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ELRCPartially AllowedAppeal from CM ELRC No. 304 of 2020· [2023] KEELRC 1327 (KLR)

Milly Glass Works Limited v Were (Appeal E015 of 2022) [2023] KEELRC 1327 (KLR)

Employment and Labour Relations Court
25 May 2023
MMM. Mbarũ
1,834 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenyan employers must hold an in-person hearing before firing an employee; written replies alone are not enough, though NSSF contributors cannot claim service pay.

What this practically means

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Executive summary

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This was a first appeal to the Employment and Labour Relations Court at Mombasa against a magistrates' court judgment (CM ELRC No. 304 of 2020, delivered January 20, 2022) which had found that the respondent assistant operator's employment was unfairly terminated following the loss of about 3,000 litres of fuel during offloading from a Gulf Energy truck on January 16, 2020, and awarded him 12 months' compensation of Ksh. 216,000 and service pay of Ksh. 126,000. The appellant employer argued that written responses to the notice to show case constituted a sufficient hearing, that the 12-month award lacked legal basis, and that service pay was unwarranted since the respondent was an NSSF member. Mbarũ J, rehearing the evidence as a first appeal, held that section 41 of the Employment Act imposes mandatory minimum procedural standards and that the employer ought to have heard the respondent's representations in person; the finding of unfair termination and the maximum compensation award (justified by the respondent's long, disciplined service under sections 45(5) and 49(1)) could not be faulted. However, the respondent's own payment statement showed NSSF deductions, so under section 35(5) and (6) service pay was not due. The appeal partially succeeded: the declaration of unfair termination and Ksh. 216,000 compensation were upheld, service pay was set aside, and each party was ordered to bear its own costs. Judgment delivered May 25, 2023.

Key legal issues

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01

Whether the absence of an oral hearing rendered the termination procedurally unfair

Holding

Yes; the magistrate's finding of unfair termination could not be faulted as the respondent was not heard in accordance with section 41(2)

Reasoning

After issuing the notice to show cause and conducting investigations, the employer was bound to hear the employee's representations under section 41(2), which is mandatory. Written exchanges did not discharge this duty, following Postal Corporation v Tanui and Oyombe v Eco Bank. The court held a hearing before termination is imperative and the employee must be allowed a representative and to make representations.

p. 3
02

Whether the award of 12 months' compensation was justified

Holding

Yes; the magistrate gave justified reasons grounded on the respondent's long, disciplined service under sections 45(5) and 49(1)

Reasoning

Section 49(1) permits compensation up to 12 months but maximum awards require reasons. The magistrate considered the respondent's years of service, clean record and discipline, consistent with section 45(5). Following Alfred Muthomi and Olute v County Government of Siaya, the award stood.

p. 4
03

Whether the award of service pay was proper

Holding

No; the respondent contributed to NSSF, so service pay was not payable under section 35(5) and (6)

Reasoning

The trial court found no evidence of NSSF contribution, but the respondent's own payment statement for October 2019 showed NSSF, NHIF and PAYE deductions. Under section 35(5) and (6) of the Employment Act, service pay is not due to an NSSF contributor, so this head of the judgment was set aside.

p. 4

Legal principles established

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  • Section 41 of the Employment Act sets mandatory minimum standards of fair procedure before termination, and written responses alone may not satisfy the hearing requirement
  • An award of the maximum 12 months' compensation must be justified on sound principles including the employee's service record

Court orders

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  1. 1.Declaration that the termination of employment was unfair
  2. 2.12 months' compensation of Ksh. 216,000 upheld
  3. 3.Award of service pay set aside
  4. 4.Each party to bear own costs

Authorities

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Legislation

  • Employment Act, 2007section 41(2)
  • Employment Act, 2007section 43
  • Employment Act, 2007section 44(4)(c) and (3)
  • Employment Act, 2007section 45(5)
  • Employment Act, 2007section 47(5)
  • Employment Act, 2007section 49(1)
  • Employment Act, 2007section 35(5) and (6)
  • Employment and Labour Relations Court Act, 2011section 12(4)

Cases cited (5)

  • Pius Machafu Isindu v Lavington Security Guards Limited
    [2017] eKLR
  • Postal Corporation of Kenya v Andrew K Tanui
    [2019] eKLR
  • Oyombe v Eco Bank Limited (Civil Appeal 185 of 2017)
    [2022] KECA 540 (KLR)
  • Alfred Muthomi & 2 others v National Bank of Kenya Limited
    [2018] eKLR
  • Olute v County Government of Siaya & another (Employment and Labour Relations Cause E059 of 2021)
    [2022] KEELRC 13206 (KLR)
On appeal from
Magistrates' Court (CM ELRC)
CM ELRC No. 304 of 2020
Jurisdiction invoked
First appeal to the Employment and Labour Relations Court

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, "Milly Glass Works Limited v Were (Appeal E015 of 2022) [2023] KEELRC 1327 (KLR)", Case Analysis (2023). Appeal from CM ELRC No. 304 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1327/eng@2023-05-25

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