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ELRCPartially AllowedNot stated in the extract (Memorandum of Claim dated 7th August 2023)· [2024] KEELRC 1870 (KLR)

Sawe v Ekaterra Tea Kenya PLC (Employment and Labour Relations Cause E012 of 2023) [2024] KEELRC 1870 (KLR)

Employment and Labour Relations Court of Kenya
18 July 2024
11,702 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~47 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded a dismissed executive Kshs 8 million because even with valid reasons, the company's flawed disciplinary hearing made his dismissal unfair.

What this practically means

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Executive summary

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The Claimant, formerly General Manager Kericho North of Ekaterra Tea Kenya PLC, claimed unfair and unlawful summary dismissal arising from a 26th January 2023 incident in which Jeremiah Koskei informed him of a WhatsApp letter from a person purporting to be a BBC correspondent alleging sexual harassment. The Claimant advised Koskei to report to the Communications department, which he did five days later. The Respondent issued a notice to show cause on 22nd April 2023, alleging breach of its 'Living the Code' policy and section 44(3) of the Employment Act, and additionally alleged a sexual relationship with an employee (later dropped for lack of evidence). After a disciplinary hearing on 27th April 2023, the Claimant was summarily dismissed on 8th May 2023. He sought declarations, Kshs 41,026,007.90 in compensation including 12 months' salary, severance pay for 26 years, exemplary damages, costs and interest, also contending that the advertisement of the Head of Manufacturing position amounted to constructive redundancy. The court held that the Respondent had valid reasons for dismissal, as the Claimant breached policy by failing to report a potential breach brought to his attention. However, the disciplinary process was flawed: the Claimant was not supplied with witness statements or the investigation report and was denied the opportunity to cross-examine adverse witnesses, contrary to section 41 of the Employment Act and the Fair Administrative Action Act. The dismissal was therefore unfair under section 45. The constructive redundancy claim failed as the Claimant did not prove the advertised position was his. The court awarded 6 months' salary as compensation and 2 months' notice pay, totalling Kshs 8,005,314.72 less statutory deductions, with costs and interest from the date of judgment.

Key legal issues

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01

Whether the disciplinary process was fair under section 41 of the Employment Act and the Fair Administrative Action Act

Holding

The process was unfair: the Claimant was not given witness statements or the investigation report and had no opportunity to cross-examine witnesses whose statements were used against him.

Reasoning

The court reviewed the disciplinary minutes and found the Claimant was questioned on statements of witnesses not present, without any chance to cross-examine them, and was never supplied the witness statements or investigation report. Section 41 of the Employment Act and section 4 of the Fair Administrative Action Act require explanation of charges, hearing of representations and cross-examination of adverse witnesses. Following Postal Corporation of Kenya v Andrew K Tanui, the procedure fell short of a fair one, so the disciplinary process was unfair.

p. 20
02

Whether the Respondent had valid reasons to dismiss the Claimant

Holding

Yes - the Claimant breached the Respondent's policy by failing to report a potential breach of the Code (the sexual harassment allegations) brought to his attention.

Reasoning

Under section 43, the employer must prove reasons it genuinely believed existed. The Claimant admitted knowledge of the allegations from Jeremiah Koskei on 26th January 2023 and did not report them himself; policy clause 5.6 obliged all employees and managers to report potential breaches. Despite his explanation that the perpetrator refused to share the message and its authenticity was doubtful, the court found he did not report the potential breach to his superior and was therefore in breach of the code, justifying dismissal on substantive grounds.

p. 21
03

Whether the dismissal was unfair overall under section 45(2)

Holding

Yes - because the procedure was flawed, the summary dismissal was unfair despite valid reasons.

Reasoning

Section 45(2) requires the employer to prove both a valid and fair reason and adherence to fair procedure. Having found valid reasons but a flawed disciplinary process, the court held the dismissal unfair in terms of section 45 and proceeded to remedies.

p. 21
04

Whether the advertisement of the Head of Manufacturing position amounted to constructive dismissal by redundancy

Holding

No - the Claimant did not prove that the advertised position was the position he occupied.

Reasoning

The Claimant served as General Manager, Kericho North (work level 2C), while the advertised role was Head of Manufacturing, Ekaterra Tea Kenya PLC (R 60002). The court found he failed to demonstrate the advertised job was his job, so constructive redundancy did not arise.

p. 21

Legal principles established

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  • A flawed disciplinary process renders a dismissal unfair under section 45 of the Employment Act even where the employer has valid reasons for termination.
  • An employee facing disciplinary action must be given the witness statements, investigation report and an opportunity to cross-examine witnesses against him.

Court orders

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  1. 1.Compensation of 6 months' salary for unfair termination (6 x 1,000,664.34 = Kshs 6,003,986.04)
  2. 2.2 months' salary in lieu of notice as per the appointment letter (2 x 1,000,664.34 = Kshs 2,001,328.72)
  3. 3.Total award of Kshs 8,005,314.72 less statutory deductions
  4. 4.Respondent to pay costs of the suit plus interest at court rates with effect from the date of judgment
Jurisdiction invoked
Original jurisdiction under the Employment Act 2007 (first-instance Memorandum of Claim; specific enabling provision not stated in the extract)

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, "Sawe v Ekaterra Tea Kenya PLC (Employment and Labour Relations Cause E012 of 2023) [2024] KEELRC 1870 (KLR)", Case Analysis (2024). Not stated in the extract (Memorandum of Claim dated 7th August 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1870/eng@2024-07-18

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