Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedNot stated in judgment (referenced prior suit: CMCC ELRC No.E076 of 2022, withdrawn)· [2024] KEELRC 1954 (KLR)

Mutembete v SGA Security Solutions Limited (Cause E006 of 2023) [2024] KEELRC 1954 (KLR)

Employment and Labour Relations Court
25 July 2024
3,146 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

#

Kenya's Employment Court upheld a summary dismissal where the employee admitted gross misconduct, awarding only seven days' unpaid wages.

What this practically means

#

Executive summary

#
The claimant, employed by the respondent from 1 May 2009 and rising to regional finance and administrative officer earning Ksh.218,500 monthly, was served with notice of summary dismissal on 7 May 2021 following an audit and internal investigations that revealed a loss of over Ksh.2.3 million through fraud in her department. She sought notice pay, twelve months' compensation, 28 leave days, gratuity/severance for twelve years, seven days' wages for May 2021, and costs, alleging she was denied a fair hearing and forced to sign the dismissal notice in the presence of police. She was also arrested and charged in Criminal Case No.E669 of 2021 at Shanzu Law Court, later withdrawn. The respondent maintained she was taken through due process, including a notice to show cause, suspension, a disciplinary hearing before a panel with her representative, and an appeal. The court found that the claimant admitted all five charges: authorising payments on forged receipts, failing to prevent fraud, failing to detect fake receipts, negligence over overpayments to former employees, and unauthorised redemption of company bonga points. Relying on Oyombe v Eco Bank Limited and Duncan Muisyo, the court held the summary dismissal justified under Section 44(4) of the Employment Act and that the withdrawal of the criminal case did not alter the internal disciplinary findings. Only the admitted claim for seven days worked in May 2021, Ksh.50,983.33, was allowed. The rest of the claim was dismissed, with each party bearing its own costs.

Key legal issues

#
01

Whether the summary dismissal was justified

Holding

Dismissal was justified; the claimant admitted the five charges and was guilty of gross misconduct under Section 44(4)(e) and (g) of the Employment Act

Reasoning

The claimant admitted all five issues in the notice to show cause: allowing payments on forged receipts, failing to detect fraud causing a loss of over Ksh.2.3 million, failure to follow procurement procedures, negligence over overpayments, and unauthorised redemption of bonga points. Her role as head of finance carried a core duty to safeguard financial resources and maintain internal controls. She was taken through a full disciplinary process with representation and an appeal. Prior warning letters for financial impropriety corroborated the employer's case.

p. 5
02

Whether the criminal charge and subsequent withdrawal affected the dismissal

Holding

The claimant's arrest and later withdrawal of the criminal case did not invalidate the dismissal, since internal disciplinary proceedings independently established gross misconduct

Reasoning

The claimant was arrested and charged in Criminal Case No.E669 of 2021 at Shanzu Law Court alongside three other employees, but the case was later withdrawn. The court held that notwithstanding her release, the internal disciplinary proceedings revealed gross misconduct. The audit and investigations, not the criminal process, grounded the summary dismissal.

p. 6
03

Entitlement to gratuity/severance and leave

Holding

No gratuity was due under the contract or on summary dismissal; severance applies only under Section 40 (redundancy); no leave days were pending

Reasoning

The employment contract made no provision for gratuity, and a summary dismissal for gross misconduct extinguished accrued benefits of that nature. Severance pay is a statutory incident of redundancy under Section 40 of the Employment Act, which had no application here. On leave, the respondent produced records showing the claimant had utilised all her leave days, and as custodian of records the employer's documents were accepted.

p. 6

Legal principles established

#
  • A court will not interfere with an employer's internal disciplinary findings where the employee, called to render an account, admits to the misconduct.
  • Redeeming company bonga points without prior authorisation is stealing contrary to Section 44(4) of the Employment Act and constitutes gross misconduct.
  • An employer who has conducted proper investigations and audits revealing financial impropriety, and followed due process, is justified in issuing summary dismissal.
  • The employer is the custodian of employment records, including leave records.

Court orders

#
  1. 1.The claim is dismissed save for the admitted claim for 7 days worked in May 2021
  2. 2.The claimant is awarded Ksh.50,983.33 for 7 days worked in May 2021
  3. 3.The claimant to attend at the shop floor for clearance and payment of the admitted dues
  4. 4.Each party bears its costs

Authorities

#

Legislation

  • Employment ActSection 44(4)
  • Employment ActSection 44(4)(e) and (g)
  • Employment ActSection 35, 35(5) and (6)
  • Employment ActSection 40

Cases cited (2)

  • Oyombe v Eco Bank Limited
    Civil Appeal 185 of 2017 [2022] KECA
  • Duncan Muisyo v Cabinet Secretary Ministry of Health & 3 others
    [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment and labour relations claims

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Mutembete v SGA Security Solutions Limited (Cause E006 of 2023) [2024] KEELRC 1954 (KLR)", Case Analysis (2024). Not stated in judgment (referenced prior suit: CMCC ELRC No.E076 of 2022, withdrawn). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1954/eng@2024-07-25

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