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ELRCPartially AllowedNot stated in the judgment· [2023] KEELRC 1728 (KLR)

Ochwang’u v Leafde Limited (Cause E072 of 2022) [2023] KEELRC 1728 (KLR)

Employment and Labour Relations Court
29 June 2023
MMM. Mbarũ
1,362 words in judgment
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The bottom line

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A Kenyan court found an employee's firing procedurally unfair, but refused compensation because his own alleged theft caused the dismissal—he got only leave pay.

What this practically means

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Executive summary

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The claimant, employed on April 1, 2021 as head of finance and accounting on a gross salary of Ksh 107,350, sued the respondent alleging unfair termination of employment without a hearing, harassment through police arrest, and non-payment of terminal dues. He sought salary to the last day worked, 13 leave days' pay (Ksh 46,518) and 12 months' compensation (Ksh 1,288,200). The respondent contended the claimant was dismissed following an audit by Aasan Solutions that revealed financial irregularities including overbilling, price fixing, kickbacks, ghost payroll payments and misappropriation; the matter was reported to Lungalunga Police Station and the claimant was charged with stealing by servant at Msambweni Law Court, and his terminal dues allegedly paid. The court framed two issues: whether termination was unfair, and whether remedies should issue. It held that although Section 44(3) and (4) of the Employment Act, 2007 permits summary dismissal for gross misconduct, Section 41(2) mandatorily requires a hearing, and the claimant was never heard despite the audit and criminal charge, resulting in procedural unfairness. However, applying Section 45(5)(b), the claimant's own culpability and pending criminal case meant awarding compensation would reward gross misconduct, so zero compensation was awarded. Leave pay of Ksh 46,518 for 13 days was found justified on basic pay. Judgment was entered only for leave pay less statutory deductions, with each party bearing its own costs. Delivered at Mombasa on June 29, 2023 by M. Mbarũ, Judge.

Key legal issues

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01

Procedural fairness in termination for gross misconduct

Holding

Termination was procedurally unfair because the claimant was not given a hearing as required by Section 41(2) of the Employment Act, 2007, despite the audit findings and criminal charge

Reasoning

Section 44(3) and (4) permit summary dismissal for gross misconduct, but the employer must still hear and consider the employee's representations under Section 41(2). The mandatory hearing process applies even on short notice. The respondent conducted an audit and reported the claimant to police and he was charged, but never gave him a shop-floor hearing. No reason was shown for omitting this step, resulting in procedural unfairness.

p. 3
02

Whether compensation should issue despite procedural unfairness

Holding

Zero compensation awarded because the claimant's own culpability and pending criminal case for stealing by servant made an award inappropriate

Reasoning

Section 45(5)(b) directs the court to consider the conduct and culpability of both employer and employee in awarding compensation. The claimant was charged with stealing by servant concerning funds under his stewardship and did not contest the ongoing criminal case. Compensating him would reward gross misconduct, so no compensation was due despite the procedural unfairness.

p. 3
03

Leave pay entitlement

Holding

Claim for 13 days' leave pay justified at Ksh 46,518, computed on basic pay

Reasoning

Under Section 28 of the Employment Act, 2007, leave pay is due where the employee has not enjoyed his leave entitlement, and the burden lay on the employer to keep records of leave taken or paid in lieu. The employment letter provided 1.75 days per month; the claim for 13 days over the employment period was reasonable and should be based on basic pay.

p. 2

Legal principles established

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  • An employer must hear and consider an employee's representations before termination or summary dismissal for gross misconduct, even where serious financial impropriety is alleged

Court orders

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  1. 1.Judgment entered for the claimant against the respondent for payment of annual leave pay for 13 days at Ksh 46,518 less statutory deductions
  2. 2.Each party to bear own costs

Authorities

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Legislation

  • Penal CodeSection 281
  • Employment Act, 2007Section 28
  • Employment Act, 2007Section 41(2)
  • Employment Act, 2007Sections 44(3) and (4)
  • Employment Act, 2007Section 45(5)(b)

Cases cited (2)

  • Pius Machafu Isindu v Lavington Security Guards Limited
    [2017] eKLR
  • Kenya Union of Commercial Food and Allied Workers v Meru North Farmers Sacco Limited
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Ochwang’u v Leafde Limited (Cause E072 of 2022) [2023] KEELRC 1728 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1728/eng@2023-06-29

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