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ELRCPartially AllowedNot stated in the judgment as provided· [2018] KEELRC 2325 (KLR)

Rose Akoth Ogwang v CIC General Insurance Limited [2018] KEELRC 2325 (KLR)

Employment and Labour Relations Court
10 January 2018
NMNzioki wa MakauRSRadido Stephen
3,546 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 upheld an employee's dismissal for undisclosed payments but awarded her unpaid house allowance of Kshs. 102,267.45 because her salary was never consolidated.

What this practically means

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Executive summary

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The Claimant, formerly employed by the Respondent from 1989 until November 2013 and last serving as Assistant Manager Claims, sued for unlawful and unfair dismissal on allegations of soliciting bribes and kickbacks from the Respondent's service providers, claiming notice pay, overtime, unpaid house allowance, accrued leave, severance pay and damages totalling Kshs. 5,697,725.55. The Respondent defended the dismissal, asserting that investigations revealed the Claimant had received undisclosed M-Pesa payments from service providers, that she was invited to and accorded a disciplinary hearing on 7th November 2013, and that her summary dismissal under Sections 44(3) and 44(4)(g) of the Employment Act was lawful, with terminal dues of Kshs. 91,280 paid and accepted. The Claimant testified and the Respondent called its HR Business Partner, Peter Mwenda Gitugi. The court framed four issues: procedural fairness, valid reason, house allowance and terminal dues, and entitlement to relief. It held that the dismissal was procedurally fair and substantively justified, noting the Claimant's inability to explain continued receipt of payments long after her mother-in-law's burial and accepting the authenticity of the disciplinary minutes. However, on house allowance, the court found the salary was not consolidated as pleaded by the Respondent and awarded house allowance only for the months covered by the payslips produced, totalling Kshs. 102,267.45, claims prior to 2009 being time-barred. The court entered judgment for the Claimant for Kshs. 102,267.45 with costs on the lower scale and no interest, most of the claim having failed.

Key legal issues

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01

Whether the termination was procedurally fair and for a valid reason

Holding

The Claimant failed to prove the termination was unjustified or unprocedural; the disciplinary process met Section 41 requirements and the undisclosed payments from service providers justified dismissal

Reasoning

The Claimant was invited by letter dated 3rd November 2013 to a hearing on 7th November 2013 and was accorded a hearing. The minutes, prepared by the Respondent's witness, contained a question and answer format matching what the Claimant said in cross-examination, so the court did not doubt they reflected the proceedings. The Claimant was unable to explain continued receipt of funds long after her mother-in-law's burial and came across as dishonest about the purpose of the payments.

p. 5
02

Whether the Claimant was entitled to unpaid house allowance

Holding

The Claimant succeeded in part; house allowance was recoverable only for the months captured in the payslips produced and within the limitation period, totalling Kshs. 102,267.45

Reasoning

The payslips exhibited showed no house allowance component and the contracts did not state the salary was consolidated under Section 31(2)(a) as pleaded by the Respondent. The employer was therefore required to pay house allowance at 15% of basic salary or provide housing. However, the three-year limitation period barred claims before 2009, so only house allowance for February 2010, January 2011, January and February 2012 and April 2013 was awarded.

p. 5

Legal principles established

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  • The employer bears the burden of proving the reason or reasons for termination, failing which the termination is deemed unfair under Section 45 of the Employment Act
  • In complaints of unfair termination, the employee bears the burden of proving that unfair termination occurred while the employer must justify the grounds for termination
  • Disciplinary hearings under Section 41 of the Employment Act are not equivalent to criminal trials and do not require courtroom-style evidence and cross-examination
  • An employer must either pay house allowance at 15% of the basic salary or provide housing under Section 31 of the Employment Act unless the salary is expressly consolidated
  • Claims for accrued employment benefits are subject to a three-year limitation period

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent for Kshs. 102,267.45 being unpaid house allowance
  2. 2.Costs on the lower scale granted to the Claimant
  3. 3.No interest on the sum awarded

Authorities

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Legislation

  • Employment Act, 2007Section 43(1) and (2)
  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 31
  • Employment Act, 2007Section 31(2)(a)
  • Employment Act, 2007Section 44(3) and 44(4)(g)

Cases cited (8)

  • Anthony Mkala Chitavi v Malindi Water & Sewerage Company Limited
    [2013] eKLR
  • Rebecca Ann Maina & 2 Others v Jomo Kenyatta University of Agriculture and Technology
    [2014] eKLR
  • David Wanjau Muhoro v Ol Pejeta Ranching Limited
    [2014] eKLR
  • Pelecia Olum v Export Processing Zones Authority
    [2014] eKLR
  • Alex Muriuki Bundi v Kakuzi Limited
    [2012] eKLR
  • Wanjohi v Mitchell Cotts Kenya Ltd
    [2002] 2 KLR 462
  • Grace Kavenrenge Kendeli v Laborex Kenya Limited
    [2013] eKLR
  • Ezekiel Nyangoya Okemwa v Kenya Marine & Fisheries Research Institute
    [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over claims arising out of termination of employment under the 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, "Rose Akoth Ogwang v CIC General Insurance Limited [2018] KEELRC 2325 (KLR)", Case Analysis (2018). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2325/eng@2018-01-22

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