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ELRCAllowedCause No. 6 of 1999

KENYA UNION OF COMMERCIAL, FOOD & ALLIED WORKERS v SHERIA CO-OPERATIVE SAVINGS & CREDIT SOCIETY LTD [2004] KEELRC 4 (KLR)

Industrial Court of Kenya
5 August 2004
CCCharles P. ChemmuttutAKA.K. KerichSMS.M. Maithya
1,931 words in judgment
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The bottom line

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A Kenyan employer cannot dismiss an employee for a charge they were never told about or allowed to answer, and vague fraud allegations won't survive scrutiny.

What this practically means

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Executive summary

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The Industrial Court at Nairobi, presided over by Charles P. Chemmuttut, J, with Members A.K. Kerich and S.M. Maithya, determined a trade dispute reported under the Trade Disputes Act, Cap. 234, concerning the summary dismissal of Joseph Rwamba Mureithi, an Accounts Clerk employed by Sheria Co-operative Savings & Credit Society Ltd from 15th July 1992. The grievant was suspended on 2nd May 1995 over alleged involvement in a fraud syndicate, and was interrogated by Central Bank Anti-Fraud police but released for lack of evidence; the actual fraudsters were convicted. He was nonetheless summarily dismissed on 5th July 1995, with retrospective effect from 27th April 1995, for 'gross negligence in failing to ensure recoveries of members' loans' - a different charge from that for which he had been suspended. The Union reported a formal dispute; the Minister for Labour's investigator found the dismissal wrongful and recommended it be reduced to normal termination with terminal dues and four months' compensation. The Union accepted the recommendation; the Society rejected it as biased. The Union's representative, Mr. Muriuki, asked the Court to adopt the Minister's recommendation, while Mrs. Onyango for the Society maintained the dismissal was justified by gross negligence. The Court held the dismissal wrongful, perverse, vindictive and capricious: the grievant faced shifting, unparticularised charges and was never heard on the negligence allegation, contrary to audi alteram partem. The Court upheld the Minister's recommendation and ordered payment of the grievant's terminal dues under the applicable collective agreement.

Questions the Court framed

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

  1. 1.whether the summary dismissal of the grievant as aforestated was justified
  2. 2.if not, what relief, if any, is he entitled to

Key legal issues

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01

Whether the summary dismissal of the grievant was justified

Holding

The dismissal was wrongful because the grievant was dismissed for gross negligence, a different offence from the fraud for which he was suspended, and was given no opportunity to be heard on the negligence charge.

Reasoning

The grievant was suspended on suspicion of involvement in a fraud syndicate, but police cleared him and the actual culprits were convicted. The dismissal letter instead accused him of gross negligence in failing to ensure loan recoveries, for which he was never suspended, charged, or heard. The suspension letter also lacked particulars of the alleged fraud. Facing shifting charges without particulars or a hearing, he could make no defence, breaching audi alteram partem.

p. 4
02

Whether the charge of fraud was properly particularised

Holding

No - the Society's suspension letter alleged fraud syndicate membership without giving particulars, which is insufficient for so serious a charge.

Reasoning

The court noted the two elements of fraud are deceit and injury, making the charge inherently serious. Elementary justice requires that when fraud is alleged, complete particulars and full facts must be supplied. Vague references to a 'syndicate' and 'school of thought' left the grievant unable to know the case against him.

p. 4

Legal principles established

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  • An employee may not be punished or dismissed for an offence without being accorded an opportunity to meet the charge or defend himself (audi alteram partem).
  • When fraud or forgery is alleged, complete particulars or full facts must be given.
  • Dismissal on a charge different from that for which the employee was suspended, without a hearing, is wrongful.

Court orders

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  1. 1.Upheld the Minister's recommendation
  2. 2.Ordered that the grievant be paid his terminal dues pursuant to the terms of the collective agreement between the parties in force at the material time

The bench

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

CC
majority

Wrote the judgment

Jurisdiction invoked
Trade Disputes Act, Cap. 234, Section 14(9)(e) and (f) - Notification of Dispute with statutory certificates from the Labour Commissioner and the Minister for Labour

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.

Accordingly, I uphold the Minister’s recommendation, and order that the grievant be paid his terminal dues pursuant to the terms of the collective agreement between the parties in force at the material time.
p. 4Final orders - dismissal upheld as wrongful and terminal dues awarded
The rule of audi alteram partem (no man shall be condemned unheard), which is one of the elementary justice, only requires that a man shall not be subject to final judgment or to punishment without an opportunity of being heard.
p. 4Right to be heard before dismissal
In the circumstances, the grievant was placed in a very difficult situation in which it was impossible for him to make out any defence or to know which charge he was facing.
p. 4Shifting and unparticularised charges
The charge of fraud is, therefore, inherently a very serious charge, irrespective of the fact whether as a result of the charge the employee is likely to gain very small or large amount. The gravity lay in the very nature of the charge.
p. 3Seriousness of fraud allegations in employment

Issues in the judgment

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minor

Judgment states it was 'DATED and delivered and signed at Nairobi this 5th day of August, 2004' although the cause number is of 1999 and hearing was 1999 - a long delay between hearing and delivery, apparent on the face of 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, "KENYA UNION OF COMMERCIAL, FOOD & ALLIED WORKERS v SHERIA CO-OPERATIVE SAVINGS & CREDIT SOCIETY LTD [2004] KEELRC 4 (KLR)", Case Analysis (2004). Cause No. 6 of 1999. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2004/4/eng@2004-08-05

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