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ELRCDismissedCause No. 1328 of 2014· [2021] KEELRC 1404 (KLR)

Kennedy Nyamwaya Bundi v Instra Products (EPZ) Limited [2021] KEELRC 1404 (KLR)

Employment and Labour Relations Court of Kenya
10 June 2021
MMM. Mbaru
1,412 words in judgment
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The bottom line

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Kenya's Employment Court confirmed an employer lawfully summarily dismissed an employee for gross misconduct, and 'without prejudice' settlement letters couldn't be used to prove redundancy.

What this practically means

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Executive summary

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The claimant, employed as a Logistics Manager on a monthly salary of Ksh.82,000, sued the respondent alleging his position was declared redundant and that the termination was unlawful, unprocedural and in contravention of section 40(1) of the Employment Act. He sought notice pay, ten years' house allowance, salary arrears, severance pay and general damages. The respondent's case was that the claimant was summarily dismissed on 25th March 2013 for gross misconduct - negligence of duty and moonlighting as chief finance officer for a competitor - after warnings and a disciplinary meeting, and that his salary was paid up to May 2013 on a consolidated basis. The court framed two issues: whether the employment was terminated by redundancy or gross misconduct, and whether the remedies sought should issue. Applying the without prejudice rule as stated in Mumias Sugar Co. Ltd & another v Beatrice Akinyi Omondi, the court held the respondent's letters marked 'without prejudice', which referenced redundancy, inadmissible. On the evidence, the claimant received notice, was invited to a hearing and the allegations were addressed with him, satisfying sections 41, 43 and 44 of the Employment Act. The court found a genuine and valid reason for termination and held the summary dismissal justified. No redundancy existed, so notice pay, severance, salary arrears and damages were not due; the house allowance claim amounted to unjust enrichment given the consolidated salary above the minimum wage. The claim was dismissed in its entirety with costs to the respondent. Judgment delivered at Nairobi on 10th June 2021 by M. Mbaru, Judge.

Key legal issues

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01

Whether the termination was by redundancy or summary dismissal for gross misconduct

Holding

The court found there was no redundancy; the claimant was lawfully summarily dismissed for gross misconduct after due process.

Reasoning

The respondent adduced letters of 15th and 25th March 2013 showing notices, warnings and a termination meeting at which reasons of negligence, moonlighting for a competitor and conflict of interest were addressed. The claimant did not deny the allegations. The without prejudice letter referring to redundancy was inadmissible. The court held a genuine and valid reason existed and procedural safeguards under sections 41, 43 and 44 were satisfied.

p. 3
02

Admissibility of without prejudice correspondence

Holding

The respondent's letters dated 5th June 2014 and 30th May 2014 marked without prejudice were inadmissible and could not found the redundancy claim.

Reasoning

Relying on the Mumias Sugar authority, the court restated that the without prejudice rule excludes all negotiations genuinely aimed at settlement, whether oral or written, from being given in evidence as admissions on liability. The claimant's redundancy claim rested on such correspondence, so it could not sustain the claim for notice pay, severance and salary arrears.

p. 2
03

Whether the remedies sought should issue

Holding

None of the remedies sought issued; the entire claim was dismissed with costs to the respondent.

Reasoning

Because the termination was a lawful summary dismissal and not a redundancy, notice pay, severance pay, salary arrears and general damages were not due. Salaries were paid up to May 2013, which the court called generous on the face of gross misconduct. The house allowance claim failed because the claimant earned above the minimum wage on a consolidated salary and the claim amounted to unjust enrichment.

p. 3

Legal principles established

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  • Documents and records marked 'without prejudice' are inadmissible in evidence, being founded on the public policy of encouraging settlement.
  • Before summary dismissal for gross misconduct under section 44, an employer must hear and consider the employee's representations as required by section 41(2) of the Employment Act.

Court orders

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  1. 1.The claim is dismissed
  2. 2.Costs to the respondent
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007

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, "Kennedy Nyamwaya Bundi v Instra Products (EPZ) Limited [2021] KEELRC 1404 (KLR)", Case Analysis (2021). Cause No. 1328 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1404/eng@2021-06-10

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