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ELRCPartially AllowedCause No. 148 of 2016· [2019] KEELRC 2567 (KLR)

Benard Wanyama Makokha v Robinson Investment Ltd [2019] KEELRC 2567 (KLR)

Employment and Labour Relations Court of Kenya at Nakuru
21 February 2019
3,030 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer won on misconduct grounds but still paid the employee because it skipped the mandatory hearing under section 41 of the Employment Act.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 1st October 2013 as Operations Manager and later Kisumu Branch Administrator without a written contract, was issued a notice to show cause on 8th January 2016 over unsigned checklists, ghost workers and misuse of company property. He replied on 9th January 2016 admitting lapses and seeking a second chance. A further audit revealed 53 missing employee files; the claimant was suspended on 24th January 2016 pending investigations, and on 25th February 2016 a letter of summary dismissal was issued, citing ghost workers and lost funds, with the matter reported to police. The claimant sued for notice pay, unpaid wages for December 2015 and January 2016, leave pay, rest day pay, public holiday pay, overtime, house allowance, compensation and certificate of service. The court held the dismissal was substantively justified for gross misconduct, hence no notice pay, but procedurally unfair because the claimant was never accorded a hearing after suspension, entitling him to one month's compensation. Terminal dues of Ksh.60,000.00 unpaid wages, Ksh.47,307.70 leave pay, Ksh.154,560.00 public holiday pay and Ksh.121,500.00 house allowance were awarded, the employer having kept no records. Overtime and rest day claims were declined for want of authorisation. The respondent's losses of Ksh.1,771,000.00 from ghost workers were recoverable by set-off against the terminal dues under section 19(1)(b) of the Employment Act, there being no counter-claim. Each party was ordered to bear its own costs.

Key legal issues

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01

Procedural fairness in summary dismissal

Holding

The dismissal was substantively justified but procedurally unfair because the claimant was never given a hearing after suspension

Reasoning

The claimant received a show cause notice on 8 January 2016 and replied on 9 January 2016, but thereafter he was suspended and investigated without any hearing. Section 41 of the Employment Act requires that an employee be heard and allowed to make representations before dismissal, in the presence of a fellow employee of his choice. The failure to accord that hearing rendered the dismissal procedurally unfair despite justifiable grounds of gross misconduct.

p. 4
02

Recovery of employer's losses from employee's dues

Holding

The respondent's losses of Ksh.1,771,000.00 from ghost workers were deductible from the claimant's terminal dues under section 19(1)(b)

Reasoning

The claimant admitted lapses in supervision that allowed unsigned checklists and ghost workers, causing losses. Section 19(1)(b) permits deduction of a reasonable amount for loss occasioned by an employee's wilful default. Having made no specific defence to the claim of losses, the claimant's terminal dues were the only source of recovery since no counter-claim was filed.

p. 4
03

Burden of proof on leave, holidays and house allowance where no written contract exists

Holding

Leave pay, public holiday pay and house allowance were awarded because the employer failed to keep records and issue a written contract

Reasoning

The respondent, as custodian of employment records, produced none to show leave taken or that the salary was consolidated. Sections 10 and 31 of the Employment Act require written particulars including house allowance. In the absence of such records, the claimant's uncontradicted word was believed, and the claims for 41 leave days, 23 public holidays and house allowance succeeded.

p. 4

Legal principles established

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  • Summary dismissal for gross misconduct requires procedural fairness under section 41(2) of the Employment Act; without a hearing the dismissal is procedurally unfair even where the grounds are justified
  • An employee who remains at work beyond hours without employer approval cannot claim overtime pay
  • Where an employer fails to issue a written contract and fails to keep employment records, the word of the employee prevails and the employer suffers the consequence
  • Under section 19(1)(b) of the Employment Act, an employer may deduct from due wages a reasonable amount for loss occasioned by the wilful default of the employee

Court orders

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  1. 1.Compensation of Ksh.30,000.00 (one month's pay) for procedural unfairness
  2. 2.Unpaid wages for January and February 2016 at Ksh.60,000.00
  3. 3.Pay for work during 23 public holidays at Ksh.154,560.00
  4. 4.House allowance of Ksh.121,500.00
  5. 5.Annual leave pay of Ksh.47,307.70
  6. 6.Respondent to recover losses of Ksh.1,771,000.00 occasioned by the claimant from the terminal dues awarded
  7. 7.Each party to bear own costs

Authorities

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Legislation

  • Employment Act, 2007section 41(2)
  • Employment Act, 2007sections 44(3) and (4)
  • Employment Act, 2007section 19(1)(b)
  • Employment Act, 2007section 20
  • Employment Act, 2007section 28
  • Employment Act, 2007sections 10(1) and (3)
  • Employment Act, 2007section 31
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 ( unfair termination and terminal dues claims)

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, "Benard Wanyama Makokha v Robinson Investment Ltd [2019] KEELRC 2567 (KLR)", Case Analysis (2019). Cause No. 148 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2567/eng@2019-02-21

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