Kenya Union of Sugar Plantation & Allied Workers v Muhoroni Sugar Company Limited (In receivership) [2018] KEELRC 2075 (KLR)
The bottom line
#Kenya's Employment Court dismissed a union's bid to reinstate five workers fired for misusing company loan funds, confirming the dismissals were justified.
What this practically means
#Executive summary
#Key legal issues
#Limitation of the claim
The claim was filed in time because the Employment Act and Labour Relations Act, enacted in 2007, do not apply retrospectively to a termination on 11th October 2006; the six-year limitation period under the Limitation of Actions Act applied and had not lapsed when suit was filed.
The Employment Act came into operation on 2nd June 2008 and the Labour Relations Act on 26th October 2007, both after the grievants' termination on 11th October 2006. The applicable limitation regime was therefore Section 4(1) of the Limitation of Actions Act, allowing six years. The cause of action accrued on 11th October 2006 and would only lapse on 10th October 2012, well after the suit was filed on 2nd February 2011.
Fairness of the termination
The termination was justified. Misappropriating the employer's loan funds advanced to the SACCO by granting themselves loans they could not service, contrary to the loan policy, constituted gross misconduct justifying disciplinary action under Section 17 of the repealed Employment Act.
The funds were a loan from the respondent advanced for the specific purpose of enabling members to pay school fees. The grievants advanced the money to themselves knowing they had no ability to repay, bypassing the loan policy. This meant children of members missed school and the money could not be recovered. The court rejected the argument that the misconduct was not against the respondent, holding the acts substantially detrimental to the employer justified summary dismissal.
Entitlement to reinstatement
Reinstatement was refused; the claimant prayed only for reinstatement but did not demonstrate exceptional circumstances warranting it under Section 49(4).
Having found the termination justified, the grievants were not entitled to reinstatement. The court considered the remedy for record purposes: at filing, the ELRC Act limiting reinstatement to three years was not in force, but even had the termination been unfair, no exceptional circumstances under Section 49(4) were demonstrated.
Legal principles established
#- The Employment Act, 2007 and the Labour Relations Act, 2007 do not apply to terminations that occurred before their commencement; such claims are governed by the six-year limitation period under Section 4(1) of the Limitation of Actions Act.
- An employee who misappropriates monies advanced by the employer, even where the misappropriation occurs through a third-party society, commits gross misconduct justifying summary dismissal under Section 17 of the repealed Employment Act.
Court orders
#- 1.The claimant's case is dismissed
- 2.Each party to bear its own costs
- Jurisdiction invoked
- First-instance jurisdiction of the Industrial Court (now Employment and Labour Relations Court) over a trade dispute reported to the Minister for Labour under the Labour Relations Act after failed conciliation
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Sugar Plantation & Allied Workers v Muhoroni Sugar Company Limited (In receivership) [2018] KEELRC 2075 (KLR)", Case Analysis (2018). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2075/eng@2018-05-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.