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ELRCPartially AllowedCause No 9 of 2019· [2022] KEELRC 1554 (KLR)

Matsesho v Newton (Cause 9 of 2019) [2022] KEELRC 1554 (KLR)

Employment and Labour Relations Court
29 July 2022
BMB O M Manani
5,507 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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A Kenyan employer with strong evidence of misconduct still lost an unfair termination claim because it skipped the proper disciplinary procedure.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 2006 as a farmhand and later farm manager at the Respondent's Bofa home in Kilifi County, was summarily dismissed on August 8, 2014 on allegations of misappropriating funds entrusted to him for paying salaries, water and electricity bills and for purchasing cattle. He sued for a declaration of unfair termination, notice pay, salary arrears, service pay, accrued leave pay, compensation, interest and costs. The court framed two issues: whether the termination was fair and whether the Claimant was entitled to the reliefs sought. On substance, documentary evidence - the Claimant's own cashbook, Kenya Power arrears records, a water bill advice note and employee acknowledgements of salary arrears - established that funds were received but bills and salaries went unpaid while the cashbook recorded settlement. The court held the Respondent had valid grounds for termination under section 44, and that termination of the related criminal charges for lack of evidence did not preclude this. However, on procedure, the meeting of August 1, 2014 addressed only the cattle money, was not a disciplinary hearing, the additional charges were never communicated, and the Claimant was excluded from the meeting at which dismissal was decided. The termination was therefore declared unfair for want of procedural fairness. Reliefs were apportioned: service pay and August 2014 salary were declined, but July 2014 salary (Ksh 16,000), eight years' accrued leave pay (Ksh 128,000) and compensation equivalent to two months' salary (Ksh 28,000) were awarded, reflecting the Claimant's contribution to his dismissal. Interest was refused; costs and a Certificate of Service went to the Claimant.

Key legal issues

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01

Whether the termination was substantively fair

Holding

The Respondent had valid reasons; the Claimant's conduct amounted to gross misconduct under section 44

Reasoning

The Claimant authored a cashbook recording payment of salaries, water and electricity bills which in fact remained unpaid. Documents from Kenya Power, the water bill advice note and employee acknowledgements of salary arrears showed the funds entrusted to the Claimant were not applied for their intended purpose. His explanation implicating the Respondent's partner did not discharge him, since he made misleading entries. The court applied the reasonable-employer test from Galgalo Jarso Jillo.

p. 5
02

Whether the termination was procedurally fair

Holding

No - the Respondent failed to follow sections 41, 43 and 45 of the Employment Act

Reasoning

The meeting of August 1, 2014 addressed only the cattle money, was not convened or communicated as a disciplinary session, and the Claimant was not told of the additional charges regarding salaries, water and electricity. He was not invited to the meeting of August 8, 2014 at which the termination decision was taken, so he was never heard on the grounds ultimately relied on.

p. 6
03

Entitlement to accrued leave pay and limitation

Holding

Entitled to leave pay for eight years from 2006; the claim was not time-barred

Reasoning

The Claimant gave prima facie evidence of never taking leave; the Respondent, who pleaded he held leave records, failed to produce them despite sections 10(6) and (7) and 9 of the Employment Act and section 112 of the Evidence Act. Though the court personally favoured a three-year cut-off for standalone leave claims, it deferred to Court of Authority authority (G4S, Rift Valley Railways) holding otherwise, and the suit filed August 1, 2017 was within three years of the August 8, 2014 termination.

p. 8
04

Quantum of compensation for unfair termination

Holding

Two months' salary, Ksh 28,000/=, reflecting the Claimant's contribution to his termination

Reasoning

Section 49 requires the court to consider the employee's contribution to the termination. Although procedural fairness was denied, the Claimant's misconduct was the direct cause of his dismissal. Awarding substantial damages would ignore that misconduct; hence a nominal award of two months' salary was considered appropriate.

p. 9

Legal principles established

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  • An employer must both have valid reasons for termination and follow due process; failure of procedure renders termination unfair even where substantive grounds exist
  • An employer may rely on grounds it genuinely believed existed at the time of termination, tested against what a reasonable employer would have done
  • Acquittal or termination of criminal charges on the same facts does not bar a valid termination on reasonable suspicion under section 44(4)(g)
  • Under section 112 of the Evidence Act the employer bears the burden of proving payment of emoluments given its control of employment records
  • An employer withholding salary by way of set-off without a counter-claim cannot defeat a claim for salary earned

Court orders

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  1. 1.Declaration that termination of the Claimant’s employment was unfair for want of compliance with procedural safeguards
  2. 2.Claim for service pay declined
  3. 3.Claimant awarded Ksh 16,000/= being salary for July 2014
  4. 4.Claim for salary for August 2014 declined
  5. 5.Claim for accrued leave pay allowed for eight years at Ksh 128,000/=
  6. 6.Compensation for unfair termination granted at two months' salary, Ksh 28,000/=
  7. 7.Interest on the amounts granted declined
  8. 8.Costs of the case awarded to the Claimant
  9. 9.Respondent to issue the Claimant with a Certificate of Service
  10. 10.Monetary award subject to statutory deductions under section 49 of the Employment Act where applicable

Authorities

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Legislation

  • Constitution of KenyaArticle 41
  • Employment Actsections 9, 10(6) & (7), 18(4), 19, 28, 35(5), 41, 43, 44, 44(4)(g), 45, 47, 49, 90
  • Evidence Actsection 112
  • ELRC (Procedure) RulesRule 28(3)

Cases cited (5)

  • Galgalo Jarso Jillo v Agricultural Finance Corporation
    [2021] eKLR
  • Vipingo Ridge Limited v Swalehe Ngonge Mpitta
    [2022] eKLR
  • G4S Security Services (K) Limited v Joseph Kamau & 468 others
    [2018] eKLR
  • Rift Valley Railways (Kenya) Ltd –vs- Hawkins Wagunza Musonye & Others
    (2019) eKLR
  • Charles Nyaringo Rianga –vs- Hatavi Security Guards Ltd
    (2019) eKLR
Jurisdiction invoked
Employment Act and Article 41 of the Constitution of Kenya 2010

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Matsesho v Newton (Cause 9 of 2019) [2022] KEELRC 1554 (KLR)", Case Analysis (2022). Cause No 9 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1554/eng@2022-07-29

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