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ELRCPartially AllowedCause No E127 of 2021· [2023] KEELRC 2089 (KLR)

Nyagah v Transchem Pharmaceuticals Limited (Cause E127 of 2021) [2023] KEELRC 2089 (KLR)

Employment and Labour Relations Court
27 July 2023
2,593 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, employed by the Respondent since 1st February 2007 as a Pharmaceutical Technologist and later Branch Manager, was terminated by letter dated 23rd December 2020. The letter stated the company was unable to meet his demands as per his ELRC Petition E081/2020 against the Respondent. He claimed a declaration of unfair termination, 12 months' salary as compensation (Kshs. 1,692,000), costs, interest, and a Certificate of Service. The Respondent, through its Managing Director Lydia Muthami Wahome, attributed the termination to a breakdown in the working relationship and insubordination, and argued that the Claimant's petition claims were baseless, invoking the proviso to Section 46(h) of the Employment Act. The court framed two issues: whether the termination contravened Section 46(h) and was unfair, and whether the Claimant was entitled to the reliefs sought. The court found the termination letter and the Respondent's own evidence admitted that the dismissal was on account of the petition, a statutorily prohibited ground, rendering the termination automatically unfair and substantively unjustified; it also held the Respondent had breached the Claimant's constitutional right against unfair labour practices. On procedure, the Respondent adduced no evidence of compliance with Section 41's notification, hearing and consideration requirements, so the termination was also procedurally unfair and the burden under Section 45(2) was not discharged. Considering 14 years of service and the absence of a hearing, the court awarded 10 months' gross salary (Kshs. 1,410,000) as compensation under Section 49(1)(c), interest from judgment, costs against the Respondent, and a Certificate of Service within 30 days.

Key legal issues

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01

Whether termination on account of the employee's filing of a petition against the employer contravenes Section 46(h) of the Employment Act

Holding

The termination was substantively unjustified and automatically unfair because it was on account of the Claimant's institution of legal proceedings against the Respondent

Reasoning

The termination letter itself admitted the termination was because the company was unable to meet the Claimant's demands in his ELRC petition. Section 46(h) provides in mandatory terms that the institution of legal proceedings against an employer is not a fair reason for dismissal. The court added that such termination breaches the employee's constitutional right against unfair labour practices.

p. 5
02

Whether the termination complied with the procedural requirements of Section 41 of the Employment Act

Holding

The termination was procedurally unfair; the Respondent did not discharge its legal burden of proving compliance with Section 41

Reasoning

Section 41 imposes a mandatory three-component procedure: notification of the grounds, a hearing with an opportunity to make representations (accompanied by a colleague or union representative), and consideration of those representations. The Respondent led no evidence of compliance, so the burden under Section 45(2) was not discharged.

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Whether the Claimant is entitled to compensation and a Certificate of Service

Holding

The Claimant was awarded 10 months' gross salary under Section 49(1)(c) and a Certificate of Service under Section 51

Reasoning

Considering his 14 years of service and that termination occurred without a hearing, and that his pursuit of constitutional rights culminated in dismissal in blatant disregard of Section 46, the court found compensatory relief under Section 49(1)(c) appropriate, awarding 10 months' gross salary.

p. 6

Legal principles established

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  • Terminating an employee because he has filed legal proceedings against the employer is a statutorily prohibited ground and the termination is automatically unfair under Section 46(h) of the Employment Act

Court orders

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  1. 1.A declaration that the Claimant's termination was unfair and unlawful
  2. 2.The Claimant be paid compensation for unfair termination equivalent to 10 months' salary, that is Kshs. 1,410,000 (Kshs. 141,000 x 10)
  3. 3.Interest on the compensation at Court rates from the date of judgment until payment in full
  4. 4.The Respondent bears the costs of this suit
  5. 5.The Respondent is ordered to issue the Claimant with a Certificate of Service, within 30 days of this Judgment

Authorities

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Legislation

  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 45[2]
  • Employment Act, 2007Section 46(h)
  • Employment Act, 2007Section 49[1][c]
  • Employment Act, 2007Section 51
  • Constitution of Kenya, 2010Bill of Rights (fair labour practices)

Cases cited (4)

  • Sammy Anyinga Madahana vs Kenya International Hotel Limited
    [2020] eKLR
  • Richard Shitehi Isiaho vs Eastern Produce Kenya Limited
    [2015] eKLR
  • Nasongo Wangila & 15 others vs Acme Containers Limited & Anor
    [2017] eKLR
  • Angela Wokabi Muoki vs Tribe Hotel Limited
    [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (Sections 41, 43, 45, 46, 49, 51); ELRC Petition E081/2020 referenced

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, "Nyagah v Transchem Pharmaceuticals Limited (Cause E127 of 2021) [2023] KEELRC 2089 (KLR)", Case Analysis (2023). Cause No E127 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2089/eng@2023-07-27

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