Richard Muema Peter v Added Performance Kenya Limited & 2 others [2020] KEELRC 1210 (KLR)
The bottom line
#A Kenyan employer lost an unfair termination case because it could not prove the employee got a fair hearing, and was ordered to pay Kshs.145,222 plus costs.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the claimant's employment was procedurally and substantively fair
The termination was unlawful and unfair as the respondents failed to prove procedural fairness under Section 41, having adduced no minutes of a disciplinary hearing or other evidence of one
The respondents relied on a notice to show cause but, despite asserting the claimant was accorded a hearing, produced no minutes or other evidence of a disciplinary hearing. The claimant testified he was not responsible for loading the lost batteries. Under Section 45(2), where the employer fails to prove either procedural fairness or validity of reason, the termination is unfair. The respondents having closed their case without calling witnesses, the claimant's evidence stood unrebutted.
Whether the 2nd and 3rd Respondents (directors) were wrongly joined
They were wrongly enjoined; the claims against them were discharged as no evidence warranted lifting the corporate veil and no claim was made against them personally
It was common ground that the 2nd and 3rd respondents were directors of the 1st respondent company. Relying on Salomon v Salomon as cited in Joseph Kobia Nguthari and on Victor Mabachi, the court held a company is a distinct legal person separate from its directors and agents unless factors warranting lifting of the veil exist. No such factors were shown and no personal claim was pleaded.
What reliefs the claimant is entitled to
One month's salary in lieu of notice and 10 months' salary as compensation for unfair termination (Kshs.132,020/-); claims for leave, overtime, service pay and salary to retirement dismissed
Notice pay was awarded under Sections 36 and 49(1) of the Employment Act despite summary dismissal because termination was unfair. Leave, overtime and service pay failed for want of proof and the NSSF exemption under Section 35. Compensation of 10 months' salary reflected length of service and the absence of a disciplinary hearing. Salary to retirement age was rejected as not provided in law or contract, remedies being proportionate to economic injury.
Legal principles established
#- For a termination to pass the fairness test there must be both substantive justification and procedural fairness
- The burden of proving unfair termination rests on the employee, while the burden of justifying the grounds for termination rests on the employer
- A company is a separate legal entity distinct from its directors and agents, and no claim lies against directors personally absent factors warranting lifting of the veil
Court orders
#- 1.Judgment entered for the claimant against the 1st respondent in the sum of Kshs.145,222/-
- 2.The 1st respondent to pay the claimant's costs of the claim
- 3.Interest to accrue from the date of judgment
- 4.Claims against the 2nd and 3rd Respondents discharged
- Jurisdiction invoked
- Original jurisdiction under the Employment Act, 2007 (unfair termination complaint under Sections 40, 41, 43, 45 and 47(5))
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Richard Muema Peter v Added Performance Kenya Limited & 2 others [2020] KEELRC 1210 (KLR)", Case Analysis (2020). Cause No 790 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1210/eng@2020-04-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.