Obayi v Judicial Service Commission & another (Cause E030 of 2022) [2024] KEELRC 1672 (KLR)
The bottom line
#A Kenyan court ruled an employee's dismissal was justified in substance but unfair because the employer withheld the audit report before the disciplinary hearing, awarding limited compensation.
What this practically means
#Executive summary
#Key legal issues
#Substantive justification for dismissal
The respondents had genuine and reasonable grounds for dismissing the claimant based on the audit report revealing fraudulent revenue losses in his section
Section 43 requires the employer to prove the reasons for termination, but the test is subjective - whether the employer genuinely believed the grounds existed. The audit reports showed over Kshs33 million irregularly paid and over Kshs1.5 million lost, with specific receipts allegedly issued by the claimant who worked in the affected section. The court held the respondents passed the substantive fairness test on a balance of probabilities.
Procedural fairness of the disciplinary process
The dismissal was procedurally unfair because the respondents failed to supply the claimant with the audit report and evidence against him despite his request
Articles 47 and 50 of the Constitution, the Fair Administrative Actions Act and Sections 41, 43, 45 and 47 of the Employment Act require disclosure of all materials before a disciplinary hearing. RW1 and RW2 admitted the claimant was not supplied with the audit report and only saw it in court, prejudicing his defence. Although represented by counsel, this non-disclosure breached natural justice.
Reinstatement as a remedy
Reinstatement denied because the fiduciary position of trust was compromised and the respondents were unwilling to re-engage
The claimant held a fiduciary position over public revenue; receipts and cheques through which money was lost bore his signature. Trust, once lost, is not recoverable, and the dismissal was wrongful only for procedural defects, not a nullity. The court therefore declined reinstatement despite the declaration of wrongful dismissal.
Compensation under Section 49 of the Employment Act
Two months' gross salary (Kshs190,362/ as computed) awarded as fair and adequate compensation despite the claimant's substantive misconduct
The court held that had the process been fair it would have awarded nil, since the claimant was the author of his own misfortune and huge public funds were lost. Nonetheless, factoring in the procedural impropriety, two months' gross salary was held fair and adequate, subject to statutory deductions.
Legal principles established
#- The test for the reason for dismissal is subjective - the employer need only show it genuinely believed the ground was good, genuine and reasonable
- Failure by an employer to disclose the audit report and evidence against an employee before a disciplinary hearing breaches natural justice and renders the dismissal procedurally unfair
- The standard of proof in employment claims is a balance of probabilities, not the criminal standard
- An employee whose signature allowed disbursement of public funds without supporting documents may himself be guilty of gross misconduct by neglect
Court orders
#- 1.The summary dismissal of the claimant is declared wrongful and unlawful for lack of procedural fairness
- 2.One month's pay in lieu of notice of Kshs95,131/= awarded
- 3.Two months' gross salary in compensation of Kshs190,262/= awarded
- 4.Total award of Kshs285,393/=, subject to statutory deductions
- 5.The respondents shall issue and deliver to the claimant a certificate of service within 30 days hereof
- 6.The claimant is awarded costs of the cause
- Jurisdiction invoked
- Original employment cause under the Employment Act and the Employment and Labour Relations Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Obayi v Judicial Service Commission & another (Cause E030 of 2022) [2024] KEELRC 1672 (KLR)", Case Analysis (2024). Cause No E030 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1672/eng@2024-06-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.