Oseko v Kenya Revenue Authority (Cause 237 of 2020) [2024] KEELRC 262 (KLR)
The bottom line
#Kenya's Employment Court upheld KRA's dismissal of a senior officer for negligence, ruling neglect of duty is gross misconduct justifying summary dismissal without compensation.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the termination of the Claimant's employment was unfair and unlawful
- 2.Whether the Claimant was entitled to the reliefs sought
Key legal issues
#Whether there was a valid and fair reason for the termination of the Claimant's employment
Yes - neglect of duty, a form of gross misconduct under section 44(4)(c) of the Employment Act, was established; the Claimant failed to conduct due diligence before removing the tax payer's VAT obligation and the court inferred a calculated scheme to avoid knowledge of the North of Nairobi station's assessment
The Respondent alleged that the Claimant removed VAT obligations for City Printing Works (K) Limited without due diligence - without the final Verification Form (VAT 12), an audit report, or confirmation of tax arrears. The Claimant relied only on a compliance certificate from North of Nairobi and had facilitated the change of the tax payer's PIN base to his own station. The court found this conduct indicative of a calculated scheme, admitted negligence at the hearing, and held the reason for termination valid and fair under section 43 of the Employment Act.
Whether the termination was procedurally fair under section 41 of the Employment Act
Yes - the Claimant received a notice to show cause, responded, was invited to and attended a disciplinary hearing, understood the charges, and exercised a right of appeal whose outcome was sent to his address
The court traced the sequence: show cause letter of 29th November 2018, the Claimant's response of 4th December 2018, invitation to hearing of 6th December 2018, hearing on 14th December 2018 and termination on 15th February 2019. The disciplinary manual excepted the investigation report from documents to be supplied; the letters were validly signed on behalf of the Deputy Commissioner - Human Resource under delegated authority; and the appeal outcome was despatched to the Claimant's last known postal address. Procedural fairness was satisfied.
Whether the Claimant was entitled to the reliefs sought including reinstatement and 12 months' salary compensation
No - the claim was dismissed in its entirety with costs; the Respondent had paid all terminal dues and the counterclaim was indicated as settled
Having found both substantive justification and procedural fairness, the court held the claim to be without merit. The Respondent confirmed all terminal dues and certificate of service were given, and stated it had no outstanding claim against the Claimant. The Respondent submitted that the counterclaim had since been settled. The court therefore dismissed the claim with costs to the Respondent.
Legal principles established
#- Under section 44(4)(c) of the Employment Act, 2007, neglect of duty is a listed ground of gross misconduct which can lead to summary dismissal, and where a valid and fair reason exists under section 43 the termination is substantially justified
- An employer need not supply the employee with the investigation report before a disciplinary hearing where the applicable disciplinary manual expressly excepts the investigation report from documents to be supplied
- Where an appeal outcome is sent to an employee's last known postal address and is returned unclaimed, the rule of postal postage applies and the employee cannot claim the appeal was not determined
- Both substantive and procedural fairness are required for a termination to pass the fairness test
Court orders
#- 1.The Claimant's claim was dismissed
- 2.The Claimant was ordered to pay the Respondent's costs of the suit
- 3.It was so ordered
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and labour relations dispute under Article 162(2) of the Constitution (ELRC jurisdiction); termination of employment challenged under the Employment Act, 2007 and Articles 41, 47 and 25(c) of the Constitution
Relief refused
#Declaration that the termination of employment was unfair, unprocedural, wrongful and unjust
The court found a valid and fair reason for dismissal (neglect of duty amounting to gross misconduct) and procedural fairness in the disciplinary process
Reinstatement to employment
Claim dismissed in its entirety
Kshs 36,960,000/= being salaries the Claimant would have earned to retirement age of 65
No unfair termination was established; no entitlement to the sums claimed
General damages for loss of credit and integrity and 12 months' salary compensation
The claim was dismissed in its entirety; the Respondent had already paid all terminal dues and the Respondent's counterclaim was submitted to have been settled
Costs
The claim was dismissed with costs to the Respondent.
Quotable passages
#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 also wonders why the tax payer had to change its tax base to East of Nairobi where the Claimant was based before removing its VAT obligation. This strikes me as a well calculated scheme by the Claimant
Under Section 44 (4) (c) of the Employment Act, 2007 neglect of duty is one of the grounds listed as amounting to gross misconduct and can lead to summary dismissal
the Court finds that the termination of Claimant's employment was substantially justified since there was in existence valid and fair reason for dismissal
the Court is of the view that the Claimant's termination was procedurally fair and lawful hence there was no unfair termination
The Court in the ultimate therefore, finds and holds that the claim herein is without merit and hereby dismisses the same with costs. It is so ordered.
Issues in the judgment
#Internal date inconsistencies: the Claimant's pleading states he was summoned to CID in 'May,2017' but later testified he met CID officers in '2014'; RW2 testified the termination letter was 'dated 15/2/2018' while all other references give 15th February 2019; the court itself refers to 'a show cause letter dated 29th November, 2019' in one paragraph though every other reference, including the Claimant's pleading, gives 29th November 2018
The Claimant pleaded that his appeal 'has not been decided to date' but the Respondent pleaded and the court found the appeal was decided by a letter dated 9th April, 2019 returned unclaimed - the court resolved this against the Claimant
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Oseko v Kenya Revenue Authority (Cause 237 of 2020) [2024] KEELRC 262 (KLR)", Case Analysis (2024). ELRC Cause (Nairobi) - Claimant's statement of claim dated 19th November, 2019 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/262/eng@2024-02-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.