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ELRCDismissedCause (number not stated in judgment)· [2021] KEELRC 1909 (KLR)

Elizer Musambi Nyongesa versus Subaru Kenya Limited [2021] KEELRC 1909 (KLR)

Employment and Labour Relations Court
7 April 2021
RSRadido Stephen
1,193 words in judgment
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The bottom line

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Kenya's Employment Court ruled that an employer who audits records, issues a show-cause letter and holds a hearing can fairly dismiss an employee for unexplained missing money.

What this practically means

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Executive summary

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The Claimant, engaged by the Respondent on 7 July 2014 as a branch accountant/office administrator, was terminated on 25 July 2016 following an audit of the Kisumu branch that revealed under banking of Kshs 833,441/-. He received a show-cause memo on 18 July 2016, attended a disciplinary hearing on 20 July 2016, and was directed to propose repayment of the unbanked monies. He challenged the termination on procedural and substantive grounds: inadequate time (less than 24 hours) to respond, lack of accompaniment by a colleague, alleged conflict of interest by his immediate boss sitting on the committee, incomplete investigations, conflicting figures on the under banking, his acquittal of related theft charges in a criminal court, and alleged duress in agreeing to a repayment proposal. The court held that adequacy of time and the format of a section 41 hearing depend on the circumstances; the Claimant, a senior employee, never sought more time, an adjournment or a colleague. The conflict-of-interest allegation failed because the audit was led by a head office team, and no prejudice was shown. On substance, the Respondent proved valid and fair reasons under sections 43 and 45: the Claimant admitted responsibility for reconciliation and banking and could not explain the unbanked monies. Relying on Court of Appeal authority, the court held that criminal acquittal does not bar disciplinary proceedings, and duress was not particularised or proved. Claims for earned salary, leave, and notice pay failed as those dues were offset against the unaccounted monies; pension and cooperative savings claims lacked evidential foundation. The Cause was dismissed with costs on 7 April 2021.

Key legal issues

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01

Procedural fairness under section 41

Holding

The Respondent was in substantial compliance with procedural fairness

Reasoning

The Claimant received a show-cause memo served by email and hardcopy, attended a disciplinary hearing, and was directed to propose repayment. As a senior employee, he did not seek more time, an adjournment, or a colleague's accompaniment. Alleged conflict of interest by his immediate boss was unsupported, as the audit was conducted by a head office team, and no prejudice was demonstrated.

p. 2
02

Substantive fairness under sections 43 and 45

Holding

Valid and fair reasons for termination were proved

Reasoning

Audit records and customer payment records showed under banking across several months of 2016. The Claimant, responsible for daily reconciliation and banking, could not explain the unbanked monies. Inconsistent figures did not deflect from this, his criminal acquittal was no bar, and duress in the repayment proposal was not particularised or proved.

p. 2
03

Relationship between criminal trial and disciplinary hearing

Holding

Criminal proceedings on the same facts do not bar disciplinary hearings or civil proceedings

Reasoning

Relying on Court of Appeal authority, the court held that dismissal founded on neglect of duty need not await the outcome of a criminal trial; the acquittal of the Claimant on theft charges did not assist him in the disciplinary context.

p. 2
04

Earned dues, pension and cooperative savings

Holding

Nothing turns on these heads of the claim

Reasoning

The earned salary, leave and notice dues were offset against the unaccounted monies. Pension relief was declined for want of the scheme rules and because the Respondent had undertaken to pay per the scheme rules, and the cooperative savings claim lacked an evidential foundation.

p. 2

Legal principles established

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  • Adequate time to prepare for a disciplinary hearing and the mode of hearing depend on the circumstances of each case
  • An employer must prove, as valid and fair, the reasons for terminating an employment contract under sections 43 and 45 of the Employment Act
  • Acquittal in a criminal trial on the same facts does not bar disciplinary proceedings or render the dismissal unfair

Court orders

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  1. 1.The Cause is dismissed with costs

Authorities

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Legislation

  • Employment Act, 2007section 35(1)
  • Employment Act, 2007section 41
  • Employment Act, 2007section 43
  • Employment Act, 2007section 45

Cases cited (2)

  • Clement Karuri v Kenya Ports Authority
    (2018) eKLR
  • Geoffrey Kiragu Njogu vs. Public Service Commission & 2 Others
    (2015) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (court not expressly stated in the excerpt)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Elizer Musambi Nyongesa versus Subaru Kenya Limited [2021] KEELRC 1909 (KLR)", Case Analysis (2021). Cause (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1909/eng@2021-04-07

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