Kiptum Nyaoke v Kenya Post Office Savings Bank [2022] KEELRC 468 (KLR)

Section 41 obliges an employer to explain the reasons for contemplated termination and allow the employee representation. The dismissal letter alluded to a disciplinary hearing, but the Claimant denied being heard and the Respondent, having not defended the suit, produced no contrary evidence. The court was left with the Claimant's uncontroverted position that no hearing was accorded, so procedural fairness was not met.

Sections 43, 45(2) and 47(5) place the legal and evidential burden on the employer to prove the reasons for termination and their validity. The dismissal letter cited 'acts of operational irregularity', but the Respondent did not demonstrate that these reasons were valid, fair and justified. Having failed to discharge that burden, the termination was deemed substantively unfair in addition to being procedurally flawed.

Section 35 of the Employment Act makes notice or pay in lieu a statutory requirement, but the parties' contract expressly provided for one month's salary in lieu of notice. The court declined to re-write the contract between the parties, awarding one month's salary (Kshs. 81,699) instead of the three months' notice claimed.

The finding of both procedural and substantive unfairness entitled the Claimant to compensation under Sections 49 and 50. Considering his 23 years of service and the Respondent's total failure to justify the termination, the court found the Claimant entitled to the statutory maximum of 12 months' salary, quantified at Kshs. 980,388.

Employment does not guarantee service until retirement, and upon termination an employee ceases to render labour; awarding anticipated salary would unjustly enrich the employee. Further, Section 49(4)(f) does not permit damages above the 12-month cap, and a permanent and pensionable contract remains terminable. The claim for Kshs. 18,627,372 was therefore lacking in merit.