Paul Billy Nyagilo v East African Portland Cement Co. Ltd [2017] KECA 483 (KLR)
The bottom line
#Kenya's Court of Appeal upheld a summary dismissal for gross misconduct but sent the employee's gratuity, leave and suspension salary claims back for a fresh hearing.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the employer had a valid and fair reason to summarily dismiss the appellant for gross misconduct
- 2.Whether the termination was effected in accordance with a fair procedure
- 3.Whether the trial judge's failure to consider the appellant's written submissions vitiated the judgment
- 4.Whether the appellant's claims for gratuity, leave allowance and salary during suspension were properly determined
Key legal issues
#Validity of the reason for summary dismissal
The employer proved on a balance of probabilities that the appellant's negligence or breach of duty caused substantial loss of cement, constituting gross misconduct under section 44(4) of the Employment Act.
The disciplinary committee's findings, supported by the evidence of the credit manager and internal auditor, established a deficit of at least 5,400 bags during the appellant's tenure. The explanation of depot expenditure and a blank cheque was rejected: the cheque was undated and specified no amount, so it was not a valid cheque or an acknowledgement of receipt of cement. A valid and fair reason under section 45 existed.
Procedural fairness of the termination
The termination followed a fair procedure: the appellant was issued a show-cause letter, filed a detailed defence, and was afforded an oral hearing before a disciplinary committee which gave detailed reasons.
The minutes showed the committee considered the evidence in great detail and gave detailed reasons. Although the appellant's internal appeal was not determined, it related only to conversion of the dismissal to early retirement, not the reasons for termination, so its non-determination caused no unfairness.
Effect of the trial judge's failure to consider written submissions
Failure to consider written submissions did not vitiate the judgment where the decision rested on the pleadings and oral evidence and no prejudice resulted.
The appellate court noted the omission but held the decision was based on the memorandum of claim, defence and oral evidence; since the appellate court itself considered the submissions and found no merit, no prejudice was caused to the appellant.
Claims for gratuity, leave allowance and salary during suspension
The trial judge failed to determine the gratuity and leave allowance claims and gave no reasons for declining the half-salary award during suspension; those claims were remitted for rehearing before a different judge.
There was insufficient evidence on the record to determine whether the appellant, who claimed continuous employment as a casual from 1993 and cited section 37 conversion, earned gratuity and in what amount. Section 18(4) preserves some benefits despite lawful summary dismissal, warranting remittal on both liability and quantum.
Legal principles established
#- The reasonableness of an employer's decision to terminate is assessed objectively as one a reasonable employer could have taken, not by the court substituting its own standard.
- The reason for termination is what the employer genuinely believed to exist at the time of termination.
- Disciplinary proceedings are not criminal trials; the employer need only establish misconduct on a balance of probabilities.
- Under section 18(4) of the Employment Act, an employee retains entitlement to certain benefits notwithstanding a lawful summary dismissal.
Court orders
#- 1.Appeal against termination of employment dismissed together with the claim for notice pay and damages
- 2.Decision of the trial judge that the appellant was only entitled to half salary in the sum of Kshs. 220,000 set aside
- 3.Appellant's entire claim for salary during suspension, gratuity and leave allowances remitted for re-hearing on liability and quantum by a different Judge
- 4.No orders as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Industrial Court of Kenya (Employment and Labour Relations Court) at Nairobi
- Industrial Cause No. 1543 of 2013
- Jurisdiction invoked
- First appeal from the Industrial Court of Kenya; judgment delivered under Rule 32(3) of the Court of Appeal Rules
Relief refused
#Salary in lieu of notice, salary for August to November 2010, damages for unfair termination and exemplary/punitive damages
Employment was lawfully terminated, so these claims could not stand
Reversal of the summary dismissal
Employer established on balance of probabilities a valid and fair reason and followed fair procedure
Costs
No orders as to costs
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
the reasonableness of the decision of the employer is not to be judged by what the court thinks should have been a reasonable decision, but on whether the particular decision was a decision that a reasonable employer could have taken in the particular circumstances of the case.
The disciplinary proceedings were not criminal proceedings charging the appellant with the theft of the cement or the proceeds of cement, thus requiring a high degree of proof.
For the foregoing reasons, the appeal against the termination of employment is dismissed together with claim for notice pay and damages with no orders as to costs.
The appellant’s entire claim for salary during suspension, gratuity and leave allowances is remitted for rehearing on liability and quantum by a different Judge.
Issues in the judgment
#The judgment refers to the trial judge variously as Makau, J. and Nzioki wa Makau J. in the coram; the half salary figure is also stated inconsistently as Shs. 222,000 in the body and Kshs. 220,000 in the orders
The coram lists three judges but the judgment states it was delivered by two judges under Rule 32(3), the third having ceased to hold office
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Paul Billy Nyagilo v East African Portland Cement Co. Ltd [2017] KECA 483 (KLR)", Case Analysis (2017). Civil Appeal No. 87 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/483/eng@2017-06-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.