Kabansora Millers Limited v Oracho (Employment and Labour Relations Appeal E059 of 2022) [2024] KEELRC 1034 (KLR)
The bottom line
#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
#Executive summary
#Key legal issues
#Commencement date and nature of the employment contract
Employment commenced in 2017 on fixed term contracts renewed periodically; the 2019 written contract was only the latest renewal.
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.
Whether the Respondent absconded duty or was unfairly terminated
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.
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.
Entitlement to house allowance as a standalone award
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.
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.
Quantum of compensation for unfair termination in a fixed term contract
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.
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.
Legal principles established
#- 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
#- 1.Declaration that the parties entered into the employment relationship from the year 2017 albeit on fixed term contracts which were renewed periodically.
- 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.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.The award of Kshs 26,154.00 being salary for days worked in July 2019 is upheld.
- 5.The trial court's award for pay in lieu of notice equivalent to Kshs 40,000.00 is upheld.
- 6.The award of costs and interest by the trial court is upheld.
- 7.No order for costs on the appeal.
- 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
#Practical implications
#Frequently asked questions
#Cite this brief
#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.