Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedNot stated in the judgment as provided· [2019] KEELRC 667 (KLR)

Ronald Odhiambo Owuor v Tea Warehouses Limited [2019] KEELRC 667 (KLR)

Employment and Labour Relations Court
11 October 2019
2,678 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

#

What this practically means

#

Executive summary

#
The Claimant, employed from 1997 by Consolidated [MSA] Limited and moved to the Respondent, Tea Warehouses Limited, rising to Shipping and Operations Manager on a gross monthly salary of Kshs. 262,626, sued for unlawful termination. On 12th February 2016 the Respondent circulated an email to staff alleging he had resigned, and locked him out of the workplace; a show cause letter followed on 29th February 2016, he replied on 1st March 2016, and no disciplinary hearing or termination letter followed. The Respondent alleged the Claimant had founded and operated Cargolog Limited, a competing clearing and forwarding company, poached an employee, and diverted business. The court found the Claimant indeed founded the rival company in breach of his contract and Code of Conduct, constituting a conflict of interest and valid reason for termination which would have justified summary dismissal. However, the Respondent botched fair procedure under Sections 41 and 45 of the Employment Act by faking a resignation, alleging desertion, and denying the Claimant a hearing; termination was therefore procedurally unfair. Under Section 49, considering the Claimant's own contribution to his exit, compensation of 2 months' gross salary (Kshs. 525,252) was awarded, together with 12 days' salary for February 2016 (Kshs. 121,212), a Certificate of Service, and interest at 14% per annum. Claims for notice pay, leave and severance were rejected, and no order was made on costs.

Key legal issues

#
01

Valid reason for termination

Holding

The Claimant's registration, directorship and operation of a competing company was a fundamental breach justifying termination

Reasoning

The Claimant founded Cargolog Limited, a clearing and forwarding company in direct competition with the Respondent's sister company Consolidated, while in active employment. He did not disclose this, poached a supervisor, and violated the Code of Conduct prohibiting divided loyalties and competing business. This constituted a conflict of interest and fundamental breach, showing valid reason for termination.

p. 3
02

Procedural fairness under Sections 41 and 45 of the Employment Act

Holding

The Respondent botched fair procedure by circulating fake resignation news, alleging desertion, and failing to give a hearing; termination was therefore unfair

Reasoning

The Respondent circulated an email alleging the Claimant had resigned when he had not, then alleged desertion. The confrontation with Nesbitt had no agenda, minutes or notice of charges, and the Claimant was never called to a disciplinary hearing after replying to the show cause letter. No termination letter was issued. The process failed the standards of Section 41 of the Employment Act.

p. 3
03

Quantum of compensation under Section 49

Holding

Compensation of 2 months' gross salary awarded, taking into account the Claimant's contribution to his own exit

Reasoning

The Claimant earned Kshs. 262,626 gross monthly and had an unblemished record until he chose to compete with his longtime employer. However, he contributed significantly to the circumstances of his exit. Balancing these factors under Section 49, the court awarded the equivalent of 2 months' gross salary rather than the 12 months sought.

p. 3

Legal principles established

#
  • An employee who engages in direct competition with the employer's business, breaching the Code of Conduct and contract, gives the employer valid reason for termination
  • Even where valid reason exists, termination is unfair if the procedure under Sections 41 and 45 of the Employment Act is not followed

Court orders

#
  1. 1.Declaration that termination was based on valid ground but procedurally unfair
  2. 2.Respondent to pay the Claimant equivalent of 2 months' gross salary at Kshs. 525,252 and salary for 12 days worked in February 2016 at Kshs. 121,212 – total Kshs. 646,464
  3. 3.Certificate of Service to issue
  4. 4.No order on the costs
  5. 5.Interest at 14% per annum from the date of Judgment till payment is made in full

Authorities

#

Legislation

  • Employment ActSection 41
  • Employment ActSection 45
  • Employment ActSection 49
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 41, 45 and 49 applied)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Ronald Odhiambo Owuor v Tea Warehouses Limited [2019] KEELRC 667 (KLR)", Case Analysis (2019). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/667/eng@2019-10-11

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