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ELRCPartially AllowedCause No. 316 of 2016· [2019] KEELRC 1959 (KLR)

Ernest Kibet Tormoi v Kenya Farmers Association Ltd [2019] KEELRC 1959 (KLR)

Employment and Labour Relations Court of Kenya
7 February 2019
5,686 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~23 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The claimant, employed by the respondent (a co-operative society) from 1982 and rising to Branch Manager, claimed his employment was unfairly terminated on 27 January 2016 following a series of unexplained transfers, prolonged suspension without pay, shifting audit allegations and a defective disciplinary process. He sought unpaid salaries, statutory dues, compensation, anticipatory salary to retirement, notice pay, travel reimbursement, leave allowances, salary increments, retirement benefits, defamation damages, a certificate of service, interest and costs. The respondent defended the termination as following due process for financial irregularities at Narok and Moi's Bridge branches and counter-claimed for Ksh.1,315,982.00 comprising Embu stock shortage, overdrawn salary and misapplied cash. The court found the termination procedurally unfair: the disciplinary figures kept changing (from Ksh.4,728,092 to Ksh.1,158,775 and later Ksh.1,287,955) without a fresh show cause notice with better particulars, and the employer improperly required the suspended claimant to verify allegations against himself. The prolonged suspension of over a year without salary while compelling twice-weekly reporting was held to be an inhumane expectation. Judgment was entered for the claimant on accrued leave, termination benefits, unremitted funds, salary to termination (Ksh.998,685), 10 months' compensation (Ksh.494,080), notice pay, two months' travel costs, access to provident fund, certificate of service and costs. Defamation damages and salary increments were declined. The counter-claim succeeded only on the Moi's Bridge overdrawn salary of Ksh.578,482.15 with interest; the Embu claim was time-barred under section 90 and the Narok claim was dismissed. Delivered at Nakuru on 7 February 2019 by M. Mbaru, Judge.

Key legal issues

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01

Whether the termination was procedurally fair

Holding

The termination was procedurally unfair - the employer failed to set out charges with clarity, changed figures without a fresh show cause notice, and required the claimant to verify allegations against himself

Reasoning

The disciplinary figures changed from Ksh.4,728,092 to Ksh.1,158,775.15 and later Ksh.1,287,955.15 without a new show cause notice. The employer, while the claimant was on suspension, had the burden of proving the allegations but required the claimant to verify documents supporting allegations against him, contrary to section 41 of the Employment Act and the audi alteram partem rule.

p. 7
02

Whether the prolonged suspension without pay was lawful

Holding

The prolonged suspension was without basis and rationale, and denying salary while requiring twice-weekly reporting was an inhumane expectation; salary remained due to termination

Reasoning

The claimant was suspended for over a year, paid 60% salary for 90 days then nothing, while required to report twice weekly. The employer could not justify the length of suspension. Suspension is interim to allow investigations, and the employee has no control over the period, so salary remained payable up to termination.

p. 9
03

Remedies justified

Holding

Accrued leave, termination benefits, unremitted funds, salary to termination, 10 months' compensation, notice pay, travel costs for two months, certificate of service and retirement benefits access were awarded

Reasoning

The respondent's own computations of dues were confirmed. Compensation of 10 months' gross wage was assessed considering the hardship, long unpaid suspension, age (56) and medical condition. Two months' notice pay was awarded as the respondent itself noted it as due. Travel costs for April-May 2015 were assessed at two months' salary.

p. 9
04

Whether the counter-claim had merit

Holding

Partially allowed - overdrawn salary at Moi's Bridge of Ksh.578,482.15 allowed with interest; Embu stock shortage barred by limitation and Narok misapplied cash claim dismissed

Reasoning

The Embu stock shortage arose in 2006 before the claimant's re-engagement and is caught by section 90 limitation. The Moi's Bridge overdrawn salary was consistently used in all notices and the claimant admitted receiving salary advances without explaining repayment. The Narok misapplied cash claim was without basis given the claimant's unrebutted defence.

p. 10

Legal principles established

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  • An employer must explain to the employee the grounds for termination and give a fair chance to respond, per section 41 of the Employment Act
  • Where charges are amended or figures changed, the employer must issue a new show cause notice with better particulars before proceeding to terminate
  • Requiring an employee on suspension to verify allegations against himself is contrary to fair labour relations and results in unfair termination
  • A prolonged suspension without a reasonable time frame is impermissible; interdiction should be interim and addressed within about three months
  • Claims by an employer against an employee that arose before re-engagement are barred by limitation under section 90 of the Employment Act

Court orders

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  1. 1.Judgment entered for the claimant with a finding that employment terminated unfairly
  2. 2.13 days accrued leave and travelling allowance of Ksh.28,894.75
  3. 3.Termination benefits for 6 years' service of Ksh.228,036.00
  4. 4.Unremitted provident fund before resignation of Ksh.21,292.00
  5. 5.Unremitted fund to the defunct Retirement Benefits Scheme of Ksh.13,640.00
  6. 6.Balance of salary between April, 2014 and October, 2014 of Ksh.285,923.00
  7. 7.Salary due up and until 27th January, 2016 of Ksh.998,685.00
  8. 8.Compensation of Kshs.494,080.00
  9. 9.Notice pay of Ksh.98,816.00
  10. 10.Travelling costs of Ksh.98,816.00
  11. 11.The claimant to be issued with necessary letter for access to the provident fund
  12. 12.Certificate of service to be issued in accordance with section 51 of the Employment Act, 2007
  13. 13.Costs of the suit to the claimant
  14. 14.Counter-claim confirmed in respect of overdrawn salary (Moi's Bridge) of Ksh.578,482.15 with interest at court rates from the time due until paid in full

Authorities

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Legislation

  • Employment Act, 2007section 41
  • Employment Act, 2007section 43(3)
  • Employment Act, 2007sections 42, 44, 45
  • Employment Act, 2007section 51
  • Employment Act, 2007section 90
  • Constitution of Kenya, 2010Article 41
  • Co-operative Societies Act

Cases cited (7)

  • Cooperative Bank of Kenya Limited versus Banking Insurance & Finance Union (K)
    [2017] eKLR
  • Samsung Electronics East Africa Ltd vs. K. M
    [2017] eKLR
  • Amatsi Water Services Company Limited versus Francis Shire Chachi
    [2018] eKLR
  • Victor Sammy Mutiso versus TSC
    [2016] eKLR
  • Peter Gaitho Ng'ang'a versus Board of Management Banita School and another
    [2015] eKLR
  • Samson Omwoyo versus Maasai Mara University & Another Cause No.2367 of 2016
  • Crospea Nafula versus Sukari Sacco Ltd, Cause No.1322 of 2012
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 and Article 41 of the Constitution (fair labour practices)

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, "Ernest Kibet Tormoi v Kenya Farmers Association Ltd [2019] KEELRC 1959 (KLR)", Case Analysis (2019). Cause No. 316 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1959/eng@2019-02-07

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