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ELRCPartially AllowedNot stated in the judgment· [2024] KEELRC 673 (KLR)

Mutie v Maxam Limited (Employment and Labour Relations Cause 273 of 2018) [2024] KEELRC 673 (KLR)

Employment and Labour Relations Court
14 March 2024
1,983 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 ruled that firing a worker over suspected theft—without a hearing or notice—was unfair and awarded him Kshs. 144,500 plus costs.

What this practically means

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Executive summary

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The claimant, a warehouse assistant, sued the respondent alleging unfair and unlawful termination of his employment and claiming terminal dues of Kshs. 584,500/=. He testified that after taking two days off to attend to his sick wife, he was served with an indefinite suspension letter on 29th March 2017 referencing fraudulent loss of stock on 28th March 2017, a day he was absent. He was never issued a notice to show cause nor called to a disciplinary hearing, and his employment was terminated without notice or terminal benefits. The respondent's internal auditor (RW1) confirmed no notice to show cause was issued and no disciplinary hearing held, admitted the claimant was absent on the day of the theft and that no investigation report was produced, and conceded the claimant exonerated himself. Two colleagues who were on duty were charged with theft by servant in a pending criminal case. The court found on a balance of probability that the respondent violated sections 36, 41, 43 and 45 of the Employment Act, 2007, having proved no valid reason and followed no fair procedure, and held the termination unlawful and unfair. It awarded notice pay of Kshs. 15,000/=, March 2017 salary of Kshs. 15,000/=, leave pay of Kshs. 22,500/= limited to one year and five months, and five months' salary (Kshs. 90,000/=) as compensation under section 49, totalling Kshs. 144,500/=. The overtime claim of Kshs. 337,500/= was dismissed for lack of proof. Judgment was entered for the claimant with interest at court rates and costs of the suit.

Key legal issues

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01

Validity and fairness of the termination

Holding

The termination was unlawful and unfair; the respondent proved no valid reason and breached sections 36, 41, 43 and 45 of the Employment Act

Reasoning

The claimant was absent on the day of the alleged theft, was suspended on his return, was never issued a notice to show cause nor summoned to a disciplinary hearing, and the respondent produced no investigation report. RW1 conceded the claimant exonerated himself since he was not at work. Termination followed without notice or payment in lieu, violating the Employment Act's procedural and substantive fairness requirements.

p. 3
02

Leave pay

Holding

Leave pay awarded for 1st November 2015 to 29th March 2017 (one year and five months) at Kshs. 22,500/=, not the full 2½ years claimed

Reasoning

The claimant gave credible unrebuted evidence that he never took annual leave. Section 10(7) places the burden on the employer where written particulars are not produced, and RW1 adduced no rebuttal. However, the written contracts produced only covered part of the service period, so the court limited leave pay to the period from 1/11/2015 to termination.

p. 4
03

Compensation under section 49

Holding

Award of five months' salary (Kshs. 90,000/=) as compensation for unlawful and unfair termination

Reasoning

The claimant served faithfully from 1/9/2014 to 29/3/2017 without a break, had expectation of continued employment, lost income without notice, contributed nothing to the termination, and received no terminal benefits. Applying section 49(1)(c) and (4) and the approach in Alphonce Maghaga Mwa Chonye v Operation 680 Ltd, five months' salary was appropriate.

p. 4
04

Overtime claim

Holding

Overtime claim dismissed for lack of proof

Reasoning

The claimant bore the burden of proving unpaid overtime. He produced no written or other evidence that he had ever claimed overtime during employment or that the respondent refused to pay it. Records of clocking in and out were said to be kept by the respondent but no claim was made during the employment, so the allegation after separation could not suffice.

p. 4

Legal principles established

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  • An employer must prove both a valid reason and follow a fair procedure before terminating employment
  • An employee under suspension remains innocent and is entitled to an opportunity to respond to adverse findings
  • Where the employer fails to produce written particulars of employment, the burden of proving or disproving an alleged term of employment lies on the employer
  • An employee must prove claims of unpaid overtime; mere allegation after separation is insufficient

Court orders

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  1. 1.Kshs. 15,000/= in lieu of notice
  2. 2.Kshs. 15,000/= arrears salary for March 2017
  3. 3.Kshs. 22,500/= in lieu of leave days not taken
  4. 4.Kshs. 90,000/= compensation for unlawful and unfair termination
  5. 5.Total award of Kshs. 144,500/=
  6. 6.Interest at court rates from date of judgment till payment in full
  7. 7.Costs of the suit to the claimant

Authorities

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Legislation

  • Employment Act, 2007sections 36, 41, 43, 45
  • Employment Act, 2007section 10(1)(a)(i) and 10(7)
  • Employment Act, 2007section 49(1)(c) and (4)

Cases cited (2)

  • Teresa N. Peter versus Kitui Teachers Service and Credit Co-operative Society
    [2014] eKLR
  • Alphonce Maghaga mwa Chonye versus Operation 680 Ltd
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "Mutie v Maxam Limited (Employment and Labour Relations Cause 273 of 2018) [2024] KEELRC 673 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/673/eng@2024-03-14

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