Ndung’u v Segera Limited (Cause E008 of 2022) [2023] KEELRC 1355 (KLR)
The bottom line
#A Kenyan court ruled an accountant was unfairly sacked for flagging financial irregularities, awarding three months' salary but rejecting his discrimination and terminal dues claims.
What this practically means
#Executive summary
#Key legal issues
#Validity of reasons for termination
The reasons cited for dismissal were not valid and fair; the termination was unjustified.
The evidence showed accounting procedures were being by-passed by the Ranch Manager with management approval. The claimant, a professional accountant, was obliged to point out these breaches; his conduct amounted to professional conduct or whistle-blowing deserving reward, not dismissal. No reasonable employer would have dismissed him; the correct persons to face discipline were those breaching procedures.
Procedural fairness under section 41 of the Employment Act
The procedure followed was fair despite the claimant's complaint of a pre-determined outcome.
The employer issued a show cause letter, accorded a hearing before a committee, communicated the decision with a right of appeal, issued a certificate of service and paid terminal dues including salary in lieu of notice. In the workplace the employer or its appointees necessarily preside over disciplinary hearings; an aggrieved employee's remedy lies in court.
Discrimination under section 5 of the Employment Act and Article 27 of the Constitution
Discrimination was not proved.
The claimant's salary was inclusive of housing, so any housing provided was discretionary and demanding a house would amount to double benefits. The claimant and tourism staff were of different cadres, so differential treatment of the tourism staff did not constitute discrimination; discrimination arises only within the same cadre.
Remedies for unfair termination
Compensation of three months' salary awarded under section 49(1); general damages for discrimination refused.
Having found no valid and fair reason for termination, the court declared the termination unfair under section 45 and awarded compensation under section 49(1). The claimant served over three years and did not contribute to the termination through misconduct, justifying three months' salary, subject to statutory deductions.
Legal principles established
#- An employer must communicate reasons for dismissal in clear and particularised language to enable the employee to respond and appeal.
- An employee who acts in compliance with accounting procedures, including whistle-blowing, cannot be guilty of gross misconduct.
- Discrimination arises only where staff of the same cadre are accorded differential treatment; an employee receiving housing allowance within gross salary cannot also demand a house.
Court orders
#- 1.Declaration that the claimant's services were terminated unfairly, unjustified and unlawfully within the meaning of section 45 of the Employment Act
- 2.Award of Kshs.552,420.00 (3 months' salary) as compensation for unfair termination, subject to statutory deductions
- 3.Costs of the suit to the claimant plus interest at court rates from the date of judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (sections 41, 43, 45, 47(5), 49) over a claim of unfair termination and discrimination
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ndung’u v Segera Limited (Cause E008 of 2022) [2023] KEELRC 1355 (KLR)", Case Analysis (2023). Nyeri ELRC Cause No. E008 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1355/eng@2023-05-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.