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ELRCPartially AllowedELRC Cause No. 44 of 2022 (consolidated with ELRC Cause No. 43 of 2022)· [2023] KEELRC 1366 (KLR)

Njuguna & another v Ubuntu Life Foundation (Employment and Labour Relations Cause 44 & 43 of 2022 (Consolidated)) [2023] KEELRC 1366 (KLR)

Employment and Labour Relations Court
8 June 2023
6,724 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled the foundation unfairly fired its HR manager, awarding her over Kshs 2.5 million, but found her colleague resigned voluntarily.

What this practically means

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Executive summary

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Two consolidated ELRC claims by Faith Wanjiru Kuria (HR Manager) and Paul Gicheru Njuguna (Head of Operations/Finance) against Ubuntu Life Foundation were determined together, Cause 44 being the lead file. Faith claimed she was suspended on December 6, 2021 and terminated by email on January 5, 2022 on grounds of operational failure, poor performance and misappropriation, without notice or hearing. Paul claimed he was forced to resign for refusing to underquote salaries to facilitate tax evasion. The respondent denied unfair termination, asserting Paul resigned voluntarily and Faith was lawfully terminated on audit findings, and counterclaimed for Kshs 5,397,643 allegedly misappropriated. The court found Faith's termination lacked valid reasons: the financial-constraints ground amounted to redundancy without section 40 compliance, and the audit relied on was completed in March 2022, after her dismissal. No disciplinary hearing was held, breaching section 41 of the Employment Act. She was awarded salary arrears, leave, salary cuts, notice pay and 8 months' compensation (total Kshs 2,524,903) plus a certificate of service. Paul's constructive dismissal claim failed since his resignation was tendered and accepted; he received only terminal benefits of Kshs 2,048,640 as computed. The counterclaim was dismissed for want of documentary proof of who authorised the impugned payments. The respondent was ordered to pay both claimants' costs with interest from the date of judgment.

Key legal issues

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01

Validity of reasons for the 1st claimant's termination

Holding

Termination was without valid reason; the alleged grounds (operational failure, poor performance, misappropriation) were not established at the time of dismissal since the audit concluded only in March 2022

Reasoning

The email of January 5, 2022 cited inability to sustain operations, unsatisfactory performance and misappropriation. The financial-constraints reason amounted to redundancy requiring section 40 procedure not followed. The performance and misappropriation allegations rested on an audit completed in March 2022, after the dismissal, and after the suit was filed. Thus no valid reason existed on January 5, 2022.

p. 12
02

Procedural fairness before the 1st claimant's termination

Holding

Termination was procedurally unfair as no disciplinary hearing was conducted

Reasoning

Section 41 of the Employment Act mandatorily requires an employer to explain reasons and hear representations before terminating on grounds of misconduct or poor performance. RW1 admitted under cross-examination that no disciplinary hearing was conducted. The claimant was therefore condemned unheard, breaching both statute and natural justice.

p. 12
03

Proof of the counterclaim for misappropriation

Holding

Counterclaim dismissed; allegations not proved

Reasoning

Though the claimants did not expressly deny receiving the monies, the respondent produced no documentary evidence showing who authorised the payments or under whose hand the cheques were drawn. The audit was conducted after the dismissal and resignation. Applying the rule that he who alleges must prove, culpability could not be determined and the claim failed.

p. 13
04

2nd claimant's alleged constructive dismissal

Holding

Not established; he resigned and his resignation was accepted, so only terminal benefits were awarded

Reasoning

Although the 2nd claimant claimed he was coerced to resign for refusing to underquote salaries to evade tax, on the record he tendered his resignation with notice and the respondent accepted it. Constructive dismissal as defined in the authorities relied on was not proved, leaving him entitled only to terminal benefits.

p. 14

Legal principles established

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  • An employer must have valid reasons existing at the time of dismissal; a dismissal based on an audit completed after termination is without valid reason
  • Termination on account of the employer's inability to sustain operations is redundancy and must follow section 40 procedure
  • An employee must be heard before termination on grounds of misconduct or poor performance
  • An audit report without documentary evidence of who authorised the impugned payments is insufficient to prove misappropriation

Court orders

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  1. 1.1st Claimant (Faith Wanjiru Kuria): payment of 36 days' salary from December 2021 to January 5, 2022 (Kshs 256,770)
  2. 2.1st Claimant: 27 days earned leave amounting to Kshs 213,972
  3. 3.1st Claimant: 30% salary cut for October and November 2021 totalling Kshs 128,383
  4. 4.1st Claimant: one month salary in lieu of notice (Kshs 213,975)
  5. 5.1st Claimant: 8 months' salary as compensation for unlawful and unfair termination (Kshs 1,711,800), total Kshs 2,524,903 less statutory deductions
  6. 6.2nd Claimant (Paul Gicheru Njuguna): 4 months' salary from December 2021 to April 11, 2022 (Kshs 1,241,600)
  7. 7.2nd Claimant: leave earned and not taken (Kshs 310,400)
  8. 8.2nd Claimant: salary as pleaded (Kshs 186,240)
  9. 9.2nd Claimant: one month salary in lieu of notice (Kshs 310,400), total less statutory deductions
  10. 10.Issuance of certificates of service to both claimants
  11. 11.Respondent to pay costs of the suits plus interest at court rates with effect from the date of judgment
  12. 12.Counterclaim against both claimants dismissed
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (unfair termination, sections 40, 41, 43, 45)

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, "Njuguna & another v Ubuntu Life Foundation (Employment and Labour Relations Cause 44 & 43 of 2022 (Consolidated)) [2023] KEELRC 1366 (KLR)", Case Analysis (2023). ELRC Cause No. 44 of 2022 (consolidated with ELRC Cause No. 43 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1366/eng@2023-06-08

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