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ELRCPartially AllowedCause No 1820 of 2017· [2023] KEELRC 1778 (KLR)

Ndirangu v Defence Canteen Organization (Cause 1820 of 2017) [2023] KEELRC 1778 (KLR)

Employment and Labour Relations Court
14 July 2023
SRSTELLA RUTTO
2,711 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled a dismissal with valid reasons was still unfair because the employer skipped proper hearing and notification procedures, awarding the employee over Kshs 255,000.

What this practically means

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Executive summary

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The claimant, employed since November 1989 and rising to the position of Manager, was summarily dismissed on March 30, 2017 after investigations linked his computer password to fraudulent transactions causing losses at DEFCO Moi Airbase. He claimed Kshs 909,861.00 as notice pay, leave pay, compensation and overtime, alleging malicious, unfair and illegal termination. The respondent defended the dismissal as summary dismissal for gross misconduct under Section 44(4)(c) of the Employment Act. The court framed three issues: valid and fair reason, procedural fairness, and entitlement to reliefs. On substance, the court held that as sole custodian of his password, the claimant's negligence in letting it be misused gave the respondent a valid and fair reason for termination, applying the Court of Appeal's guidance on password handling. On procedure, however, the respondent failed to produce the disciplinary proceedings or evidence of notification and hearing despite a notice to produce; the court drew an adverse inference and found the termination procedurally unfair. The claimant was awarded one month's salary in lieu of notice (Kshs 44,832.00), four months' salary as compensation (Kshs 179,328.00) considering his long service and the circumstances, and unpaid leave of Kshs 31,382.40, totalling Kshs 255,542.40 with interest and costs. The overtime claim failed for want of specific pleading and proof.

Key legal issues

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01

Valid and fair reason

Holding

Termination was substantively justified - claimant negligent in handling his password

Reasoning

Claimant was a senior manager and sole custodian of his password; its use in fraud pointed to negligence in handling it, giving the employer a valid and fair reason grounded on misconduct.

p. 4
02

Procedural fairness

Holding

Termination was procedurally unfair

Reasoning

The respondent did not produce evidence of notification or the disciplinary proceedings despite a notice to produce; the court drew an adverse inference and found the claimant was not shown to have been accorded notification and a hearing under Section 41(1).

p. 5

Legal principles established

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  • An employer must prove the reasons for termination, failing which the termination is unfair
  • Fair procedure requires notification and hearing, and failure to produce disciplinary proceedings attracts an adverse inference against the employer

Court orders

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  1. 1.One (1) month's salary in lieu of notice being Kshs 44,832.00
  2. 2.Compensatory damages of Kshs 179,328.00 equivalent to four months gross salary
  3. 3.Unpaid leave of Kshs 31,382.40
  4. 4.Total award of Kshs 255,542.40
  5. 5.Interest at court rates from date of judgment until payment in full
  6. 6.Claimant to have costs of the suit

Authorities

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Legislation

  • Employment ActSections 41(1), 43(1), 44(4)(c), 45(2)(a)(b)(c), 74(1)(f)
  • Evidence ActSection 107
  • Constitution of KenyaArticles 47, 50
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticles 159(2)(d), 48

Cases cited (2)

  • Violet Kadala Shitsukane vs Kenya Post Savings Bank
    Nairobi Civil Appeal No. 295 of 2016
  • Daniel Waweru Kinyua vs Nairobi City Water & Sewerage Company Limited
    [2016] eKLR
Jurisdiction invoked
First-instance employment claim under the Employment Act

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, "Ndirangu v Defence Canteen Organization (Cause 1820 of 2017) [2023] KEELRC 1778 (KLR)", Case Analysis (2023). Cause No 1820 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1778/eng@2023-07-14

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