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ELRCPartially AllowedNot stated in the judgment as provided· [2023] KEELRC 2175 (KLR)

Kiragu v Nairobi Bottlers Limited (Cause 1302 of 2018) [2023] KEELRC 2175 (KLR)

Employment and Labour Relations Court
22 September 2023
SRStella Rutto
4,769 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a procurement specialist's dismissal unfair because her employer couldn't prove corruption charges and gave her only one day to prepare a defence.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 2005 and terminated on 12th August 2015 while serving as a procurement specialist, claimed wrongful, unfair and unlawful termination, seeking declarations of unfair dismissal and invalid disciplinary panels, compensation for the residual contract period, damages for breach of her contractual rights and her constitutional right to reputation (arising from a newspaper publication), plus costs. The Respondent maintained the termination followed the Employment Act and denied injuring her reputation. The Claimant testified that she was terminated without lawful cause after being urged to resign, and that a Daily Nation publication portraying her as involved in criminal conduct damaged her reputation. The Respondent's HR Manager (RW1) testified that the Claimant admitted receiving payments from Joshua Mugo of Oshgoh Commercial Agencies, money allegedly linked to Waveline, a Respondent supplier, contrary to the Company Code of Business Ethics. The Court framed three issues: substantive justification, procedural fairness, and reliefs. It found the Respondent failed to prove the connection between Oshgoh, Waveline and the Claimant, hence no justifiable reason under Sections 43(1) and 45(2) of the Employment Act. On procedure, although Section 41 was largely complied with, the charges were general and lacking particulars and the one-day notice was unreasonable; applying Ol Pejeta and Ombajo, the process was procedurally unfair. The Court awarded compensatory damages of Kshs 1,411,200 (seven months' gross salary) with interest, but denied residual contract compensation as anticipatory relief following D K Njagi Marete v TSC. Costs were awarded to the Claimant. The reputation and panel-invalidity claims were not granted in the final orders.

Key legal issues

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01

Substantive justification for termination

Holding

The Respondent failed to prove a justifiable reason; the connection between the Claimant, Oshgoh and Waveline was never established.

Reasoning

The termination letter cited receipt of Kshs 860,000 from Oshgoh as a conflict of interest. While the Claimant admitted transacting with Joshua Mugo, no evidence established that Oshgoh was a supplier of the Respondent or that money flowed from Waveline to Oshgoh. Without connecting the dots, the Court could not find the Claimant acted in conflict of interest or received a bribe, so Section 43(1) and 45(2) requirements were not met.

p. 7
02

Procedural fairness

Holding

The process was procedurally unfair: the charges were general and lacking particulars, and the Claimant had only one day to prepare.

Reasoning

The disciplinary enquiry notification did not name the person from whom payment was received, the amount, or the dates. Following Ol Pejeta, general allegations deny an employee a fair chance to defend themselves. Additionally, notice given on 3rd August for a 5th August hearing was unreasonably short, applying the Ombajo decision. Although Section 41 formalities were largely met, the haste and vagueness compromised the defence and vitiated the process.

p. 8
03

Remedies

Holding

Compensatory damages of 7 months' gross salary awarded; residual contract compensation denied as anticipatory relief.

Reasoning

Having found both substantive and procedural unfairness, the Court exercised discretion under Section 49 to award seven months' gross salary, factoring in the 11-year employment relationship. The claim for the residual contract period was rejected on the authority of D K Njagi Marene v TSC and Elizabeth Wakanyi Kibe v Telkom Kenya, no employment being permanent.

p. 8

Legal principles established

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  • An employer bears the burden of proving a valid and fair reason for termination; failure to do so renders termination unfair (Sections 43(1) and 45(2) Employment Act).
  • General charges lacking particulars deprive an employee of a fair chance to mount a defence, vitiating the disciplinary process.
  • A short notice period for a disciplinary hearing is unfair and oppressive; adequate time must be given to prepare.
  • Damages equivalent to the residual contract period are anticipatory and not payable; only compensatory damages are awardable.

Court orders

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  1. 1.The Claimant is awarded compensatory damages in the sum of Kshs 1,411,200.00 being equivalent to 7 months of her gross salary
  2. 2.Interest on the amount in (a) at court rates from the date of Judgment until payment in full
  3. 3.The Claimant shall also have the costs of the suit

Authorities

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Legislation

  • Employment ActSections 41(1), 43(1), 45(2)(a), 45(2)(b), 45(2)(c)
  • Constitution of Kenya, 2010Articles 159(2)(d), 48
  • Civil Procedure ActSection 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (9)

  • Pamela Nelima Lutta vs Mumias Sugar Co. Ltd
    (2017) eKLR
  • Beatrice Nyambane Mosiria vs Judicial Service Commission
    (2019) eKLR
  • Rebecca Ann Maina & 2 Others vs Jomo Kenyatta University of Agriculture and Techonology
    (2014) eKLR
  • Magdalene M. Ngea v National Cereals and Produce Board
    (2017) eKLR
  • Ol Pejeta Ranching Limited v David Wanjau Muhoro
    [2017] eKLR
  • Nebert Mandala Ombajo v Institute of Certified Public Accountants of Kenya (ICPAK)
    Nakuru Civil Appeal No. 62 of 2018
  • D K Njagi Marete vs Teachers Service Commission
    [2020] eKLR
  • Elizabeth Wakanyi Kibe v Telkom Kenya Ltd
    [2014] eKLR (Civil Appeal No. 25A of 2013)
  • Engineer Francis N. Gachuri v Energy Regulatory Commission
    [2013] eKLR (Industrial Cause No. 203 of 2011)
Jurisdiction invoked
Original jurisdiction under the Employment Act, 2007

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, "Kiragu v Nairobi Bottlers Limited (Cause 1302 of 2018) [2023] KEELRC 2175 (KLR)", Case Analysis (2023). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2175/eng@2023-09-22

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