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ELRCDismissedELRC Appeal (Nairobi), arising from CM ELC Case No. 725 of 2018· [2020] KEELRC 270 (KLR)

H. Young [EA] Limited v Samuel Gikunda Mbiuki [2020] KEELRC 270 (KLR)

Employment and Labour Relations Court
5 November 2020
3,861 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 confirmed an employer must prove both a valid reason and a fair hearing before firing an employee for misconduct, or the dismissal is unfair.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Nairobi (Onesmus N Makau, J) against the judgment of Senior Resident Magistrate Hon. P. Muholi delivered on 31st January 2020 in CM ELC Case No. 725 of 2018, which awarded Samuel Gikunda Mbiuki one month's salary in lieu of notice, two months' salary as damages for unlawful termination, and costs against his former employer, H. Young & Company (East Africa) Limited. The employer had summarily dismissed the respondent, a tipper driver, on the ground of high fuel consumption allegedly indicating siphoning. The appellant argued the magistrate ignored the fuel report, prior warning letters, and the respondent's refusal to attend hearings, and that the awards lacked justification. The court reaffirmed the first appellate duty to re-evaluate evidence and framed two issues: whether termination was unfair, and whether the awards were justified. It held the employer failed to prove a valid reason under sections 43 and 45, since DW2 admitted the anti-siphoning seal was intact, the fuel card was not produced, and leakage could not be excluded. It also found the mandatory notification-and-hearing procedure under section 41 was not proved, rendering the dismissal procedurally unfair. The notice pay award was upheld, monthly salary having been proved by payslips. Although the two-months compensation award lacked any stated justification and thus invited appellate interference, the court declined to set it aside given the respondent's 7 years of service and age of 63. The appeal was dismissed with half costs to the respondent.

Key legal issues

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01

Whether the appellant proved a valid reason for summary dismissal

Holding

The appellant did not prove a valid reason; the fuel consumption evidence did not establish siphoning since the seal was intact, the fuel card was not produced, and leakage could not be ruled out

Reasoning

The court evaluated DW2's admissions on cross-examination: the tipper had a seal against siphoning which was not broken, the fuel card was not produced in court, and it was possible to lose fuel through leakage. The trial court had also noted high consumption could be caused by mechanical faults or leakage. The employer therefore failed to discharge the burden under sections 43 and 45 of the Employment Act to prove a valid and fair reason related to the employee's conduct.

p. 4
02

Whether the termination followed a fair procedure under section 41 of the Employment Act

Holding

The termination was procedurally unfair; the appellant adduced no evidence that the respondent was notified and heard before dismissal

Reasoning

Section 41 mandates that before terminating on grounds of misconduct the employer must explain the reasons to the employee and hear and consider any representations. The court found no evidence that this mandatory procedure was followed, adopting the Court of Appeal position in Standard Group Limited v Jenny Luesby and CMC Aviation Limited v Mohammed Noor that the right to a hearing before dismissal for a cause is mandatory.

p. 4
03

Whether the award of one month's salary in lieu of notice was justified

Holding

Yes; even without a written contract, an employee paid monthly is entitled to one month's salary in lieu of notice under sections 35(1)(c) and 36, and section 49(1)(a)

Reasoning

The respondent's monthly salary was proved by payslips and was not disputed. Under section 35(1)(c), a contract paying wages periodically at intervals of or exceeding one month is terminable by either party by twenty-eight days' notice, and section 49(1)(a) permits an award of wages that would have been earned during the notice period.

p. 4
04

Whether the trial court erred in awarding two months' salary as compensation without justification

Holding

The trial court gave no reasons for the award, which invited appellate interference, but the court declined to set the award aside because it was modest given the respondent's 7 years of service and age of 63

Reasoning

The only statement in the impugned judgment on damages was a bare arithmetic computation with no reference to the factors in section 49(4) of the Employment Act. Following Ol Pejeta Ranching Limited v David Wanjau Muhoro, an unexplained discretionary award justifies intervention. Nonetheless, the court exercised its discretion to retain the award, considering the employee's length of service and diminished prospects of re-employment at 63 years of age.

p. 5

Legal principles established

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  • Without a written contract of service, an employee is still entitled to payment of salary in lieu of notice under section 36 of the Employment Act based on the intervals at which wages are paid (section 35(1)(c)).
  • An employer must prove on a balance of probability both a valid and fair reason for termination and that a fair procedure was followed; where the alleged misconduct (fuel loss) could be explained by other extraneous factors not ruled out by evidence, the reason is not proved.
  • Compliance with section 41 of the Employment Act (notification and hearing before dismissal for misconduct) is mandatory; failure to accord the employee a hearing renders the dismissal procedurally unfair.
  • An appellate court may interfere with a discretionary award of compensation where the trial court gives no reasons justifying the award, indicating irrelevant considerations were taken into account or relevant ones ignored.

Court orders

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  1. 1.The appeal is dismissed
  2. 2.The impugned judgment of the trial magistrate delivered on 31st January 2020 is upheld
  3. 3.Costs: the appeal is dismissed with half costs to the respondent

Authorities

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Legislation

  • Employment Actsection 44(4)
  • Employment Actsection 44(c)
  • Employment Actsection 44(g)
  • Employment Actsection 45(1) and (2)
  • Employment Actsection 45(5)
  • Employment Actsection 43(2)
  • Employment Actsection 41(1) and (2)
  • Employment Actsection 42(1)
  • Employment Actsection 49(1)(a)
  • Employment Actsection 49(4)
  • Employment Actsection 35(1)(c)
  • Employment Actsection 36
  • Employment Actsection 47(5)
  • ELRC Procedure RulesRule 28(3)

Cases cited (11)

  • Abok James Odera T/A A.J Odera & Associates vs. John Patrick Machira T/A Machira & Co. Advocates
    [2013] eKLR
  • Kenya Ports Authority vs Kuston (Kenya) Limited
    (2009) 2EA 212
  • National Social Security Fund v Grace K. Kazungu & another
    [2018] eKLR
  • Freight In Time Limited v Rosebell Wambui Munene
    [2018] eKLR
  • Ol Pejeta Ranching Limited -v- David Wanjau Muhoro
    [2017] eKLR
  • Kenya Revenue Authority v Kenya Bankers Association
    [2020] eKLR
  • Selle & Another vs. Associated Motor Boat Company Limited & others
    [1968] E.A 123
  • Anthony Mkala Chitavi vs Malindi Water and Sewerage Company Limited
    Mombasa ELRC Cause No. 64 of 2012
  • Pius Machafu Isindu v Lavington Security Guards Limited
    [2017] eKLR
  • Standard Group Limited v Jenny Luesby
    [2018] eKLR
  • CMC Aviation Limited v Mohammed Noor
    Civil Appeal No. 199 of 2013
On appeal from
Senior Resident Magistrate's Court, Nairobi
CM ELC Case No. 725 of 2018
Jurisdiction invoked
First appeal from the magistrates' court to the Employment and Labour Relations Court (employment dispute under the Employment Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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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, "H. Young [EA] Limited v Samuel Gikunda Mbiuki [2020] KEELRC 270 (KLR)", Case Analysis (2020). ELRC Appeal (Nairobi), arising from CM ELC Case No. 725 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/270/eng@2020-11-05

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