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ELRCPartially AllowedCause No. 501 of 2014· [2019] KEELRC 1767 (KLR)

Patrick Lisutsa Masakhwi v Mogas Kenya Limited (Cause 501 of 2014) [2019] KEELRC 1767 (KLR)

Employment and Labour Relations Court of Kenya
25 April 2019
2,990 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that an employer who suspends an employee for investigations must still give them a hearing before dismissal, or the dismissal is unfair.

What this practically means

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Executive summary

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The claimant, employed by the respondent as Station Manager at Njoro Mogas Station in October 2011 at Ksh.22,000 per month and confirmed in March 2012, was suspended without pay on 10 December 2013 following reports of abnormal fuel losses at his station, and summarily dismissed on 19 December 2013 for gross negligence, altering stock reports, failing offloading procedures and leaving the PMS tank unlocked. He claimed unpaid salary for October and November 2013, salary for December days worked, half salary during suspension, compensation for unfair termination and gratuity. The respondent attributed losses of approximately Ksh.421,297 to the claimant's negligence, theft and false reporting, relying on a hydro test that found a pin-hole perforation in the underground tank. The court framed three issues: whether the termination was wrongful; whether the remedies sought were due; and costs. Applying sections 41, 43, 44 and 47(5) of the Employment Act, 2007, the court found procedural unfairness: after suspending the claimant to allow investigations, the respondent failed to invite him to a hearing on the findings as section 41 mandates. It further held that dismissing the claimant to recover fuel losses whose amounts kept changing and were unascertained was unfair termination amounting to double punishment, while noting the claimant's own blame in failing to report a 1,500-litre variance. Judgment was entered for the claimant for notice pay of Ksh.27,000 and unpaid salary of Ksh.71,100; gratuity was refused as not contractual or statutory, and the half-salary claim was subsumed in the December award. Each party was ordered to bear its own costs.

Key legal issues

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01

Whether the summary dismissal was procedurally fair

Holding

The dismissal was procedurally unfair; the respondent failed to afford the claimant a hearing after the investigations following his suspension, contrary to section 41 of the Employment Act, 2007.

Reasoning

The claimant was suspended on 10 December 2013 to allow investigations into fuel losses. Once investigations were complete, the employer was obliged under section 41 to invite him to a hearing on the findings before summarily dismissing him on 19 December 2013. No such hearing was held. The respondent therefore, despite having arguably justified reasons as at 10 December, breached the mandatory procedure, resulting in procedural unfairness.

p. 4
02

Whether the dismissal was substantively justified

Holding

The grounds for dismissal were not sufficiently established; the fuel loss figures kept changing, and dismissing the claimant to recover unascertained losses was unfair and double punishment.

Reasoning

The amounts of fuel loss stated by the respondent varied from 3,355 litres to 4,500 litres to approximately 1,245 litres per the hydro test. The claimant had reported the leakage and a mechanical report attributed the loss to a leaking underground tank. The respondent had no counterclaim for the loss and no records supported deduction of terminal dues. Dismissing the claimant to pay unascertained approximate losses was unfair and a double punishment, though the claimant bore some blame for failing to report a 1,500-litre variance.

p. 4
03

What remedies are due

Holding

Notice pay of Ksh.27,000.00 and unpaid salary of Ksh.71,100.00 awarded; gratuity refused; half salary during suspension subsumed in the December 2013 award.

Reasoning

With no records of payment of terminal dues, the claimant's salary for October, November and 19 days in December 2013 was due, computed at his last earnings of Ksh.27,000.00 per month. Notice pay of one month was due where termination followed no due process. Gratuity was not an agreed contractual term nor founded in law. The half-salary claim for the suspension period was addressed by the award for days worked in December 2013.

p. 4

Legal principles established

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  • The burden of proving unfair termination rests on the employee, while the burden of justifying the grounds for termination rests on the employer (section 47(5), Employment Act).
  • Before summary dismissal an employee must be given a hearing per section 41, and the employer must have valid and genuine reasons per section 43 of the Employment Act, 2007.
  • An employer who suspends an employee to allow investigations must, upon completion, invite the employee to a hearing based on the findings; failure to do so renders the termination procedurally unfair.
  • Terminating an employee to compel payment of fuel losses whose amounts were unascertained and approximate amounts to unfair termination and double punishment.

Court orders

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  1. 1.Judgment entered for the claimant against the respondent for notice pay of Ksh.27,000.00
  2. 2.Payment of unpaid salary of Ksh.71,100.00 (October, November and 19 days worked in December 2013)
  3. 3.Each party shall bear own costs

Authorities

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Legislation

  • Employment Act, 2007section 47(5)
  • Employment Act, 2007section 44(3) and (4)
  • Employment Act, 2007section 41
  • Employment Act, 2007section 43

Cases cited (2)

  • Bamburi Cement Limited versus William Kilonzi
    [2016] eKLR
  • Anthony Mkala Chitavi versus Malindi Water and Sewerage Co. Limited
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007

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, "Patrick Lisutsa Masakhwi v Mogas Kenya Limited (Cause 501 of 2014) [2019] KEELRC 1767 (KLR)", Case Analysis (2019). Cause No. 501 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1767/eng@2019-04-25

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