Keiser v Makupa Transit Shade Limited (Cause 47 of 2020) [2023] KEELRC 3448 (KLR)
The bottom line
#A Kenyan court ruled an employer's firing of its CEO without a hearing was unfair, but also ordered him to repay salary advances.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination was procedurally and substantively unfair
Termination was unfair both procedurally and substantively; the claimant was sent home on 21 November 2019 without notice, hearing or reasons, and the summary dismissal letter issued only on 16/17 December 2019 after the audit and after notifying third parties.
Section 47(5) places the burden of justifying termination on the employer. Sections 41, 44 and 45 mandate explanation of grounds, hearing of representations and a representative. The respondent admitted no hearing or notice issued. The interim removal could only lawfully have been a suspension or compulsory leave pending investigation, followed by a show-cause notice and hearing. The failure compounded unfairness.
Whether the published messages notifying over 1,000 contacts that the claimant was no longer an employee were defamatory
The messages circulated before termination were meant to injure the claimant's employability and were malicious; damages awarded, but modest since no evidence of failed job applications.
The court applied Mercy Kawira Mithika and Naqvi Syed Omar on employment defamation and damaged employability, and relied on the trend of Kshs. 5,000,000 awards in media defamation cases. However, because the WhatsApp circulation was to a specific group and the claimant proved no lost job applications, only Kshs. 50,000 was awarded.
Whether the counter-claim for Kshs. 12,974,791.07 for mismanaged funds succeeds
Counter-claim largely fails for lack of due process; only unrepaid salary advances and airfare of Kshs. 2,252,354 recoverable under Section 19(1) of the Act.
The Board approved the VAB initiative and could not blame the claimant for it. The audit was conducted after the claimant's exit and he was never called to respond to its findings or given access to records. Unauthorised expenses were never raised while he was in employment. Only unaddressed salary advances and airfares remain lawfully recoverable.
Legal principles established
#- Even where a contract allows summary dismissal for gross misconduct, Section 44 must be read together with Section 41 of the Employment Act; due process is mandatory regardless of the gravity of alleged misconduct.
- An employer may suspend or place an employee on compulsory leave to allow investigation, but must thereafter afford a hearing before termination.
- An employer who publicises statements stigmatising an employee in the course of termination commits employment defamation for which damages for injured employability lie.
- Under Section 19(1)(h) of the Employment Act an employer may recover unpaid salary advances and monies advanced to an employee at the end of employment.
Court orders
#- 1.Declaration that termination of employment was without due process and was unfair
- 2.Compensation awarded $25,000
- 3.Notice pay $150,000
- 4.Unpaid salaries $25,000
- 5.General damages for defamation Kshs. 50,000
- 6.Amounts converted to the contract currency (United States Dollars applicable as of the date of judgment)
- 7.Counter-claim allowed for recovery of Kshs. 2,252,354 in salary advances
- 8.Counterclaim award to be offset from the awards under (b) to (d)
- 9.Each party to bear own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 over the unfair termination claim and counter-claim
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Keiser v Makupa Transit Shade Limited (Cause 47 of 2020) [2023] KEELRC 3448 (KLR)", Case Analysis (2023). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3448/eng@2023-12-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.