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ELRCPartially AllowedCause No 1202 of 2017· [2023] KEELRC 1087 (KLR)

Muyah v Agakhan Education Services Kenya (Cause 1202 of 2017) [2023] KEELRC 1087 (KLR)

Employment and Labour Relations Court
28 April 2023
SRStella Rutto
3,626 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 confirmed a teacher's dismissal over an undeclared conflict of interest was justified, but ruled the secretive disciplinary process unfair and awarded damages.

What this practically means

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Executive summary

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Patrick Muyah, a Physical Education teacher and Sports Coordinator with the respondent, was summarily dismissed in December 2016 after an internal audit revealed he was the sole proprietor of Proactive Concepts, a business contracted by the respondent to provide soccer coaching services, which interest he had not formally declared under the respondent's Conflict of Interest Policy. He died on April 6, 2021, and Rose Wangari Munangwe was substituted as his personal representative on May 31, 2022. The claim sought notice pay, 15 days' December salary, compensatory damages, salary deductions, service pay and a declaration that the dismissal was wrongful and unfair. The court framed three issues: substantive justification, procedural fairness, and entitlement to reliefs. On substance, the court held that although the respondent was actually aware of the deceased's ownership of Proactive Concepts (the contract bearing his ID number and co-signed by him), the failure to formally declare the interest breached a binding policy requirement and afforded a valid and fair reason for termination. On procedure, however, the deceased was merely summoned to report to the Regional Human Resource Manager without being told a disciplinary hearing awaited him, which the court, applying the Court of Appeal's decision in Nebert Mandala Ombajo v ICPAK, termed an ambush and procedurally unfair. The dismissal was therefore justified but unlawful. Judgment was entered for the claimant: compensatory damages of Kshs 432,276.00 (two months' gross salary), refund of Kshs 86,225.00 in unremitted SACCO deductions, total Kshs 518,501.00 with interest from the date of judgment, plus costs. Notice pay, December salary and service pay claims were declined, the latter under Section 35(6) of the Employment Act.

Key legal issues

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01

Whether there was a justifiable reason to terminate the deceased's employment

Holding

Yes. Failure to formally declare the interest in Proactive Concepts breached the respondent's Conflict of Interest Policy and afforded a valid and fair reason for termination.

Reasoning

Section 43(1) obliges the employer to prove reasons for termination, and Section 45(2)(a) and (b) require a valid and fair reason related to conduct. Although the court found the respondent actually knew of the deceased's ownership of Proactive Concepts because the contracts bore his ID number and were co-signed by him, the deceased was still bound by the policy to formally declare the interest, and the entity offered a wider range of services beyond the school programme.

p. 5
02

Whether the deceased was afforded procedural fairness prior to termination

Holding

No. Although the respondent initially complied with Section 41, the manner in which the deceased learnt of the disciplinary hearing rendered the process an ambush and procedurally unfair.

Reasoning

The deceased received a show cause notice and responded in writing, but was merely told to report to the Regional Human Resource Manager without being informed a disciplinary hearing would take place, depriving him of the opportunity to prepare psychologically or obtain representation. Following the Court of Appeal in Nebert Mandala Ombajo v ICPAK, disciplinary proceedings are grave matters requiring sufficient time to prepare, so the termination was unlawful despite being substantively justified.

p. 6
03

Whether the claimant is entitled to the reliefs sought

Holding

Partially. Compensatory damages of two months' gross salary and refund of unremitted SACCO deductions were awarded; notice pay, December salary and service pay were declined.

Reasoning

Having found the dismissal justified but procedurally unfair, the court exercised discretion to award compensatory damages equivalent to two months' gross salary. Notice pay and December salary were disproved by the claimant's own exhibits, and service pay was excluded by Section 35(6) of the Employment Act because the deceased was an NSSF member. The respondent having failed to prove remittance of SACCO deductions, the claimant was entitled to reimbursement.

p. 6

Legal principles established

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  • An employer must prove valid and fair reasons for termination under Sections 43(1) and 45(2) of the Employment Act; failure to formally disclose a conflict of interest in an entity doing business with the employer can constitute a valid and fair reason even where the employer has actual knowledge of the interest.
  • An employee facing disciplinary proceedings must be notified of the significance of a disciplinary hearing to allow adequate preparation; springing a hearing on the employee amounts to an ambush and renders the process procedurally unfair under Section 41 of the Employment Act.

Court orders

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  1. 1.Compensatory damages in the sum of Kshs 432,276.00 being equivalent to two (2) months of the deceased's gross salary.
  2. 2.Refund of salary deductions in respect of Utabibu SACCO and Utabibu Investment Cooperative Society being Kshs 86,225.00.
  3. 3.Total award of Kshs 518,501.00.
  4. 4.Interest on the amount at court rates from the date of judgment until payment in full.
  5. 5.The claimant shall also have the costs of the suit.

Authorities

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Legislation

  • Employment ActSection 41(1)
  • Employment ActSection 42(1)
  • Employment ActSection 43(1)
  • Employment ActSection 45(2)(a) and (b)
  • Employment ActSection 45(2)(c)
  • Employment ActSection 35(6)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48

Cases cited (5)

  • John Florence Maritime Services & another vs Cabinet Secretary Transport & Infrastructure & 3
    KESC 39 (KLR)
  • Mary Chemweno Kiptui vs Kenya Pipeline Company Limited
    (2014) eKLR
  • Anthony Mkala Chitavi vs Malindi Water & Sewerage Co Limited
    (2013) eKLR
  • Arnold Muoki vs Local Production Kenya Limited
    (2021) eKLR
  • Nebert Mandala Ombajo vs Institute of Certified Public Accountants of Kenya (ICPAK)
    Nakuru Civil Appeal No. 62 of 2018
Jurisdiction invoked
Employment and labour relations jurisdiction under Article 162(2) of the Constitution (first-instance claim under the Employment Act, 2007)

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, "Muyah v Agakhan Education Services Kenya (Cause 1202 of 2017) [2023] KEELRC 1087 (KLR)", Case Analysis (2023). Cause No 1202 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1087/eng@2023-04-28

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