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ELRCPartially AllowedEmployment claim filed 22nd September 2016 (Nairobi), transferred to Bungoma 2022 - memorandum of claim dated 21st September 2016· [2023] KEELRC 1503 (KLR)

Namachi v Tesia Supermarket (Employment and Labour Relations Claim 1 of 2022) [2023] KEELRC 1503 (KLR)

Employment and Labour Relations Court of Kenya
21 June 2023
5,440 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court found Tesia Supermarket fairly dismissed a shop assistant for theft but unfairly skipped the required hearing, awarding her Kshs 59,029.

What this practically means

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Executive summary

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The claimant, a shop assistant dismissed by the respondent supermarket by letter dated 24th September 2013 for allegedly sneaking two Vaseline jellys without permission, claimed Kshs. 432,541.50 as terminal benefits and compensation for unfair termination. The court framed three issues: employment status, lawfulness and fairness of the termination, and entitlement to reliefs. On the first issue, it held the claimant was a contractual employee from 1st July 2012, her casual status having converted after three months' continuous service under section 37 of the Employment Act. On the second issue, the court found the reasons for dismissal (theft and dishonesty) valid and justified under sections 43 and 45 - the applicable standard being the employer's genuine belief, not proof beyond reasonable doubt - but found the termination procedurally unfair for want of a hearing under section 41(2). On reliefs, the court awarded underpayment of Kshs. 16,101.66 computed against the Regulation of Wages (General) (Amendment) Order 2012, house allowance of Kshs. 23,727.36 at 15% of basic salary, notice pay of Kshs. 9,600 and leave pay of Kshs. 9,600, totalling Kshs. 59,029.02. It refused compensation under section 49(1)(c), holding that compensatory damages require substantive unfairness, and notice pay sufficed for procedural unfairness given the claimant's contributory conduct. Claims for national holidays pay, uniform reimbursement, overtime and unpaid September days failed for lack of proof. Interest at court rates and costs of the suit were granted. Judgment dated, signed and delivered in open court at Kakamega on 21st June 2023.

Key legal issues

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01

Employment status - casual or contractual employee

Holding

Claimant was a contractual employee from 1st July 2012 to 24th September 2013; casual status converted on lapse of three months' continuous service under section 37

Reasoning

It was not disputed the claimant was employed in July 2012 and dismissed in September 2013. The appointment letter was not produced, but continuous service exceeding three months converts casual employment to a monthly contract under section 37 of the Employment Act, conferring full statutory rights.

p. 4
02

Substantive fairness of the dismissal

Holding

The reasons of theft and dishonesty were valid and justified under section 43

Reasoning

The dismissal letter cited theft and dishonesty. The claimant was caught with Vaseline jelly oil and had no evidence of her claimed source (a sales promotion lady); her apology was taken as relating to the theft. The applicable standard is the employer's genuine belief under section 43(2), not proof beyond reasonable doubt.

p. 6
03

Procedural fairness of the dismissal

Holding

Termination was procedurally unfair; no hearing under section 41(2)

Reasoning

Procedural fairness is mandatory even for summary dismissal for gross misconduct. The respondent led no evidence of disciplinary proceedings or records and dismissed the claimant on the basis of lost trust after her apology. The absence of a hearing breached section 41(2) of the Employment Act.

p. 6
04

Remedies for unfair termination

Holding

Notice pay of one month was sufficient compensation given valid reasons for dismissal; underpayment, house allowance and untaken leave awarded

Reasoning

Under section 49(4) factors, the claimant's conduct wholly contributed to the termination. Compensatory damages under 49(1)(c) require substantive unfairness; only procedural unfairness was found, so notice pay sufficed. Underpayment was computed against the Regulation of Wages Order 2012, with housing allowance at 15% under section 31, and untaken leave under section 28.

p. 11
05

Burden of proof on salary records

Holding

Claimant discharged her burden of proving salary of Kshs. 9,600 since the employer failed to produce salary records under section 74

Reasoning

The employer, as custodian of employee records under section 74 of the Employment Act, did not produce records of salary paid, leave taken or disciplinary proceedings. The court therefore accepted the claimant's testimony of her salary and leave entitlement.

p. 8

Legal principles established

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  • Casual employment converts to a term contract where the employee works continuously for three months or more, entitling the employee to statutory rights of a permanent employee (section 37 Employment Act)
  • Procedural fairness under section 41(2) Employment Act is mandatory even where summary dismissal for gross misconduct is contemplated
  • Fair termination requires both substantive justification and procedural fairness
  • Compensatory damages under section 49(1)(c) are justified only where termination is substantively unfair; notice pay suffices for procedural unfairness alone

Court orders

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  1. 1.Notice pay of Kshs. 9,600/-
  2. 2.Payment in lieu of leave Kshs. 9,600/-
  3. 3.Underpayment of salary Kshs. 16,101.66
  4. 4.Unpaid house allowance Kshs. 23,727.36
  5. 5.Total award of Kshs. 59,029.02
  6. 6.Interest at court rates from date of judgment until payment in full
  7. 7.Costs of the suit to the claimant

Authorities

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Legislation

  • Employment Actsection 2 (definition of casual employee)
  • Employment Actsection 28 (annual leave)
  • Employment Actsection 31 (housing)
  • Employment Actsection 35(1)(c)
  • Employment Actsection 37 (conversion of casual employment)
  • Employment Actsection 41(2) (procedure before termination)
  • Employment Actsection 43 (proof of reason for termination)
  • Employment Actsection 44 (summary dismissal)
  • Employment Actsection 45 (unfair termination)
  • Employment Actsection 47(5)
  • Employment Actsection 49 (remedies)
  • Employment Actsection 74 (records to be kept by employer)
  • Regulation of Wages (General) (Amendment) Order, 2012Legal Notice No. 71

Cases cited (6)

  • Daniel Kiplagat Kipkeibut v Smep Deposit Micro Finance limited
    (2016) eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    (2013) eKLR
  • Nicholas Muasya Kyula v Farmchem limited
    industrial cause no. 1992 of 2011 (2012) LLR 235 (ICK)
  • Pius Machafu Isindu v Lavington Security Guards Limited
    [2017] eKLR
  • Esther Wambura Ndegwa v Laboratory and Allied Limited
    (2021) eKLR
  • Kenya Power & Lighting Company Limited v Aggrey Lukorito Wasike
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (first-instance employment claim)

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, "Namachi v Tesia Supermarket (Employment and Labour Relations Claim 1 of 2022) [2023] KEELRC 1503 (KLR)", Case Analysis (2023). Employment claim filed 22nd September 2016 (Nairobi), transferred to Bungoma 2022 - memorandum of claim dated 21st September 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1503/eng@2023-06-21

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