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ELRCPartially AllowedNot stated in judgment· [2023] KEELRC 2437 (KLR)

Muinde v Libya Oil Kenya Limited (Employment and Labour Relations Cause 78 of 2016) [2023] KEELRC 2437 (KLR)

Employment and Labour Relations Court
6 October 2023
AMAnna Ngibuini Mwaure
3,088 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court found a dismissal unfair because the employer never proved its misconduct allegations, despite following a fair disciplinary process.

What this practically means

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Executive summary

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The claimant, employed from September 1980 as a terminal supervisor on a salary of Kshs 249,131.21 per month, was summarily dismissed with effect from 9 January 2015 following losses of approximately 3 million litres of LPG from the respondent's Nairobi terminal between 2012 and 2014 through fraudulent shipping. He was alleged to have wilfully neglected his duties, breached conflicts-of-interest and ethics policy, and refused to follow written procedures. He challenged both the fairness of the process and the validity of the reasons. The court framed two issues: whether the termination was unfair, and whether he was entitled to remedies. On procedure, the court found the respondent had done well: the claimant was invited to investigatory and disciplinary hearings with notice, allegations and documents, was heard, signed the minutes, and exercised a right of appeal which was heard by a panel. On substance, however, the court found the reasons unverified and general - the respondent did not prove the claimant's actual negligence nor that stock reconciliation was solely his responsibility, particularly as section heads compiled reports and a stock loss committee participated, with other members neither investigated nor disciplined. Relying on Kenfreight EA v Benson Nguti and Walter Oguro Onuro v Teachers Service Commission, the court held a fair termination requires both substantive justification and procedural fairness, and entered judgment for the claimant. It awarded two months' salary (Kshs 498,202/42) as compensation under section 49(4), refused service pay (NSSF dues were remitted) and speculative loss of earnings, with interest at court rates, and ordered each party to bear their own costs.

Key legal issues

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01

Whether the termination was substantively fair

Holding

No - the reasons given were general, unverified and not proved; the respondent did not prove the claimant's actual negligence or that stock reconciliation was solely his responsibility

Reasoning

The termination letter alleged wilful neglect, breach of conflicts-of-interest policy and refusal to follow written procedures, but the respondent led no proof of actual negligence or of the losses. The claimant held a supervisory role, worked with a stock loss committee and section heads who compiled reports, yet other committee members were neither disciplined nor investigated. Reasons were therefore not valid or verifiable.

p. 6
02

Whether the termination was procedurally fair

Holding

Yes - the respondent accorded the claimant a fair hearing and the court commends the process

Reasoning

The claimant was invited to an investigatory meeting and a disciplinary hearing with notice, allegations and documents, was heard with his documentation, minutes were signed, and he was given a right of appeal which he exercised successfully to a panel that upheld the dismissal. However, cross-examination showed he did not request more time or a representative and admitted the admissions in the minutes.

p. 7
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Remedies

Holding

Compensation of two months' salary awarded under section 49(4) of the Employment Act; notice pay treated as settled; service pay and loss of earnings refused

Reasoning

Although the procedure followed was largely correct, the lack of a valid verifiable reason rendered the termination unfair. Exercising discretion under section 49(4), and considering the respondent substantially followed the right procedure, the court awarded two months' salary as compensation, Kshs 498,202/42, with interest, and refused the speculative loss-of-earnings claim.

p. 7

Legal principles established

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  • For a termination to be fair there must be both substantive justification (a valid, verifiable reason) and procedural fairness
  • General, unverified allegations of negligence and misconduct do not constitute valid reasons for termination

Court orders

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  1. 1.Judgment entered in favour of the claimant on the finding of unlawful termination
  2. 2.Compensation for unfair termination of two months' salary equivalent, Kshs 498,202/42 (2 x 249,131/21)
  3. 3.One-month salary in lieu of notice noted as already settled by the respondent
  4. 4.Award to attract interest at court rates from date of judgment until full payment
  5. 5.Each party to bear their own costs

Authorities

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Legislation

  • Employment Actsection 45(2)
  • Employment Actsection 44(4)(g)
  • Employment Actsection 41
  • Employment Actsection 49(4)
  • Civil Procedure RulesOrder 21 Rule 1
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B

Cases cited (2)

  • Kenfreight EA vs Benson Nguti
    (2016) eKLR
  • Walter Oguro Onuro vs Teachers Service Commission
    Cause 955 of 2011
Jurisdiction invoked
Employment and labour relations dispute heard under the Employment Act

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, "Muinde v Libya Oil Kenya Limited (Employment and Labour Relations Cause 78 of 2016) [2023] KEELRC 2437 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2437/eng@2023-10-06

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