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ELRCPartially AllowedCase No 284 of 2015· [2019] KEELRC 675 (KLR)

Paul Kimutai Murgor v Mumias Sugar Company Limited [2019] KEELRC 675 (KLR)

Employment and Labour Relations Court
8 October 2019
MNMathews N. Nduma
1,524 words in judgment
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The bottom line

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A Kenyan court awarded a former Commercial Director over Kshs 7.8 million because his employer fired him without giving reasons or a fair hearing.

What this practically means

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Executive summary

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The claimant, formerly Commercial Director of the respondent, sued for unfair termination. He was employed on 1st September 2008 and rose through several positions until 1st April 2014, when he was sent on compulsory leave pending a KPMG investigation into alleged improprieties concerning sugar importation, procurement and commercial transactions. He was exonerated by the audit, but on 28th July 2014 the Chairman of the Board Nominations and Human Resource Committee pressed him to resign or take early retirement. On his refusal, he was served on 1st October 2014 with a termination letter dated 27th August 2014 giving no reasons; his appeal went unanswered. Neither party called oral witnesses - the claimant's testimony and documents were admitted by consent and stood uncontroverted. The court framed two issues: whether the termination was for a valid reason and by fair procedure, and whether the claimant was entitled to the reliefs sought. It found the respondent had no valid reason and followed no fair procedure, violating Sections 36, 41, 43 and 45 of the Employment Act, 2007. Reinstatement was refused because over four years had elapsed and viability was unproven. The court instead awarded six months' gross salary (Kshs. 4,905,740) as compensation for unlawful and unfair termination, guided by Murambi vs Nzoia Sugar Company, plus two months' notice pay (Kshs. 1,635,246.70) and Kshs. 1,323,771.10 for 34 untaken leave days, with interest and costs. Other reliefs, including constitutional damages and retirement benefits, were not granted. Judgment was delivered on 8th October 2019 by Mathews N. Nduma, Judge.

Key legal issues

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01

Validity of the reason and fairness of the procedure for termination

Holding

The termination was without valid reason and unfair in procedure.

Reasoning

The claimant was exonerated by the KPMG audit yet the committee pressed him to resign or take early retirement; on his refusal he was served a termination letter giving no reasons. His appeal was never answered. The court found no valid reason and no fair procedure, citing Sections 36, 41, 43 and 45 of the Employment Act.

p. 2
02

Entitlement to reliefs, including reinstatement versus compensation

Holding

Reinstatement refused as impractical; maximum-tier compensation with notice pay and leave pay awarded.

Reasoning

Because over four years had passed since termination, reinstatement was no longer viable and the claimant did not prove continued compatibility with the respondent's operational requirements. The court instead awarded six months' gross salary as compensation, guided by Murambi vs Nzoia Sugar Company, plus notice pay and accrued leave.

p. 3

Legal principles established

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  • Termination of employment without a valid reason and without a fair procedure violates Sections 36, 41, 43 and 45 of the Employment Act, 2007 and is unlawful and unfair, entitling the employee to compensation under Section 49.
  • Uncontroverted evidence stands as proof of the facts narrated where the opposing party calls no witness.

Court orders

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  1. 1.Award of the equivalent of six (6) months gross salary in the sum of Kshs. 4,905,740 as compensation for the unlawful and unfair termination of employment.
  2. 2.Award of two months salary in lieu of notice in the sum of Kshs. 1,635,246.70.
  3. 3.Award of Kshs. 1,323,771.10 in lieu of 34 untaken leave days.
  4. 4.Interest at court rates in respect of the notice and leave pay awards from date of filing suit, and in respect of the compensation award from date of judgment till payment in full.
  5. 5.Costs of the suit to the claimant.

Authorities

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Legislation

  • Constitution of KenyaNot specified (rights referred to generally)
  • Employment ActSections 36, 41, 43, 45, 49(1)(2)(3) and 4

Cases cited (1)

  • Murambi vs Nzoia Sugar Company
    2019 eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction under the Constitution of Kenya, 2010 and the Employment Act, 2007 (jurisdiction provision not expressly cited in the excerpt)

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, "Paul Kimutai Murgor v Mumias Sugar Company Limited [2019] KEELRC 675 (KLR)", Case Analysis (2019). Case No 284 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/675/eng@2019-10-08

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