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Case Brief · caselaw.co.ke
Court of AppealPartially AllowedCivil Appeal No. 1 of 2017· [2018] KECA 22 (KLR)

Alba Petroleum Limited v Jackson Kivilu

Court of Appeal
25 January 2018
2,530 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed the dismissal was unfair because the employee never got a proper hearing, but halved the compensation award to six months' salary.

What this practically means

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Executive summary

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The Court of Appeal at Mombasa (Waki, Karanja and Koome, JJ.A) determined an appeal by Alba Petroleum Limited against the Employment and Labour Relations Court's finding that the respondent's services had been unfairly terminated, with an award of 12 months' salary as compensation. The respondent, an employee of some years in the appellant's operations department, received a general warning letter in May 2013 and was terminated on 1st October 2013, having been paid his contractual terminal dues. The Court reaffirmed the duty of a first appellate court to re-evaluate and re-analyse the evidence, and held that the audi alteram partem rule underpins the hearing requirement in Section 41 of the Employment Act. The warning letter contained only general allegations, did not invite a response, and no disciplinary hearing or minutes existed; no performance targets or appraisals had been set. The appellant accordingly failed to prove both procedural fairness and the validity of the reasons for dismissal under Section 45(2). On quantum, the Court, applying Kemro Africa and following United States International University v Outa, held that maximum awards must be supported by assigned reasons; the trial judge's reliance on the respondent's age, length of service and lack of pension or gratuity did not justify a maximum award, terminal dues having been settled. The appeal succeeded in part: the 12-month award was set aside and substituted with 6 months' salary (Ksh.809,076 subject to statutory deductions), with interest from the trial judgment date. Each party was ordered to bear its own costs of the appeal, with the appellant bearing the costs of the proceedings below. The appeal partially succeeded.

Key legal issues

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01

Procedural fairness in termination under Section 41 of the Employment Act

Holding

The respondent was never given a hearing prior to termination; the warning letter did not invite a response and contained only general allegations without particulars

Reasoning

The warning letter's allegations were couched in a general manner and the respondent sought clarification from the Managing Director which was never given. The letter did not invite the respondent to respond, and there was no evidence of any disciplinary hearing or minutes. No performance targets or appraisals had been set, so there was no basis for gauging the alleged poor performance.

p. 3
02

Validity of the reasons for dismissal under Section 45(2) of the Employment Act

Holding

The appellant failed to prove that the reason for the respondent's dismissal was valid

Reasoning

The evidence did not satisfactorily prove the allegations of poor performance and theft. The respondent's uncontroverted evidence was that no performance targets had been set and no performance appraisal had ever been conducted, leaving no basis on which his performance could have been gauged.

p. 3
03

Assessment of compensation under Section 49(1)(c) of the Employment Act

Holding

The maximum award of 12 months' salary was unsupported by proper reasons and is set aside and substituted with 6 months' salary

Reasoning

The trial judge's reasons - the respondent's age of 60 years, length of service, and absence of pension or gratuity - did not support a maximum award. Retirement at 60 is normal, and pension and gratuity were extraneous matters not part of the contract; terminal dues had already been settled. The award was reduced to 6 months' salary.

p. 3

Legal principles established

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  • An appellate court will interfere with quantum only where the trial judge took into account an irrelevant factor, left out a relevant one, or the award is so inordinately low or high as to be a wholly erroneous estimate
  • A warning letter couched in general terms that does not invite the employee to respond does not satisfy the hearing requirement under Section 41 of the Employment Act; the employee must be given notice containing sufficient details of the allegations and an opportunity to be heard
  • A maximum award of compensation for unfair termination must be supported by assigned reasons and consideration of the relevant principles on assessment of damages
  • The primary role of the first appellate court is to re-evaluate, re-assess and re-analyze the evidence before the trial court while being cognisant that it neither saw nor heard the witnesses

Court orders

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  1. 1.The maximum award of 12 months' salary as damages for unfair termination is set aside
  2. 2.Substituted with an award of 6 months' salary as damages for wrongful termination, translating to Ksh.809,076 subject to statutory deductions
  3. 3.Interest to accrue from the date of the trial court's judgment
  4. 4.Each party to bear their own costs of the appeal
  5. 5.The appellant to bear the costs of the High Court proceedings as ordered
On appeal from
Employment and Labour Relations Court at Mombasa
E.L.R.C Cause No. 156 of 2015
Jurisdiction invoked
First appellate jurisdiction over the Employment and Labour Relations Court

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Alba Petroleum Limited v Jackson Kivilu", Case Analysis (2018). Civil Appeal No. 1 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/22/eng@2018-01-25

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