Peter Wachira Ngunga v Kirinyaga District Farmers Sacco Society Limited [2014] KEELRC 1473 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the termination was unfair
The termination was unfair both substantively and procedurally.
The respondent gave no reason at the time of termination, contrary to section 43, and did not serve notice or afford a hearing under section 41. Although misconduct/poor performance was particularised in the defence, the employer was required to establish it during the administrative disciplinary process, not litigate it before the court. The court applied its earlier holding in Joseph Otieno Nyolo v Rift Valley Railways Kenya Ltd that courts must not be converted into the employer's disciplinary tribunal, and found the termination unfair ab initio. Long service and absence of contributory conduct warranted maximum compensation of 12 months' salary.
Whether the claimant is entitled to gratuity
Yes, per clause 29 of the collective agreement: 11.5 times monthly salary times 2, i.e. Kshs.404,340.00.
Clause 29 of the collective agreement provided for gratuity at two months' salary per completed year (prorated). The claimant served 11.5 years undisputedly. The parties were entitled to contract on service pay under section 35(5) of the Employment Act. Terminal dues of Kshs.386,760 pleaded as paid were found to have been applied to the claimant's loans, as confirmed by RW2; the notice and leave claims were subsumed in that sum. The net award was Kshs.227,580.00.
Legal principles established
#- The employer must establish the reason for termination before or at the time of dismissal through the administrative disciplinary process; failure to do so renders the termination unfair ab initio.
- The court's inquiry into the validity of reasons for termination arises only where the employer first invoked due process under section 41.
- Parties may agree upon and fix the rates of service pay/gratuity under section 35(5) of the Employment Act.
Court orders
#- 1.The respondent to pay the claimant Kshs.227,580.00 by 1.02.2015 failing interest to be payable at court rates from the date of the judgment till full payment
- 2.The respondent to pay costs of the suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (not expressly cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Peter Wachira Ngunga v Kirinyaga District Farmers Sacco Society Limited [2014] KEELRC 1473 (KLR)", Case Analysis (2014). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1473/eng@2014-12-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.