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Case Brief · caselaw.co.ke
ELRCDismissedNot stated in judgment

Kamau v Nairobi Enterprises Limited (Cause 864 of 2019) [2023] KEELRC 1162 (KLR)

Employment and Labour Relations Court
16 May 2023
3,084 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court upheld the summary dismissal of an employee who secretly ran a competing business, ruling the dismissal both substantively justified and procedurally fair.

What this practically means

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Executive summary

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The Claimant, employed as a Biomedical Engineer since 2010 and summarily dismissed on November 12, 2018, sued the Respondent Company for unfair and unlawful termination, seeking a declaration, twelve months' salary compensation, terminal dues (notice pay, November 2018 salary, leave days, gratuity and commission), the value of allegedly withheld personal tools (Kshs 230,300), access to his pension savings of Kshs 1,248,466, a certificate of service, costs and interest. The Respondent defended the dismissal as summary dismissal for gross misconduct, contending that the Claimant secretly ran a competing business through Medquip Limited, soliciting the Respondent's clients, and that all dues were paid. The court, per Abuodha J, held that the employer bore the burden under section 43 of the Employment Act and that the burden was discharged: the Claimant did not contest operating a competing business; his assertion that the Respondent's director authorised and funded the registration of Medquip was unsupported by independent evidence and disbelieved. Invoicing of MP Shah, a Respondent client, constituted an obvious conflict of interest justifying summary dismissal. On procedure, the court held that a section 41 hearing need not be a formal session; fairness may be satisfied through active interaction between employer and employee on an issue the employee has not denied or rebutted. A formal hearing would have served no purpose. The court found valid reasons existed and no procedural violation, dismissed the entire claim with costs to the Respondent, and ordered accordingly on May 16, 2023.

Questions the Court framed

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

  1. 1.Whether there existed valid reasons for the summary dismissal of the Claimant (substantive fairness under section 43 of the Employment Act)
  2. 2.Whether the termination accorded procedural fairness under section 41 of the Employment Act
  3. 3.Whether the Claimant is entitled to the reliefs sought (terminal dues, notice pay, leave days, tools, commission, pension, certificate of service)

Key legal issues

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01

Substantive fairness - valid reason for dismissal

Holding

Valid reasons existed: the Claimant ran a competing business (Medquip Limited) dealing with the Respondent's clients, an obvious conflict of interest

Reasoning

The Claimant did not contest that he conducted a competing business; his defence that the Respondent's director authorised and financed the registration was unsupported by any independent evidence and disbelieved. Invoices from Medquip to MP Shah, a Respondent client, evidenced conflict of interest. Summary dismissal for gross misconduct under section 44(4) was therefore substantively justified.

p. 6
02

Procedural fairness - hearing under section 41

Holding

No violation of procedural fairness; the format of a hearing depends on circumstances and need not be a formal session

Reasoning

Section 41 requires an employee be heard, but not necessarily through a formal sitting with witnesses. Fairness may be achieved through exchange of letters or active interaction between employer and employee on an issue the employee has not denied or rebutted. Since the reason for dismissal was clear to the Claimant and he admitted involvement, a formal hearing would have served no purpose.

p. 6
03

Reliefs

Holding

None awarded; the claim having failed, the Claimant is disentitled to all reliefs

Reasoning

Having found the dismissal lawful and fair, the court dismissed the entire claim including compensation, terminal dues, notice pay, leave, tools, commission and pension claims, and awarded costs to the Respondent.

p. 6

Legal principles established

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  • The employer bears the burden of proving the reason for termination; failing which the termination is unfair
  • A hearing before termination need not be a formal session; fairness may be satisfied by an exchange/interaction between employer and employee
  • Employment is a position of trust; competing business by an employee justifies summary dismissal

Court orders

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  1. 1.The claim is dismissed with costs
  2. 2.It is so ordered

The bench

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

majority

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 41, 43, 44, 45, 49 applied)

Relief refused

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Declaration of unfair and unlawful termination

Court found valid reasons existed and procedure not violated

p. 6

12 months' salary compensation

Claim dismissed as without merit

p. 6

Terminal dues, notice pay, leave days, value of tools, commission and pension

Dismissed with the entire claim

p. 6

Costs

The claim is 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.

The claim is therefore found without merit and is hereby dismissed with costs.
p. 6Disposition
It is so ordered.
p. 6Final orders
The Court is therefore persuaded that there existed valid reasons for dismissing the claimant and that the dismissal did not violate any procedural fairness since the matter for which he was dismissed was live in his mind and he admitted being involved save for that he tried to justify the same as being with the knowledge of the respondent.
p. 6Substantive and procedural fairness
there is no requirement that such a hearing must be by a formal session where people must sit down and witnesses called
p. 6Format of section 41 hearing

Issues in the judgment

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minor

Case name of the KRA authority appears in two variants within 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, "Kamau v Nairobi Enterprises Limited (Cause 864 of 2019) [2023] KEELRC 1162 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1162/eng@2023-05-16

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