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ELRCPartially Allowed· [2024] KEELRC 2544 (KLR)

Odie v Jims Fresh Vegetables Growers and Exporters Limited (Employment and Labour Relations Appeal E221 of 2022) [2024] KEELRC 2544 (KLR)

Employment and Labour Relations Court
18 October 2024
3,786 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled an employer can fire an employee for dishonesty but must still follow fair hearing procedures or pay damages.

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 against the decision of the Chief Magistrate's Court at Kajiado in ELRC No. E072 of 2021. The Appellant, employed as Livestock Responsible from 3rd October 2017, claimed he was unlawfully and unfairly dismissed on 4th July 2021 without reasons or a hearing, and sought notice pay, salary arrears, holiday, leave and rest-day pay, service pay, compensatory damages and a certificate of service. The Respondent maintained he was only suspended pending disciplinary action and police investigations into the sale of a cow belonging to a third party on its farm, and counterclaimed Kshs 87,000/=, the sum the Appellant admitted owing the buyer. The trial Court dismissed the claim but paradoxically awarded notice pay, terminal dues and a certificate of service, and made no finding on the counterclaim. On appeal, Stella Rutto J found the Respondent had a valid and fair reason for termination, since the Appellant's unauthorized sale of the cow breached the trust inherent in his position (applying McKinley v BC Tel). However, the Respondent failed to prove compliance with Section 41(1) of the Employment Act, and its desertion claim was unsupported, so the termination was procedurally unfair. The trial Court's judgment was set aside, the appeal allowed, the notice-pay award sustained, and compensatory damages of Kshs 45,000/=, unpaid salary of Kshs 117,923.10/= and leave pay of Kshs 31,500/= awarded, totalling Kshs 239,423.10/= with interest and costs. Overtime and service pay were refused; the Respondent's counterclaim was not addressed in the final orders.

Key legal issues

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01

Valid and fair reason for termination

Holding

The Respondent had a valid and fair reason to terminate the Appellant's employment under Section 45(2)(a) and (b) of the Employment Act

Reasoning

The Appellant, as Livestock Responsible, sold a cow on the Respondent's farm without authorization or any paper trail, and pocketed proceeds from a buyer who was stopped while transporting the cow. He admitted the sale and use of funds. This dishonesty breached the trust inherent in his position and went to the root of the employment relationship, satisfying the McKinley v BC Tel contextual test for dismissal on grounds of dishonesty.

p. 5
02

Procedural fairness

Holding

The termination was procedurally unfair as the Respondent failed to comply with Section 41(1) of the Employment Act

Reasoning

Beyond the letter of suspension, the Respondent led no evidence of affording the Appellant notification and a hearing as contemplated by Section 41. Its assertion that the Appellant deserted duty was doubtful: DW1 could not recall the last time the Appellant was on the farm, and the Respondent made no attempt to trace him or issue a show-cause notice. The trial Magistrate therefore erred in finding the disciplinary process was frustrated by the Appellant.

p. 6
03

Remedies

Holding

Notice pay was sustained; nominal compensatory damages of one month's salary, unpaid salary of Kshs 117,923.10 and leave pay of Kshs 31,500.00 were awarded; overtime and service pay claims were refused

Reasoning

Because termination was substantively justified but procedurally unfair, one month's notice pay was sustained and compensatory damages of one month's salary awarded, taking into account the Appellant's contribution to his termination. Unpaid salary was admitted and uncontroverted. Leave records were not exhibited as required by Section 74(1)(f). Overtime was proved paid from the muster roll, and NSSF membership excluded service pay under Section 35(6)(d).

p. 6

Legal principles established

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  • On a first appeal, the court has a duty to reconsider the evidence, evaluate it and draw its own conclusions while making allowance for not having seen or heard the witnesses
  • Where an employee deserts duty, an employer must take reasonable steps to ascertain his or her whereabouts before relying on desertion to defeat a disciplinary hearing
  • Termination may be substantively justified yet procedurally unfair where the employer fails to comply with Section 41(1) of the Employment Act

Court orders

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  1. 1.The judgment of the trial Court is set aside and the Appeal is allowed
  2. 2.The award of one month's salary in lieu of notice is sustained
  3. 3.The Appellant is awarded compensatory damages in the sum of Kshs 45,000.00 equivalent to one month of his last salary
  4. 4.The Appellant is awarded Kshs 117,923.10 being salary underpaid in April 2021 and unpaid salary in May, June and July 2021
  5. 5.The Appellant is awarded pay in lieu of leave being Kshs 31,500.00
  6. 6.The final award is Kshs 239,423.10
  7. 7.Interest on the final award at court rates from the date of Judgment until payment in full
  8. 8.Costs in this Court and at the trial Court shall be borne by the Respondent and pegged on the final award

Authorities

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Legislation

  • Employment ActSection 45(2)(a) and (b)
  • Employment ActSection 45(2)(c)
  • Employment ActSection 41(1)
  • Employment ActSection 42
  • Employment ActSection 44(4)(a)
  • Employment ActSection 47(5)
  • Employment ActSection 74(1)(f)
  • Employment ActSection 35(6)(d)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (8)

  • Walter Anuro v Teachers Service Commission
    [2013] eKLR
  • David Gichana Omuya v Mombasa Maize Millers Limited
    [2014] eKLR
  • Samuel Muchiri Gikonyo v Henkel Chemicals (EA) Ltd
    [2014] eKLR
  • Peter Apolo Ochieng v Amido Centre Kenya
    [2016] eKLR
  • David Njoroge Muiru v Elsa Limited
    [2014] eKLR
  • J. S. M. v E. N. B.
    [2015] eKLR
  • McKinley v BC Tel
    [2001] 2 S.C.R 161
  • Mary Mumbi Kariuki v Director, Pamoja Women Development Programme
    [2015] eKLR
On appeal from
Chief Magistrate's Court at Kajiado (ELRC)
ELRC No. E072 of 2021
Jurisdiction invoked
First appellate jurisdiction over the Chief Magistrate's Court at Kajiado in an employment and labour relations matter

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, "Odie v Jims Fresh Vegetables Growers and Exporters Limited (Employment and Labour Relations Appeal E221 of 2022) [2024] KEELRC 2544 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2544/eng@2024-10-18

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