Namasake & 2 others v Nzoia Sugar Co. Ltd (Cause 77, 76 & 78 of 2017 (Consolidated)) [2022] KEELRC 50 (KLR)
The bottom line
#A Kenyan court ruled that firing workers for 'lack of remorse' without valid, proven reasons was unlawful and awarded them compensation.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the Claimants was lawful
The termination was not lawful: the investigation report was inconclusive, the disciplinary committee report was not produced, and the committee had recommended return to work with a warning, so the reasons in the termination letters were neither justified nor valid.
The parties agreed the junior disciplinary committee recommended reinstatement with a warning, yet management terminated the Claimants on grounds of lack of remorse and prior disciplinary issues that were never discussed at the hearing. The inconclusive investigation report did not find them culpable. Under Section 43 of the Employment Act the reasons for termination must be valid and justifiable; the Respondent failed to discharge that burden.
Entitlement to notice pay
Each Claimant, having served over 12 years, was entitled to 3 months' notice under Article 9(d) of the CBA but received credit for one month already reflected in the dues computation, so 2 months' salary in lieu was awarded.
Article 9(d) of the CBA required 3 months' notice or pay in lieu for employees with 12 or more years of service. All three Claimants had served far longer (36, 25 and 21 years). The dues computation already reflected one month's notice, so the court awarded only the outstanding 2 months.
Entitlement to service pay
Service pay was not awarded because the Claimants were members of a registered provident fund.
Under Section 35 of the Employment Act an employee covered by a registered provident fund does not qualify for service pay. The Claimants were under a provident fund, so the claim failed; any dispute over the fund must be raised with the relevant authority.
Compensation for unlawful termination
Each Claimant was awarded 6 months' salary as compensation under Section 49, considering length of service, past disciplinary record, the disciplinary hearing held and the unlikelihood of comparable employment.
Applying the Section 49 criteria, the court weighed the long service (36, 25 and 21 years), the fact that a disciplinary hearing was held, the Claimants' prior disciplinary records, and the difficulty of obtaining similar employment. It determined 6 months' salary to be adequate compensation in each case.
Whether final dues were paid
On a balance of probability the Respondent proved payment of the stated final dues; the Claimants admitted knowledge of debts cleared and receipt of remaining amounts.
The defence produced cheque registers and bank statements showing payments to the Claimants, their banks and societies. The Claimants admitted the debts were settled and remaining sums received, and could not produce the alleged bank demand messages despite five years having elapsed since termination.
Legal principles established
#- An employer may only terminate employment for valid and justifiable reasons, and under Section 43 of the Employment Act bears the burden of proving such reasons even in summary dismissal, on a balance of probability.
- The standard of proof for an employer under Section 43 is the balance of probability and the employer need only prove reasons it genuinely believed to exist.
- Counsel may not introduce new evidence in submissions.
- An employee under a registered provident fund is not entitled to service pay.
Court orders
#- 1.Award to Philip Namasake: notice pay for 2 months of Kshs. 85,039.20 and compensation for unlawful termination of Kshs. 255,117.60
- 2.Award to Shaban Simiyu: notice pay for 2 months of Kshs. 121,203.95 and compensation for unlawful termination of Kshs. 369,611.82
- 3.Award to Joseph Sifuna Wamalwa: notice pay of Kshs. 116,566.72 and compensation for unlawful termination of Kshs. 349,700.16
- 4.Awards subject to statutory deductions of PAYE only
- 5.Respondent to pay costs of suit to Claimants
- 6.Interest at court rate from date of judgment until payment in full if not settled within 30 days
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (claims for unfair termination)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Namasake & 2 others v Nzoia Sugar Co. Ltd (Cause 77, 76 & 78 of 2017 (Consolidated)) [2022] KEELRC 50 (KLR)", Case Analysis (2022). Cause No. 77 of 2017 (with Causes Nos. 76 of 2017 and 78 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/50/eng@2022-04-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.