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ELRCPartially AllowedCause No 1092 of 2018· [2024] KEELRC 620 (KLR)

Mbugua v Powermax General Electrical Merchants (Cause 1092 of 2018) [2024] KEELRC 620 (KLR)

Employment and Labour Relations Court
14 March 2024
LNLINNET NDOLO
2,077 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court ruled an employee's dismissal unfair because her employer never gave her notice of allegations or a chance to respond.

What this practically means

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Executive summary

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This Employment and Labour Relations Court judgment at Nairobi, delivered virtually by Linnet Ndolo J on 14 March 2024, concerns a storekeeper/store manager employed by the Respondent from 1 February 2010 until her employment was terminated on 5 April 2014. The Claimant alleged unlawful termination for want of substantive justification and procedural fairness, and claimed refund of monthly deductions of Kshs. 7,000 (November 2012 to March 2014), one month's salary in lieu of notice, maternity leave pay, gratuity and 12 months' salary as damages. The Respondent contended that any summary dismissal was executed procedurally and alleged misconduct including dishonesty, misappropriation of company revenue, underperformance and poor supervision. The court framed two issues: whether the termination was unlawful, and entitlement to remedies. It held that although the allegations, if proved, would constitute serious misconduct, the Respondent adduced no evidence of prior notice to the Claimant or of a hearing at the shop floor as required by Section 41 of the Employment Act, so the allegations remained unproved. The court also found that the compulsory leave which transitioned into termination indicated a pre-made decision unsupported by law or internal rules. Further, the monthly surcharge, admittedly effected through payslips, was a unilateral disciplinary measure violating due process under Section 41, and reusing the same allegations to justify termination breached the rule against double jeopardy. The court awarded 8 months' salary as compensation (Kshs. 360,000), one month's notice pay (Kshs. 45,000) and refund of the surcharge (Kshs. 119,000), totalling Kshs. 524,000, with interest and costs to the Claimant. Maternity leave pay and gratuity were disallowed as unproved.

Key legal issues

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01

Whether the termination was substantively and procedurally fair

Holding

Termination was substantively and procedurally unfair; no notice of allegations or opportunity to respond was given, and the allegations remained unproved.

Reasoning

Section 41 requires the employer to explain allegations to the employee and hear representations before termination on grounds of misconduct or poor performance. No evidence of prior notice or shop-floor hearing existed. The compulsory leave that transitioned into termination suggested the decision was pre-made and lacked legal or regulatory support. Under Section 43, the employer failed to prove the reasons for termination, rendering it unfair.

p. 4
02

Whether the monthly surcharge of Kshs. 7,000 was lawful

Holding

The surcharge was a unilateral disciplinary measure taken in violation of due process and the deductions must be refunded.

Reasoning

The Respondent claimed the Claimant consented to the surcharge, but no evidence supported this. Under the Kenya National Library Services Board v Beatrice N. Ayoti decision, a surcharge is a disciplinary action requiring Section 41 procedural fairness. Further, having surcharged the Claimant, the Respondent could not reuse the same allegations to justify termination, breaching the rule against double jeopardy.

p. 5
03

Entitlement to remedies

Holding

Claimant awarded 8 months' salary compensation, one month's salary in lieu of notice, and refund of the unlawful surcharge; maternity leave pay and gratuity disallowed for want of proof.

Reasoning

Compensation of 8 months' salary reflected the length of service and the employer's unlawful conduct: unexplained compulsory leave, surcharge in violation of due process, breach of double jeopardy, and denial of an opportunity to be heard. Notice pay was contractually provided. Deductions were expressly admitted in the termination letter. Maternity leave and gratuity claims were not proved.

p. 5

Legal principles established

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  • Under Section 43 of the Employment Act, the employer must prove the reasons for termination, failing which the termination is deemed unfair.
  • A surcharge is a disciplinary action that can only be taken pursuant to the procedural fairness provisions of Section 41 of the Employment Act.
  • Once an employer has surcharged an employee for alleged misconduct, the same allegations cannot be used again as a basis for termination, in accordance with the rule against double jeopardy.

Court orders

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  1. 1.Judgment entered in favour of the Claimant: 8 months' salary in compensation Kshs. 360,000
  2. 2.1 month's salary in lieu of notice Kshs. 45,000
  3. 3.Unlawful surcharge refund Kshs. 119,000; total Kshs. 524,000
  4. 4.Amount subject to statutory deductions and to attract interest at court rates from the date of judgment until payment in full
  5. 5.Claimant awarded costs of the case

Authorities

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Legislation

  • Employment ActSection 47(5)
  • Employment ActSection 43(1) and (2)
  • Employment ActSection 41(1) and (2)
  • Employment ActSection 45

Cases cited (3)

  • Milano Electronics Limited v Dickson Nyasi Muhaso
    [2021] eKLR
  • Peter Otabong Ekisa v County Government of Busia
    [2017] eKLR
  • Kenya National Library Services Board v Beatrice N. Ayoti
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 41, 43, 45, 47(5))

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, "Mbugua v Powermax General Electrical Merchants (Cause 1092 of 2018) [2024] KEELRC 620 (KLR)", Case Analysis (2024). Cause No 1092 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/620/eng@2024-03-14

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