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ELRCPartially AllowedCause No 170 of 2014· [2019] KEELRC 1865 (KLR)

Joseph Kimani Kigotho v Diani Flowers & Landscaping Ltd [2019] KEELRC 1865 (KLR)

Employment and Labour Relations Court
29 March 2019
1,674 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 an employer's dismissal unfair because it never clearly told the employee he faced termination, but denied extra compensation because the employee acted dishonestly.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from January 2009 and sent to Rwanda in June 2010 to maintain Amahoro Stadium, received a notice on 15 March 2013 requiring explanations over allegations including submitting a parallel tender, failing to report equipment failure, neglect of the stadium and absconding. On the same day the Respondent summarily dismissed him. He sued for unfair termination and breach of contract. The Court adopted the issues of whether the dismissal was fair, whether he was entitled to US $ 34,900, and costs. It found the summary dismissal procedurally unfair because the Respondent never unambiguously informed the Claimant that termination was under consideration; the 15 March 2013 letter merely called for explanations that could have formed part of a routine audit, failing the mandatory threshold of sections 41(1) and (2) of the Employment Act, 2007. Substantive fairness was not examined, but the Court noted unrebutted evidence that the Claimant had incorporated a company with a name similar to a Respondent Director's to compete for the stadium tender, placing him in conflict of interest and acting dishonestly. The Court awarded US $ 14,090 in reimbursements based on the Respondent's admitted reconciliation, February 2013 and March 2013 salaries, and one month's pay in lieu of notice. It refused compensation, NHIF remissions, leave beyond 18 months, and PAYE fines for want of proof or discretion. The Respondent was ordered to issue a certificate of service within 15 days, and each party to bear its own costs.

Key legal issues

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01

Procedural fairness of summary dismissal

Holding

The summary dismissal failed the procedural fairness test under section 41 of the Employment Act because the Respondent did not unambiguously inform the Claimant that termination was under consideration

Reasoning

The letter of 15 March 2013 called for explanations to specified allegations but did not indicate the explanations were part of a disciplinary process that could end in dismissal; they could have been routine audit or investigative. Although the Claimant may have known the allegations, the process did not meet the mandatory threshold of section 41(1) and (2), which requires hearing and considering representations before summary dismissal.

p. 2
02

Substantive fairness (sections 43 and 45)

Holding

Not necessary to determine, but the unrebuted evidence showed the Claimant incorporated a company to compete with the Respondent for the stadium tender, acting in conflict of interest and dishonestly

Reasoning

Because the dismissal failed the mandatory procedural fairness test, the Court did not examine substantive fairness under sections 43 and 45. However, it noted that evidence of the Claimant incorporating a company with a name similar to a Respondent Director's to compete in the tender was unrebutted, informing the refusal of compensation.

p. 2
03

Reimbursement/debt claim

Holding

Reimbursement allowed at US $ 14,090 as per the Respondent's own reconciliation admitted in cross-examination

Reasoning

The Respondent's Managing Director admitted under cross-examination that an internal reconciliation by the Accountant showed the Claimant was owed US $ 14,090. The Respondent's attempt to disown the reconciliation on the basis of a further audit failed because the further reconciliation was not filed within the window for filing and exchange of documents.

p. 2
04

Salary arrears

Holding

February 2013 salary (Kshs 72,600/-) and salary up to 15 March 2013 (Kshs 36,300/-) awarded as the Respondent produced no records of payment

Reasoning

The Claimant was entitled as of right to salary up to the date of dismissal. No records were produced showing the February 2013 salary was paid, establishing breach of contract, and salary up to 15 March 2013 was computed and allowed.

p. 3
05

Pay in lieu of notice

Holding

One month's salary in lieu of notice awarded under section 36 as read with section 44(1) of the Employment Act

Reasoning

The Claimant had no formal contract at separation but was paid by the month, so pay in lieu of notice equivalent to one month's salary was allowed under section 36 read with section 44(1) of the Employment Act, 2007.

p. 3
06

Adjournment request at resumed hearing

Holding

Declined because the Respondent knew of its unpreparedness when fixing the hearing date and it was not its first adjournment application

Reasoning

When the hearing date was fixed on 16 November 2018 the Respondent's advocate was aware the counsel handling the brief had left the firm. It was also not the Respondent's first application for adjournment, so the request was declined, with reasons to be given in the judgment.

p. 2

Legal principles established

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  • Section 41(1) and (2) of the Employment Act mandatorily requires an employer to hear and consider an employee's representations before summary dismissal, and a letter merely calling for explanations without indicating a disciplinary process does not meet that threshold
  • Section 28(4) of the Employment Act limits accrued leave that can be carried forward to 18 months
  • An employee who secretly incorporates a company to compete with his employer in tendering is in conflict of interest and acting dishonestly

Court orders

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  1. 1.Declaration that the dismissal of the Claimant was procedurally unfair and that the Respondent was in breach of contract
  2. 2.Award of pay in lieu of notice of Kshs 72,600/-
  3. 3.Award of salary for February 2013 of Kshs 72,600/-
  4. 4.Award of salary up to 15 March 2013 of Kshs 36,300/-
  5. 5.Award of reimbursement/debt of US $ 14,090
  6. 6.Respondent to issue Certificate of Service within 15 days
  7. 7.Each party to bear own costs

Authorities

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Legislation

  • Employment Act, 2007section 35(1)(c)
  • Employment Act, 2007section 36
  • Employment Act, 2007section 41(1) and (2)
  • Employment Act, 2007section 43
  • Employment Act, 2007section 45
  • Employment Act, 2007section 28(4)
  • Employment Act, 2007section 44(1)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination of employment and breach of contract claims (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, "Joseph Kimani Kigotho v Diani Flowers & Landscaping Ltd [2019] KEELRC 1865 (KLR)", Case Analysis (2019). Cause No 170 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1865/eng@2019-03-29

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