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Court of AppealDismissedNot stated in the judgment· [2024] KECA 127 (KLR)

Ndugu Transport Company Limited v Sewe (Civil Appeal 23 of 2019) [2024] KECA 127 (KLR)

Court of Appeal
9 February 2024
HOHannah OkwenguHOH.A. OmondiJNJoel Ngugi
2,802 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that even if an employee commits gross misconduct, dismissing them without a fair hearing makes the dismissal unlawful and costly.

What this practically means

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Executive summary

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Fredrick Sewe sued Ndugu Transport Company Ltd before the Employment and Labour Relations Court, claiming that his verbal summary dismissal on 10th June 2013, on suspicion of colluding to overload a company lorry, was unfair and that he was owed terminal dues, leave, overtime and house allowance. The trial judge found the dismissal unfair both procedurally and substantively and awarded the respondent pay in lieu of notice, salary for ten days worked, public holiday pay, house allowance and underpayment, accrued leave, rest days pay and compensation under section 49 of the Employment Act, with costs and interest. The employer appealed on nine grounds, contending that the summary dismissal under section 44 of the Employment Act was lawful, that leave had been taken, and that awards for rest days and house allowance were unjustified. The Court of Appeal, comprising Okwengu, Omondi and Ngugi, JJ A, in a single unanimous judgment, framed two issues: whether the termination was lawful and procedural, and whether the remedies awarded were due. The Court reaffirmed that a fair termination requires both due procedure and substantive justification; that even gross misconduct does not excuse the employer's duty to hear the employee; and that the burden of proving fair procedure rests on the employer. The appellant's own witness admitted there was no weighbridge at the quarry and that dues were unpaid, that the quarry operated on Sundays and public holidays, and that the respondent was not housed. The Court found the awards justified and dismissed the appeal with costs to the respondent.

Key legal issues

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01

Whether the summary dismissal was lawful and procedural

Holding

The dismissal was unfair, unprocedural and illegal because the respondent was verbally dismissed without being accorded a fair hearing as required by sections 41, 43, 45 and 47(5) of the Employment Act

Reasoning

The court held that unfair termination turns on the twin requirements of procedure and substantive justification. The respondent was verbally dismissed on suspicion of overloading without any hearing, and the appellant's own witness confirmed there was no weighbridge at the quarry, undermining the allegation of misconduct. The appellant did not demonstrate compliance with section 41 or that the grounds for dismissal were valid and fair, and failed to discharge the burden placed on it.

p. 5
02

Whether the respondent was entitled to the remedies awarded under section 49 of the Employment Act

Holding

The awards were justified; the trial court properly exercised its discretion under section 49(4) and the appellate court found no basis to interfere

Reasoning

Remedies under section 49 read with section 50 are discretionary and must be exercised judiciously having regard to the statutory considerations. The appellant's own witness confirmed terminal dues had not been paid, that the quarry operated on Sundays and public holidays, and that the respondent was not housed. The appellant did not show that the trial court failed to take into account any of the section 49(4) considerations, so the awards of notice pay, overtime, house allowance and compensation stood.

p. 6
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The duty of a first appellate court

Holding

A first appellate court must evaluate the evidence on the record and reach its own independent conclusion on both evidence and law

Reasoning

Relying on Rule 31(1)(a) of the Court of Appeal Rules and prior decisions of the Court, the court restated that on a first appeal it is the primary duty of the court to re-evaluate the evidence and draw its own conclusions, though it was unnecessary to dwell on this as the appeal turned on the fairness of the dismissal and the propriety of the remedies.

p. 4

Legal principles established

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  • A fair termination requires both due procedure and substantive justification; adherence to one and contravention of the other renders the dismissal wrongful
  • Even where gross misconduct warrants summary dismissal, the employer must accord the employee procedural fairness, including an opportunity to give a defence, save in exceptional demonstrated circumstances
  • The burden lies on the employer to prove that the employment was terminated in accordance with fair procedure
  • Compensation under section 49 of the Employment Act is compensatory, not punitive, and is aimed at making good the employee's loss

Court orders

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  1. 1.The appeal is dismissed with costs to the respondent
  2. 2.The judgment of the trial court (award of notice pay, salary for 10 days worked, public holidays pay, house allowance and underpayment, accrued leave, rest days and 12 months' compensation, with costs and interest from the date of judgment) is upheld
On appeal from
Employment and Labour Relations Court (Superior Court)
Not stated in the judgment
Jurisdiction invoked
First appeal to the Court of Appeal under Rule 31(1)(a) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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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, "Ndugu Transport Company Limited v Sewe (Civil Appeal 23 of 2019) [2024] KECA 127 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/127/eng@2024-02-09

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