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ELRCPartially AllowedCause No 1825 of 2016· [2019] KEELRC 471 (KLR)

James Ooko Seda v Adsite Limited [2019] KEELRC 471 (KLR)

Employment and Labour Relations Court
23 October 2019
2,347 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer that fires a worker without written records of misconduct or a fair hearing must pay up to 12 months' salary in compensation.

What this practically means

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Executive summary

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The Claimant, employed as a storekeeper and cleaner from 1st September 2012, sued for compensation for unfair termination and terminal dues after his services were verbally terminated by a director on 30th May 2015 without notice, hearing or a termination letter. He sought notice pay, 12 months' compensation, house allowance, overtime, untaken leave and severance pay totalling Kshs. 940,084.22. The Respondent admitted the employment but contended the Claimant was summarily dismissed for gross misconduct - lateness, insubordination and lost store items - after warnings, and that all dues were paid at separation. At trial the Claimant (CW1) testified he was never warned or heard; the Respondent's CEO (RW1) admitted there were no records of the Claimant's lateness and no written warnings, and no termination letter was served. The court found the Respondent failed to prove a valid reason under Section 43 and that no disciplinary process under Section 41 was undertaken, rendering the termination unfair under Section 45(2). The Claimant was awarded one month's notice pay (Kshs. 12,500), 12 months' compensation (Kshs. 150,000), and house allowance at 15% of salary for 3 years (Kshs. 67,500), the remaining 3 years being time barred - a total of Kshs. 238,750. The overtime, untaken leave and severance pay claims were not granted. The Respondent was ordered to pay costs with interest at court rates from the date of judgment.

Key legal issues

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01

Validity of reason for termination

Holding

The Respondent had no valid reason to terminate the Claimant as it produced no documents to show lateness, erratic attendance or warnings

Reasoning

The Respondent alleged the Claimant was insubordinate, reported late and left early, and had been warned severally. However, RW1 admitted in cross-examination that there were no records in court to confirm the lateness and no written warnings existed. Under Section 43 of the Employment Act, the employer must prove the reasons for termination; failing this, the termination is deemed unfair under Section 45.

p. 4
02

Procedural fairness

Holding

The termination violated Section 41 of the Employment Act as the Claimant was not taken through any disciplinary process and was terminated verbally without a termination letter

Reasoning

The Claimant testified he was not given an opportunity to be heard and no disciplinary action was taken prior to the verbal termination. RW1 admitted there was no termination letter served on the Claimant to explain the reasons for termination. Section 41 requires notification and a hearing before termination on grounds of misconduct, which was not done.

p. 4
03

Entitlement to reliefs

Holding

The Claimant was awarded one month's notice pay, 12 months' compensation for unfair termination, and house allowance at 15% for 3 years, totaling Kshs. 238,750

Reasoning

Having found the termination unfair and unjustified under Section 45(2) for lack of proper reasons and want of due process, the court found for the Claimant and applied the maximum 12 months' compensation under Section 49 of the Employment Act. Notice pay was granted since no summary dismissal procedure was followed. House allowance was limited to 3 years on limitation grounds.

p. 4

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
  • An employee must be taken through a disciplinary process before termination

Court orders

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  1. 1.1 month's salary in lieu of notice of Kshs. 12,500
  2. 2.12 months' compensation for unlawful termination of Kshs. 150,000 (12 x 12,500)
  3. 3.House allowance at 15% of salary for 3 years of Kshs. 67,500 (15% x 12,500 x 36), the other 3 years being time barred
  4. 4.Total award of Kshs. 238,750
  5. 5.Respondent to pay costs of the suit plus interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment Act, 2007Section 44(4)(e)
  • Employment Act, 2007Sections 41, 43 and 45
  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Sections 35 and 36
  • Employment Act, 2007Section 45(2)

Cases cited (13)

  • Kenya Human Rights Commission & Another Vs Non-Governmental Organization Co-ordination Board & Another (2018) eKLR
  • Daniel Kiplagat Kikeibut Vs Smep Deposit Taking Micro Finance Limited
  • Walter Ogal Anuro Vs Teachers Service Commission (2013) eKLR
  • Saklani Vs DHL Global Forwarding (K) Limited (2012) eKLR
  • John Wafula Vs Star Production Limited (2016) eKLR
  • Robert Kimutai Rutto Vs Hotel Cathay Limited (2018) eKLR
  • Kiambaa Dairy Farmers Co-operative Society Limited Vs Rhoda Njeri & 3 Others (2018) eKLR
  • CMC Aviation Limited Vs Mohammed Noor (2015) eKLR
  • Koki Muia Vs Samsung Electronics East Africa Limited (2015) eKLR
  • Kenya Plantation & Agricultural Workers’ Union Vs Keen Kleeners Limited (2014) eKLR
  • Kesi Mohamed Salim Vs Kwale International Sugar Co. Limited (2017) eKLR
  • Krystalline Salt Limited Vs Kwekwe Mwakele & 67 Others (2017) eKLR
  • Haji Hassan Mohammed Vs Salim Mohamed Al-Moudy Limited (2014) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "James Ooko Seda v Adsite Limited [2019] KEELRC 471 (KLR)", Case Analysis (2019). Cause No 1825 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/471/eng@2019-10-23

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