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ELRCPartially Allowed· [2019] KEELRC 288 (KLR)

Julius Macharia Mwangi v Matanga Investments Limited [2019] KEELRC 288 (KLR)

Employment and Labour Relations Court
25 November 2019
6,311 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~25 min to read original · ~4 min brief

The bottom line

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A Kenyan farm manager won Kshs 2.3 million after his employer fired him without a hearing, and the employer's fraud counterclaim collapsed because it lacked records.

What this practically means

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Executive summary

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The Claimant, a farm manager retained by the Respondent on successive three-year contracts from 1st July 2010, was suspended on 10th December 2015 over allegations including absence from duty, disclosure of confidential information and taking two cows from the farm. After a disciplinary meeting scheduled for 15th December 2015 which he did not attend, his employment was terminated by letter dated 16th December 2015. On 8th January 2016 the company house he occupied was demolished. The Claimant sued for unlawful termination, various contractual dues, damages for breach of constitutional rights, and general damages, while the Respondent counterclaimed for Kshs. 4,865,009/- alleging fraud and misappropriation through the petty cash system. The court found the dismissal was carried out in a callous manner contrary to Section 41 of the Employment Act, which requires an opportunity to be heard before termination; the hurried process, culminating in the demolition of the employee's residence, was condemned. The court also found no allegation of fraud or misappropriation appeared in the letters issued before dismissal, and the Respondent, as keeper of records under Section 74, failed to substantiate its counterclaim. Judgment was entered for the Claimant for Kshs. 417,450/- pay in lieu of leave days not taken, Kshs. 92,604/- salary for days worked in December 2015, and Kshs. 1,800,000/- maximum compensation for unlawful termination, with costs and interest. Claims for crop bonus, gratuity and payments relating to prior contracts failed for want of proof, as did the Respondent's counterclaim.

Key legal issues

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01

Whether the summary termination was procedurally fair

Holding

The termination was unfair and unlawful for want of due process

Reasoning

The court found the Claimant was dismissed in a callous manner contrary to the requirements of Section 41 of the Employment Act, which requires an opportunity to be heard before termination. The disciplinary process was rushed, the house he occupied was demolished, and the Respondent failed to follow the law. The failure to follow the law meant there was merit in the claim regarding the termination without due process.

p. 5
02

Whether the Respondent proved its counterclaim for Kshs. 4,865,009/-

Holding

The counterclaim failed; the Respondent did not prove the alleged fraud or misappropriation

Reasoning

The court noted there was no indication why the alleged audit was not a financial audit and why it was never revealed to the Claimant before his dismissal. No allegation of fraud or misappropriation appeared in the letters issued to the Claimant prior to suspension and dismissal. As employer, the Respondent was the keeper of records under Section 74 and woefully failed to back its claims.

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03

Remedies for the unfair termination

Holding

Pay in lieu of untaken leave, salary for days worked, and maximum compensation of 12 months' salary under Section 49(1)(c) awarded

Reasoning

Having found the termination unlawful, the court awarded pay in lieu of leave days not taken, salary for days worked in December 2015, and maximum compensation for unlawful termination. Other heads (crop bonus, gratuity, service pay, additional payments) failed for want of proof.

p. 5

Legal principles established

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  • Before terminating an employee for poor performance the employer must give the employee an opportunity to be heard
  • As keeper of employment records under Section 74 of the Employment Act, an employer who makes allegations against an employee must back them with records

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent for Kshs. 417,450/- being pay in lieu of leave days not taken
  2. 2.Kshs. 92,604/- being salary for 15 days worked in December 2015
  3. 3.Kshs. 1,800,000/- being maximum compensation for the unlawful termination
  4. 4.Costs of the suit to the Claimant
  5. 5.Interest on the sums in (i), (ii) and (iii) at court rates from the date of judgment till payment in full
  6. 6.The Respondent's counterclaim dismissed (Respondent failed to prove it was entitled to the sums in the counterclaim)

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 43(1) and 43(2)
  • Employment ActSection 44 (incl. 44(4)(a), 44(c))
  • Employment ActSection 45
  • Employment ActSection 49(1)(c)
  • Employment ActSection 74
  • Constitution of KenyaArticles 28, 31 and 41
  • Companies Act 2015Section 719(1)

Cases cited (5)

  • Paul Mwaura Mbugua v Kagwe Tea Factory Ltd & Another
    [2012] eKLR
  • Mary Chemweno Kiptui v Kenya Pipeline Company Ltd
    [2014] eKLR
  • David Wanjau Muhoro v Ol Pejeta Ranching Ltd
    [2014] eKLR
  • Patrick Abuya v Institute of Cerified Public Accountants of Kenya (ICPAK) & Another
    [2015] eKLR
  • Abraham Gumba v Kenya Medical Supplies Authority
    [2014] eKLR
Jurisdiction invoked
First-instance jurisdiction over an employment dispute (memorandum of claim and counterclaim) under the Employment and Labour Relations Court's jurisdiction; the judgment does not cite a specific provision

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Julius Macharia Mwangi v Matanga Investments Limited [2019] KEELRC 288 (KLR)", Case Analysis (2019). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/288/eng@2019-11-25

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