Lukas Akunga Omariba v Tatu City Limited [2021] KEELRC 1127 (KLR)
The bottom line
#Tatu City's CEO won Kshs. 27.6 million after the court found his firing had no stated reason and no hearing.
What this practically means
#Executive summary
#Key legal issues
#Whether a valid reason for termination was proved
No reason was given in the termination letter and the respondent did not prove a valid reason; termination was substantively unfair
The termination letter merely stated the Board had resolved to terminate. Reasons pleaded in the defence were not in the letter or the Board resolution. Rw1 confirmed the termination letter did not set out reasons and the meeting agendas did not include the claimant's termination. The burden under sections 43 and 45(2)(a) and (b) was not discharged, so the dismissal was substantively unfair.
Whether the termination followed fair procedure
The termination was procedurally unfair because no hearing was accorded despite the mandatory requirement of section 41
Rw1 admitted the claimant was not given a hearing because of friction within the Board. Section 41 requires, in mandatory terms, an explanation of grounds and an opportunity to make representations before termination. Board divisions could not be used as a scapegoat for failing to convene a disciplinary hearing; the employer should have made an effort to accord the claimant an opportunity to respond.
Reliefs: compensation, notice, leave, medical, bonus, certificate of service
10 months' compensation, notice pay, 32 days' leave pay and certificate of service granted; medical premium and bonus declined
Having found the termination unfair and the claimant not contributorily at fault, the court awarded 10 months' compensation considering his three years of service without warning and his lack of alternative employment. Leave records being in the employer's custody under section 74, the leave claim was unrebuted. Medical cover ceased on termination; discretionary bonus was unproved.
Whether the counter-claim was merited
Partially merited: return of the two mobile phones or half purchase price granted; delivery up of electronic information and permanent injunction declined
Under clause 8.4 of the Employment Agreement the claimant was to return company property, but the electronic information in prayer (a) was not pleaded with precision. The phones had been used for the respondent's business and had depreciated, justifying only half purchase price as replacement cost. The injunction failed for want of proof of the confidential information shared.
Legal principles established
#- An employer must give reasons for termination before dismissing an employee; a departure from the employer's traditional power to terminate at will
- Section 41 of the Employment Act is mandatory and requires an oral hearing before dismissal for cause
- The employer bears the burden of proving a valid reason for termination under sections 43 and 45 of the Employment Act
Court orders
#- 1.Declaration that the termination of the Claimant's employment was unfair and unlawful
- 2.Award of one month's salary in lieu of notice of Kshs. 2,189,687.50
- 3.Award of 10 months' salary as compensation for unfair termination of Kshs. 21,896,875.00
- 4.Award of 32 days' pay in lieu of accrued leave of Kshs. 3,503,500.00
- 5.Total award of Kshs. 27,590,062.50, subject to statutory deductions and half purchase price of the two phones (iPhone 5s and 5c) which should be deducted from dues owed to the Claimant
- 6.Respondent to issue the Claimant with a Certificate of Service
- 7.Claimant directed to return the two mobile phones or pay half purchase price as replacement cost, deductible from his dues
- 8.Claimant to have costs of the suit plus interest at court rates from the date of judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (claim for unfair termination and employment benefits; specific provision not stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lukas Akunga Omariba v Tatu City Limited [2021] KEELRC 1127 (KLR)", Case Analysis (2021). ELRC Cause (Nairobi), Claim filed 22.5.2015 (reference number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1127/eng@2021-07-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.