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ELRCPartially AllowedNot stated in the judgment as provided

Mugo v ASP Company Limited (Appeal E103 of 2021) [2024] KEELRC 191 (KLR)

Employment and Labour Relations Court
12 February 2024
1,931 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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A Kenyan employment court ruled that a valid reason for dismissal is not enough — employers must still hold a proper disciplinary hearing or pay compensation.

What this practically means

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Executive summary

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This is a judgment of the Employment and Labour Relations Court at Nairobi (Rika J) determining an Appeal by a former Receptionist against a Trial Court judgment and a Counter-Appeal by her former employer. The Appellant claimed her transfer from Nairobi to Isinya contravened fair labour practices, that her termination for alleged absenteeism was unfair, and sought compensation and refund of salary deductions. The Trial Court had awarded only Kshs. 72,000 for unreasonable deployment. The appeal was determined on the Record of Appeal and written submissions. The Court found the Trial Court judgment internally unclear (a reference to an untraceable Kshs. 188,000 award) and silent on whether a disciplinary hearing was held. It held that a prior explanation notice did not amount to the disciplinary hearing contemplated under sections 41 and 45 of the Employment Act, so termination, though for a valid reason, was procedurally unfair. The appeal succeeded on that ground only: the Court declared the termination unfair as to procedure and awarded 6 months' salary, Kshs. 143,346, as compensation. The claims that the Appellant was on authorized sick-off and that the salary deduction was unlawful failed, since the sick-off sheet authorized only 2 days and deduction was lawful under section 19(1)(c). The Counter-Appeal succeeded: the transfer was a reasonable exercise of managerial prerogative under the contract's transfer clause, and the Kshs. 72,000 award for unreasonable deployment was set aside. There was no order as to costs on both Trial and Appeal.

Questions the Court framed

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

  1. 1.Whether the Appellant was granted a fair hearing under section 41 of the Employment Act before termination
  2. 2.Whether the Trial Court erred in finding the Appellant was away from work without leave despite the sick-off sheet under section 30 of the Employment Act
  3. 3.Whether the Trial Court's holding that the Claim lacked merit was against the weight of evidence
  4. 4.Whether the Trial Court erred in failing to award compensation for unfair termination and refund of salary deductions
  5. 5.Whether the Trial Court erred in finding deployment to Isinya unreasonable and awarding Kshs. 72,000 compensation (Counter-Appeal)

Key legal issues

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01

Procedural fairness in termination

Holding

Termination was on valid ground but procedurally unfair, as the Appellant was not taken through a disciplinary hearing under sections 41 and 45 of the Employment Act.

Reasoning

The Trial Court's judgment was silent on whether a disciplinary hearing was afforded. No reference was made to charges, a show-cause letter, invitation to a hearing, or a finding of gross misconduct under section 44(4)(a). A previous explanation notice did not amount to a disciplinary hearing. Valid reason existed (unauthorized absence), so compensation was limited to the procedural lapse.

p. 4
02

Whether absence was on authorized sick-off

Holding

The Trial Court did not err in rejecting the Appellant's evidence that she was away on account of illness; she was authorized only 2 days' sick-off and extended it without permission or supporting medical evidence.

Reasoning

The sick-off sheet dated 21st January 2019 granted only 2 days. The Appellant did not exhibit medical evidence showing she was required to return to hospital on 24th January 2019 or that the Respondent granted an extension. The Respondent's Witness confirmed she exceeded the stipulated days. Clause 6 of the contract entitled the Respondent to summarily dismiss for absence without reason.

p. 3
03

Reasonableness of transfer to Isinya

Holding

The transfer was a reasonable exercise of managerial prerogative under clause 8 of the contract; the award of Kshs. 72,000 for unreasonable deployment had no legal or factual justification and was set aside.

Reasoning

The contract allowed transfer to any department, project site or sister organization. Isinya was not distant; the Appellant was given 3 days to complete transfer, worked there over 6 months without complaint, and no evidence showed the transfer was inhumane or in bad faith. The pleaded basis of Kshs. 2,000 per week had no contractual or legal foundation.

p. 4
04

Salary deduction for days absent

Holding

The deduction of salary for days absent without permission was lawful under section 19(1)(c) of the Employment Act.

Reasoning

Since the Appellant was found to have been away without permission beyond her authorized sick-off, the Respondent was entitled under section 19(1)(c) of the Employment Act to deduct salary for the days not worked.

p. 3

Legal principles established

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  • An employee's previous explanation notices do not amount to the disciplinary hearing contemplated under sections 41 and 45 of the Employment Act.
  • Transfer of an employee is a managerial prerogative; the Court will not intervene unless the prerogative is exercised unreasonably.
  • A sick-off sheet is not an open-ended authorization to be away from work.

Court orders

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  1. 1.Declared that termination of the Appellant's contract was not based on fair procedure, and to that extent was unfair
  2. 2.Respondent to pay the Appellant the equivalent of 6 months' salary in compensation for unfair termination, at Kshs. 143,346
  3. 3.Counter-Appeal allowed; award of Kshs. 72,000 in compensation for unreasonable deployment set aside
  4. 4.No order on the costs on both Trial and Appeal

The bench

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

majority

Wrote the judgment

On appeal from
Trial Court (subordinate court, not named)
Not stated
Jurisdiction invoked
Appellate jurisdiction over the Trial Court in an employment dispute (statutory basis not expressly stated in the judgment)

Relief refused

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Refund of salary deduction for days absent (Kshs. 9,556)

The deduction was lawful under section 19(1)(c) of the Employment Act as the Appellant was absent without permission

p. 3

Compensation for unreasonable deployment (Kshs. 72,000)

Transfer was a managerial prerogative exercised reasonably under a transfer clause in the contract; no evidence of inhumane or bad-faith transfer

p. 3

Costs

No order on the costs on both Trial and Appeal (each party to bear own costs)

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 Court does not think that a previous explanation notice, whatever this was, issued by the Respondent upon the Appellant, amounted to a disciplinary hearing, contemplated under Sections 41 and 45 of the Employment Act.
p. 3Disciplinary hearing requirement under sections 41 and 45
The Trial Court erred in finding that termination was fair, while there was no evidence that the Claimant was taken through a disciplinary hearing; but did not err, in finding that the Appellant was dismissed for valid reason.
p. 3Validity of reason versus fairness of procedure
Unless the prerogative is exercised unreasonably, the Court has no reason to intervene.
p. 4Managerial prerogative in employee transfer
The Counter-Appeal is allowed and the award of Kshs. 72,000 in compensation for unreasonable deployment, set aside.
p. 5Final orders - Counter-Appeal
The Respondent shall pay to the Appellant equivalent of 6 months' salary in compensation for unfair termination, at Kshs. 143, 346.
p. 4Final orders - compensation awarded

Issues in the judgment

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material

Internal inconsistency in the Trial Court judgment as reproduced: paragraph 17 awards Kshs. 188,000 while paragraph 20 enters judgment for Kshs. 72,000 only

minor

Case number of the appeal and identity of the parties' names are not stated in the judgment as provided

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, "Mugo v ASP Company Limited (Appeal E103 of 2021) [2024] KEELRC 191 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/191/eng@2024-02-12

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