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ELRCPartially AllowedNot specified in judgment (Memorandum of Claim dated 13th December 2022)· [2023] KEELRC 2701 (KLR)

Mboya v Mini Bakeries (N) Limited (Employment and Labour Relations Cause E035 of 2022) [2023] KEELRC 2701 (KLR)

Employment and Labour Relations Court
31 October 2023
9,494 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~38 min to read original · ~4 min brief

The bottom line

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A Kenyan employer was ordered to pay Kshs. 874,000 for firing a manager after it had already disciplined him, because its own HR policy timelines were ignored.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 2016 and promoted to Bakery Manager III (Branch Manager) at Bungoma in July 2021, was summarily dismissed on 21st December 2021 following an audit that revealed a bread and polybag shortfall of Kshs. 95,015. After a disciplinary hearing on 9th December 2021, the claimant signed a deduction form surcharging him Kshs. 47,507.50 within the 7-day period prescribed by the respondent's HR Policy; six days later he received a summary dismissal letter stating the panel's proposed action was 'too lenient'. The court framed two issues: whether the termination was lawful and fair, and whether the reliefs sought were payable. Holding that a reasonable employer would not have punished in piecemeal, the court found the dismissal an afterthought that breached the HR Policy timelines, giving rise to a legitimate expectation that the surcharge had settled the matter; procedural fairness was also absent. The dismissal was thus unfair under sections 41, 43 and 45 of the Employment Act. Claims for underpaid house allowance, discrimination, refund of the surcharge, gratuity and unpaid leave failed - the leave claim being unpleaded. The court awarded two months' notice pay (Kshs. 218,500) and six months' gross salary as compensation (Kshs. 655,500), totalling Kshs. 874,000 subject to PAYE, with costs to the claimant, interest from judgment, and a 30-day stay.

Key legal issues

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01

Whether the summary dismissal was substantively fair and for a valid reason

Holding

Although the initial disciplinary action had justifiable grounds, the subsequent dismissal outside policy timelines and based on unparticularised allegations of continued malpractice was unfounded and unfair.

Reasoning

The show cause and disciplinary hearing flagged negligence over a bread/polybag shortfall, and the committee recommended action. But the claimant was surcharged within the 7-day policy window, then dismissed on 21st December 2021, six days later, based on allegations in the defence of 'gross acts of negligence and malpractice' never particularised or proved. The court found the dismissal an afterthought and the piecemeal punishment contrary to the employer's operational requirements and HR Policy.

p. 12
02

Whether the dismissal was procedurally fair

Holding

The dismissal was procedurally unfair because the respondent breached its own HR Policy by failing to communicate the decision within 7 days and issuing two different decisions at different times.

Reasoning

The HR Policy required the panel's decision to be communicated within 7 days of the hearing. The word 'should' was read mandatorily, and contra proferentem applied against the drafter-employer. The claimant signed the deduction form on the seventh day expecting the matter settled, then received a summary dismissal letter 12 days after the hearing. The claimant attended the hearing with a representative, so section 41 was largely met, but non-compliance with the policy timelines vitiated the procedure.

p. 14
03

Whether the claimant was entitled to compensation under section 49 of the Employment Act

Holding

Six months' gross salary (Kshs. 655,500) was sufficient compensation, taking into account the claimant's contributory negligence and failure to mitigate.

Reasoning

Guided by section 49 of the Employment Act and Kenya Ports Authority v Festus Kipkorir Kiprotich, the court considered the claimant's conduct: as branch manager he failed to report or curb malpractices, was found negligent and surcharged, did not appeal, and did not attempt to secure alternative employment. These factors reduced the award from the 12-month maximum to six months' gross salary of Kshs. 109,250.

p. 16
04

Whether the claimant was discriminated against

Holding

Discrimination was not proven; the claimant adduced no evidence that his immediate boss was merely suspended.

Reasoning

The claimant alleged he alone was dismissed while his Assistant Operations Manager was only suspended for two weeks. DW testified the boss had been dismissed and produced no rebuttal document would amount to a fishing expedition. Under section 108 of the Evidence Act the claimant bore the burden of proving the fact of differential treatment, which he failed to discharge; punishment also varies with individual contractual obligations.

p. 15

Legal principles established

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  • An employer is bound by its own human resource policy timelines and procedures; where a decision of a disciplinary panel must be communicated within 7 days, failure to do so and issuance of a second, harsher sanction thereafter renders the dismissal unfair.
  • Issuing punishment in piecemeal - a surcharge first and a summary dismissal six days later after the employee held a legitimate expectation the surcharge settled the matter - amounts to double suffering and unfair dismissal.
  • The contra proferentem rule applies to one-sided contracts such as employment contracts and employment manuals.

Court orders

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  1. 1.Notice pay for two months in lieu awarded at Kshs. 218,500/-
  2. 2.Compensation for unfair dismissal equivalent of 6 months gross salary at Kshs. 655,500/- (awards a and b total Kshs 874,000/- payable subject to statutory deduction of PAYE only)
  3. 3.The respondent to pay costs of the suit to the claimant
  4. 4.Interest awarded at court rates on the award amount and costs from date of judgment until payment in full
  5. 5.Stay of 30 days

Authorities

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Legislation

  • Employment Actsection 43
  • Employment Actsection 45(2)
  • Employment Actsection 41
  • Employment Actsection 44
  • Employment Actsection 49
  • Constitution of KenyaArticle 41
  • Constitution of KenyaArticle 47
  • Constitution of KenyaArticle 50(1)
  • Evidence Actsection 108
  • General Wages Orderhouse allowance minimum 15%
  • Respondent's Human Resource Policy 2016Procedure for Handling Gross Misconduct; warning procedure; surcharge provisions
  • CBA (R-Exhb-38)Clause 5(c); Clause 3(i) and (ii)

Cases cited (11)

  • Gachuhi v Malster International
    (Cause E406 of 2020)(202)KEELRC 3822(KLR)(1 August 2022)
  • Justus Mutahi Ihaji v Kenya Airways Limited
    (2018)eKLR
  • Walter Ogal Anure v Teachers Service Commission
  • Emmanuel Mambo Oduory v One Are Fund
    (2020)eKLR
  • Anthony Mkala Chitavi Vs Malindi Water & Sewerage Co. Ltd
    Industrial Court Cause No. 66 of 2012
  • Evans Kamadi Misango vs Barclays Bank of Kenya Limited
    (2015)eKLR
  • Samson Gwer & 5 others vs Kenya Medical research Institute & 3 others
    (2020) eKLR
  • Pathfinder international Kenya Limited Vs Stephen Ndegwa Mwangi
    (2019) eKLR
  • Cecilia Karuru Ngayu vs Barclays Bank of Kenya & another
    (2016) eKLR
  • Kenya Ports Authority v Festus Kipkorir Kiprotich
    [2014] eKLR
  • British Leland UK LTD v Swift
    (1981) IRLR 91
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment dispute (Employment Act, 2007; Articles 41 and 47 of the Constitution of Kenya invoked)

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, "Mboya v Mini Bakeries (N) Limited (Employment and Labour Relations Cause E035 of 2022) [2023] KEELRC 2701 (KLR)", Case Analysis (2023). Not specified in judgment (Memorandum of Claim dated 13th December 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2701/eng@2023-10-31

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