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ELRCPartially AllowedEmployment claim dated 18th November 2022, amended 12th June 2023· [2024] KEELRC 3 (KLR)

Riungu v Geothermal Development Company (Employment and Labour Relations Cause E043 of 2022) [2024] KEELRC 3 (KLR)

Employment and Labour Relations Court
16 January 2024
4,630 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan court threw out an employee's dismissal because the employer kept changing its reasons during the disciplinary process, awarding her 12 months' salary.

What this practically means

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Executive summary

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The claimant, employed by the Respondent from 2009 and serving at termination as a non-designated driver/security assistant, was arrested in June 2021 over allegations of handling company property marked 'GDC' found near her under-construction residence. The criminal matter did not proceed; the Respondent instead issued a show cause letter alleging failure to safeguard company property by authorizing gate passes. After interdiction and a disciplinary hearing at which the charge was theft of company property, she was summarily dismissed with effect from 2nd December 2021 for authorizing gate passes 5381, 5382 and 30612. Her appeal was dismissed. She sued for declarations of unfair dismissal, compensation, terminal dues, costs and interest. The Respondent maintained that substantive justification and fair procedure were met. The court found that the reasons for dismissal shifted across the show cause letter, the disciplinary hearing and the dismissal letter, amounting to a denial of fair hearing, and that the Respondent's own witnesses confirmed the gate passes were authorized by Panita Nafula and Jeremy Rono, not the claimant, and that the materials had been sold by Samuel Maina. The disciplinary process was held flawed, unfair and contrary to sections 41 and 45(2) of the Employment Act. The claim was allowed: a declaration that the dismissal was disproportionate, unfair, lacking valid reason and null and void; 12 months' salary compensation (Kshs 1,601,668.32); one month's salary in lieu of notice (Kshs 133,472.36); terminal dues; and costs plus interest from the date of judgment.

Key legal issues

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01

Whether the reason for dismissal was valid and fair under section 45(2) of the Employment Act

Holding

The dismissal was unjustified: the reason shifted from failure to safeguard property (show cause letter), to theft (disciplinary hearing), to authorizing gate passes (dismissal letter), and the respondent's own witnesses exonerated the claimant of authorizing the gate passes

Reasoning

The court traced the accusation through three inconsistent stages: the show cause letter alleged failure to safeguard company property; the disciplinary committee heard charges of theft under the HR Policy; the dismissal letter cited authorization of gate passes. RW-1 confirmed the gate passes were authorized by Panita Nafula and Jeremy Rono, not the claimant, and that the materials were sold by Samuel Maina. The shifting grounds rendered the reason invalid and unfair under section 45(2).

p. 9
02

Whether fair procedure under section 41 of the Employment Act was followed

Holding

Although the claimant was heard, the process was flawed because new allegations were introduced at the hearing and in the dismissal letter, denying her a fair hearing

Reasoning

The claimant was given a show cause notice, responded, attended a disciplinary hearing and appealed, so the formal steps in section 41 were taken. However, the substance of fair procedure requires notice of the specific allegations with sufficient detail and time to respond. Introducing theft charges at the hearing and a different reason in the dismissal letter fell below the irreducible minimum of notice and hearing set out in the Court of Appeal authorities relied upon.

p. 8
03

Whether the claimant was entitled to remedies

Holding

The claimant was awarded 12 months' salary as compensation for unfair termination, one month's salary in lieu of notice, terminal dues, costs and interest

Reasoning

Having found the dismissal unfair and void, the court awarded the maximum compensation of 12 months' gross salary (Kshs 1,601,668.32), one month's salary in lieu of notice (Kshs 133,472.36), subject to statutory deductions, plus terminal dues, costs and interest at court rates from the date of judgment.

p. 9

Legal principles established

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  • It is a denial of the right to a fair hearing for an employer to introduce new matters at the disciplinary hearing or in the termination letter that were not in the notice to show cause

Court orders

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  1. 1.Declaration that the dismissal of the claimant was disproportionate, unfair, lacked valid reasons and is therefore null and void
  2. 2.Compensation equivalent to 12 months' salary (12 x 133,472.36 = 1,601,668.32)
  3. 3.One month's salary in lieu of notice (133,472.36)
  4. 4.Terminal dues
  5. 5.Respondent to pay costs of the suit plus interest at court rates with effect from the date of judgment

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 43(1)
  • Employment Actsection 44(3) and (4), including section 44(4)(g)
  • Employment Actsection 45(1) and (2)
  • Employment Actsection 47(5)
  • GDC Human Resource Management Policies and Procedures Manual, 2018section 12.16 III (ix) / clause 12.16(III)(XI)
  • CBA (KETAWU & GDC)Section 12.12.3 (e)

Cases cited (9)

  • National Cereals and Produce Board V John Kirui Tongorei
    [2017] eKLR
  • MC Arighani Ltd V Mohammed Noor
    [2015] eKLR
  • County Assembly of Kisumu & 2 Others Vs Kisumu County Assembly Service Board & 6 others
    [2015] eKLR
  • Josephine M Ndungu & Others V Plan International Inc.
    [2019] eKLR
  • Kenya Revenue Authority V Reuwal Waithaka Gitahi & 2 others
    [2019] eKLR
  • Walter Ogal Anuro V Teachers Service Commission
    [2013] eKLR
  • Galgalo Jarso Jillo V Agricultural Finance Corporation
    [2021] eKLR
  • CMC Aviation Limited V Mohammed Noor
    [2015] eKLR
  • Kenya Union of Commercial Food and Allied Workers Vs Meru North Farmers Sacco Limited
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination claims under the Employment Act, 2007 (ss. 41, 43, 44, 45, 47(5) applied)

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, "Riungu v Geothermal Development Company (Employment and Labour Relations Cause E043 of 2022) [2024] KEELRC 3 (KLR)", Case Analysis (2024). Employment claim dated 18th November 2022, amended 12th June 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/3/eng@2024-01-16

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