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ELRCPartially AllowedNot stated in the judgment (Employment Cause instituted 15 June 2017)· [2021] KEELRC 2268 (KLR)

Stephen Oluoch Kabondo v South Nyanza Teachers Co-operative Savings & Credit Society Ltd [2021] KEELRC 2268 (KLR)

Employment and Labour Relations Court
20 January 2021
1,290 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 awarded an unfairly dismissed Sacco employee Kshs 166,794 because the employer skipped the hearing and failed to justify the dismissal.

What this practically means

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Executive summary

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The Claimant, an employee of the Respondent sacco for about 16 years, sued for unfair termination and breach of contract after being sent on compulsory leave in February 2016 amid investigations into an alleged financial scandal, suspended in April 2016, and dismissed with effect from 1 December 2016. The Respondent filed a defence and counterclaim but failed to attend the hearing on 14 December 2020 despite notice; the Court closed the Respondent's case and dismissed the Counterclaim for non-prosecution. On procedural fairness, the Court found substantial compliance with sections 35(1) and 41 of the Employment Act, 2007, because the Claimant was informed of the allegations and invited to respond through several letters, but snubbed the invitations. However, on substantial fairness, sections 43 and 45 place a statutory burden on the employer to prove the reasons for termination and their validity and fairness; the Respondent having failed to attend hearing, the Court concluded the dismissal was unfair. Salary in lieu of notice was refused for lack of evidential or legal basis and no proof of procedural unfairness. Compensation of 8 months' gross salary (Kshs 147,728/-) was awarded on account of the length of service. On the contractual claims, the medical allowance was allowed for 9 months of compulsory leave (Kshs 6,300/-), accrued leave was allowed at Kshs 12,766/- after the Respondent failed to produce leave records, while house allowance and salary underpayment claims were declined. Total award: Kshs 166,794/- with costs to the Claimant. Judgment delivered at Kisumu on 20 January 2021 by Radido Stephen, Judge.

Key legal issues

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01

Procedural fairness of the dismissal

Holding

The Respondent was in substantial compliance with sections 35(1) and 41 of the Employment Act; the Claimant was informed of the allegations and invited to respond but snubbed the invitations.

Reasoning

The Claimant was notified of the allegations through letters dated 29 February 2016 and 26 April 2016 and invited to meetings by letters dated 13 July 2016 and 19 July 2016, including through his advocate. He failed to attend. Written notice under section 35(1)(c) may serve as a show-cause, and section 41 requires an opportunity to make representations, which was afforded.

p. 2
02

Validity and fairness of the reasons for dismissal

Holding

The reasons were not valid or fair because the Respondent failed to attend hearing to discharge the statutory burden under sections 43 and 45.

Reasoning

Sections 43 and 45 place the burden on the employer to prove the reasons for termination and their validity and fairness. The Respondent closed its case without testifying, so no evidence was led to justify the alleged financial scandal. The Court therefore concludes the reasons were neither valid nor fair and awards compensation based on 16 years of service.

p. 2
03

Breach of contract - medical allowance during compulsory leave

Holding

Allowed for 9 months at Kshs 700/- per month, totalling Kshs 6,300/-.

Reasoning

The contract provided a monthly medical allowance of Kshs 700/-. The Claimant remained an employee during compulsory leave and was entitled to the allowance unless the contract provided otherwise. He was on compulsory leave from 1 March 2016 to dismissal effective 1 December 2016, a period of 9 months, not the 15 months claimed.

p. 3
04

Unpaid accrued leave

Holding

Allowed in the sum of Kshs 12,766/-, the Claimant's monthly basic pay.

Reasoning

Under section 28 of the Employment Act an employee is entitled to at least 21 days annual leave with full pay. The Claimant disclosed the accrued leave related to 2015/2016 and his monthly basic pay was Kshs 12,766/-, so the amount sought of Kshs 308,320/- was mathematically unsupportable. The Respondent also failed to produce leave records as contemplated by section 10(3).

p. 3
05

Counterclaim

Holding

Dismissed for non-prosecution as the Respondent did not attend court on 14 December 2020.

Reasoning

The Respondent failed to attend the hearing on 14 December 2020 despite notice; the Court closed the Respondent's case on the claim and dismissed the unprosecuted Counterclaim.

p. 1

Legal principles established

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  • Sections 43 and 45 of the Employment Act place a statutory burden on the employer to prove both the reasons for termination and their validity and fairness
  • An employee on compulsory leave remains an employee and is entitled to contractual allowances unless the contract provides otherwise
  • An employer who fails to attend hearing to discharge the statutory burden cannot justify the dismissal

Court orders

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  1. 1.Declaration that the dismissal of the Claimant was unfair
  2. 2.Award of compensation of Kshs 147,728/- being the equivalent of 8 months' gross salary
  3. 3.Award of medical allowance of Kshs 6,300/-
  4. 4.Award of accrued leave of Kshs 12,766/-
  5. 5.Total award of Kshs 166,794/- to the Claimant
  6. 6.Dismissal of the Respondent's Counterclaim
  7. 7.Claimant to have costs

Authorities

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Legislation

  • Employment Act, 2007section 35(1)(c)
  • Employment Act, 2007section 41
  • Employment Act, 2007sections 43 and 45
  • Employment Act, 2007section 28
  • Employment Act, 2007section 10(3)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination of employment and breach of contract 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, "Stephen Oluoch Kabondo v South Nyanza Teachers Co-operative Savings & Credit Society Ltd [2021] KEELRC 2268 (KLR)", Case Analysis (2021). Not stated in the judgment (Employment Cause instituted 15 June 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/2268/eng@2021-01-20

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