Ogechi v DPL Festive Limited & another (Cause 1427 of 2018) [2023] KEELRC 1845 (KLR)
The bottom line
#A Kenyan court found an employer had valid reason to fire a worker over missing money but still broke fairness rules, awarding modest compensation plus refunded salary deductions.
What this practically means
#Executive summary
#Key legal issues
#Validity of reason for termination
The 1st Respondent had reasonable grounds to believe the Claimant misappropriated Ksh. 43,642.00, justifying termination under section 43(2) of the Employment Act.
The Claimant conceded sales worth Ksh. 43,642.00 on 18th January 2018 but failed to convincingly account for the proceeds. His claim that he remitted Ksh. 20,000/20,500 was uncorroborated and the employer denied receipt. He produced no evidence of credit customers to explain the balance of about Ksh. 23,000. The loss of Ksh. 81,000 was resolved when the 2nd Respondent paid the shortfall, leaving the Ksh. 43,642 loss as the operative reason.
Procedural fairness in termination
There was a procedural flaw: the employer failed to controvert the Claimant's evidence that he was not afforded the chance to call witnesses, entitling him to nominal compensation of one month's salary.
Section 41 of the Employment Act and the Fair Administrative Action Act require notification of the charge, an opportunity to respond and to call witnesses, a prompt decision, and an avenue of appeal. Although the employer substantially complied, it did not rebut the Claimant's assertion that he was denied the chance to call witnesses. Because the Claimant contributed to his dismissal, only one month's gross salary was awarded under section 49.
Irregular salary deductions
The deductions (trade union agency fees, provident fund, welfare fund, security deposit) were irregular and refundable in the sum of Ksh. 147,834.00.
The 1st Respondent did not deny making the deductions but justified them by statute or consent. There was no recognition agreement or CBA with a trade union, no evidence of the union or provident fund to which deductions were remitted, and no evidence of the Claimant's consent to welfare and security deposit deductions. Neither the union nor the fund was a party to the suit, so no adverse inference could be drawn from their silence.
Jurisdiction over the 2nd Respondent
The court lacks jurisdiction over the Claim against the 2nd Respondent since there was no employment relation between them.
Section 12 of the Employment and Labour Relations Court Act confines the court to employment and labour disputes, or disputes stemming from an employment relation. The 2nd Respondent merely managed the 1st Respondent's bank account and had no employment relationship with the Claimant; the claim regarding the deposit reversal therefore fell outside the court's jurisdiction.
Unpleaded matter made an issue at trial
The loss of Ksh. 43,642.00, though not pleaded, was extensively canvassed by both parties in documentary and oral evidence and was properly considered an issue for determination.
The Memorandum of Claim focused only on the Ksh. 81,000 loss, and neither party pleaded the Ksh. 43,642 loss. However, both parties litigated it through witness statements, the notice to show cause, dismissal letter and oral testimony. Following M N M v D N M K, the court treated it as an issue placed before it for determination.
Legal principles established
#- Parties are bound by their pleadings, but where parties make an unpleaded matter the subject of trial, the court may consider it as an issue for determination.
- Under section 43(2) of the Employment Act, an employer may terminate a contract if it has a reasonable basis for believing a valid reason to terminate exists.
- The employer bears the duty under section 45 of the Employment Act to demonstrate that it afforded the employee the opportunity to call witnesses during the disciplinary process.
- Under section 19 of the Employment Act, deductions from salary are lawful only where sanctioned by law or consented to by the employee.
- The ELRC's jurisdiction is limited to employment and labour relations disputes, and disputes outside this reach must stem from the employment relation.
Court orders
#- 1.Compensation of Ksh. 40,031.00 (one month's gross salary) for unlawful termination arising from procedural flaws
- 2.Judgment for the Claimant against the 1st Respondent for Ksh. 147,834.00 being irregular salary deductions
- 3.Claims for defamation, unlawful detention and work injuries dismissed for want of proof
- 4.Claim for service pay declined
- 5.1st Respondent ordered to issue the Claimant with a Certificate of Service under section 51 of the Employment Act
- 6.Interest on the amounts awarded at court rates from the date of institution of the suit
- 7.Claimant granted half costs of the suit against the 1st Respondent
- 8.Suit against the 2nd Respondent dismissed with costs to the 2nd Respondent
- Jurisdiction invoked
- Section 12 of the Employment and Labour Relations Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ogechi v DPL Festive Limited & another (Cause 1427 of 2018) [2023] KEELRC 1845 (KLR)", Case Analysis (2023). Cause No 1427 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1845/eng@2023-07-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.