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ELRCDismissedSotik ELRC Appeal (arising from Sotik PMCC (ELRC) No. 1 of 2018)· [2024] KEELRC 27 (KLR)

New Kenya Co-operative Creameries v Sigei (Appeal E002 of 2022) [2024] KEELRC 27 (KLR)

Employment and Labour Relations Court
25 January 2024
DNDAVID NDERITU
5,793 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court confirmed that employers cannot fire staff based on suspicion without solid evidence and a fair hearing.

What this practically means

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Executive summary

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This is a judgment of the Employment and Labour Relations Court at Nakuru (Nderitu, J) dismissing an employer's appeal against a trial court decision in Sotik PMCC (ELRC) No. 1 of 2018. The respondent, a booking clerk who had served the appellant for close to 30 years, was terminated for gross neglect of duty under Section 44(4)(c) of the Employment Act following an audit report alleging manipulation of milk intake records at the Sotik factory. The trial magistrate had found the dismissal unfair and unlawful and awarded compensation equivalent to 12 months' gross salary (Kshs.489,360), notice pay (Kshs.40,780), leave dues (Kshs.38,061.33) and a certificate of service. On appeal, the court re-evaluated the evidence as a first appellate court, applying the Selle v Associated Motor Boat principles. It held that the audit report contained only generalised, collective allegations against the respondent and co-workers, with no particulars of the specific entries attributed to him; that suspicion alone cannot constitute genuine and reasonable grounds for termination under Section 43; and that the promised further investigation was never evidenced. Procedurally, the audit report was never supplied to the respondent, the hearing invitation omitted his right to be accompanied, the en masse hearing denied individual fair hearing, and the hearing became a grilling session. The court also held that dismissal of a 30-year employee with a clean record was disproportionate, urging employers to adopt alternative sanctions. All trial court awards were upheld and the appeal dismissed with costs to the respondent.

Key legal issues

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01

Substantive fairness of the termination

Holding

The appellant failed to establish genuine and reasonable grounds under Section 43 of the Employment Act; the generalized audit report did not particularise allegations against the respondent

Reasoning

The audit report made only collective, generalised allegations against the respondent and two co-workers, with no evidence of the specific dates or entries attributable to him. The suspension letter promised further investigation but none was shown. Suspicion, however strong, does not satisfy the requirement of a valid and fair reason under Section 43. Disciplinary proceedings must nonetheless meet Article 47 and Fair Administrative Action Act standards.

p. 10
02

Procedural fairness of the disciplinary process

Holding

The process breached natural justice: the audit report was never supplied, the right to witnesses/union representative was not communicated, and the en masse hearing was unfair

Reasoning

The show-cause letter did not enclose the audit report, and the respondent's request for it went unheeded. The hearing invitation omitted the right to be accompanied. The respondent first saw the audit report at the hearing and could not question its author. The collective hearing denied each employee an individual fair hearing. These breaches violated Section 41 of the Act and Article 47 of the Constitution.

p. 10
03

Proportionality of dismissal for a 30-year employee

Holding

Even with compliant process, dismissal of an employee of nearly 30 years with a clean record would have been excessive; alternative sanctions should be applied

Reasoning

The respondent had served close to 30 years with a clean disciplinary record. The court held it was time employers applied graduated sanctions such as warnings, surcharges, demotion or transfer before resorting to termination, particularly in a poor economy where dismissal causes undue suffering to employees and dependants.

p. 10
04

Whether the trial magistrate failed to consider the appellant's evidence

Holding

The submission was rejected; the trial magistrate analysed the evidence of both parties

Reasoning

The court found the complaint factually unfounded, as the learned magistrate clearly analysed and considered the evidence adduced by both sides and rival submissions before arriving at the judgment. The appeal therefore had no merit.

p. 11
05

Whether the trial court's awards were justified

Holding

The 12 months' compensation, one month's notice pay, leave dues and certificate of service orders were all upheld

Reasoning

Considering the respondent's service of over 30 years, non-payment of terminal dues, absence of willingness to re-engage, and Section 49(4) factors, the compensation of Kshs.489,360 was fair. Notice pay (Kshs.40,780) and leave dues (Kshs.38,061.33) were upheld; the employer, as custodian of records under Sections 10 and 74, had not dislodged the leave claim. The certificate of service order was grounded in Section 51.

p. 11

Legal principles established

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  • Suspicion alone does not constitute genuine and reasonable grounds for termination; it must be supported by plausible evidence
  • Omnibus or collective charges against an employee and co-workers cannot found a valid termination
  • An employer must supply the employee with the evidence relied on and inform him of his right to witnesses and union representation
  • Termination should be proportionate; employers should consider alternative sanctions, especially for long-serving employees

Court orders

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  1. 1.The judgment of the lower court be and is hereby upheld
  2. 2.This appeal is hereby dismissed in its entirety with costs to the respondent

Authorities

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Legislation

  • Employment ActSection 45(2)(b)
  • Employment ActSection 44(4)(c)
  • Employment ActSection 43
  • Employment ActSection 41
  • Employment ActSection 49(1)(c)
  • Employment ActSection 49(4)
  • Employment ActSections 10 and 74
  • Employment ActSection 51
  • Evidence ActSection 107
  • Constitution of KenyaArticle 41(1)
  • Constitution of KenyaArticle 47
  • Fair Administrative Action ActSection 4

Cases cited (9)

  • Walter Ogal Anuro V Teachers Service Commission
    (2013) eKLR
  • Margaret Auma Ingwe V Kenya Power & Lighting Co. Ltd
    (2015) eKLR
  • Joseph Nyandiko Nyanchama V Pipeline Company Limited
    (2019) eKLR
  • Jane Nalonja Rutto V New Kenya Cooperative Creameries Limited
    (2022) eKLR
  • Rebecca Ann Maina & 2 Others V Jomo Kenyatta University of Agriculture & Technology
    (2014) eKLR
  • Selle & Another V Associated Motor Boat Co. Ltd & Others
    [1968] EA 123
  • Mary Chemweno V Kenya Pipeline Company Limited
    (2017) eKLR
  • Loice Otieno V Kenya Commercial Bank Limited
    (2013) eKLR
  • Walter Ogal Anuro V Teachers Service Commission
    (2012) eKLR
On appeal from
Sotik Principal Magistrate's Court (ELRC)
PMCC (ELRC) No. 1 of 2018
Jurisdiction invoked
First appeal from the subordinate court under the Employment Act framework (ELRC appellate jurisdiction); judgment characterises this court as 'a court of first appeal'

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "New Kenya Co-operative Creameries v Sigei (Appeal E002 of 2022) [2024] KEELRC 27 (KLR)", Case Analysis (2024). Sotik ELRC Appeal (arising from Sotik PMCC (ELRC) No. 1 of 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/27/eng@2024-01-25

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