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Case Brief · caselaw.co.ke
ELRCPartially AllowedNot stated in the extract (Memorandum of Claim dated 7th August 2023)

Sawe v Ekaterra Tea Kenya PLC (Employment and Labour Relations Cause E012 of 2023) [2024] KEELRC 1870 (KLR)

Employment and Labour Relations Court of Kenya
18 July 2024
11,702 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~47 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded a dismissed executive Kshs 8 million because even with valid reasons, the company's flawed disciplinary hearing made his dismissal unfair.

What this practically means

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Executive summary

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The Claimant, formerly General Manager Kericho North of Ekaterra Tea Kenya PLC, claimed unfair and unlawful summary dismissal arising from a 26th January 2023 incident in which Jeremiah Koskei informed him of a WhatsApp letter from a person purporting to be a BBC correspondent alleging sexual harassment. The Claimant advised Koskei to report to the Communications department, which he did five days later. The Respondent issued a notice to show cause on 22nd April 2023, alleging breach of its 'Living the Code' policy and section 44(3) of the Employment Act, and additionally alleged a sexual relationship with an employee (later dropped for lack of evidence). After a disciplinary hearing on 27th April 2023, the Claimant was summarily dismissed on 8th May 2023. He sought declarations, Kshs 41,026,007.90 in compensation including 12 months' salary, severance pay for 26 years, exemplary damages, costs and interest, also contending that the advertisement of the Head of Manufacturing position amounted to constructive redundancy. The court held that the Respondent had valid reasons for dismissal, as the Claimant breached policy by failing to report a potential breach brought to his attention. However, the disciplinary process was flawed: the Claimant was not supplied with witness statements or the investigation report and was denied the opportunity to cross-examine adverse witnesses, contrary to section 41 of the Employment Act and the Fair Administrative Action Act. The dismissal was therefore unfair under section 45. The constructive redundancy claim failed as the Claimant did not prove the advertised position was his. The court awarded 6 months' salary as compensation and 2 months' notice pay, totalling Kshs 8,005,314.72 less statutory deductions, with costs and interest from the date of judgment.

Questions the Court framed

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

  1. 1.Whether the Respondent summarily dismissed the Claimant unfairly and unlawfully
  2. 2.Whether the Respondent had valid reasons to terminate the Claimant's employment for breach of its policies
  3. 3.Whether the Respondent followed due process in effecting the summary dismissal
  4. 4.Whether the advertisement of the position of Head of Manufacturing rendered the Claimant's position redundant (constructive dismissal/redundancy)
  5. 5.What remedies, if any, are available to the Claimant and who bears costs

Key legal issues

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01

Whether the disciplinary process was fair under section 41 of the Employment Act and the Fair Administrative Action Act

Holding

The process was unfair: the Claimant was not given witness statements or the investigation report and had no opportunity to cross-examine witnesses whose statements were used against him.

Reasoning

The court reviewed the disciplinary minutes and found the Claimant was questioned on statements of witnesses not present, without any chance to cross-examine them, and was never supplied the witness statements or investigation report. Section 41 of the Employment Act and section 4 of the Fair Administrative Action Act require explanation of charges, hearing of representations and cross-examination of adverse witnesses. Following Postal Corporation of Kenya v Andrew K Tanui, the procedure fell short of a fair one, so the disciplinary process was unfair.

p. 20
02

Whether the Respondent had valid reasons to dismiss the Claimant

Holding

Yes - the Claimant breached the Respondent's policy by failing to report a potential breach of the Code (the sexual harassment allegations) brought to his attention.

Reasoning

Under section 43, the employer must prove reasons it genuinely believed existed. The Claimant admitted knowledge of the allegations from Jeremiah Koskei on 26th January 2023 and did not report them himself; policy clause 5.6 obliged all employees and managers to report potential breaches. Despite his explanation that the perpetrator refused to share the message and its authenticity was doubtful, the court found he did not report the potential breach to his superior and was therefore in breach of the code, justifying dismissal on substantive grounds.

p. 21
03

Whether the dismissal was unfair overall under section 45(2)

Holding

Yes - because the procedure was flawed, the summary dismissal was unfair despite valid reasons.

Reasoning

Section 45(2) requires the employer to prove both a valid and fair reason and adherence to fair procedure. Having found valid reasons but a flawed disciplinary process, the court held the dismissal unfair in terms of section 45 and proceeded to remedies.

p. 21
04

Whether the advertisement of the Head of Manufacturing position amounted to constructive dismissal by redundancy

Holding

No - the Claimant did not prove that the advertised position was the position he occupied.

Reasoning

The Claimant served as General Manager, Kericho North (work level 2C), while the advertised role was Head of Manufacturing, Ekaterra Tea Kenya PLC (R 60002). The court found he failed to demonstrate the advertised job was his job, so constructive redundancy did not arise.

p. 21

Legal principles established

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  • A flawed disciplinary process renders a dismissal unfair under section 45 of the Employment Act even where the employer has valid reasons for termination.
  • An employee facing disciplinary action must be given the witness statements, investigation report and an opportunity to cross-examine witnesses against him.

Court orders

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  1. 1.Compensation of 6 months' salary for unfair termination (6 x 1,000,664.34 = Kshs 6,003,986.04)
  2. 2.2 months' salary in lieu of notice as per the appointment letter (2 x 1,000,664.34 = Kshs 2,001,328.72)
  3. 3.Total award of Kshs 8,005,314.72 less statutory deductions
  4. 4.Respondent to pay costs of the suit plus interest at court rates with effect from the date of judgment

The bench

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

majority

Wrote the judgment

Jurisdiction invoked
Original jurisdiction under the Employment Act 2007 (first-instance Memorandum of Claim; specific enabling provision not stated in the extract)

Relief refused

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Declaration that the advertisement of the Head of Manufacturing position amounted to constructive dismissal/redundancy

The Claimant failed to demonstrate that the job he occupied was the one advertised

p. 21

Gratuitous/severance pay for 26 years (Kshs 26,016,492.8)

Termination was not by way of redundancy; severance pay not warranted

Exemplary and/or punitive damages for malice (Kshs 1,000,000)

Not awarded; the court did not find the case fell within the categories for exemplary damages

Three months' salary in lieu of notice

The appointment letter provided for 2 months' notice, and the court awarded only 2 months

General damages for wrongful dismissal equivalent to 12 months' salary

Court found 6 months' compensation adequate in the circumstances

p. 22

Costs

The Respondent will pay costs of this suit plus interest at court rates with effect from the date of this judgment.

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.

It is my finding that the Claimant was subjected to an unfair disciplinary process.
p. 20Unfair disciplinary process
From the disciplinary process that the Claimant was taken through, he was not given an opportunity to present his case. He was also denied an opportunity to cross examine the witnesses who spoke against him. He was never supplied with witness statements nor an investigation report.
p. 20Elements of fair hearing denied
Despite the Claimant being informed of this potential breach, he did not report it to his superior and was therefore in breach of the Respondent's code. Having found as above, it is my finding that the Respondents had valid reason to warrant dismissal of the Claimant.
p. 21Valid reason for dismissal
The Claimant in my view failed to demonstrate that the job he was occupying was the one that was advertised and in this case the issue of constructive redundancy does not arise.
p. 21Constructive redundancy claim rejected
Having found as above and in considering the remedies sought by the Claimant and given the fiawed disciplinary process applied against him, I find that the Claimant is entitled to compensation which I find 6 months salary is adequate I the circumstances and I award him accordingly.
p. 22Final orders - compensation
I also award him 2 months' salary in lieu of notice as per his appointment letter
p. 22Final orders - notice pay
The Respondent will pay costs of this suit plus interest at court rates with efiect from the date of this judgment.
p. 22Final orders - costs

Issues in the judgment

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minor

The judgment records the claimant's 2023 promotion and transfer with dates of 2013 and 2017 ('transferred from Kericho Tea Estate to Kimugu Tea Estate by the letter of 9th December, 2013' and 'By the letter of 27th January, 2017'), which are internally inconsistent with the 2023 chronology.

minor

The show cause letter is dated 22nd April 2023 but demands a written reply 'not later than Monday 24th April 2022'.

minor

The show cause letter was quoted as dated 22nd April 2023 while the claimant's response is elsewhere described as by 'the letter of 24th April, 2024'.

minor

The advertisement date is inconsistently given as 19th March 2023, 17th March 2023 and 24th March 2023 in different parts of 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, "Sawe v Ekaterra Tea Kenya PLC (Employment and Labour Relations Cause E012 of 2023) [2024] KEELRC 1870 (KLR)", Case Analysis (2024). Not stated in the extract (Memorandum of Claim dated 7th August 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1870/eng@2024-07-18

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