K B Sanghani & Sons v Achola (Appeal E074 of 2023) [2023] KEELRC 3078 (KLR)
The bottom line
#An employer won its appeal because an employee who caused nearly Ksh. 20 million in fuel losses can be made to pay, even without criminal charges.
What this practically means
#Executive summary
#Key legal issues
#Mode and date of termination of employment
The appellant's desertion narrative was negatived by its own directions and payments in May and June 2019; with no notice terminating employment, termination occurred on 6 June 2019 as stated by the respondent, but without due process
The employer asserted the respondent deserted duty after leave, yet concurrently directed him to account for fuel variances and paid him for May and June 2019, which could not arise outside employment. No written notice of termination or notice to the labour officer under Section 18(4) was issued, so the employer did not complete the termination circuit.
Substantive justification versus procedural fairness
There was a valid substantive reason (refusal to obey lawful instructions) but termination was unfair for want of procedural justice; yet compensation must reflect employee culpability, so zero compensation was awarded
The respondent refused lawful instructions to render account on fuel use, amounting to gross misconduct under Section 44(4). However, no notice of dismissal was issued, a lapse in due process. Under Section 45(5), compensation must consider the employee's conduct and culpability; rewarding him would reward gross misconduct.
Remedies: notice pay, food allowances, overtime, rest days, public holidays
Notice pay reduced to Ksh. 7,000 to account for 24 days already paid; food allowances and public holiday claims failed for want of particulars; overtime failed on the all-inclusive wage; two rest days claim has no legal foundation under Section 27
Wages for May and June 2019 were paid, so notice pay for 6 days only (Ksh. 7,000). The food allowance contract clause excluded leave and rest days and the respondent failed to particularise 197 days worked. The Ksh. 35,000 wage was consolidated to cover agreed 12-hour days, and Section 27(2) provides one rest day per week.
The counterclaim for fuel losses of Ksh. 19,931,010
Allowed; the employer may recover losses caused by an employee's careless performance of duties in the employment forum without pursuing criminal or debt proceedings
A forensic audit revealed fuel losses of Ksh. 19,931,010 which the respondent failed to render account for. The option of criminal procedures or debt recovery did not preclude recovery within employment; the respondent did not materially challenge the counterclaim nor give representations, losing his opportunity to clear himself.
Legal principles established
#- An employer cannot simply plead abandonment of duty; it must take reasonable steps to bring an absent employee to account and formally terminate the contract
- Where there is no notice terminating employment, the date of termination is as stated by the employee
- An employer's losses caused by an employee's careless performance of allocated duties are recoverable from the employee without recourse to criminal proceedings
- Costs in employment claims are discretionary and reasons must be given
Court orders
#- 1.The judgment in Mombasa CMELRC No. 684 of 2019 is set aside
- 2.Compensation for unfair termination awarded at zero (0)
- 3.Award of notice pay reduced to Ksh. 7,000
- 4.Certificate of Service confirmed
- 5.Counterclaim found with merit; judgment entered for the appellant against the respondent for fuel loss at Ksh. 19,931,010
- 6.The awards shall be offset from whichever is higher
- 7.Each party to bear own costs
- On appeal from
- Mombasa CMELRC
- CMELRC No. 684 of 2019
- Jurisdiction invoked
- First appeal under the Employment and Labour Relations Court Act; Section 12(4) of the Employment and Labour Relations Court Act, 2011 invoked on costs
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "K B Sanghani & Sons v Achola (Appeal E074 of 2023) [2023] KEELRC 3078 (KLR)", Case Analysis (2023). ELRC Appeal (Mombasa) arising from Mombasa CMELRC No. 684 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3078/eng@2023-11-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.