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ELRCPartially AllowedCause No 952 of 2013· [2020] KEELRC 1620 (KLR)

Musyoka Nzoka Muasya v Toyota Kenya Limited [2020] KEELRC 1620 (KLR)

Employment and Labour Relations Court
7 February 2020
MOMAUREEN ONYANGO
3,576 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 the dismissal unfair because the employer skipped a mandatory hearing, but the accountant recovered only one month's notice pay.

What this practically means

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Executive summary

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The Claimant, an accountant employed by the Respondent under a contract dated 10th October 2001, was summarily dismissed on 8th October 2012 following investigations into irregular stock orders and payments at the Respondent's bodyshop department. He sued for notice pay, salary arrears, service gratuity, leave allowance, a declaration that his termination was unlawful, and damages. The Respondent countered that the dismissal was lawful under section 44 of the Employment Act and filed a counterclaim for Kshs.4,077,894.00 plus general damages for fraud and negligence. The court framed three issues: lawfulness of the termination, the Claimant's reliefs, and the counterclaim. It held that although there was valid reason for dismissal - the Claimant's failure to exercise due care as accountant - the mandatory procedural requirements of section 41 (hearing the employee in the presence of a representative) were not met, rendering the dismissal unfair under section 45(2). Only the notice pay claim succeeded, at Kshs.156,050; gratuity failed as the Claimant was in a pension scheme; salary arrears and leave failed as terminal dues had been offset against debts owed; and compensation was refused due to the Claimant's own recklessness. The counterclaim failed because the Respondent could not prove on a balance of probabilities that the Claimant alone caused the losses, other actors having been involved. The counterclaim was dismissed and each party ordered to bear its own costs. Judgment delivered at Nairobi on 7th February 2020 by Maureen Onyango, J.

Key legal issues

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01

Lawfulness of the summary dismissal - procedure

Holding

The dismissal was for valid reason but the procedure was flawed, rendering it unfair under section 45(2).

Reasoning

Section 41 requires an employer terminating for misconduct to explain the reasons and hear the employee in the presence of a representative. RW3's evidence that the Claimant was heard but declined representation was unsupported, so the Claimant's assertion that he was never heard remained uncontroverted. Valid reasons existed but the procedural limb failed.

02

Entitlement to one month's salary in lieu of notice

Holding

The claim succeeds as the Claimant was contractually entitled to notice pay despite summary dismissal.

Reasoning

Having found the termination unlawful for procedural failure, the court held the Claimant entitled to notice pay under clause 12.1 of his employment contract, awarding Kshs.156,050.

p. 5
03

Respondent's counterclaim for financial losses

Holding

Counterclaim dismissed - the Respondent failed to prove the Claimant was solely liable for the losses.

Reasoning

Evidence showed multiple actors in the payment and job-card process, including Rashid Yusuf and Morris Okoth who opened job cards, and that not all payments resulting in the overpayment were approved by the Claimant. The Claimant's degree of liability could not be isolated on a balance of probabilities.

p. 5

Legal principles established

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  • Under section 45(2) of the Employment Act, termination is fair only where both fair procedure and valid reasons are established.
  • The procedure in section 41 of the Employment Act - explaining reasons and giving the employee an opportunity to be heard in the presence of a representative - is mandatory.
  • A respondent seeking to hold an employee liable for losses must prove the employee was solely responsible, on a balance of probabilities.

Court orders

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  1. 1.Judgment entered for the claimant against the respondent in the sum of Kshs.156,050 being one month's salary in lieu of notice.
  2. 2.The Respondent's counterclaim is dismissed.
  3. 3.Each party shall bear its own costs.

Authorities

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Legislation

  • Employment Actsection 44
  • Employment Actsection 41
  • Employment Actsection 45(2)

Cases cited (1)

  • Mary Chemweno Kiptui vs. Kenya Pipeline Company Limited
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment dispute)

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, "Musyoka Nzoka Muasya v Toyota Kenya Limited [2020] KEELRC 1620 (KLR)", Case Analysis (2020). Cause No 952 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1620/eng@2020-02-07

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