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ELRCPartially AllowedNot stated in the judgment as provided

Ireri v New Kenya Co-operative Creameries Ltd (Cause 113 of 2017) [2023] KEELRC 1049 (KLR)

Employment and Labour Relations Court
28 April 2023
2,602 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded an employee 12 months' salary after her employer failed to prove theft allegations, but dismissed her bigger claim for lack of evidence.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a saleslater doubling as a driver from April 2007, was arrested in August 2013 over an alleged theft of twelve cartons of powdered milk, suspended, prosecuted in Eldoret Criminal Case No. 3345 of 2013, and dismissed during the pendency of the criminal case. She was acquitted under Section 215 of the Criminal Procedure Code in October 2015 and sued for unfair termination and unlawful prosecution, claiming Kshs.13,276,803. The respondent defended the suspension and dismissal as lawful, maintaining the claimant was heard and that the investigation, arrest and prosecution were conducted by police. The court identified the central question as the burden of proof under Section 47(5) of the Employment Act. It found the theft allegations rested on the gate guards and one Joseph Opiyo, neither of whom testified before the disciplinary panel or the court; the alleged stolen milk was neither detained nor properly documented, the cash sale was never receipted, and no action was taken against the guards. The respondent therefore failed to discharge the burden of justifying the termination, which was held unfair under Section 45. The special damages heads (basic pay, house allowance, leave and a retirement claim running to 2041) were disallowed for want of strict proof and because continued employment to retirement is never guaranteed. Under Section 49(1)(c) as read with Section 50, the court awarded one month's salary in lieu of notice (Kshs.40,189) and twelve months' salary as compensation (Kshs.482,268), totaling Kshs.522,457, plus costs and interest, subject to taxes and statutory deductions. The court also apologized for the delay in delivering the judgment after the file was mistakenly filed away.

Questions the Court framed

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

  1. 1.Whether the parties discharged their legal and evidentiary burdens under Section 47(5) of the Employment Act
  2. 2.Whether the termination of the claimant's services was unfair within the meaning of Section 45 of the Employment Act
  3. 3.Whether the claimant was entitled to the special damages claimed (basic pay, house allowance, leave, retirement claim)
  4. 4.What compensation, if any, is payable under Section 49(1)(c) as read with Section 50 of the Employment Act

Key legal issues

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01

Whether the respondent justified the termination under Section 47(5) of the Employment Act

Holding

The respondent failed to discharge the burden; the termination was unfair under Section 45

Reasoning

The serious accusation of theft rested on the evidence of the gate guards and Mr Opiyo, neither of whom testified before the disciplinary panel or the court. The alleged stolen milk was never detained nor documented, no receipt issued for the cash sale, and no action taken against the guards. The respondent thus failed to prove the reason for termination.

p. 4
02

Whether the claimant was entitled to the special damages claimed

Holding

The heads of claim for basic pay, house allowance, leave and retirement benefits were disallowed for want of proof

Reasoning

Special damages must be specifically pleaded and strictly proved. Although the claimant pleaded the heads of claim, she led no documentation or oral testimony establishing entitlement. Compensation to retirement is also objectionable because continued employment is never guaranteed.

p. 4
03

What compensation is payable for the unfair termination

Holding

Twelve months' gross salary as compensation under Section 49(1)(c) as read with Section 50, plus one month's salary in lieu of notice

Reasoning

The accusations imputed a criminal offence but the evidence did not sufficiently disclose the claimant's culpability; the prosecution and termination were too harsh. Being a proper case for full compensation, the court awarded twelve months' gross salary, subject to taxes and statutory deductions.

p. 5

Legal principles established

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  • The burden of proving unfair termination lies on the employee while the burden of proving the reason or justification for termination lies on the employer
  • Where an employer levels an accusation of theft, evidence approaching the criminal threshold of proof is desirable even if not sufficient to sustain a conviction
  • Special damages must be specifically pleaded and strictly proved
  • Courts should be wary of awarding compensation of salary up to retirement because employment can end prematurely

Court orders

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  1. 1.One month's salary in lieu of notice of Kshs.40,189.00
  2. 2.Twelve months' salary as compensation for unfair termination of Kshs.482,268.00
  3. 3.Costs of the suit and interest
  4. 4.Items (a) and (b) to be subject to taxes and statutory deductions

The bench

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

majority

Wrote the judgment

Jurisdiction invoked
Employment Act, Sections 45, 47(5), 49(1)(c) and 50

Relief refused

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Claim for basic pay and house allowance from September 2013 to October 2015, annual leave for two months and retirement claim totalling approximately Kshs.13,276,000

Special damages must be specifically pleaded and strictly proved; the claimant adduced no documentation or testimony proving entitlement

p. 4

Retirement compensation up to the year 2041

Employment may end prematurely and continued service to retirement is not guaranteed

p. 5

Costs

Costs of the suit and interest awarded to the claimant

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.

On this alone, the Court finds and holds that the termination of the claimant’s service was unfair within the meaning of Section 45 of the Employment Act.
p. 4Unfair termination
An allegation of theft is a serious one and whereas the evidence at the disposal of an employer may not be suficient to sustain a conviction on criminal trial, it desirable that it be such evidence that barely misses the threshold of proof in criminal trial.
p. 4Standard of proof in employer theft allegations
The Court therefore awards the claimant as follows: a. One month’s salary in lieu of notic Kshs.40,189.00 b. Twelve months’ salary as compensation for unfair termination Kshs.482,268.00 Total Kshs.522,457.00
p. 5Final orders - award
The Court therefore finds that this is a proper case to award full compensation of twelve months’ salary.
p. 5Maximum compensation under Section 49(1)(c)

Issues in the judgment

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minor

The coram lists appearances for 'the Appellant' and 'the Respondent' although this is a first-instance claimant/respondent suit

minor

The respondent's first witness is reported as confirming that 'the claimant was the respondent’s employer', an apparent transcription error for 'employee'

minor

The claimant's pleading states she was suspended on 4th September 2013 but her trial evidence was that she was suspended in July 2013

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, "Ireri v New Kenya Co-operative Creameries Ltd (Cause 113 of 2017) [2023] KEELRC 1049 (KLR)", Case Analysis (2023). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1049/eng@2023-04-28

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