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ELRCDismissedNot stated in the judgment as provided

Mutuku v AAR Insurance (Kenya) Limited (Cause 114 of 2019) [2024] KEELRC 2387 (KLR)

Employment and Labour Relations Court
27 September 2024
AJABUODHA NELSON JORUM
3,968 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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A Kenyan court upheld a Management Accountant's dismissal, ruling the employer proved both a valid reason and followed fair procedure.

What this practically means

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Executive summary

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The Claimant, formerly employed by the Respondent as a Management Accountant, sued claiming that his summary dismissal by letter dated 21st June, 2018 was unfair and unlawful, and sought a declaration to that effect plus damages equivalent to twelve months' salary of Kshs 3,506,945/=. The Respondent maintained that the dismissal was for gross misconduct - disrespectful conduct towards the disciplinary committee, missing approvals and authorisations on journals, and unreliable general ledger reconciliations - and that due process under the Employment Act was followed through show cause letters, a warning letter and two disciplinary hearings. The court framed two issues: whether the termination was unfair and unlawful, and whether the Claimant was entitled to the reliefs sought. On substance, the court found the job description included trial balance preparation, that losses were incurred though not solely attributable to the Claimant, and that he failed to perform his duties professionally and carefully contrary to section 44(4)(c) of the Employment Act, hence a valid and fair reason under section 43. On procedure, the court held the Claimant received show cause letters, a warning, adequate time to review the forensic report, and attended two hearings; his refusal to sign minutes and unauthorised recording of proceedings was gross conduct. Relying on authorities including Mary Chemweno Kiptui and Kenya Union of Commercial Food and Allied Workers, the court found both substantive and procedural fairness satisfied, dismissed the claim with costs to the Respondent, and ordered accordingly on 27th September, 2024.

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 of employment was unfair and unlawful
  2. 2.Whether the Claimant is entitled to the reliefs sought

Key legal issues

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01

Whether there were valid and fair reasons for termination

Holding

Yes - the Claimant failed to perform duties professionally and carefully, contributing to losses contrary to section 44(4)(c)

Reasoning

The Claimant's job description included preparation of trial balance; losses were incurred though not solely attributed to him. He admitted verification duties and escalation obligations but management succumbed to pressure to report profits instead of losses. The factual report blamed weak policies, not solely the Claimant, and the former GM Finance resigned over the same issues. The court therefore found the reason valid and fair under section 43.

p. 7
02

Whether the procedure adopted was fair under section 41

Holding

Yes - the Claimant was given show cause letters, a warning letter, adequate time, and attended two disciplinary hearings

Reasoning

The Respondent accommodated the Claimant's requests for time to review the forensic report; invitations were elaborate and he could bring a fellow employee. His refusal to sign minutes and unauthorised recording of proceedings amounted to gross conduct warranting summary dismissal. The draft report contained sufficient grounds for him to defend himself.

p. 8

Legal principles established

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  • Before termination there must be a valid and fair reason touching on misconduct, poor performance or physical incapacity
  • Section 41 of the Employment Act is mandatory; failure to follow it renders the outcome unfair

Court orders

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  1. 1.The Claim is found without merit and is dismissed
  2. 2.The Claimant is awarded no reliefs
  3. 3.Costs of the suit awarded to the Respondent

The bench

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

AJ
majority

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment claim)

Relief refused

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Declaration that termination was unfair and unlawful

Court found valid reasons and fair procedure

p. 8

Damages equivalent to 12 months' salary (Kshs 3,506,945/=)

Claim dismissed as the termination was substantially justified

p. 7

Costs

The claim is dismissed with costs to the Respondent

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.

In conclusion the Court finds and holds that there were valid reasons for terminating the claimant's service and that the termination was carried out through a fair procedure. The Claim is therefore found without merit and is hereby dismissed with costs.
p. 8Disposition - claim dismissed
In conclusion, the Court finds that the termination of Claimant's employment was substantially justified with a valid and fair reason for dismissal/termination.
p. 7Substantive fairness
Section 41 of the Employment Act is couched in mandatory terms. Where an employer fails to follow these mandatory provisions, whatever outcome of the process is bound to be unfair
p. 7Procedural fairness - mandatory hearing (quoting KUCFAW v Meru North Farmers Sacco)

Issues in the judgment

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minor

Judgment opens with unexplained numbered placeholders ('1. 2. 3.') before the substance begins

minor

Inconsistent dates for the factual/forensic report (2nd August, 2018 vs 2nd May, 2018) within the judgment

minor

Claimant's submissions describe the Factual report as dated 2nd August, 2018 while evidence says 2nd May, 2018

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, "Mutuku v AAR Insurance (Kenya) Limited (Cause 114 of 2019) [2024] KEELRC 2387 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2387/eng@2024-09-27

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