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ELRCDismissedNot stated in judgment· [2021] KEELRC 2208 (KLR)

Ochuodho v Intercontinental Hotel Limited (Cause 2127 of 2014) [2021] KEELRC 2208 (KLR)

Employment and Labour Relations Court
22 January 2021
OMONESMUS N. MAKAU
3,804 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 upheld the dismissal of a supervisor who solicited a commission, confirming that a documented, properly heard disciplinary process will defeat unfair termination claims.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 12 August 2004 and rising to Laundry Supervisor earning about Kshs. 87,059 gross, was elected Shop Steward in 2013. Following a complaint by UAP Insurance that he visited its offices on 27 September 2013 with a Kodak Insurance Agency agent to solicit a commission in respect of the Respondent's staff medical scheme tender, he was served with a show cause letter, suspended, accorded an investigatory hearing and a disciplinary hearing before the Works Committee, and his employment was terminated on 23 October 2013 for gross misconduct with payment of terminal dues. He sued seeking reinstatement, salary arrears, special damages of Kshs. 1,550,875.49, maximum 12 months' compensation, and in the alternative terminal dues. The Respondent defended the termination as substantively and procedurally fair. The court found the CCTV evidence unhelpful because the clips did not identify the premises, but was persuaded by Mr. Ruoro's email that the Claimant visited UAP seeking a commission, breaching the Code of Ethics and Business Conduct. The termination was therefore substantively fair under sections 43 and 45 of the Employment Act, and procedurally fair under section 41 given the show cause letter, hearings, Works Committee representation, and JIC referral upholding the termination. All reliefs were refused, reinstatement being time-barred, and the suit was dismissed with each party bearing its own costs.

Key legal issues

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01

Validity of the reason for termination

Holding

The reason (soliciting a commission/conflict of interest from UAP Insurance) was valid; breach of Code of Ethics proved on a balance of probability.

Reasoning

The court relied on the email from Mr. Ruoro indicating the Claimant visited UAP to have Kodak Insurance Agency appointed for a commission. The Claimant did not deny knowledge of Kodak nor explain why Mr. Ruoro would falsely accuse him. CCTV clips were found irrelevant for proving the visit since the premises were not identifiable, but the email evidence sufficed. The employer thus met the substantive fairness threshold under sections 43 and 45.

p. 4
02

Procedural fairness of the termination

Holding

Procedure was fair: show cause letter, written response, investigatory hearing, disciplinary hearing before the Works Committee, and referral to the JIC which upheld the termination.

Reasoning

Section 41 requires an explanation of the reasons and a hearing with a fellow employee or union representative. The Claimant was served with a show cause letter and responded, recorded a statement with the Security Officer, attended a disciplinary hearing with the entire Works Committee, and the matter was escalated to the JIC under the CBA which upheld the termination. The employer therefore complied with sections 41 and 45.

p. 5
03

Entitlement to reliefs

Holding

No reliefs due; the suit was dismissed and each party to bear own costs.

Reasoning

Having found the termination substantively and procedurally fair, the court declined reinstatement (also barred by the lapse of the 3-year period) and compensation. The claims for salary until retirement, special damages, and terminal dues all failed for lack of legal basis, lack of evidence, or because they had already been paid.

p. 5

Legal principles established

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  • An employer need not conduct a mini-court in disciplinary hearings, but must accord the employee a hearing under section 41 of the Employment Act.
  • Substantive fairness under sections 43 and 45 of the Employment Act is satisfied where the employer proves on a balance of probability a valid reason for termination.

Court orders

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  1. 1.Reinstatement not ordered and no compensation for wrongful dismissal awarded
  2. 2.Claim for salary from separation until retirement age dismissed for lack of legal basis
  3. 3.Claim for special loss and damages of Kshs. 1,550,875.49 dismissed for lack of legal basis and evidence
  4. 4.Alternative prayer for notice pay, leave, salary for days worked and service pay dismissed as already paid
  5. 5.Suit dismissed for lack of merits
  6. 6.Each party to bear own costs

Authorities

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Legislation

  • Employment Actsections 41, 42(1), 43, 44(3), 44(4), 45
  • Evidence Actsection 106B
  • Constitution of KenyaArticle 4
  • ELRC Procedure RulesRule 28(3)

Cases cited (2)

  • Patrick Abuya v. Institute of Certified Public Accountants of Kenya
    [2015] eKLR
  • John Joel Muchuna & 8 Others vs. Kenya Revenue Authority
    [2015] eKLR
Jurisdiction invoked
First-instance employment and labour relations claim under the Employment Act before the Employment and Labour Relations Court

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, "Ochuodho v Intercontinental Hotel Limited (Cause 2127 of 2014) [2021] KEELRC 2208 (KLR)", Case Analysis (2021). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/2208/eng@2021-01-22

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