Mwakoi v Kaylift Services Limited (Cause 787 of 2015) [2023] KEELRC 2071 (KLR)

Employment and Labour Relations Court of Kenya

22 August 2023

JRJames Rika

2,155 words in judgment

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The bottom line

Even when an employee clearly commits misconduct, Kenyan employers must still follow fair dismissal procedure or pay compensation.

What this practically means

Executive summary

The Claimant, employed by the Respondent as a forklift driver from 4th December 2009, sought declarations and payment arising from his summary dismissal on 28th September 2013, alleging dismissal without valid reason or fair procedure. He claimed October 2013 salary, one month's notice pay, accrued leave for 2009-2013, and 12 months' salary as compensation for unfair termination, totalling Kshs. 214,402, plus costs and interest. The Respondent asserted he was caught at Donholm estate, off his designated route, carrying unauthorized passengers and using the forklift for private business, amounting to gross misconduct, and that all dues had been paid. The Court framed three issues: valid reason, fair procedure, and remedies. On the evidence of the Respondent's Director, who caught the Claimant carrying five mechanics in the forklift two hours off his route, the Court preferred the Respondent's account and found a valid reason under Section 43 of the Employment Act, dismissing the Claimant's story of street boys and a broken-down forklift as a fabrication. However, the Court found the dismissal procedurally flawed: there was no show-cause letter, no disciplinary hearing and no opportunity to explain, breaching Section 41. Most prayers were declined - October salary, notice pay and leave were refused, the Court finding dues already paid. The Claimant was awarded the equivalent of 2 months' salary, Kshs. 23,478, as compensation to redress the procedural infirmities. There was no order on costs, and interest was allowed at court rate from the date of judgment.

Key legal issues

Whether there was a valid reason for summary dismissal under Section 43 of the Employment Act

Holding

The Court found a valid reason: the Claimant was caught carrying unauthorized passengers far off his designated route, using the Employer's forklift for private business

Reasoning

The Director caught the Claimant live at Donholm at 5.30 p.m. carrying 5 mechanics in the forklift, off his designated route, after a 2-hour absence. The Claimant's account of street boys jumping onto the forklift and of stopping to assist a stricken forklift was disbelieved, since the other forklift was at JKIA, not Donholm, and the Claimant did not call the other driver as a witness. On the balance of probability gross misconduct was established.

p. 4

Whether fair procedure under Section 41 of the Employment Act was followed

Holding

Procedure was flawed: there was no letter to show cause, no disciplinary hearing, and no opportunity to explain

Reasoning

Although charges could be oral, the Director dismissed the Claimant the morning after catching him, without allowing him time to explain his detour, without a show-cause letter and without any form of disciplinary hearing. This denied the Claimant his procedural right under Section 41 of the Employment Act, rendering the otherwise substantively justified termination procedurally unfair.

p. 4

What remedies flow from a termination that is substantively justified but procedurally flawed

Holding

Notice pay and other dues were refused, but the Claimant received 2 months' salary as compensation to redress the procedural infirmities

Reasoning

The Court declined the prayers for October 2013 salary, notice pay and annual leave, finding the Claimant had been paid his dues, and that gross misconduct excluded notice. Compensation was calibrated to the procedural lapse only, taking into account the 4 years of cumulative service and the fact that only 2 months of the contract remained at termination.

p. 5

Legal principles established

An employer must show both a valid reason under Section 43 and fair procedure under Section 41 of the Employment Act; failure of procedure vitiates a substantively justified dismissal and attracts compensation
Compensation for unfairly terminated employment may be scaled to reflect the short remaining duration of the contract

Court orders

1.Declaration implicit in the ruling that termination was on valid reason, but flawed procedure
2.The Respondent shall pay to the Claimant the equivalent of 2 months' salary in compensation for unfair termination at Kshs. 23,478
3.No order on the costs
4.Interest allowed at court rate, with effect from the date of Judgment

Authorities

Legislation

Employment ActSection 43
Employment ActSection 41
Electronic Case Management Practice Directions, 2020Practice Direction 6[2]

Jurisdiction invoked: Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act (claim for unfair termination under the Employment Act)

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Mwakoi v Kaylift Services Limited (Cause 787 of 2015) [2023] KEELRC 2071 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2071/eng@2023-08-22

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