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ELRCPartially AllowedNot stated in the judgment· [2020] KEELRC 428 (KLR)

Loise Njeri v Devkan Enterprises Limited [2020] KEELRC 428 (KLR)

Employment and Labour Relations Court
1 October 2020
3,680 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a dismissal can have a valid reason but still be unfair if the employer skips a hearing, awarding the ex-employee over KShs. 641,000.

What this practically means

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Executive summary

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The claimant, formerly the respondent's HR Manager from 10.5.2016 to 10.12.2018, sued for unfair summary dismissal and various employment benefits. She was dismissed on 10.12.2018 after absenting herself from work from 6 to 8 December 2018, alleging she had been granted sick leave, while the respondent alleged absenteeism and negligence. The court framed three issues: validity of the reason, procedural fairness, and reliefs. It found absenteeism a valid and fair reason under section 44(4)(a) of the Employment Act, since her medical certificate covered only one day and no written permission was proved; the poor performance allegation, however, was unproved as no warnings, appraisal or performance management existed. The dismissal was nonetheless procedurally unfair because the claimant was never accorded a hearing under section 41. The court awarded four months' salary as compensation (KShs. 439,273.04), factoring in her two years of service, continued unemployment and contributory misconduct; 18 days' leave pay (KShs. 76,028.03); and gratuity as claimed (KShs. 126,690.00), totaling KShs. 641,991.07. Claims for house allowance and loss of income to retirement failed, the gross pay being held inclusive of housing and compensation capped at twelve months' wages. The respondent was ordered to pay the damages less statutory deductions, having failed to prove the claimant's loan default or written authorization for paying dues to the Sacco as guarantor. The claimant received costs and interest at court rates. Judgment was delivered online under Covid-19 directions.

Key legal issues

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01

Valid and fair reason for summary dismissal

Holding

Absconding duty from 6.12.2018 to 8.12.2018 without leave or proof of medical incapacity was a valid and fair reason under section 44(4)(a); poor performance was not proved.

Reasoning

The claimant's sick off covered only 6.12.2018 and she produced no written permission for the remaining days. The poor performance allegation was unrebutted evidence of no warnings, appraisals or performance management, so the respondent failed to discharge the high burden of proof required for performance-based terminations.

p. 4
02

Fair procedure before termination

Holding

The termination was procedurally unfair because the claimant was not accorded a hearing under section 41 of the Employment Act.

Reasoning

Despite the grounds being misconduct and poor performance, the claimant was never heard nor told the reason before termination, and RW1 adduced no evidence to rebut her allegation. Section 45 was therefore breached and the summary dismissal was unfair.

p. 4
03

Remedies: compensation, leave, gratuity, house allowance, loss of income

Holding

Four months' salary as compensation, 18 days' leave pay and gratuity as claimed awarded; loss of income to retirement and house allowance claims failed.

Reasoning

The court considered the claimant's two years of service, lack of alternative employment and her contributory misconduct in fixing compensation at four months. Loss of income is capped at twelve months' wages, which the compensation award already covered. Gross pay was found inclusive of house allowance, and leave was limited to the admitted 18 days.

p. 4
04

Diversion of terminal dues to the Sacco as guarantor

Holding

The claimant is entitled to all damages awarded less statutory deductions, as the respondent proved neither default nor written authorization.

Reasoning

The respondent did not produce Sacco receipts, the loan agreement, or proof of default. A guarantor's rights and liability arise only upon the principal debtor's default, so payment of terminal dues to the Sacco without the claimant's written authorization was unjustified.

p. 5

Legal principles established

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  • Termination of employment is unfair where the employer fails to prove a valid and fair reason and that a fair procedure was followed.
  • Poor performance as a ground of termination requires the employer to have put in place a policy or practice for measuring performance; the burden of proof is high.
  • Compensation for loss of earnings following unfair termination is capped at the equivalent of twelve months' gross wages.
  • A guarantor's liability does not arise before default by the principal debtor; terminal dues cannot be diverted to a guarantor without proof of default.

Court orders

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  1. 1.Leave pay of KShs. 76,028.03
  2. 2.Compensation for unfair termination of KShs. 439,273.04 (4 months' salary)
  3. 3.Service gratuity of KShs. 126,690.00
  4. 4.Total judgment of KShs. 641,991.07 less statutory deductions and any amount the claimant has authorized the respondent in writing
  5. 5.Costs of the suit to the Claimant together with interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment Actsection 41(1) and (2)
  • Employment Actsection 44(3) and (4)(a) and (b)
  • Employment Actsection 45(1) and (2)
  • Employment Actsection 51(1)
  • Employment Actsection 35(6)
  • Employment Actsection 31
  • ELRC Procedure RulesRule 28(3)

Cases cited (7)

  • Liz Ayany vs. Leisure Lodges Limited
    [2018] eKLR
  • Jared Aimba vs. Fina Bank Limited
    [2016] eKLR
  • Angela Wokabi Muoki vs. Tribe Hotel Limited
    [2016] eKLR
  • Mary Mutanu Mwendwa vs. Ayuda Ninos De Africa-Kenya
    [2013] eKLR
  • Jane Samba Mukala vs. Oitukai Lodge Limited
    [2010] LLR 225
  • Martin Kirima Baithambu vs. Jeremiah Miriti
    [2017] eKLR
  • Robert Njoka Muthara & Another v Barclays Bank of Kenya Limited & Another
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (ELRC Procedure Rules referenced regarding online delivery)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Loise Njeri v Devkan Enterprises Limited [2020] KEELRC 428 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/428/eng@2020-10-01

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