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ELRCDismissedCause No 213 of 2017· [2019] KEELRC 1930 (KLR)

Peter Macharia Gakure & another v Amica Savings & Credit Limited [2019] KEELRC 1930 (KLR)

Employment and Labour Relations Court
26 March 2019
2,480 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court dismissed two SACCO employees' unfair termination claims but also refused to hear the SACCO's counterclaim, which belongs to the Co-operative Tribunal.

What this practically means

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Executive summary

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Two former employees of a SACCO, Peter Macharia Gakure (Thika Branch manager) and Martha Wangari Gichana (officer in charge of SMEs, Groups and Chamas), sued for unfair termination following their summary dismissal on 19th April 2017 after an audit and supervisory committee inspection of the Thika branch revealed irregular loan disbursements, insider loans and unsecured approvals, with losses estimated at approximately Kshs. 7,000,000/-. They sought declarations of unlawful termination, reinstatement or damages. The Respondent defended the dismissals as procedurally fair and counterclaimed for outstanding loans and the estimated losses. The court framed five issues including fairness of hearing, due process and the counterclaim. It found that although the Claimants were not given the audit report, they were given the allegations and an opportunity to respond, satisfying Section 41 of the Employment Act, and held the hearing substantively and procedurally fair, dismissing the claims. On the counterclaim, the court held that disputes concerning the business of a co-operative society, including loan dues and audit losses, fall within the exclusive jurisdiction of the Co-operative Tribunal under Sections 76 and 77 of the Co-operative Societies Act, and declined even to set off the sums due. Both the claims and the counterclaims were dismissed, with each party bearing its own costs.

Key legal issues

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01

Procedural and substantive fairness of the termination under Section 41 of the Employment Act

Holding

The terminations were both substantively and procedurally fair

Reasoning

The court found that although the Claimants were not given a copy of the audit report, they were given the allegations against them and an opportunity to respond, evidenced by the admission letter of 6th March 2017 and their attendance at the disciplinary meetings. The minutes recorded the proceedings and a report recommending summary dismissal was made. The court thus held that the hearing satisfied the dictates of Section 41 and the Claimants failed to prove otherwise.

p. 3
02

Jurisdiction over the counterclaim for loans and losses

Holding

The court lacks jurisdiction; the dispute belongs to the Co-operative Tribunal

Reasoning

The court held that the audit losses and loan dues are disputes concerning the business of a co-operative society between the society and its members, which Section 76 of the Co-operative Societies Act directs to the Tribunal established under Section 77. Consequently the court could not entertain the counterclaim nor even set off the sums due against any award, and the counterclaims failed alongside the claims.

p. 3

Legal principles established

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  • Disputes concerning the business of a co-operative society, including claims by a society for debts due from members, must be referred to the Co-operative Tribunal and fall outside the employment court's jurisdiction
  • An employer satisfies Section 41 of the Employment Act where the employee is given the allegations and an opportunity to respond, even if a copy of the audit report is not availed

Court orders

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  1. 1.Dismissal of the Claimants' suits
  2. 2.Dismissal of the Respondent's counterclaims
  3. 3.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSection 41
  • Co-operative Societies ActSection 76
  • Co-operative Societies ActSection 77

Cases cited (4)

  • Samuel Nyeso Masha v Silver Holdings Limited & Another
    [2018] eKLR
  • Karisa Charo Kiraga v Nakayima Hauliers (K) Limited
    [2016] eKLR
  • Samuel Kigima Kamau v Invesco Assurance Company Limited
    [2018] eKLR
  • Nahason Njogu Njoroge v Murata Co-Operative Savings and Credit Society Limited
    [2015] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act; counterclaim jurisdiction ousted by Section 76 of the Co-operative Societies Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Peter Macharia Gakure & another v Amica Savings & Credit Limited [2019] KEELRC 1930 (KLR)", Case Analysis (2019). Cause No 213 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1930/eng@2019-03-26

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