  1. 1.Declaration that the termination of the claimant's employment was unfair
  2. 2.Kshs.27,000 being one month's salary in lieu of notice
  3. 3.Kshs.31,500 being pay in lieu of annual leave (35 days at 1.75 days per month worked)
  4. 4.Two months' salary (Kshs.54,000) as compensation for unfair termination
  5. 5.Certificate of service in terms of Section 51 of the Employment Act
  6. 6.Half of the taxed costs awarded to the claimant

Authorities

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Legislation

  • Employment ActSections 35, 35(5), 35(6), 36, 41, 43, 44(2), 45, 49, 51
  • Cooperative Societies ActNot specified
  • Respondent's Staff Policy 2008 (dated May 2009)Clause 8.2.1

Cases cited (6)

  • SABINA MUTUA -VS- AMEDO CENTRE KENYA LIMITED
    [2017]
  • PAUL MWAURA MBUGUA VS- KAGWE TEA FACTORY LTD & ANOTHER
    [2012]
  • MARY CHEMWENO KIPTUI -VS- KENYA PIPELINE COMPANY LIMITED
    [2014]
  • THOMAS SILA NZOIVO -VS- BAMBURI CEMENT LIMITED
    [2014]
  • CLEMENT MUTISO MUINDE -VS- BRITISH AMERICAN INSURANCE COMPANY LIMITED
    [2014] eKLR
  • NICHOLAS MWASYA KYULA -VS- FARMCHEM LIMITED
    [2012]
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act claims)

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, "Moreen Anne Taaka v Naku Sacco Society Limited & 4 others [2018] KEELRC 1998 (KLR)", Case Analysis (2018). Cause No 2264 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1998/eng@2018-05-11

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