Patrick Handa v Rai Plywoods (K) Limited [2020] KEELRC 1920 (KLR)
The bottom line
#An employer who suspends an employee and never holds a proper disciplinary hearing risks paying full salary for the entire suspension period plus compensation.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness in termination
Although there may have been valid reasons to terminate the claimant's services, the termination was procedurally flawed because the claimant was never given an opportunity to be heard before termination.
The claimant was suspended indefinitely pending investigations and later acquitted of criminal charges. The respondent alleged it sent about five notices by registered post to a postal address supplied by the claimant, but the returned unclaimed mail was never exhibited, and the respondent never replied to the claimant's demand letter after acquittal. The court found a breakdown in communication and held that the disciplinary hearing never took place, breaching the procedural requirements of the Employment Act.
Status of a suspended employee and date of termination
A suspended employee remains an employee until services are terminated; as no termination letter was issued, the court reckoned the date of termination as 26th March 2012, when the claimant's advocate issued a demand letter that went unanswered.
The claimant was only issued with a suspension letter, never a termination or dismissal letter. The respondent conceded no dismissal letter was issued. The court therefore fixed the effective date of termination at the date of the unanswered demand letter, and computed salary for the suspension period up to that date, together with notice pay and compensation.
Effect of criminal acquittal on disciplinary action
Acquittal in a criminal trial does not bar an employer from conducting a disciplinary hearing on the same allegations, since the standard of proof in disciplinary proceedings is lower than the criminal standard.
The claimant was charged with conspiracy to commit felony and acquitted for lack of evidence. The court held that the failure of the criminal case did not preclude the employer from using similar evidence internally, because the disciplinary standard of proof is not as high. However, the respondent's failure to actually hold the hearing, and its failure to respond to the demand letter, undermined its case that it had genuinely sought to hear the claimant.
Legal principles established
#- A suspended employee remains an employee until services are lawfully terminated; absent a termination letter, termination may be reckoned from the date of an unanswered demand letter.
- Even where criminal charges end in acquittal, an employer may still hold a disciplinary hearing on the same facts, the standard of proof in a disciplinary hearing being lower than in a criminal prosecution.
- Termination must follow fair procedure, including giving the employee an opportunity to be heard.
Court orders
#- 1.Award of Kshs. 248,079 being salary for the period of suspension (15/2/2011 to 26/3/2012)
- 2.Award of Kshs. 19,083 being one month's salary in lieu of notice
- 3.Award of Kshs. 419,826 being eight months' salary as compensation for unfair termination
- 4.Costs of the suit awarded to the claimant
- 5.Awards in items (i), (ii) and (iii) made subject to taxes and statutory deductions
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Patrick Handa v Rai Plywoods (K) Limited [2020] KEELRC 1920 (KLR)", Case Analysis (2020). ELR No. 20 of 2017 (Formerly NKR ELRC 172/14). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1920/eng@2020-10-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.