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ELRCPartially AllowedCause No E049 of 2021· [2023] KEELRC 432 (KLR)

Otieno v Toyota Kenya Limited (Cause E049 of 2021) [2023] KEELRC 432 (KLR)

Employment and Labour Relations Court
16 February 2023
4,362 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled Toyota Kenya unfairly dismissed an employee without a hearing and without proof, awarding him over Ksh 925,000.

What this practically means

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Executive summary

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The Claimant, employed as a Yamaha Sales Supervisor at the Respondent's Mombasa branch from November 1, 2010 earning Ksh 102,838.11 monthly, was summarily dismissed by a letter dated January 31, 2020, which he received on March 18, 2020 by registered post. The dismissal cited alleged receipt of Ksh 924,500.26 from customers for Yamaha motorcycles not remitted to the company or delivered, and abscondment. The Claimant had earlier been charged in Mombasa CM Criminal Case No 1250 of 2019 but was acquitted on January 19, 2021 under section 210 of the Criminal Procedure Code. The court framed two issues: whether the termination was unfair, and whether the Claimant was entitled to the reliefs sought. The court found the Respondent breached the mandatory procedure in Section 41 of the Employment Act - no show cause letter or hearing was given - and the abscondment excuse was rejected on the evidence. Substantively, the Respondent failed to prove the validity of the allegations: key witnesses (customers, cashier) were not called and the criminal court had acquitted the Claimant. Termination was declared both procedurally and substantively unfair. The court awarded eight months' salary (Ksh 822,704.88) as compensation plus one month's pay in lieu of notice (Ksh 102,838.11), subject to statutory deductions, and ordered issuance of a certificate of service within thirty days. Claims for salary arrears, leave, paternity leave and school fees savings were declined as unpleaded and unproved. The Claimant received costs and interest at court rates.

Key legal issues

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01

Procedural fairness of the termination

Holding

Termination was procedurally unfair because the Respondent did not comply with Section 41 of the Employment Act - no show cause letter, no hearing, and the excuse of abscondment was rejected.

Reasoning

Section 41 mandates explanation of reasons to the employee and a hearing before termination. RW-2 admitted no show cause letter was issued and no disciplinary hearing was held. The abscondment narrative failed because the Respondent, the complainant in the criminal case, could have effected personal service; it had the Claimant's contacts and successfully reached him by registered post; and unrebutted evidence showed the Claimant reported to work as directed by the Network Manager.

p. 7
02

Substantive justification of the termination

Holding

The Respondent failed to prove the validity of the reasons for termination; termination was substantively unfair.

Reasoning

The two customers who allegedly paid cash to the Claimant were not called to testify; the Cashier was not called; no evidence showed the nine units were released without receipts or by whom; no proper investigation was conducted; and the criminal court acquitted the Claimant under section 210 of the Criminal Procedure Code. The Respondent therefore did not prove a valid and fair reason related to the Claimant's conduct.

p. 9
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Reliefs

Holding

Eight months' salary compensation and one month's pay in lieu of notice awarded; certificate of service ordered; claims for salary arrears, leave, paternity leave and school fees savings declined as unpleaded and unproved.

Reasoning

Having found unfair termination, the Court exercised discretion under the Employment Act to award eight months' gross salary as compensation and notice pay since Section 35(1) was not complied with. Special damages claims required specific pleading and proof, which was absent. Section 51 entitled the Claimant to a certificate of service. The award is subject to statutory deductions under Section 49(2).

p. 9

Legal principles established

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  • Non-compliance with the mandatory procedure in Section 41 of the Employment Act renders termination procedurally unfair under Section 45(1)
  • An employer cannot terminate without a hearing and then prove the allegations after termination; reasons must be proved before termination
  • Fairness of termination requires both substantive justification and procedural fairness

Court orders

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  1. 1.The equivalent of eight months' salary being compensation for unfair termination of employment, Ksh 822,704.88
  2. 2.One month salary in lieu of notice, Ksh 102,838.11, total Ksh 925,542.99
  3. 3.The awarded sum shall be subject to statutory deductions pursuant to Section 49(2) of the Employment Act
  4. 4.The Respondent shall issue the Claimant with a Certificate of Service pursuant to Section 51 of the Employment Act within thirty days of this judgment
  5. 5.The Claimant is awarded costs of the suit and interest at Court rates

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 44
  • Employment ActSection 45(1) and (2)
  • Employment ActSection 35(1)
  • Employment ActSection 49(2)
  • Employment ActSection 51
  • Criminal Procedure CodeSection 210

Cases cited (3)

  • Kenfreight [e.a.] Limited v Benson K. Nguti
    [2016] eKLR
  • Johnson Shijenje v Stephen Gikera & Punit Vadgama T/a Gikera & Vadgama Advocates
    [2023] eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute)

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, "Otieno v Toyota Kenya Limited (Cause E049 of 2021) [2023] KEELRC 432 (KLR)", Case Analysis (2023). Cause No E049 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/432/eng@2023-02-16

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