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ELRCPartially AllowedCause No. 241 of 2018· [2020] KEELRC 1399 (KLR)

James Njuki Michuki v Kenya Power and Lighting Company Limited [2020] KEELRC 1399 (KLR)

Employment and Labour Relations Court of Kenya
27 February 2020
MMM. Mbar
3,120 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 ruled Kenya Power unfairly dismissed an employee because the real reasons for dismissal were never put to him, but cut his compensation sharply.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 2nd July 1987 as a technician, was summarily dismissed by letter dated 9th September 2015 with effect from 10th September 2015, on the ground of soliciting for a bribe from a customer, invoking clause 11 of the employment agreement. The dismissal followed his arrest by EACC investigators on 25th August 2015, a notice to show cause dated 27th/28th August 2015, his reply of 29th August 2015, and a disciplinary hearing at which he declined to sign minutes he felt did not reflect his explanations. He sought notice pay, 12 months' compensation, and costs under section 12(4) of the ELRC Act. The respondent justified the dismissal on loss of trust, negative publicity and gross misconduct, relying on the EACC report and internal security investigations, and cited the claimant's prior disciplinary history including a 2003 dismissal and reinstatement. The court identified three issues: whether the termination was unlawful or unfair; whether the remedies were due; and whether costs were payable. It found a critical disconnect: the EACC alert reached the respondent only on 26th October 2015, after the dismissal, and no complaint was made directly to the respondent. The disciplinary committee's recommendation rested on loss of trust and negative publicity - grounds never put to the claimant in the show cause letter or hearing, and not fairly covered by clause 11, which the court declined to stretch. Substantive grounds under sections 41 and 43 of the Employment Act were therefore absent and the termination was unfair. Compensation was limited to three months' gross pay (Kshs.372,804) given the claimant's chequered disciplinary record, plus notice pay of Ksh.124,268, deductible by admitted liabilities under sections 17 and 19, with costs to the claimant.

Key legal issues

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01

Whether the termination was substantively fair

Holding

Unfair - the respondent had no genuine reason for terminating the employment

Reasoning

The EACC's letter alerting the respondent to the alleged misconduct was dated 21st October 2015, after the termination, and the respondent's witness admitted no complaint was made directly to the respondent. The disciplinary hearing was on allegations of soliciting a bribe, but the dismissal recommendation rested on loss of trust and negative publicity - grounds never put to the claimant and not covered by clause 11 of the employment agreement. The court read clause 11 restrictively, holding that stretching it to such grounds would be 'an overkill'.

p. 4
02

Whether the procedure under section 41 was complied with

Holding

Procedure alone could not save the dismissal; substantive grounds were absent

Reasoning

The court recited the statutory obligations under sections 41, 43 and 45 of the Employment Act: to explain reasons, hear the employee, and prove valid and fair reasons. Although a show cause letter was issued, a reply received and a disciplinary hearing convened, the process was undermined by the absence of genuine grounds. Cases cited by the claimant on the statutory duty of procedural fairness were noted.

p. 4
03

What remedies are due

Holding

Three months' gross pay as compensation (Kshs.372,804) and notice pay Ksh.124,268, less outstanding liabilities

Reasoning

Under section 45(5) the court considered the claimant's chequered disciplinary history - prior cautions, a 2003 termination and reinstatement - in fixing compensation at three months' gross pay rather than the 12 months sought. Notice pay was assessed at gross salary. Admitted liabilities (including the car loan) to be deducted under sections 17 and 19 of the Act.

p. 5

Legal principles established

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  • Even where procedural requirements are followed, there must exist substantive grounds for termination under sections 41 and 43 of the Employment Act
  • The reasons for termination must be valid and fair and genuinely believed by the employer to exist at the time of termination
  • An employer cannot dismiss an employee on grounds (loss of trust, negative publicity) that were never put to the employee in the notice to show cause or at the disciplinary hearing

Court orders

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  1. 1.Declaration that employment terminated unfairly
  2. 2.Compensation awarded at Kshs.372,804 (three months' gross pay)
  3. 3.Notice pay Ksh.124,268
  4. 4.The dues shall be paid less the liabilities/dues owed to the respondent and subject to section 49(2) of the Employment Act
  5. 5.The claimant is awarded costs

Authorities

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Legislation

  • Employment Act, 2007section 43(2)
  • Employment Act, 2007section 47(5)
  • Employment Act, 2007section 45(2)(a) & (b)
  • Employment Act, 2007section 41(2)
  • Employment Act, 2007section 45(5)
  • Employment Act, 2007section 49(2)
  • Employment Act, 2007sections 17 and 19
  • Employment and Labour Relations Court Act, 2011section 12(4)
  • Anti-Corruption and Economic Crimes Actsections 39(3)(a) and 48(1)

Cases cited (3)

  • Muthaiga Country Club versus Kudheiha Workers
    [2017] eKLR
  • Alphonce Maghanga Mwachanya versus Operation 680 Limited
    [2013] eKLR
  • Water Ogal Anuro versus Teachers Service Commission
    [2013] eKLR
Jurisdiction invoked
Article 162(2)(a) of the Constitution (Establishment of the Employment and Labour Relations Court); Employment and Labour Relations Court Act, 2011

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, "James Njuki Michuki v Kenya Power and Lighting Company Limited [2020] KEELRC 1399 (KLR)", Case Analysis (2020). Cause No. 241 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1399/eng@2020-02-27

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