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ELRCPartially AllowedCause 453 of 2012

DAVID O. OWINO V KENYA INSTITUTE OF SPECIAL EDUCATION [2013] KEELRC 409 (KLR)

Industrial Court of Kenya
10 April 2013
LNLinnet Ndolo
2,457 words in judgment
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The bottom line

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A Kenyan court ruled an employee's firing was unfair because his disciplinary hearings were a box-ticking formality, awarding him compensation.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 1st August 1991 and last serving as a Cook, was interdicted in November 2007 over allegations of stealing maize meal and milk, and charged with stealing by servant contrary to Section 281 of the Penal Code. The criminal case was withdrawn under Section 87(A) of the Criminal Procedure Code in March 2008. On 4th November 2008 the Respondent reinstated him, but on reporting to duty he was issued with a termination letter effective 6th November 2008. After appeals by the Claimant, the Respondent held disciplinary proceedings before its Finance and General Purposes Committee and Full Council, and on 31st December 2009 upheld the termination while expressly acknowledging that the procedure used amounted to unfair termination, and paid him 14 months' salary. The Court found the effective date of termination to be 6th November 2008 but deemed the Claimant an employee until the final decision of 31st December 2009, treating the 14 months' payment as salary for that period rather than compensation. Applying Sections 41, 43 and 45 of the Employment Act, 2007, and the authority that acquittal in a criminal case does not bar employer discipline, the Court held the ultimate termination unfair because the Respondent's remedial process was a formality. It awarded 10 months' salary as compensation and one month's salary in lieu of notice, totalling Kshs. 173,932, dismissed the claims for service charge, leave allowance, and the bank remittance claims as a lawful debt, and ordered the Respondent to pay the costs.

Questions the Court framed

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

  1. 1.The effective date of termination of the Claimant's employment
  2. 2.Whether the ultimate termination of the Claimant's employment was unfair
  3. 3.Whether the claims for service charge, leave allowance, money remitted to the Cooperative Bank and arrears on the bank loan were proved

Key legal issues

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01

Whether the termination of the Claimant's employment was unfair

Holding

The termination was unfair within the meaning of Section 45 of the Employment Act, 2007; the Respondent admitted procedural unfairness and its remedial disciplinary process was not genuine.

Reasoning

The Respondent conceded in its letter of 31st December 2009 that the procedure used amounted to unfair termination. Although it later afforded the Claimant hearings before the Finance and General Purposes Committee and the Full Council, the Court found no serious effort to review the case, the meetings appearing designed to satisfy the letter of the law rather than render justice. The reason for termination was also not proved as required by Section 43(1).

p. 5
02

Effect of the Claimant's acquittal of stealing by servant on the disciplinary outcome

Holding

Acquittal does not by itself render the employer's disciplinary decision wrongful or unfair.

Reasoning

Following Kibe v Attorney General, the Court held that criminal trial and internal disciplinary proceedings are distinct processes with different procedural and standard of proof requirements. An employer may rely on the outcome of a criminal trial, and going against it does not by itself make the employer's decision unfair.

p. 4
03

Effective date of termination and treatment of the 14 months' salary payment

Holding

The Claimant is deemed to have remained an employee until the final decision of 31st December 2009, and the 14 months' payment is applied as salary for November 2008 to December 2009, not as compensation.

Reasoning

Because the initial termination was admittedly unfair and the Claimant was recalled for disciplinary proceedings, the Court treated him as an employee up to the date of the final decision. This characterisation of the 14 months' payment allowed a fresh award of 10 months' compensation for the ultimate unfair termination.

p. 4

Legal principles established

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  • Acquittal in a criminal case does not automatically immunise an employee from employer disciplinary action; the two are distinct processes.
  • An employer considering termination must prove valid and fair reasons and follow fair procedure under Sections 41, 43 and 45 of the Employment Act.
  • A hearing of an employee facing disciplinary action must be real and authentic, not a formality.

Court orders

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  1. 1.A declaration that the termination of the Claimant's employment was unfair
  2. 2.Award of the equivalent of 10 months' salary as compensation for unfair termination (Kshs. 158,120)
  3. 3.Award of 1 month's salary in lieu of notice (Kshs. 15,812)
  4. 4.Total award of Kshs. 173,932
  5. 5.The Respondent to pay the costs of the case

The bench

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

LN
majority

Wrote the judgment

Jurisdiction invoked
Industrial Court jurisdiction under the Employment Act, 2007

Relief refused

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Service charge of Kshs. 142,306.20

Not proved

p. 5

Leave allowance of Kshs. 27,763.50

Not proved

p. 5

Amount unlawfully remitted to the Bank (Kshs. 223,072.00) and arrears on bank loan (Kshs. 36,982.05)

The payment was a debt lawfully owed to the Cooperative Bank under a scheme to which the Claimant consented

p. 5

Compensation beyond the award granted, including ½ salary during interdiction

The Court applied the 14 months' salary payment as salary for the period November 2008 to December 2009 rather than as compensation

p. 4

Costs

The Respondent will pay the costs of this case.

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 view of the foregoing, I find the termination of the Claimant's employment to have been unfair within the meaning of Section 45 of the Employment Act, 2007 and award the Claimant's the equivalent of 10 months' salary as compensation. I also award him 1 month's salary in lieu of notice.
p. 5Finding of unfair termination and compensation
The Respondent will pay the costs of this case.
p. 6Costs
Hearing of an employee facing disciplinary action must be real and authentic.
p. 5Authenticity of disciplinary hearing
In any claim arising out of termination of a contract, the employer shall be required to prove the reason or reasons for the termination and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of Section 45.
p. 4Burden of proof under Section 43(1) Employment Act
a criminal trial and internal disciplinary proceedings initiated by an employer against an employee are two distinct processes with different procedural and standard of proof requirements.
p. 4Criminal proceedings vs disciplinary proceedings

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "DAVID O. OWINO V KENYA INSTITUTE OF SPECIAL EDUCATION [2013] KEELRC 409 (KLR)", Case Analysis (2013). Cause 453 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/409/eng@2013-04-10

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