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ELRCPartially AllowedNairobi ELRC Cause No. E279 of 2021· [2023] KEELRC 726 (KLR)

Bhundia v Chandarana Supermarket Ltd & another (Cause E279 of 2021) [2023] KEELRC 726 (KLR)

Employment and Labour Relations Court
21 March 2023
4,132 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 an employee unfairly fired over missing money because the employer had no investigation, no hearing, and no proof.

What this practically means

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Executive summary

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The Claimant, employed as an Assistant Manager from August 2019, sued the Respondent claiming terminal dues arising from alleged constructive dismissal after Kshs.295,595/= collected during his night shift of 15th/16th March 2020 went missing from the safe. He was questioned, sent on compulsory leave without pay, and on 2nd May 2020 informed orally that the Board had terminated his employment for lack of trust. The Respondent maintained the Claimant was dismissed for gross misconduct after a fair process and argued the suit was barred by Section 45(3) of the Employment Act for want of 13 months' service. The court framed four issues. On jurisdiction, it followed Samuel G. Momanyi, holding Section 45(3) unconstitutional and inapplicable. Constructive dismissal failed for want of evidence of repudiatory breach, applying the contractual test in Western Excavating v Sharp and Coca Cola v Ligaga. On unfair termination, the court found the Respondent failed to prove a valid and fair reason: no investigation, show cause letter, termination letter or police report; the CCTV was off; and the cash figures conflicted. Procedurally, Section 41 was breached as the Claimant was never invited to a disciplinary hearing. The court declared the termination unfair, awarded one month's salary in lieu of notice, 15 days worked in April 2020, accrued leave pay, a certificate of service, and compensation equivalent to two months' salary, but declined declarations of constructive dismissal and exemplary damages. Costs were awarded to the Claimant. Judgment was delivered virtually at Nairobi on 21st March 2023.

Key legal issues

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01

Jurisdiction/cause of action despite Section 45(3) of the Employment Act

Holding

Section 45(3) was declared unconstitutional in Samuel G. Momanyi and is inapplicable; the Claimant with 9 months' service had the right to claim and the court had jurisdiction.

Reasoning

The Respondent argued the Claimant, having served only 9 months, could not complain under Section 45(3). The court noted Lenaola J in Samuel G. Momanyi declared the provision unconstitutional as inconsistent with Articles 28, 41(1), 47, 48 and 50(1). The court found itself persuaded by that decision, holding the provision inapplicable, so the suit was properly before it.

p. 5
02

Constructive dismissal

Holding

Claim failed; no evidence of repudiatory breach or that the Claimant left employment on account of the Respondent's conduct.

Reasoning

Adopting the contractual test in Western Excavating v Sharp as adopted by the Court of Appeal in Coca Cola v Ligaga, the court held constructive dismissal requires conduct amounting to repudiatory breach making continued stay untenable. The Claimant neither proved such breach nor that he quit blaming the employer; indeed he was terminated by the Respondent, rendering the doctrine inapplicable.

p. 6
03

Valid and fair reason for termination

Holding

Respondent failed to prove a valid and fair reason for terminating the Claimant's employment.

Reasoning

Under Sections 43(1) and 45(2), the employer must prove the reason for termination. The court found no serious investigation, no show cause letter, no investigation report, no termination letter, conflicting figures for the missing cash, failure to report to police, and no evidence implicating the Claimant, especially as other managers had safe access after handover.

p. 7
04

Procedural fairness under Section 41

Holding

Termination was procedurally flawed as the Claimant was neither invited to nor participated in a disciplinary hearing.

Reasoning

Section 41 is mandatory. RWI admitted there was no disciplinary committee and no minutes or invitation evidence. The Claimant was not notified of charges nor given an opportunity to be heard; the Board's decision was communicated orally. In the absence of evidence of compliance with Section 41, the termination was procedurally unfair.

p. 8

Legal principles established

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  • Section 45(3) of the Employment Act, having been declared unconstitutional, cannot be used to bar employees with less than 13 months' service from complaining of unfair termination
  • Termination must be both substantively justified and procedurally fair
  • The contractual test applies to constructive dismissal requiring a repudiatory breach going to the root of the contract
  • The employer bears the burden of proving valid and fair reasons for termination on a balance of probabilities

Court orders

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  1. 1.Declaration that termination of the Claimant's employment was unfair
  2. 2.One month's salary in lieu of notice
  3. 3.15 days worked in April 2020
  4. 4.Accrued leave days
  5. 5.Certificate of service
  6. 6.Equivalent of 2 months' salary as compensation under Section 49(1)(c)
  7. 7.Costs of the suit to the Claimant

Authorities

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Legislation

  • Employment Act, 2007Sections 5, 10, 35, 41, 43(1), 44(4), 45(2), 45(3), 47(5), 49(1)(c), 49(4), 51
  • Constitution of Kenya, 2010Articles 28, 41(1), 47, 48, 50(1), 159(2)(d)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (14)

  • Walter Ogal Anuro V Teachers Service Commission
    (2013) eKLR
  • Pamela Nelima Lutta v Mumias Sugar Co. Ltd
    (2017) eKLR
  • Kennedy Maina Mirera V Barclays Bank of Kenya Ltd
    (2018) eKLR
  • Joyce Sang V Sumaria Industries Ltd
    (2019) eKLR
  • Western Excavating ECC Ltd V Sharp
    (1978) 2 WLR 344
  • United States International University v Eric Rading Outa
    (2016) eKLR
  • Rookes V Bernard
    (1964) AC 1129
  • Bank of Baroda (K) Ltd V Timwood Products Ltd
    Civil App. No. 132 of 2001
  • Samuel G. Momanyi V Attorney General & another
    (2012) eKLR
  • Hamdarda Wakhama V Union of India
    AIR (1960) at 554
  • Coca Cola East & Central Africa V Maria Kagai Ligaga
    (2015) eKLR
  • Naima Khamis v Oxford University Press (E.A) Ltd
    (2017) eKLR
  • Pius Machafu Isindu v Lavington Security Guards
    (2017) eKLR
  • Postal Corporation of Kenya v Andrew K. Tanui
    (2019) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007; challenge under Section 45(3) rejected following Samuel G. Momanyi v Attorney General

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, "Bhundia v Chandarana Supermarket Ltd & another (Cause E279 of 2021) [2023] KEELRC 726 (KLR)", Case Analysis (2023). Nairobi ELRC Cause No. E279 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/726/eng@2023-03-21

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