Veteran Pharmaceuticals Limited v Ngeresa (Employment and Labour Relations Appeal E052 of 2022) [2023] KEELRC 2919 (KLR)
The bottom line
#Kenyan employers claiming an employee absconded must prove they tried to reach them, or face unfair termination awards.
What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent's employment was unfairly terminated
Yes - the appellant failed to prove that the respondent absconded duties, so termination without valid reason was unfair
Section 43 and section 47(5) of the Employment Act place the burden of proving the reason for termination on the employer. Although absconding is gross misconduct under section 44(4), the appellant produced no warning letters or evidence of any effort to contact the respondent. Inferring termination without valid reason, the trial court was justified.
Whether the trial court erred in awarding house allowance
Yes - the award was set aside because the contract provided a gross, consolidated salary
Clause 4 of the contract provided a gross salary of Kshs. 18,000 later increased to Kshs. 30,000, and the pay slips made no mention of house allowance. Following Sani Orina v Hiprora, gross salary includes house allowance, so no separate award was warranted.
Whether the award of one month's pay in lieu of notice was erroneous
No - justified under section 36 of the Employment Act given the finding of unfair termination
Having upheld the finding of unfair termination without notice, the court held the notice pay award justified under section 36, though it corrected the quantum from Kshs. 34,500 to Kshs. 30,000, the respondent's actual salary.
Whether the appellate court should interfere with the six months' compensation
No - the trial court's discretion was reasonably exercised and no misapprehension of facts was shown
Guided by Kenya Revenue Authority v Darasa Investments, an appellate court interferes with discretion only where the trial court misapprehended the facts leading to an erroneous decision. The trial court reasonably considered the appellant's full payment of salary during sick leave. The appeal on this ground failed.
Legal principles established
#- An employer alleging that an employee absconded duties must demonstrate that efforts were made to contact the employee
- An appellate court will not interfere with a trial court's exercise of discretion unless the trial court misdirected itself and arrived at a wrong decision
- A gross (consolidated) salary is presumed to include house allowance
Court orders
#- 1.Appeal allowed in part
- 2.One month's payment in lieu of notice at Kshs. 30,000/= substituted for the trial court award of Kshs. 34,500
- 3.Six months' compensation for unfair termination maintained at Kshs. 300,000/= (recalculated on salary of Kshs. 30,000)
- 4.House allowance award of Kshs. 131,400/= set aside
- 5.Costs and interests of the suit and the appeal awarded to the Respondent
- On appeal from
- Magistrates' Court at Milimani (CMEL No. E583 of 2022)
- Milimani CMEL No. E583 of 2022
- Jurisdiction invoked
- First appellate jurisdiction over the subordinate court's judgment in an employment claim
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Veteran Pharmaceuticals Limited v Ngeresa (Employment and Labour Relations Appeal E052 of 2022) [2023] KEELRC 2919 (KLR)", Case Analysis (2023). Milimani ELRC Appeal (Judgment in appeal against Milimani CMEL No. E583 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2919/eng@2023-11-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.