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ELRCPartially AllowedELRC Cause No. 846 of 2012 (Consolidated)· [2023] KEELRC 2079 (KLR)

Okello & another v Kenya Education Management Institute (Employment and Labour Relations Cause 846 & 845 of 2012 (Consolidated)) [2023] KEELRC 2079 (KLR)

Employment and Labour Relations Court
31 July 2023
5,625 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~23 min to read original · ~4 min brief

The bottom line

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The Employment Court upheld two dismissals as lawful and fair, but ordered the employer to pay notice and untaken leave dues.

What this practically means

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Executive summary

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Two claimants, accountants in Job Group 'J' at the Kenya Education Management Institute (formerly KESI), sued for unlawful and unfair termination following their interdiction on 24th November, 2010 over alleged financial irregularities and subsequent termination by letters dated 30th April, 2012. They sought declarations of unlawfulness, reinstatement, or in the alternative, salary to retirement date, notice pay, service/severance pay, leave pay, suspension income and 12 months' compensation. The claimants alleged they were flushed out of office at gunpoint, denied a hearing before interdiction, subjected to indefinite interdiction contrary to 30-day government regulations, and made scapegoats for overpayments to Milele Beach Hotel and KRA that the Director and accountant-in-charge had approved. The respondent maintained the terminations were grounded in an internal audit report revealing a fraudulent double-payment voucher, unauthorized alteration of payment voucher No. 00252 causing overpayments of over Kshs.5.6 million, and wrongful processing of a Kshs.90,000 cheque from Mahiga Girls' Secondary School. The Court found the respondent proved valid reasons on a balance of probabilities under Section 43 of the Employment Act and that a fair procedure was followed, as both claimants responded in writing and appeared before the Human Resource Committee. Relying on Walter Ogal Anuro and National Bank of Kenya v Samuel Nguru Mutonya, the Court held the terminations substantively justified and procedurally fair. The substantive claim was dismissed, but the Court awarded each claimant one month's salary in lieu of notice and pay in lieu of untaken leave, with interest and half costs.

Key legal issues

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01

Whether termination was for a valid reason

Holding

Yes - the respondent proved on a balance of probabilities misconduct including attempted double payment, unauthorized alteration of payment voucher No. 00252, and wrongful processing of a Kshs.90,000 payment.

Reasoning

The Court evaluated the evidence of both claimants against the internal audit and investigation reports and the testimony of R.W.1, R.W.2 and R.W.3. It found the claimants implicated in preparing and altering payment vouchers without authority, leading to overpayments to Milele Beach Hotel and KRA, and that C.W.2 wrongfully processed payment of a training fees cheque towards rent arrears.

p. 10
02

Whether a fair procedure was followed

Holding

Yes - claimants were given opportunity to respond in writing and to appear before the Human Resource Committee before termination.

Reasoning

The Court found that the claimants responded to the charges in writing by letters dated 24/6/2011 and appeared before the Human Resource Committee on 24/6/2011 and 1/7/2011 before the Council decided to terminate. The interdiction pending investigation was a fair step, following Peter Gaitho Ng'ang'a v Board of Management of Banita Secondary School.

p. 10
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Whether claimants are entitled to the reliefs sought

Holding

Only partially - one month's salary in lieu of notice and pay in lieu of untaken leave are awarded; the rest of the reliefs are refused.

Reasoning

Since the termination was lawful and fair, no compensation, salary to retirement, or service/severance pay is payable. The claimants were pensionable and registered with NSSF. However, the letters of termination offered one month's notice pay, and the respondent did not demonstrate payment in lieu of untaken leave days, which the Court awarded as claimed.

p. 11

Legal principles established

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  • The employer bears the burden under Section 43(1) and (2) of the Employment Act to prove on a balance of probabilities that termination was for a valid reason.
  • A fair termination requires both substantive justification and procedural fairness.
  • An adjudicating authority must scrutinize the procedure adopted by the employer in reaching a dismissal decision.

Court orders

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  1. 1.Judgment entered for Barrack Okello: Kshs.26,774 in lieu of one month notice and Kshs.42,945 in lieu of unpaid leave days not taken.
  2. 2.Judgment entered for Bernard Mbulo: Kshs.32,294 in lieu of one month notice and Kshs.42,945 in lieu of 45 leave days not taken in 2009 and 2010.
  3. 3.Interest at Court rates from date of termination till payment in full.
  4. 4.The respondent to pay half the Costs of the suit.

Authorities

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Legislation

  • Employment ActSection 43(1) and (2)
  • Employment ActSections 36, 41, 43, 45
  • Employment ActSection 51

Cases cited (3)

  • Peter Gaitho Ng'ang'a v Board of Management of Banita Secondary School and another
    [2015] eKLR
  • National Bank of Kenya v Samuel Nguru Mutonya
    [2019] eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007: Sections 36, 41, 43, 45, 51)

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, "Okello & another v Kenya Education Management Institute (Employment and Labour Relations Cause 846 & 845 of 2012 (Consolidated)) [2023] KEELRC 2079 (KLR)", Case Analysis (2023). ELRC Cause No. 846 of 2012 (Consolidated). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2079/eng@2023-07-31

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