Turgut v Nakuru Water & Sanitation Services Company Limited (Employment and Labour Relations Cause E062 of 2021) [2023] KEELRC 1097 (KLR)
The bottom line
#A Kenyan court ruled a manager's dismissal was unfair because her employer ignored her system warnings and denied her an independent appeal.
What this practically means
#Executive summary
#Key legal issues
#Validity of reasons for termination
The claimant was dismissed without valid reasons
The employer alleged negligence and incompetence in approving fuel orders causing a loss of Kshs 3,219,256 and failure to utilise the ERP Fleet Management Module. However, the claimant had raised concerns about the system's unreliability in memos and a report of December 11, 2020, recommending testing and improvements which were not acted upon. The internal audit manager could not confirm the employer acted on her recommendations, and witnesses confirmed she did not make fuel requests and did not directly benefit from the fraud.
Procedural fairness of the disciplinary process
The disciplinary process was unfair because the same board panel sat at both the disciplinary and appellate stages, and the claimant was not interviewed by the internal auditor while other suspects were
Section 41 of the Employment Act and Section 7 of the Fair Administrative Action Act require a fair hearing. RW1 and RW2 confirmed the Board conducted the disciplinary process as a committee and also sat on appeal, denying the claimant an independent appellate forum. The internal auditor interviewed other employees but not the claimant. The compulsory leave was also imposed by the Managing Director without Board approval as required under clause 7.3.11 of the HR Manual.
The counterclaim for Kshs 3,219,256
The counterclaim fails because the claimant was not directly responsible for, and did not benefit from, the loss
Both witnesses confirmed the claimant never directly received or benefited from the lost funds. The fraud occurred at the Transport Assistant's desk, and the problem stemmed from the flawed ERP system which the claimant had complained about and which the respondent subsequently replaced. Liability for the loss could not be fastened on the claimant without evidence connecting her to it.
Remedies for unfair termination
Claimant awarded compensation of 10 months' salary plus notice pay, accrued salary, pro-rata leave, allowances, leave travelling allowance and pro-rata gratuity
Having found the dismissal unfair both substantively and procedurally, the court exercised its discretion under the Employment Act to award compensation equivalent to 10 months' gross salary, and contractual and statutory dues including three months' notice pay, salary up to the date of termination, 20 days' pro-rata leave, allowances listed in the dismissal letter, leave travelling allowance at 6.5% and pro-rata gratuity at 31% of basic salary, subject to statutory deductions.
Legal principles established
#- An employee who raised grievances about the very system through which a loss occurred, and whose recommendations were not acted upon, cannot be held negligent or incompetent for the loss.
- A disciplinary process where the same body sits both as the disciplinary committee and as the appellate body violates the employee's right of appeal and renders the process unfair.
Court orders
#- 1.Compensation of 10 months' salary equivalent to Kshs 3,050,000 for unfair dismissal
- 2.Three months' salary in lieu of notice of Kshs 915,000
- 3.Unpaid salary up to February 3, 2021 of Kshs 30,500
- 4.Pro-rata leave earned for 20 days of Kshs 203,333
- 5.Earned allowances as listed in the dismissal letter of February 3, 2021
- 6.Pro-rata leave travelling allowance calculated at 6.5% of annual basic pay up to February 3, 2021
- 7.Pro-rata gratuity at 31% of basic salary up to February 2021, items 5, 6 and 7 to be calculated or agreed by the parties
- 8.Respondent to pay costs of the suit plus interest at court rates with effect from the date of judgment
- 9.Counterclaim dismissed with costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes; reliefs grounded on Employment Act, 2007 and Fair Administrative Action Act, 2015
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Turgut v Nakuru Water & Sanitation Services Company Limited (Employment and Labour Relations Cause E062 of 2021) [2023] KEELRC 1097 (KLR)", Case Analysis (2023). Employment and Labour Relations Court Claim, memorandum of claim dated November 3, 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1097/eng@2023-05-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.