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ELRCPartially AllowedAppeal No E020 of 2023· [2024] KEELRC 2196 (KLR)

Thumbi v Everest Enterprises Limited (Appeal E020 of 2023) [2024] KEELRC 2196 (KLR)

Employment and Labour Relations Court
12 September 2024
2,621 words in judgment
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The bottom line

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Kenya's ELRC in Nyeri held that giving an employee one month's notice is not enough — employers must also explain reasons and hear the employee before termination.

What this practically means

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Executive summary

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The appellant was employed by the respondent from 29th October 2012 as a Technical Mechanic until 30th October 2018 when her employment was terminated by one month's notice. She sued in the lower court for unfair termination and terminal dues; the respondent filed a defence but tendered no evidence at trial. The trial magistrate (Hon. S. Mwangi, SRM) dismissed the suit, finding the claim unproved. On first appeal, Onsmus N Makau J restated the appellate mandate under Selle v Associated Motor Boat Company Ltd and framed two issues: whether the termination was unfair and unlawful, and whether the appellant was entitled to the reliefs sought. The court held that the respondent's pleading that the appellant was terminated for running a competing company was an admission that the reason was never explained to her as required by section 41 of the Employment Act. Relying on Kenfreight EA Limited v Benson K. Nguti, the court held that notice or pay in lieu does not absolve the employer's duty to hear the employee, and that the respondent's failure to adduce evidence rendered its defence futile, so it failed to prove substantive and procedural fairness under sections 43 and 45. The trial court was held to have erred in law and fact. The appeal was allowed, the lower court judgment set aside, and the appellant awarded a declaration of unfair termination, four months' salary as compensation (Kshs.280,000), withheld salary (Kshs.510,000), leave (Kshs.55,416.66) and service pay (Kshs.210,000), totalling Kshs.1,055,416.66, subject to statutory deductions, with costs of the appeal and court below and interest from the date of judgment. Notice pay, HELB deductions/penalties and salary arrears were refused as satisfied.

Key legal issues

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01

Whether the termination was unfair and unlawful

Holding

The termination was unfair and unlawful; the employer pleaded a reason (competing business) that was never explained to the appellant as required by section 41, and tendered no evidence to discharge its burden under sections 43 and 45.

Reasoning

The termination letter gave one month's notice but cited no reason. The respondent's pleading alleged the appellant operated a competing company, amounting to an admission that the reason was not explained before the decision. Despite filing a defence and documents, the respondent tendered no evidence at trial, so it failed to prove valid reason and fair procedure. Notice alone does not absolve the duty to hear the employee.

p. 5
02

First appellate court's duty

Holding

The court is obliged to re-evaluate the evidence and reach its own conclusions while making allowance for not having seen the witnesses, per Selle v Associated Motor Boat Company Ltd.

Reasoning

As a first appeal, the mandate is to subject the whole evidence to fresh evaluation and draw independent conclusions, bearing in mind the court neither saw nor heard the witnesses, and not being bound by the trial court's factual findings where it misdirected itself.

p. 3
03

Reliefs payable

Holding

The appellant was awarded four months' salary as compensation, withheld salary of Kshs.510,000, leave of Kshs.55,416.66 and service pay of Kshs.210,000; notice pay, HELB deductions and salary arrears were refused.

Reasoning

Compensation was assessed at four months given no offence was proved and six years of service. Withheld salary, leave and service pay were admitted in the respondent's computation letter and agreement, and the respondent led no evidence of NSSF registration to defeat service pay. Sums admitted as paid were excluded.

Legal principles established

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  • Even where an employer serves a termination notice or pays salary in lieu, the employer remains under a legal duty to accord the employee a hearing under section 41 of the Employment Act.
  • Failure by a respondent to adduce evidence to prove its defence renders the defence futile and the employer fails to discharge its burden of proving substantive and procedural fairness.

Court orders

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  1. 1.A declaration that the termination of the appellant's employment by the respondent was unlawful and unfair.
  2. 2.Compensation for unfair termination of Kshs.280,000.00
  3. 3.Withheld salary of Kshs.510,000.00
  4. 4.Leave of Kshs.55,416.66
  5. 5.Service pay of Kshs.210,000.00 (total Kshs.1,055,416.66)
  6. 6.The award is subject to statutory deductions.
  7. 7.The Appellant is awarded costs of the appeal and court below.
  8. 8.The Appellant is awarded interest at court rates from the date of the judgment.

Authorities

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Legislation

  • Employment Act, 2007section 41
  • Employment Act, 2007section 42(1)
  • Employment Act, 2007section 43
  • Employment Act, 2007section 44(3) and (4)
  • Employment Act, 2007section 45
  • Employment Act, 2007section 47(5)
  • Employment Act, 2007section 49
  • ELRC Procedure RulesRule 28(3)

Cases cited (4)

  • Waite v Lets Go Travel Limited
    (2022) KEELRC 1163 (KLR)
  • Coastal Bottlers v Kimathi Mithika
    (2018) eKLR
  • Kenfreight EA Limited v Benson K. Nguti
    [2016] eKLR
  • Selle v Associated Motor Boat Company Ltd
    (1968) EA 123
On appeal from
Magistrates' Court
Jurisdiction invoked
First appellate jurisdiction over the subordinate court suit (ELRC Procedure Rules referenced); no specific constitutional provision cited

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, "Thumbi v Everest Enterprises Limited (Appeal E020 of 2023) [2024] KEELRC 2196 (KLR)", Case Analysis (2024). Appeal No E020 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2196/eng@2024-09-12

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