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ELRCPartially AllowedCause No 19 of 2018· [2019] KEELRC 2000 (KLR)

Lucy Makena v Xplico Insurance Company Limited [2019] KEELRC 2000 (KLR)

Employment and Labour Relations Court
19 March 2019
NMNzioki wa Makau
1,445 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Nyeri court ruled an employee was unfairly fired over theft allegations the employer could not prove, awarding her notice pay, compensation and costs.

What this practically means

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Executive summary

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The Claimant, formerly employed by the Respondent as a secretary from 1st August 2011 (her salary rising from Kshs. 21,000/- to Kshs. 46,200/- per month), sued for unfair, unprocedural, biased and constructive termination. She was sent on compulsory leave effective 1st October 2014 following an allegation that she stole Kshs. 308,491/- (later stated as Kshs. 685,892/- after an audit), was arrested and charged with stealing by servant in Meru Criminal Case No. 1960 of 2014, and was acquitted under section 210 of the Criminal Procedure Code on 20th September 2017 for want of evidence. She sought a declaration of unfair termination, salary from 30th September 2014, special and general damages, and compensation under section 49(1)(c) of the Employment Act. The Respondent denied constructive termination, contending her acquittal did not exonerate her from breach of duty. The matter proceeded ex parte on 5th February 2019. Framing three issues, the court held the Claimant was not guilty of the alleged theft: no investigations were evidenced, the Respondent's witnesses never testified, the criminal trial collapsed through halfhearted prosecution, and the Respondent contradicted itself on the amounts lost without documentary proof. The termination therefore lacked a valid reason, disentitling the Respondent to sections 43 and 45 protection. Further, the Claimant received no notice or disciplinary hearing, breaching section 41, rendering the dismissal unfair. Judgment was entered for the Claimant for one month's notice pay (Kshs. 46,200/-), five months' compensation (Kshs. 231,000/-), costs, interest, and a certificate of service.

Key legal issues

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01

Whether the Claimant engaged in gross misconduct justifying summary dismissal

Holding

The Claimant was not guilty of theft as alleged; the dismissal was not for a fair or valid reason, disentitling the Respondent to the protection of sections 43 and 45 of the Employment Act.

Reasoning

The Claimant was sent on compulsory leave after discovery of an alleged theft, but the Respondent produced no evidence of investigations; its witnesses never testified. The criminal charge ended in acquittal under section 210 of the Criminal Procedure Code amid halfhearted prosecution. The Respondent also contradicted itself on the amount allegedly stolen (Kshs. 358,491/- versus Kshs. 685,892/-) without documentary proof such as receipts that the Claimant collected the funds.

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02

Whether the termination was procedurally fair under sections 41 and 45(2) of the Employment Act

Holding

The termination was procedurally unfair because the Claimant was neither issued notice nor taken through a disciplinary hearing.

Reasoning

Section 45(2) renders dismissal unfair where the employer fails to prove a valid and fair reason and fair procedure. Section 41 requires the employer to explain the reasons for termination in a language the employee understands and allow a companion or union representative. The court, applying the authority in Titus Musau Ndivau, held the employer must investigate and give the employee a chance to show cause and a hearing; none occurred here.

p. 2

Legal principles established

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  • Where an employer fails to prove a valid and fair reason for termination and fails to follow fair procedure, the dismissal is ipso facto unfair and unlawful.
  • An employer must investigate misconduct and afford the employee a hearing under section 41 of the Employment Act before termination.

Court orders

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  1. 1.One month's salary in lieu of notice – Kshs. 46,200/-
  2. 2.5 months salary as compensation – Kshs. 231,000/-
  3. 3.Costs of the suit
  4. 4.Interest on (a) and (b) above at court rates from date of judgment till payment in full
  5. 5.Certificate of service

Authorities

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Legislation

  • Employment Actsection 44(3)
  • Employment Actsection 44(4)(g)
  • Employment Actsections 43 and 45 (including 45(2))
  • Employment Actsection 41 (including 41(1) and 41(2))
  • Employment Actsection 49(1)(c)
  • Criminal Procedure Codesection 210

Cases cited (2)

  • Lydia Kaguru Makathimo v Consolidated Bank of Kenya Ltd
    [2019] eKLR
  • Titus Musau Ndivau & another versus Waridi Limited
    [2012] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; the judgment does not cite a specific constitutional provision)

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, "Lucy Makena v Xplico Insurance Company Limited [2019] KEELRC 2000 (KLR)", Case Analysis (2019). Cause No 19 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2000/eng@2019-03-19

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