Ouma v Faulu Microfinance Bank Limited (Cause E015 of 2022) [2023] KEELRC 2809 (KLR)
The bottom line
#A Kenyan court ruled Faulu Kenya unfairly fired an employee over unproven sexual harassment claims, awarding him Kshs. 1.32 million because he wasn't shown the evidence against him.
What this practically means
#Executive summary
#Key legal issues
#Whether the reason for dismissal (sexual misconduct/sexual harassment) was valid and fair
The allegations of sexual misconduct were not proved on a balance of probabilities; the reason for dismissal was not valid
The employer relied on a whistle-blower email which was hearsay, and on an investigation report resting on rumours. Neither alleged victim, M.O. nor A.A.M., made any complaint that the conduct was unwanted. There was no direct, physical or corroborative evidence linking the Claimant to the alleged relations, and the altercation between two third parties could not prove sexual harassment by the Claimant.
Whether the disciplinary process accorded the Claimant procedural fairness under section 41
The process fell short of procedural fairness because the Respondent failed to avail the investigation report and witness evidence to the Claimant
Section 41 is mandatory. The Claimant requested the witness statements but got no response; the panel carried the investigation report to the hearing while the Claimant was unaware of its contents, making the panel accuser, prosecutor and judge. Failure to call the alleged victims for cross-examination compounded the unfairness, confidentiality having been negated by naming the victims.
Whether the Claimant was defamed
No defamation was proved; there was no publication to third parties and no malice
The suspension and dismissal letters went only to the Claimant and the Respondent's senior management. The investigations were undertaken to exercise the employer's mandate against workplace harassment, not maliciously. Anticipated humiliation is not proved humiliation, and no ridicule in public was demonstrated.
What remedies the Claimant was entitled to
One month's notice pay under sections 35 and 36 and ten months' compensation under section 49, computed on the documented salary of Kshs. 120,000
Compensation is capped and guided by section 49 factors including conduct, mitigation and employability. The Claimant showed no efforts to mitigate. His claimed salary of Kshs. 143,519 lacked payslip proof, so the consolidated salary in the offer letter (Kshs. 120,000) was used. Loss of future earnings and exemplary damages are not section 49 remedies.
Legal principles established
#- An employer must avail to an employee the evidence against him, including the investigation report and witness statements, for the disciplinary hearing to satisfy procedural fairness; confidentiality cannot be invoked once the accusers are named
- For a sexual harassment allegation to ground dismissal there must be proof that the victim considered the conduct unwanted; hearsay or whistle-blower rumour is insufficient
- Defamation requires proof of publication to at least one third party; publication only to the employer's internal management is not enough
Court orders
#- 1.Notice Pay of Kshs. 120,000/-
- 2.Compensation of Kshs. 1,200,000/- (both awards subject to PAYE deduction only)
- 3.Interest at court rates on the notice pay and compensation from the date of judgment until payment in full
- 4.Costs of the suit to the Claimant
- 5.Stay of 30 days granted
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 over a claim of unfair termination
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Chomba v Board of Management (BOM) (St Aloysius Gonzaga Secondary School) & 3 others (Cause E677 of 2022) [2025] KEELRC 2640 (KLR)[2025] KEELRC 2640 (KLR)29 Sept 2025
- Chomba v Board of Management (BOM) (St Aloysius Gonzaga Secondary School) & 3 others (Cause E677 of 2022) [2025] KEELRC 2640 (KLR)[2025] KEELRC 2640 (KLR)29 Sept 2025
Cite this brief
#Cite this brief
Caselaw, "Ouma v Faulu Microfinance Bank Limited (Cause E015 of 2022) [2023] KEELRC 2809 (KLR)", Case Analysis (2023). ELRC Cause (Kakamega), Statement of Claim dated 31st May 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2809/eng@2023-11-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.