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ELRCPartially AllowedELRC Appeal from CMELRC Case No. 2157 of 2019· [2024] KEELRC 1034 (KLR)

Kabansora Millers Limited v Oracho (Employment and Labour Relations Appeal E059 of 2022) [2024] KEELRC 1034 (KLR)

Employment and Labour Relations Court
7 May 2024
2,911 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court confirmed that even a worker who abandons duty must be given a fair hearing before dismissal, but reduced the money awarded.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court (Manani J) against the decision of the Chief Magistrate's Court in CMELRC Case No. 2157 of 2019 rendered on 17th May 2022, in a dispute over the termination of an electrician's employment. Three issues fell for determination: when the employment commenced and its nature; whether the Respondent absconded or was unfairly dismissed; and whether the reliefs granted by the trial magistrate were justified. On the first issue, the court found both parties lacked candour but held, relying on the Appellant's own Certificate of Service and NHIF remittance schedules, that employment commenced in 2017 on fixed term contracts renewed periodically, culminating in the one-year written contract signed on 2nd January 2019. On the second issue, the court held that although desertion is a legitimate ground for termination, an employer must afford the absconding employee due process under sections 41 and 45 of the Employment Act; the Appellant did not, so the termination was procedurally flawed and unfair. On quantum, the court set aside the award of Kshs 144,000 house allowance because the Respondent's Kshs 40,000 salary already included Kshs 6,000 house allowance, and reduced compensation for unfair termination from eight months' (Kshs 320,000) to three months' gross salary (Kshs 120,000), holding compensation should not exceed the balance of the fixed term. The awards for pay in lieu of notice (Kshs 40,000) and July 2019 salary (Kshs 26,154), and the trial court's costs and interest orders, were upheld. No order for costs on the appeal.

Key legal issues

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01

Commencement date and nature of the employment contract

Holding

Employment commenced in 2017 on fixed term contracts renewed periodically; the 2019 written contract was only the latest renewal.

Reasoning

The court found both parties lacked candour but relied on the Appellant's own Certificate of Service dated 5th August 2019 confirming engagement on 25th July 2017, and NHIF remittance schedules for January 2018 listing the Respondent as an employee. The signed 2nd January 2019 one-year fixed term contract showed the prior unwritten relation (2017-2018) was also fixed term and periodically renewed.

p. 6
02

Whether the Respondent absconded duty or was unfairly terminated

Holding

Even if the Respondent deserted duty, the termination was procedurally flawed because the Appellant accorded him no due process under sections 41 and 45 of the Employment Act; therefore the termination was unfair.

Reasoning

Desertion is a legitimate substantive ground for termination, but the employer must still follow the right procedure. The Appellant produced no evidence of a notice to show cause or any opportunity for the Respondent to rebut the accusation of desertion. The court endorsed a line of ELRC decisions requiring procedural fairness even where desertion is established, and agreed with the trial court's finding.

p. 4
03

Entitlement to house allowance as a standalone award

Holding

The Respondent's constant Kshs 40,000 salary comprised basic pay of Kshs 34,000 plus house allowance of Kshs 6,000; the standalone award of Kshs 144,000 was set aside.

Reasoning

The 2019 written contract expressly stated the Kshs 40,000 included basic salary of Kshs 34,000 and house allowance of Kshs 6,000. Since the salary remained constant from 2017 to 2019, the court inferred the same composition applied throughout, making a standalone house allowance award improper double recovery.

p. 5
04

Quantum of compensation for unfair termination in a fixed term contract

Holding

Compensation of eight months' salary (Kshs 320,000) was grossly exaggerated; replaced with three months' gross salary (Kshs 120,000), reflecting the approximately five months remaining on the fixed term.

Reasoning

In fixed term employment there is no guarantee the employee serves the entire term, as the contract could terminate midstream for lawful reasons. With the contract terminable on 31st December 2019 and termination on 17th July 2019, only about five months remained; compensation should not exceed the balance of the contractual term.

p. 5

Legal principles established

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  • An employer may not lawfully close an employment contract on the ground of desertion without affording the employee due process under sections 41 and 45 of the Employment Act.
  • In a fixed term employment relation, compensation for unfair termination should not exceed the balance of the contractual term.
  • On a first appeal, the court evaluates the evidence and reaches its own conclusion but with caution, departing from trial court findings of fact only if unsupported by evidence or inconsistent with law.

Court orders

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  1. 1.Declaration that the parties entered into the employment relationship from the year 2017 albeit on fixed term contracts which were renewed periodically.
  2. 2.The trial court's award of Kshs 144,000.00 for house allowance is set aside; the Respondent is not entitled to house allowance as a standalone item.
  3. 3.The award of compensation of Kshs 320,000.00 (eight months' gross salary) is set aside and replaced with compensation for unfair termination equivalent to three months' gross salary, i.e. Kshs 120,000.00.
  4. 4.The award of Kshs 26,154.00 being salary for days worked in July 2019 is upheld.
  5. 5.The trial court's award for pay in lieu of notice equivalent to Kshs 40,000.00 is upheld.
  6. 6.The award of costs and interest by the trial court is upheld.
  7. 7.No order for costs on the appeal.

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 45
  • ELRC Procedure RulesRule 28(3)

Cases cited (7)

  • Ben Nandasaba Muiyundo v Ideal Security Services Limited
    [2018] eKLR
  • Vincent Keya and another v D. M. Enterprises Limited
    (2020) eKLR
  • Everline Ichechi v Mombasa Continental Resort
    [2019] eKLR
  • Wanjiru Munyao v New Wide Garments Kenya Epz Limited & another
    [2022] eKLR
  • Nyabiba v Apak Company Limited
    (Cause 2005 of 2017) [2023] KEELRC 672 (KLR) (21 March 2023)
  • Lilian Akoth Otuoma v Mohan Oysterbay Drinks Kenya Limited
    [2019] eKLR
  • Paul Mwakio v Reliable Freight Services Ltd
    [2022] eKLR
On appeal from
Chief Magistrate's Court (CMELRC)
CMELRC Case No. 2157 of 2019
Jurisdiction invoked
First appellate jurisdiction over the Chief Magistrate's Court (Employment and Labour Relations) - this is a first appeal

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, "Kabansora Millers Limited v Oracho (Employment and Labour Relations Appeal E059 of 2022) [2024] KEELRC 1034 (KLR)", Case Analysis (2024). ELRC Appeal from CMELRC Case No. 2157 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1034/eng@2024-05-07

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