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ELRCPartially AllowedCause E068 of 2021· [2022] KEELRC 327 (KLR)

John Jaoko Othino v Intrahealth International [2022] KEELRC 327 (KLR)

Employment and Labour Relations Court
4 April 2022
7,126 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~29 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that an employer who cannot prove the misconduct behind a summary dismissal must pay compensation, even when the dismissal procedure was followed.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a Procurement Officer from June 2012 until his summary dismissal on 29th March 2019, challenged the dismissal and the Respondent's deduction of Kshs.442,600 from his entitlements for alleged overstated procurement costs, seeking terminal dues, notice pay, 12 months' compensation and a certificate of service. The Respondent maintained the dismissal was procedurally and substantively fair, the Claimant having admitted the charge, and that all dues were paid. The court re-fashioned the issues into four: procedural fairness, substantive fairness, reliefs, and costs. On procedure, the court found full compliance with section 41 of the Employment Act - notice to show cause, response, disciplinary hearing and right of accompaniment. On substance, however, the court held the dismissal unjustified: the alleged admission was equivocal; there were systemic gaps in hotel rate procurement with no binding rate agreements; an elaborate multi-officer approval process existed; the Respondent reduced the alleged loss from Kshs.825,000 to Kshs.442,600 after dismissal without involving the Claimant; and the Respondent failed to discharge its burden under sections 43 and 45. The dismissal was declared substantively unfair. The court awarded one month's salary in lieu of notice (Kshs.287,043.80) and compensation of five months' gross salary (Kshs.1,435,219.90) under section 49(1)(c), with interest, but refused leave pay (already paid) and general or aggravated damages for want of evidence. Costs were awarded to the Claimant. Judgment delivered on 4th April 2022 by Ocharo Kebira, J.

Key legal issues

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01

Procedural fairness of the summary dismissal

Holding

The dismissal was procedurally fair

Reasoning

The court found the section 41 safeguards were observed: a notice to show cause was issued with particulars, the Claimant responded, was invited to and attended a disciplinary hearing, declined his right to accompaniment, and the panel considered his representations before dismissing him. The later demand for Kshs.442,600 did not taint procedure but went to substantive fairness.

p. 7
02

Substantive fairness of the summary dismissal

Holding

The dismissal was without valid and fair reasons; it was substantively unjustified

Reasoning

The dismissal rested on an alleged loss of Kshs.825,000, but the employer later demanded only Kshs.442,600 post-termination without involving the employee. There were systemic gaps in hotel rates procurement, no binding agreements on rates, an elaborate multi-officer approval process, and emails to the CEO and Finance. Cogent evidence linking the Claimant to the loss was absent; the burden under sections 43 and 45 was not discharged.

p. 9
03

Whether the Claimant's statement amounted to an admission of gross misconduct

Holding

The statement was equivocal and not an unambiguous admission

Reasoning

The Respondent relied on the Claimant's disciplinary hearing statement owning up to the charge of overstatement/loss. The court held the statement equivocal, not an unambiguous admission on which a reasonable employer could found summary dismissal.

p. 8
04

Entitlement to reliefs

Holding

Notice pay and five months' salary as compensation awarded; leave pay and general damages refused

Reasoning

Having found want of substantive justification, the court awarded one month's notice pay under the contract and compensation under section 49(1)(c) at five months' gross salary, considering the systemic lapses visited on the employee and length of service. General/aggravated damages failed for lack of evidence; leave days had been paid.

p. 9

Legal principles established

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  • The procedure under section 41 of the Employment Act is mandatory and its breach renders termination procedurally unfair
  • An employer bears the burden under sections 43 and 45(2) of the Employment Act of proving valid and fair reasons for termination
  • Reasonableness of dismissal is tested against the band of reasonable responses of a reasonable employer, not the tribunal substituting its own view
  • An equivocal statement does not amount to an unambiguous admission justifying summary dismissal for gross misconduct
  • Gross misconduct must be established with cogent evidence showing conduct so grave it evinces abandonment of the employment relationship

Court orders

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  1. 1.A declaration that the dismissal was substantively unfair
  2. 2.One month's salary in lieu of notice of Kshs.287,043.80
  3. 3.Compensation under section 49(1)(c) of the Employment Act of Kshs.1,435,219.90 (five months' gross salary)
  4. 4.Interest on the notice pay and compensation at Court rates from the time of filing suit until full payment
  5. 5.Costs of the suit to the Claimant

Authorities

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Legislation

  • Employment Act, 2007Section 36
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 44 (including 44(4)(c) and (g))
  • Employment Act, 2007Section 45 (including 45(2))
  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Section 49 (including 49(1)(c))
  • Employment Act, 2007Section 51
  • Employment Act, 2007Section 17

Cases cited (11)

  • Charles Sande Nagatso v Security Group Kenya Limited
    [2016] eKLR
  • British Leyland UK Ltd v Swift
    [1981] IRLR 91
  • Kenya Revenue Authority v Reuwel Waithaka Gitahi & 2 others
    [2019] eKLR
  • Daniel Muchiri v Red Cross Society
    [2014] eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
  • Alphonse Machanga Mwachanga v Operation 680 Limited
    [2013] eKLR
  • Kenya Broadcasting Corporation v Geoffrey Wako
    [2019] eKLR
  • Postal Corporation of Kenya v K. Tanui
    [2019] eKLR
  • Joyce Mukolwe v Mustek East Africa Limited
    [2021] eKLR
  • Evans Kamadi Misango vs Barclays Bank of Kenya Limited
    [2015] eKLR
  • Laws vs London Chronicle Limited
    [1959] 2 All E.R. 285
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (ss. 41, 43, 45, 49) in a first-instance employment claim

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, "John Jaoko Othino v Intrahealth International [2022] KEELRC 327 (KLR)", Case Analysis (2022). Cause E068 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/327/eng@2022-04-04

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