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ELRCPartially AllowedEmployment Appeal arising from Mombasa Chief Magistrate's Court Employment Case No. E201 of 2020· [2024] KEELRC 2523 (KLR)

Carslake Nominees Ltd t/a Diani Sea Resort & another v Chesebe (Appeal E058 of 2022) [2024] KEELRC 2523 (KLR)

Employment and Labour Relations Court of Kenya
18 October 2024
ANAGNES KITIKU NZEI
3,222 words in judgment
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The bottom line

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A Kenyan court cut a hotel's unfair dismissal award to Kshs.426,038 after finding the employer's vague show cause letter and flawed disciplinary hearing made the firing unfair.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Nairobi (Agnes Kitiku Nzei, J) against the judgment of the Mombasa Chief Magistrate's Court in Employment Case No. E201 of 2020 delivered on 31st August 2022, in which a former Head Storekeeper who had worked for the Appellants for 28 years and 5 months was awarded Kshs.1,034,339 for unfair termination. The Appellants appealed on 7 grounds, contending the respondent received a show cause letter, a fair hearing and union representation; the respondent filed a cross appeal seeking additional reliefs. The court rehearsed the first appellate duty of fresh evaluation (Selle and Peters) and framed three issues: fairness of termination, whether the trial reliefs were deserved, and the cross appeal. On the evidence, the suspension/show cause/invitation letter combined three documents, lacked particulars, did not inform the employee of his Section 41(1) right to accompaniment, gave only six days to respond, and did not avail the documents relied upon; the disciplinary hearing also raised issues different from the general allegations. The court held the termination substantively and procedurally unfair and upheld the trial court's finding. However, it varied the quantum: compensation reduced from twelve to seven months' salary (Kshs.276,136 based on the pleaded gross salary of Kshs.39,448), notice pay of Kshs.39,448 upheld, unpaid leave recalculated at Kshs.110,454.4, while uniform allowance, underpayment claims and interest from filing suit were set aside. The cross appeal was dismissed. Total award: Kshs.426,038.4, subject to statutory deductions, with interest from the date of the trial court's judgment; each party to bear own costs of the appeal, with costs of the trial court to the respondent.

Key legal issues

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01

Whether termination was substantively unfair

Holding

Yes - no specific charges were set out and no wrongdoing was demonstrated; issues at the hearing differed from the general allegations in the letter.

Reasoning

The suspension/show cause/invitation letter combined three documents and contained no particulars of the alleged losses, fraud or vandalism. The disciplinary hearing minutes raised issues significantly different from the general allegations. Under Sections 43(1) and 45 of the Employment Act the employer bore the burden of justifying the termination and failed to do so.

p. 6
02

Whether termination was procedurally unfair

Holding

Yes - the Respondent was not informed of his right to be accompanied to the hearing per Section 41(1).

Reasoning

The letter did not notify the employee of the right to be accompanied by a fellow employee or union official, gave only six days to respond and prepare, and did not avail the documents said to found the allegations. This breached the mandatory procedure in Section 41(1) of the Employment Act, 2007.

p. 6
03

Appropriate compensation for unfair termination

Holding

Seven months' salary (Kshs.276,136) substituted for the trial court's twelve months, based on pleaded gross salary of Kshs.39,448.

Reasoning

The court considered the length of service (28 years and 5 months) and the manner of termination. Parties are bound by their pleadings, so the pleaded gross monthly salary of Kshs.39,448 rather than the highest earned was used for computation.

p. 7
04

The Respondent's cross appeal

Holding

Dismissed - the reliefs sought were not proved and service gratuity was not pleaded at trial.

Reasoning

No evidence was led in proof of the three months' notice pay, holiday pay, terminal gratuity and acting allowance. Service gratuity was not part of the trial reliefs. Parties are bound by their pleadings and relief follows proof.

p. 7

Legal principles established

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  • A show cause letter must contain particulars of allegations to enable an employee to respond; general allegations render the disciplinary process unfair.
  • An invitation to a disciplinary hearing ought to be given separately, with adequate time to prepare and to be accompanied as contemplated in Section 41(1) of the Employment Act.
  • Where the employer fails to justify reasons for termination, the termination is deemed unfair; termination may be substantively and/or procedurally unfair.

Court orders

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  1. 1.Judgment entered for the Respondent against the Appellants jointly and severally: compensation for unfair termination Kshs.276,136; one month's salary in lieu of notice Kshs.39,448; unpaid leave days Kshs.110,454.4; total Kshs.426,038.4
  2. 2.The trial court's award of twelve months' salary as compensation set aside and substituted with seven months' salary (Kshs.276,136)
  3. 3.The award of one month's salary in lieu of notice upheld (Kshs.39,448)
  4. 4.The award of uniform allowance (Kshs.37,800) set aside as not proved
  5. 5.Award of unpaid leave recalculated to Kshs.110,454.4; the award of Kshs.219,100 set aside
  6. 6.The award based on alleged underpayment of basic salary and house allowance set aside as not proved
  7. 7.The awarded sum to be subject to statutory deductions pursuant to Section 49(2) of the Employment Act
  8. 8.Interest on the awarded sum from the date of the trial court's Judgment
  9. 9.Each party to bear its own costs of the appeal; the Respondent awarded costs of proceedings in the trial court
  10. 10.The Respondent's cross appeal dismissed with no order as to costs

Authorities

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Legislation

  • Employment Act, 2007Section 41(1)
  • Employment Act, 2007Section 43(1)
  • Employment Act, 2007Section 45(2)(a) and (4)(b)
  • Employment Act, 2007Section 45(2)(c) (as quoted in Naima Khamis)
  • Employment Act, 2007Section 28(1)
  • Employment Act, 2007Section 49(2)

Cases cited (3)

  • Selle & Another – vs – Associated Motor Boat Company Limited & Another
    (1968) E.A 123
  • Peters – vs – Sunday Post Ltd
    (1958) E.A page 424
  • Naima Khamis – vs – Oxford University Press (E.A) Limited
    (2017) eKLR
On appeal from
Mombasa Chief Magistrate's Court (Employment Case No. E201 of 2020)
E201 of 2020
Jurisdiction invoked
First appellate jurisdiction over an appeal from the Chief Magistrate's Court employment claim (the judgment records: 'this is a first appeal, and that the evidence presented before the trial court is before this court for fresh evaluation')

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, "Carslake Nominees Ltd t/a Diani Sea Resort & another v Chesebe (Appeal E058 of 2022) [2024] KEELRC 2523 (KLR)", Case Analysis (2024). Employment Appeal arising from Mombasa Chief Magistrate's Court Employment Case No. E201 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2523/eng@2024-10-18

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