Gathoni v Airports Savings & Credit Co-operative Society Ltd (Cause E588 of 2020) [2024] KEELRC 2716 (KLR)
The bottom line
#A Kenyan court ruled a SACCO unfairly fired its Finance Manager, finding employers must share evidence and stick to stated charges before dismissing staff.
What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent proved failure to account for monies received or held
Not proved; the ground lacked particulars and was incongruous with the notices to show cause
The dismissal letter cited failure to account for monies received or held on behalf of the Society, but neither notice to show cause made such an allegation. The job description of a Finance Manager involved no receipt or holding of monies, and no evidence showed any amount received or unaccounted for. Absence of particulars rendered the ground hollow and a mere allegation, contradicting the earlier charges.
Whether the Claimant was negligent causing loss of Kshs.9,647,404.93
Negligence not proved; the Claimant had reported the system loophole and unearthed the fraud herself
The loss was occasioned by the Claimant's supervisee, Dorothy Waeni, exploiting a system loophole the Claimant had reported from 2013 and by email of 1st October 2018. The Claimant discovered and reported the fraud to the CEO, Chairman and Treasurer, and Dorothy was charged. The forensic audit report was undated and not availed, so the Claimant's evidence remained uncontroverted; a supervisor is not duty-bound to detect supervisees' fraud.
Whether the termination procedure was fair under Section 41 of the Employment Act
Procedure was flawed and unfair
On the eve of the hearing the Claimant was ambushed with nine new charges, none of the documents cited as their basis was availed despite her suspension without access to records. She was not interviewed by the investigator, was given needed documents only at the hearing, the chair did not read out the charges or invite representations, and minutes were withheld despite a request. This fell below the Section 41 threshold and violated her right to fair hearing.
Whether the Claimant was entitled to the reliefs claimed
Partially; declarations, notice pay, 4 months' compensation, half salary during suspension and certificate of service awarded; retirement earnings, pension, leave and gratuity declined
The declarations were merited. Notice pay followed the confirmation letter. Compensation of 4 months was fixed considering her service of 8 years and 5 months, absence of prior warnings, her appeal, and her contribution to the termination. The inordinate 6-month suspension without extension evidence justified half salary. Retirement earnings lacked legal basis, pension was recoverable from the administrator, leave lacked particulars, and gratuity was unenforceable.
Legal principles established
#- An employer must demonstrate both a valid and fair reason and a fair procedure for termination to pass muster
- An employee's employment cannot be terminated on grounds other than those previously brought to the employee's attention and explained; doing so violates audi alteram partem
- Failure by the employer to furnish the employee with the relevant documents relied on for the charges vitiates the disciplinary process
- Availment of information, materials and evidence to be relied upon by the decision maker is a legal right not dependent on requests
- It is not the duty of a supervisor to discover fraudulent activities of supervisees unless brazen enough that a reasonable supervisor ought to have noticed it
- Permanent and pensionable employment is not absolutely permanent where it carries an exit clause invokable by either party
- He who alleges bears the burden of proof under Sections 107, 108 and 109 of the Evidence Act
Court orders
#- 1.Declaration that termination of the Claimant's employment was unjustified and unfair
- 2.3 months salary in lieu of notice Kshs.512,057.10
- 3.Equivalent of 4 months salary Kshs.682,742.80 as compensation under Section 49(1)(c) of the Employment Act
- 4.Unpaid half salary for the entire duration of suspension
- 5.Certificate of service
- 6.Costs of the suit to the Claimant
- 7.Interest at court rates from the date of judgment till payment in full
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over unfair and wrongful termination of employment under the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gathoni v Airports Savings & Credit Co-operative Society Ltd (Cause E588 of 2020) [2024] KEELRC 2716 (KLR)", Case Analysis (2024). Not indicated in the judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2716/eng@2024-11-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.