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ELRCPartially AllowedNot stated in the judgment· [2020] KEELRC 1619 (KLR)

Paul Kimemia Njihia v Kenya Credit Traders Limited [2020] KEELRC 1619 (KLR)

Employment and Labour Relations Court
14 February 2020
1,382 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~6 min to read original · ~4 min brief

The bottom line

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A Kenyan court found the dismissal procedurally unfair but refused compensation because the employee's own dishonesty caused his sacking.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Nairobi (Radido Stephen, Judge) determined a claim by Paul Kimemia Njihia, a former Store Manager, against Kenya Credit Traders Ltd arising from his dismissal on 22 May 2012. The Claimant contended the dismissal was procedurally unfair because he was summoned to the head office without being told he faced a disciplinary hearing, contrary to section 41 of the Employment Act, 2007, relying on Alphonce Machanga Mwachaya v Operation 680 Ltd. The Respondent asserted he was afforded a hearing and relied on prior warnings and performance reports. The Court found that the Respondent did not controvert the Claimant's testimony that he was not notified termination was contemplated, that he was ambushed and denied sufficient time to prepare or be accompanied, rendering any hearing a sham or mechanical process. On substantive fairness, the Respondent proved the allegations that the Claimant received 14 customer instalment payments through his personal mpesa account contrary to an internal memo, conduct the Court found deliberate and dishonest; the dismissal was thus substantively fair. The Court declined compensation given the Claimant's dishonesty, and nothing turned on notice pay as the Respondent had offered it. The security deposit balance, if not offset against loans, was to be released; NHIF and NSSF complaints were referred to the Funds; service pay was barred by section 35(5) and (6) as the Claimant contributed to NSSF; and a certificate of service, a statutory entitlement, was to be issued. Each party was ordered to bear its own costs. The judgment was delivered in Nairobi on 14 February 2020.

Key legal issues

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01

Procedural fairness of the dismissal

Holding

The termination was procedurally unfair; the Claimant was ambushed and not given sufficient time to prepare for a disciplinary hearing or to be accompanied by a colleague.

Reasoning

Section 41 obliges the employer to notify the employee before termination that termination is contemplated and to afford an opportunity to make representations. The Respondent did not controvert the Claimant's testimony that he was not notified when summoned that termination was under consideration. Any hearing held was therefore a sham or mechanical process not meeting the statutory threshold.

p. 2
02

Substantive fairness of the dismissal

Holding

The Respondent proved valid and fair reasons for the dismissal — the Claimant dishonestly received customer instalment payments through his personal mpesa account contrary to company instructions.

Reasoning

Under sections 43 and 45 the Respondent bore the burden of proving the reasons for dismissal. It produced mpesa statements showing payments from customers to the Claimant's personal account, and an internal memo directing staff to stop receiving payments through personal mpesa accounts. The Claimant admitted receiving such payments despite the paybill account and could not explain how customers got his details. His conduct was deliberate and dishonest.

p. 2
03

Compensation and notice pay

Holding

Compensation refused due to the Claimant's dishonesty; notice pay had already been offered by the Respondent.

Reasoning

Compensation is a discretionary remedy. The Claimant's dishonest conduct made it inappropriate. Although the procedural unfairness would ordinarily have attracted one month's salary in lieu of notice, the Respondent had offered that pay, so nothing turned on that head of relief.

p. 2

Legal principles established

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  • In cases of summary dismissal, an oral hearing is a prerequisite under section 41(2) of the Employment Act, and the employee must be afforded sufficient time to prepare a defence.
  • A disciplinary hearing convened without notice of the charges or of contemplated termination, denying the employee time to prepare or be accompanied, is a sham or mechanical process failing the statutory threshold.

Court orders

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  1. 1.Declaration that the termination of the Claimant's employment, though substantively fair, was procedurally unfair
  2. 2.Declined to award compensation or any other relief save for a Certificate of Service and balances, if any, of the security deposit
  3. 3.Respondent to issue the Claimant a Certificate of Service
  4. 4.Respondent to release the balance of the security deposit to the Claimant, if not used to offset loans
  5. 5.Each party to bear own costs

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 41(2)
  • Employment Actsection 35(1)(c)
  • Employment Actsection 35(5) & (6)
  • Employment Actsection 43
  • Employment Actsection 45

Cases cited (1)

  • Alphonce Machanga Mwachaya v Operation 680 Ltd
    (2013) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment cause)

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, "Paul Kimemia Njihia v Kenya Credit Traders Limited [2020] KEELRC 1619 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1619/eng@2020-02-14

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