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Case Brief · caselaw.co.ke
Court of AppealDismissedCivil Appeal 14 of 2019

Chepkuto v Egerton University Investment Co Ltd

Court of Appeal
20 December 2024
6,866 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed an employee's dismissal was justified because he misused a company safe, even though the disciplinary hearing was flawed.

What this practically means

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Executive summary

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The Court of Appeal at Nakuru (Warsame, Ochieng and Kairu, JJA) dismissed this first appeal against the ELRC's dismissal of a farm manager's claim for unfair termination. The appellant was summarily dismissed in July 2016 after a disciplinary hearing over allegations that he misappropriated the respondent's power saw, tractor and safe; only the safe allegation was ultimately proved. The Court affirmed the trial court's findings that taking and using the employer's safe for personal business amounted to misappropriation under Section 44(4)(g) of the Employment Act, holding that misappropriation does not require theft or embezzlement - misuse of a company asset for personal gain suffices. However, the Court found the disciplinary process breached Section 41: the appellant was not notified he faced a disciplinary hearing, was not accompanied by a representative of his choice, and was excluded while the employer's witnesses testified. Despite declaring the termination procedurally unfair, the Court held the appellant wholly contributed to his dismissal and was entitled to no more than the Kshs.414,000 awarded below for two months' unpaid salary and 30 days' accrued leave. The appeal was dismissed with costs to the respondent. The judgment binds subordinate courts on the allocation of burdens under Section 47(5), the scope of misappropriation as gross misconduct, and the principle that a valid reason does not cure a procedurally flawed hearing.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the appellant was unfairly terminated
  2. 2.Whether the appellant was entitled to the reliefs sought

Key legal issues

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01

Whether taking and using the employer's safe for personal use amounted to gross misconduct justifying summary dismissal

Holding

Yes - the appellant's act of taking the safe, using it for his business and returning it only on demand amounted to misappropriation constituting gross misconduct under Section 44(4)(g).

Reasoning

The Court adopted dictionary definitions of misappropriation, holding it does not require theft or embezzlement. The appellant conceded taking the safe, kept it for five months using it for his business, and returned it only when ordered. The trial court's finding of misappropriation was affirmed, and the reason for dismissal was held valid and fair.

p. 11
02

Whether the disciplinary process complied with Section 41 of the Employment Act

Holding

No - the termination was procedurally unfair because the appellant was not accompanied by a representative of his choice, was excluded while witnesses testified, and was not notified he was attending a disciplinary hearing.

Reasoning

Section 41 mandatorily requires the employer to explain the reasons in a language the employee understands, allow a fellow employee or union representative of choice, and hear representations. The invitation letter did not disclose it was a disciplinary hearing; the appellant was sent out while the employer's witnesses testified. These breaches rendered the termination unfair despite the valid reason.

p. 11
03

Whether the appellant was entitled to additional remedies beyond the trial court award

Holding

No - the appellant wholly contributed to his termination and was entitled only to the Kshs.414,000 awarded by the trial court for unpaid salary and accrued leave.

Reasoning

Applying Sections 49 and 50 factors, the Court found the appellant caused or contributed to the termination by taking and retaining the safe. The trial court's award of two months' salary and 30 days' leave was undisturbed; claims for notice pay, compensation, gratuity and unexpired contract term were refused.

p. 13

Legal principles established

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  • On a first appeal, the Court of Appeal must defer to trial court findings of fact based on witness credibility, but may interfere where findings are based on no evidence, misapprehension of evidence, or wrong principles.
  • Misappropriation does not necessarily connote theft or embezzlement; misuse of a company asset for personal gain may amount to misappropriation justifying summary dismissal.
  • A dismissal may be for a valid reason yet unfair if the procedure under Section 41 of the Employment Act was not followed.
  • The burden of proving unfair termination rests on the employee, while the burden of justifying the grounds of termination rests on the employer.

Court orders

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  1. 1.The appeal is dismissed with costs to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Mohamed Abdulahi Warsame
M A WarsameJA
Currently serving
majority
majority
majority
On appeal from
Employment and Labour Relations Court at Nakuru
ELRC Cause No. 402 of 2016
Jurisdiction invoked
First appeal under Rule 31(1)(a) of the Court of Appeal Rules

Relief refused

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All further compensation beyond the trial court award (notice pay, compensation for unfair termination, gratuity, unexpired contract term)

The appellant wholly contributed to his termination and failed to persuade the Court he was entitled to more

p. 13

Setting aside the judgment and decree of the ELRC

The appeal lacked merit

p. 13

Costs

Appeal dismissed with costs to the respondent

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In the result, the appeal lacks merit, and is hereby dismissed, with costs to the respondent.
p. 13Final orders - dismissal of appeal
misappropriation does not necessarily connote theft or embezzlement. The misuse of any company asset for personal gain may amount to misappropriation
p. 8Definition and scope of misappropriation in employment
Where there is a fair reason for terminating an employee’s service but the employer does it in a procedure that does not conform with the provisions of a statute that still amounts to unfair termination
p. 12Procedural fairness notwithstanding valid reason
the burden of proving that an unfair termination of employment or wrongful dismissal has occurred shall rest on the employee, while the burden of justifying the grounds of the termination of employment or wrongful dismissal shall rest on the employer
p. 8Allocation of burden of proof under Section 47(5)
Although the reasons for the dismissal of the appellant met the threshold, he was not allowed in the room at the disciplinary hearing while the respondent’s witnesses testied, nor was he accompanied by a representative of his choice
p. 11Breach of Section 41 procedural requirements

Issues in the judgment

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minor

Judgment states the tractor allegation was dropped in the dismissal letter, but elsewhere says the dismissal letter included the tractor allegation though unproved

minor

CMC Aviation and Ridge v Baldwin cited as '(supra)' but no earlier citation appears in the judgment

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, "Chepkuto v Egerton University Investment Co Ltd", Case Analysis (2024). Civil Appeal 14 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1848/eng@2024-12-20

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