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ELRCDismissedCause No 2175 of 2017· [2023] KEELRC 240 (KLR)

Ongera v Transebel Ltd (Branan Flowers) (Cause 2175 of 2017) [2023] KEELRC 240 (KLR)

Employment and Labour Relations Court
7 February 2023
3,765 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 dismissed an unfair dismissal claim because the employee had signed a settlement agreement waiving further claims, despite finding the dismissal procedurally flawed.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from July 2001 and serving as Assistant Security Officer/security guard (shift leader), was issued a notice to show cause on 28th August 2015 over suspected involvement in theft of company property (diesel, manhole covers and other items). After a hearing on 4th September 2015, his services were terminated and he was paid dues of Kshs.114,108/= under a settlement agreement dated 8th September 2015 which recorded full and final settlement and no further claims. He sued for declarations that the dismissal was unfair, terminal dues and compensatory damages of Kshs.2,241,001/=, and costs. The Respondent's witness failed to attend hearings twice, and the parties agreed to proceed by documents and submissions. The court framed three issues: fairness and lawfulness of termination, waiver, and entitlement to reliefs. On substance, it found the Respondent had reasonable and sufficient grounds to suspect the Claimant, who as security supervisor failed to rebut the allegations or report on the thefts. On procedure, however, the court found the process vitiated because the Respondent failed to facilitate witnesses the Claimant had requested for the disciplinary hearing. On waiver, applying Coastal Bottlers v Kimathi Mithika, the court held that the voluntarily executed full and final settlement agreement was a binding contract discharging the Respondent from further claims. Consequently, the claim for reliefs was unsustainable and the suit was dismissed, with each party bearing their own costs.

Key legal issues

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01

Whether termination was substantively justified

Holding

Yes - the Respondent had reasonable and sufficient grounds to suspect the Claimant of involvement in theft of company property

Reasoning

The notice to show cause and termination letter alleged the Claimant, a security supervisor, was part of a network stealing company property. The Claimant did not deny the accusations or explain the thefts despite being the officer on the ground, instead requesting that other persons be summoned. The court held his allegations of threats since 2003 were diversionary and that he did not sufficiently rebut the allegations to eradicate the employer's suspicion, satisfying Section 43 read with Section 44(4)(c) of the Employment Act.

p. 6
02

Whether the termination procedure was fair under Section 41

Holding

No - the procedure was vitiated by the Respondent's failure to facilitate the witnesses the Claimant requested

Reasoning

Although the Claimant was issued a notice to show cause, responded to it and attended a hearing where he was entitled to be accompanied by an employee of his choice, he twice requested that specific persons with information about the alleged thefts attend the hearing. The Respondent neither acknowledged nor responded to these requests nor explained why the witnesses could not be summoned, which vitiated the process. The court therefore found the Respondent failed to demonstrate fair procedure within the meaning of Section 45.

p. 7
03

Whether the settlement agreement waived further claims

Holding

Yes - the full and final settlement agreement dated 8th September 2015 was a binding agreement that discharged the Respondent

Reasoning

Applying Coastal Bottlers Ltd v Kimathi Mithika and Krystalline Salt Ltd v Kwekwe Mwakele, the court examined whether the discharge voucher was voluntarily executed. The Claimant confirmed on cross-examination that he signed the document willingly and alleged no misrepresentation, fraud or other vitiating element. The court gave effect to the parties' intention, holding the agreement absolved the Respondent from further claims under the contract or in relation to the termination.

p. 9
04

Entitlement to reliefs

Holding

No - having found a valid waiver, the claim for reliefs was unsustainable and the suit was dismissed

Reasoning

The court reasoned that since the settlement agreement executed by the parties discharged the Respondent from further claims, the issue of entitlement to terminal dues and compensatory damages did not arise. The conclusion followed from the waiver finding rather than an independent assessment of quantum, and the suit was dismissed with each party bearing their own costs.

p. 9

Legal principles established

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  • For a termination of employment to pass the fairness test, it must be substantively justifiable and procedurally fair
  • A voluntarily executed settlement agreement or discharge voucher constitutes a complete contract and bars further claims
  • Reasons for termination are those the employer genuinely believed to exist at the time of termination
  • Four elements must be discernible for a disciplinary procedure to pass muster under Section 41

Court orders

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  1. 1.Dismissal of the Claimant's suit
  2. 2.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSection 43
  • Employment ActSection 45
  • Employment ActSection 41
  • Employment ActSection 44(4)(c)
  • Employment ActSection 43(2)
  • Employment ActSection 90
  • Employment Act, 2007Sections 43 and 45 (as cited)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48

Cases cited (15)

  • Gibson D. Mwanjala V Kenya Revenue Authority
  • Joshua Rodney Marimba V Kenya Revenue Authority
    (2019) eKLR
  • Menginya Salima Murgani V Kenya Revenue Authority
  • Anthony Mkala Chitavi V Malindi Water & Sewerage Co. Ltd
    (2013) eKLR
  • CMC Aviation Ltd V Mohammed Noor
    (2015) eKLR
  • Naqvi Syed Qmar V Paramount Bank & another
    (2015) eKLR
  • Pius Machafu Isindu V Lavington Security Guards Ltd
    (2017) eKLR
  • Walter Ogal Anuro V Teacher Service Commission
    (2013) eKLR
  • Naima Khamis V Oxford University Press (EA) Ltd
    (2017) eKLR
  • Loice Atieno V Kenya Commercial Bank Ltd
    (2015)
  • Postal Corporation of Kenya V Andrew K. Tanui
    (2019) eKLR
  • Coastal Bottlers Ltd V Kimathi Mithika
    (2018) eKLR
  • Krystalline Salt Ltd V Kwekwe Mwakele & 67 others
    (2017) eKLR
  • Trinity Investment Ltd V Lion of Kenya Insurance Co. Ltd
    (2015) eKLR
  • Damodar Jihabhai & Co. Ltd and another V Eustace Sisal Estates Ltd
    (1967) E.A. 153
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (claim of unfair/unlawful termination and terminal dues)

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, "Ongera v Transebel Ltd (Branan Flowers) (Cause 2175 of 2017) [2023] KEELRC 240 (KLR)", Case Analysis (2023). Cause No 2175 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/240/eng@2023-02-07

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