Mwangi v CPF Financial Services Limited (Cause 833 of 2018) [2023] KEELRC 3018 (KLR)
The bottom line
#Even when an employee deserves discipline, Kenyan employers lose in court if they rush the disciplinary hearing or spring surprise charges.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination was substantively justified
Yes. The Claimant took advantage of a mistaken salary insertion, backdated the contract, and refused to sign the corrected contract, giving the Respondent valid grounds for disciplinary action.
The court found the salary of Kshs 114,746.20 in the confirmation contract was a typing error, since the Claimant's grade and salary band (7)(1A) were fixed at Kshs 88,266.32 in the appointment letter and the Salary and Grading Structure. The Claimant received the contract on 9th October 2017 yet dated it 10th August 2016, which the court found illogical and evidence of backdating. Her insistence on the erroneous salary and refusal to sign the corrected contract gave the employer valid reasons to discipline her.
Whether the termination followed a fair procedure
No. The notice of the disciplinary hearing was unreasonably short and fresh charges were introduced at the hearing without prior notice, rendering the termination procedurally unfair.
The Claimant was served with the disciplinary hearing letter on 7th December 2017 for a hearing on 8th December 2017, leaving her less than a day to prepare, which the court, applying Nebert Mandala Ombajo v ICPAK, found oppressive and unfair. Additionally, the Notice to Show Cause only alleged backdating, yet fresh allegations concerning refusal to sign the corrected contract were introduced midstream at the hearing, amounting to an ambush contrary to Section 41 of the Employment Act.
Whether the Claimant is entitled to the reliefs sought
Partially. She was awarded one month's salary in lieu of notice and three months' gross salary as compensation; underpayment and accrued leave claims were declined.
Because substantive justification existed but the process was flawed, the court exercised its discretion under Section 49 to award limited compensation of three months' gross salary, factoring in the short period served. The underpayment claim failed because the court found the correct contractual salary was Kshs 88,266.32, and the accrued leave claim failed as it formed part of the terminal dues already paid.
Legal principles established
#- An employer must prove both substantive justification (valid and fair reasons) and procedural fairness under Sections 43 and 45 of the Employment Act
- Adequate notice of a disciplinary hearing is essential; serving a hearing letter the day before the hearing is oppressive and unfair and vitiated the disciplinary process
- An employee must not be confronted with fresh charges at a disciplinary hearing that were not contained in the Notice to Show Cause
Court orders
#- 1.The Claimant is awarded the sum of Kshs 88,266.32 being one (1) month's salary in lieu of notice
- 2.The Claimant is awarded compensatory damages in the sum of Kshs 264,798.96 being equivalent to three (3) months of her gross salary
- 3.The total award is Kshs 353,065.28
- 4.Interest on the total award at court rates from the date of Judgment until payment in full
- 5.The Claimant shall have the costs of the suit
- Jurisdiction invoked
- Original jurisdiction of the Employment and Labour Relations Court over employment and labour relations claims (Article 162(2) of the Constitution implied by the nature of the cause; not expressly cited)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mwangi v CPF Financial Services Limited (Cause 833 of 2018) [2023] KEELRC 3018 (KLR)", Case Analysis (2023). Cause No 833 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3018/eng@2023-11-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.