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ELRCPartially AllowedCause No 1740 of 2015· [2020] KEELRC 395 (KLR)

Thomas Bacha Ndungu v Kiu Construction Company Limited [2020] KEELRC 395 (KLR)

Employment and Labour Relations Court
9 October 2020
3,995 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that suspending an employee indefinitely without pay amounts to firing them, and awarded the worker over Kshs. 450,000.

What this practically means

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Executive summary

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The Claimant, a driver employed by the Respondent from November 2010 at a salary of about Kshs.24,898, was indefinitely suspended on 6th July 2015 after being accused of absconding duty on 4th July 2015. His advocates wrote twice seeking clarification of his employment status; the Respondent never replied. He sued claiming notice pay, unpaid leave, damages for unlawful dismissal, service gratuity and overtime exceeding Kshs.2.1 million, plus interest and costs. The Respondent denied termination, asserting he had absconded and been issued a termination letter dated 10th October 2015. The court framed four issues: whether the indefinite suspension amounted to termination; whether there were valid reasons for summary dismissal; whether due process was followed; and entitlement to reliefs. It held the indefinite suspension without pay, absent communication that employment continued, amounted to termination. The Claimant's written response to the show cause notice admitted absconding, so valid reasons existed. However, the employer failed to follow the mandatory hearing procedure in section 41 of the Employment Act - a show cause notice and response alone do not suffice - rendering the dismissal an unfair termination. On reliefs, the court awarded one month's notice pay (Kshs.24,898), five months' compensation (Kshs.124,490), leave pay for 119 days (Kshs.113,956.20), and overtime for the three-month Mwingi posting computed at 1.5 times the hourly rate (Kshs.188,428.06). Service gratuity was refused as the Claimant was an NSSF member with no contractual basis for gratuity. Judgment was entered for Kshs.451,772.26, with a certificate of service, costs and interest from the date of judgment.

Key legal issues

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01

Whether the indefinite suspension amounted to termination

Holding

Yes - the indefinite suspension without pay, and the Respondent's failure to respond to the advocates' letters clarifying status, amounted to termination

Reasoning

The Claimant was suspended indefinitely on 6th July 2015. His advocates wrote twice seeking clarification and the Respondent never responded. The termination letter the Respondent relied on was dated 10th October 2015, long after the demand letters, so the court rejected the claim that a termination letter had issued earlier. Suspension without pay and without communication of continued employment was treated as termination.

p. 4
02

Whether there were valid reasons for summary dismissal

Holding

Yes - the Claimant admitted absconding duty in his response to the show cause notice, giving the Respondent a valid reason under section 44(4)

Reasoning

Although the Claimant testified he had been sent to Sagana to ferry a machine, his own written response to the show cause notice told a different story and contained an apology for absconding on 4th July 2015. The court preferred the written admission over the oral testimony, finding the Claimant guilty of absconding duty on his own admission, which constituted a valid and fair reason for summary dismissal.

p. 5
03

Whether due process under section 41 of the Employment Act was followed

Holding

No - a notice to show cause and response alone do not satisfy section 41; the dismissal was therefore an unfair termination

Reasoning

Section 41 requires the employer to explain the reasons in a language the employee understands, in the presence of a colleague or shop floor union representative, and to hear and consider representations. The evidence that the Claimant was never given such an opportunity was uncontroverted. The Respondent's issuance of a show cause notice and receipt of a response fell short of the mandatory procedure, rendering the dismissal unfair.

p. 5
04

Entitlement to reliefs

Holding

Notice pay, five months' compensation, leave pay of 119 days and overtime for 3 months at Mwingi awarded; service gratuity refused

Reasoning

Notice pay was awarded as the Respondent produced no proof of payment. Compensation was fixed at five months considering section 49(4) factors. Leave was awarded at 119 days on 21 days per year because the Respondent's assertion of leave taken was unsupported. Overtime was computed for the 3-month Mwingi posting at 88 hours per week above the 52-hour statutory maximum, at 1.5 times the hourly rate, since the Claimant could not substantiate hours at other stations or double-time claims.

p. 6

Legal principles established

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  • An indefinite suspension without pay, coupled with the employer's failure to communicate that employment is still in force, amounts to termination
  • Termination is unfair unless the employer proves both valid and fair reasons and a fair procedure
  • Issuing and receiving a response to a notice to show cause does not, by itself, satisfy the mandatory hearing requirements of section 41 of the Employment Act
  • An employer bears the obligation under section 74(1)(f) of the Employment Act to keep records of leave; failure to produce them leaves uncontroverted the employee's claim for unpaid leave

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent in the total sum of Kshs.451,772.26
  2. 2.The Respondent shall issue a certificate of service to the Claimant
  3. 3.The Respondent shall pay the Claimant's costs
  4. 4.Interest to accrue on the decretal sum at court rates from the date of judgment

Authorities

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Legislation

  • Employment Actsection 45
  • Employment Actsection 44(4)
  • Employment Actsections 43 and 45(2)
  • Employment Actsection 41
  • Employment Actsection 74(1)(f)
  • Employment Actsection 47(5)
  • Employment Actsection 49(4)
  • Employment Actsection 35(6)(d)
  • Employment Actsection 51
  • Fair Administrative Action ActNot specified
  • Regulation of Wages (General) OrderRule 6
  • Constitution of KenyaArticles 159(2)(d) and 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (7)

  • Anthony Mkala Chitavi v Malindi Water and Sewerage Company Limited
    [2013] eKLR
  • Andrew M. Meongela v Mbukoni Logistics Limited
    [2015] eKLR
  • Paul Ngeno v Pyrethrum Board of Kenya
    [2013] eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
  • George Okello Munyolo v Unilever Kenya Limited
    [2019] eKLR
  • Janet Nyandiko v Kenya Commercial Bank Limited
    [2017] eKLR
  • National Bank of Kenya v Samuel Nguru Mutonya
    [2019] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Employment and Labour Relations Court Act); specific Article 159(2)(d) and Article 48 of the Constitution invoked regarding delivery of judgment

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, "Thomas Bacha Ndungu v Kiu Construction Company Limited [2020] KEELRC 395 (KLR)", Case Analysis (2020). Cause No 1740 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/395/eng@2020-10-09

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