Kitheka & another v Harambee Sacco Society (Cause 669 & 670 of 2019 (Consolidated)) [2024] KEELRC 1290 (KLR)
The bottom line
#Kenya's Employment Court ruled a Sacco fairly suspected negligence but unfairly dismissed two workers because it hid the audit evidence behind the charges.
What this practically means
#Executive summary
#Key legal issues
#Whether the dismissal was substantively justified
The Respondent proved on a balance of probabilities a valid and fair reason - the Claimants' failure to verify members' details facilitated the fraudulent Msacco transactions
The internal audit report of November 2018 showed mobile numbers of non-members were updated into members' bio data and linked to FOSA accounts, with withdrawals effected days later. The audit attributed the updates to the Claimants. Having pleaded and testified that their duties included updating members' details, the findings indicted them. The employer need only show a genuine belief on reasonable grounds.
Whether the disciplinary procedure was fair
The procedure was unfair because the Respondent withheld the Internal Audit Report on which the charges were based, impairing the Claimants' defence
Fair hearing requires the accused party to be supplied with the evidence the accuser intends to rely on. The Respondent's HR officer could not confirm the documents were availed and agreed they ought to have been supplied. Withholding the audit report jeopardised the Claimants' ability to challenge the evidence, rendering the termination procedurally flawed.
Entitlement to reliefs
Three months' gross salary awarded to each Claimant; most other heads declined for lack of particulars or evidence
Compensation was assessed considering long service of about 29 and 23 years, the first warning against Mary Kitheka, and the Claimants' substantive contribution to the termination. Notice pay, service pay, leave pay, loan discount, medical cover and exemplary damages all failed for want of evidence or particulars.
Whether the Respondent's counter claim should be allowed
The set-off was declined; the Claimants are to continue servicing their outstanding loans
The Claimants acknowledged the outstanding loans in their evidence. Rather than awarding the counterclaimed sums or ordering set-off, the court directed continuation of loan repayment as during employment.
Legal principles established
#- An employer must supply an accused employee with the evidence and documents it intends to rely on before a disciplinary hearing, failing which the termination is procedurally unfair
- A termination is fair only if the employer proves both a valid and fair reason and procedural fairness
- Substantively justified but procedurally unfair termination attracts compensation under Section 49(1)(c) but not notice pay
Court orders
#- 1.Declaration that the act of the Respondent of withholding evidence which formed the basis of termination of the Claimants' employment was unfair, unlawful and in breach of the rules of natural justice
- 2.Declaration that termination of the Claimants' employment by the Respondent was unfair
- 3.Equivalent of 3 months' gross salary for each of the Claimants under Section 49(1)(c) of the Employment Act, 2007
- 4.Claimants to continue servicing the outstanding loans with the Respondent
- 5.50% costs of the suit to the Claimants
- Jurisdiction invoked
- First-instance employment claim under the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kitheka & another v Harambee Sacco Society (Cause 669 & 670 of 2019 (Consolidated)) [2024] KEELRC 1290 (KLR)", Case Analysis (2024). Cause No 670 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1290/eng@2024-05-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.