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ELRCPartially AllowedCause No 729 of 2018· [2023] KEELRC 2140 (KLR)

Mulu v Dodla Dairy (K) Limited (Cause 729 of 2018) [2023] KEELRC 2140 (KLR)

Employment and Labour Relations Court
20 September 2023
NMNzioki wa Makau
3,085 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded an employee over Kshs. 555,000 because his employer fired him for poor performance without giving him a hearing first.

What this practically means

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Executive summary

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The Claimant, employed as a Sales Supervisor from 1st October 2017 on a one-year contract, sued the Respondent for unlawful and unfair termination effected on 4th April 2018, claiming terminal dues, a certificate of service, interest and costs, and alleging unpaid salary, notice pay, overtime and leave pay. The Respondent defended the suit on the basis that the Claimant was on probation which was not renewed due to poor performance and an unexplained loss of Kshs. 158,148.83 in his department, and counter-claimed for that loss plus damages of Kshs. 420,000/-. The court found that section 41 of the Employment Act, requiring explanation and hearing before termination for poor performance, was not adhered to, the Respondent admitting no hearing took place, rendering the dismissal ipso facto unfair and unlawful. On the counter-claim, the court held that the Claimant, as sales supervisor, was not responsible for remittance of sales proceeds, which were governed by strict payment deadlines enforced by the Respondent's finance department, so the losses could not be placed at his door. Judgment was entered for the Claimant for unpaid February 2018 salary (Kshs. 30,000/-), March 2018 salary (Kshs. 70,000/-), one month's notice pay (Kshs. 70,000/-), pro rata unpaid leave (Kshs. 35,000/-), and damages for unlawful dismissal equivalent to five months (Kshs. 350,000/-), with costs, a certificate of service and interest. The counter-claim was dismissed with no orders as to costs. Delivered at Nairobi on 20th September 2023 by Nzioki wa Makau, Judge.

Key legal issues

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01

Whether termination without a disciplinary hearing was fair

Holding

The termination was unfair and unlawful because the Respondent did not comply with section 41 of the Employment Act, which requires an explanation and hearing before termination on grounds of poor performance

Reasoning

Section 41 mandates that before terminating on grounds of misconduct, poor performance or physical incapacity, the employer must explain the reasons to the employee and hear representations in the presence of a fellow employee or union representative of the employee's choice. The Respondent admitted no hearing was conducted. The Claimant was entitled to be placed on a performance matrix or dismissed after a fair hearing; failure to follow the law renders the dismissal ipso facto unfair.

p. 5
02

Whether the Respondent's counter-claim for the loss of Kshs. 158,148.83 could be sustained against the Claimant

Holding

The counter-claim was unmerited and dismissed because collection of payment from customers was not the Claimant's responsibility

Reasoning

The court found the Respondent had a strict payment option for suppliers carrying its products, with payment deadlines enforceable by the finance department. The Claimant, as sales supervisor, was not responsible for payment of sales proceeds; salesmen supplied products and clients paid into the Respondent's paybill account. Losses on delivered goods could therefore not be attributed to him.

p. 6

Legal principles established

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  • Failure to accord an employee a hearing under section 41 of the Employment Act before termination for poor performance renders the dismissal unfair and unlawful
  • A sales supervisor is not responsible for remittance of sales proceeds; losses on goods delivered to customers cannot be attributed to the supervisor

Court orders

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  1. 1.Unpaid portion of February 2018 salary – Kshs. 30,000/-
  2. 2.Salary for March 2018 – Kshs. 70,000/-
  3. 3.One month's salary as notice – Kshs. 70,000/-
  4. 4.Unpaid leave on pro rata basis – Kshs. 35,000/-
  5. 5.Damages for unlawful dismissal equivalent to 5 months – Kshs. 350,000/-
  6. 6.Costs of the suit to the Claimant
  7. 7.Certificate of service to be issued to the Claimant
  8. 8.Interest on the awarded sums at court rates from the date of judgment till payment in full
  9. 9.Counter-claim dismissed with no orders as to costs

Authorities

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Legislation

  • Employment Actsection 12
  • Employment Actsection 28(1)(b)
  • Employment Actsection 36
  • Employment Actsection 41(1) and (2)
  • Employment Actsection 42(1) and (2)
  • Employment Actsection 43
  • Employment Actsection 44(3) and (4)
  • Employment Actsection 47(5)
  • Constitution of KenyaArticle 41

Cases cited (3)

  • Mwilo v Absa Bank (K) PLC (Cause 31 of 2020) [2022] KEELRC 53 (KLR) (5 May 2022)
    [2022] KEELRC 53 (KLR)
  • Benjamin Nyambati Ondiba v Egerton University
    [2014] eKLR
  • Francis Aboge Oduk v Hasbah Kenya Limited
    [2020] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment and labour relations disputes (Employment Act; Article 41 of the Constitution invoked by parties)

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, "Mulu v Dodla Dairy (K) Limited (Cause 729 of 2018) [2023] KEELRC 2140 (KLR)", Case Analysis (2023). Cause No 729 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2140/eng@2023-09-20

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