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ELRCPartially AllowedCause No. 180 of 2016· [2019] KEELRC 378 (KLR)

Lydia Sarango Momanyi v Maridadi Flowers Limited [2019] KEELRC 378 (KLR)

Employment and Labour Relations Court of Kenya
17 October 2019
MMM. Mbaru
2,228 words in judgment
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The bottom line

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A Kenyan court upheld a fair dismissal for poor performance but ordered the employer to pay gratuity owed under a collective agreement.

What this practically means

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Executive summary

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The claimant, employed by the respondent from May 2008 and promoted to greenhouse supervisor in 2012, was terminated on 10th December 2014 on grounds of poor performance and more than three valid warning letters. She alleged the disciplinary hearing was a sham, that section 41 of the Employment Act was not followed, and claimed 12 months' compensation, gratuity/severance pay and costs. The respondent maintained that the claimant was a habitual offender issued with verbal and written warnings, that show cause notices were issued, that a disciplinary hearing was conducted with the claimant and her witness present, and that all dues were paid. The court held that before termination the employer must comply with section 41 procedural requirements and have valid reasons under section 43, citing authority submitted by the claimant. On the facts, the court found the respondent acted on valid and justifiable grounds and that due process was followed, since the claimant was invited to the hearing with her witness and could write her defence; she also failed in court to challenge the reasons for termination. Compensation was therefore not due, and the claim for severance pay failed as this was a termination and not a redundancy. However, under clause 24 of the collective agreement, an employee with over 5 years' service is entitled to gratuity of 23 days per full year; with 6 full years of service and a last gross wage of Ksh.18,904.81 assessed under section 49(2) of the Employment Act, the claimant was awarded gratuity of Kshs.86,962.13. All other claims failed, with the claimant awarded 50% of costs. Judgment delivered at Nakuru on 17th October 2019 by M. Mbaru, Judge.

Key legal issues

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01

Validity of reasons for termination

Holding

The respondent acted on valid and justifiable grounds; the claimant did not challenge the reasons as untrue

Reasoning

The claimant was supervisor responsible for poor performance in her greenhouse. In response to the show cause notice she shifted blame rather than explain the poor performance. In court she did not challenge the reasons given, only the fairness of the hearing, so the court found the reasons valid under section 43.

p. 3
02

Procedural fairness under section 41

Holding

Due process was followed; the claimant was invited to the disciplinary hearing with her witness and could write her defence

Reasoning

The claimant received show cause notices, replied in writing, attended a disciplinary hearing with her witness, and had a right of appeal. The court rejected the claim that the hearing was a sham, finding that the employee was given a chance to defend herself.

p. 3
03

Entitlement to gratuity under the collective agreement

Holding

The claimant, with 6 full years of service, is entitled to gratuity of 23 days per full year based on her last gross wage of Ksh.18,904.81

Reasoning

Clause 24 of the collective agreement grants gratuity to employees with over 5 years' service upon termination. The parties are bound by this private treaty. Gratuity is computed on the last gross wage per section 49(2) of the Employment Act, yielding Kshs.86,962.13.

p. 3

Legal principles established

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  • Before termination the employer must comply with the procedural requirements of section 41 of the Employment Act and must have valid and genuine reasons under section 43
  • A collective agreement binds the parties as a private treaty; an employee with over 5 years' service is entitled to gratuity of 23 days per full year of service

Court orders

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  1. 1.Payment of gratuity of Kshs. 86,962.13 to the claimant
  2. 2.Dismissal of all other claims
  3. 3.Claimant awarded 50% of costs

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 45
  • Employment Actsection 49(2)

Cases cited (1)

  • Kenfreight (EA) Limited versus Benson K Nguti
    [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 41, 43, 45, 49)

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, "Lydia Sarango Momanyi v Maridadi Flowers Limited [2019] KEELRC 378 (KLR)", Case Analysis (2019). Cause No. 180 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/378/eng@2019-10-17

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