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ELRCPartially AllowedNot stated in judgment (Memorandum of Claim dated 30th November, 2023)

Ngeno v AIC Litein Hospital (Employment and Labour Relations Cause E059 of 2023) [2024] KEELRC 2066 (KLR)

Employment and Labour Relations Court
25 July 2024
4,999 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan hospital was ordered to pay a former employee over Kshs 522,000 because it fired him without giving reasons or a fair hearing.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a Programme Site Coordinator from 1st October 2020 on successive fixed-term contracts, was terminated on 26th October 2023, roughly a year before the expiry of his second two-year contract, following allegations that he prepared and approved petty cash vouchers for transport reimbursement of 70 patients when only 34 attended a clinic activity, occasioning a loss of Kshs 14,400. The Respondent counterclaimed for the Kshs 14,400 and a work laptop valued at Kshs 45,000. The Claimant sought a declaration that the termination was unlawful, damages of Kshs 1,395,170.59, interest, a certificate of service and costs. The court framed two issues: whether the termination was fair and justified, and the remedies due. It found the termination letter stated no reasons for the dismissal, making it impossible to discern whether valid reasons existed, and that the disciplinary hearing minutes disclosed no witness testimony or evidence from the Claimant on the allegations, breaching section 41 of the Employment Act. Under section 45(2), both valid reasons and a fair hearing are required, so the dismissal was unfair and unjustified. The court awarded six months' salary as compensation, given twelve months of the contract remained unspent, plus gratuity on the two-year contract, totalling Kshs 522,081.84 less statutory deductions, with costs and interest to the Claimant. The Respondent's limitation arguments on house allowance, leave and service pay claims were not ultimately decisive in the awards made.

Questions the Court framed

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

  1. 1.Whether the Claimant's termination was fair and justified
  2. 2.If yes, whether the Claimant is entitled to the remedies sought

Key legal issues

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01

Whether the termination of the Claimant's employment was substantively and procedurally fair

Holding

The dismissal was unfair and unjustified: the termination letter gave no reasons, and the disciplinary process did not comply with section 41 of the Employment Act

Reasoning

The termination letter dated 26th October 2023 stated no reasons for termination, making it impossible to discern whether valid reasons existed. The disciplinary hearing minutes showed no witness was called to testify and no indication the Claimant was asked to give his evidence on the allegations. Section 45(2) requires both valid reasons and a fair hearing; the disciplinary process was flawed.

p. 10
02

Whether the Claimant is entitled to remedies

Holding

Claimant awarded 6 months' salary as compensation for unfair termination and gratuity on the 2-year contract

Reasoning

Having found the dismissal unfair, the court awarded compensation equivalent to 6 months' salary given 12 months of the contract remained unspent, plus gratuity at 10% of basic salary over 24 months, less statutory deductions, with costs and interest.

p. 10

Legal principles established

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  • For a fair dismissal there must be both valid reasons and a fair hearing, and where the dismissal letter does not state reasons the court cannot discern validity of reasons

Court orders

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  1. 1.Award of 6 months' salary as compensation for unfair termination (Kshs 356,487.60), given 12 months of the contract remained unspent
  2. 2.Award of gratuity on the 2-year contract (Kshs 165,594.24)
  3. 3.Total award of Kshs 522,081.84 less statutory deductions
  4. 4.Respondent to pay costs of the suit plus interest at court rates 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
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 41, 43, 45, 47(5), 51 and 90 cited)

Relief refused

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Declaration that termination was null and void / damages as claimed of Kshs 1,395,170.59 (court awarded lesser amounts instead)

Court awarded 6 months' compensation and gratuity rather than the damages sum claimed

p. 10

Certificate of service under section 51 of the Employment Act

Not addressed in the judgment's final orders

Respondent's counterclaim for Kshs 14,400 and a laptop valued at Kshs 45,000

Not specifically addressed in the judgment; no orders made on the counterclaim

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.

The Respondent will pay costs of this suit plus interest at court rates with efiect from the date of this judgment.
p. 10Final orders - costs and interest
In the circumstances, I find the disciplinary process was fiawed. In terms of section 45 (2) of the Employment Act 2007 for there to be a fair dismissal, there must both be established the existence of valid reasons and a fair hearing.
p. 10Procedural fairness under section 41 and 45(2) Employment Act
The letter above never gave reasons for the termination.
p. 9Substantive justification - termination letter silent on reasons
In the circumstances of these case, I therefore find that the Claimant’s dismissal was unfair and unjustified.
p. 10Finding of unfair termination

Issues in the judgment

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material

Arithmetic error in compensation computation: 6 x 68,997.60 does not equal 356,487.60 (it equals 413,985.60), and the salary figure varies between 68,997.60, 85,997.60 and 68,097.60 in adjacent paragraphs

material

The Respondent's counterclaim (Kshs 14,400 and laptop worth Kshs 45,000) is not addressed in the judgment or the final orders

minor

Contradiction on date of show cause response: judgment records response dated 22/8/2023 while paragraph 13 records 18th August, 2023 and submissions record 8th August, 2023

minor

The court states the section 41 procedure was followed but immediately finds it was flawed

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, "Ngeno v AIC Litein Hospital (Employment and Labour Relations Cause E059 of 2023) [2024] KEELRC 2066 (KLR)", Case Analysis (2024). Not stated in judgment (Memorandum of Claim dated 30th November, 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2066/eng@2024-07-25

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