David Adema Lugongo v New Kenya Co-operative Creameries Limited [2015} eKLR

Key Facts

Issues

• The court determined the claimant's entitlement to remedies including 3 months' salary in lieu of notice, house allowance, and damages for unlawful termination, while also addressing the validity of the surcharge claimed by the employer.
• The court assessed whether due process was adhered to during the dismissal, including whether the claimant was afforded a proper disciplinary hearing as mandated by law, and whether the employer met procedural obligations such as explaining charges and allowing representation.
• The court examined whether the employer could prove the existence of valid and fair reasons for dismissal, specifically allegations of fraudulent deals, misuse of company resources, and failure to report road accidents involving company vehicles as per Section 43 of the Employment Act 2007.

Holdings

• The Claimant is entitled to 3 months' salary in lieu of notice (132,000/=-), 15% house allowance for 15 months (99,000/=-), and 12 months' salary as damages for unlawful termination (528,000/=-), totaling 759,000/=- (less statutory deductions).
• The Respondent is required to issue the Claimant a Certificate of Service and cover the costs of the legal proceedings.
• The court found the Claimant's dismissal unfair under Section 45 of the Employment Act 2007, as the Respondents failed to prove valid reasons for termination and did not follow a fair procedure. The disciplinary hearing was not properly conducted, and allegations against the Claimant lacked corroboration.
• The Claimant's request for a refund of surcharges (194,946/=-) was denied due to lack of proof that the surcharge was actually deducted or imposed.

Remedies

• 3 months salary in lieu of notice as per Clause 20 of Claimant's letter of appointment = 3 x 44,000 = 132,000/=-.
• 12 months salary as damages for unlawful termination = 12 x 44,000 = 528,000/=-.
• Service pay is not payable as the Claimant was a member and contributor of NSSF.
• The Respondent should issue Claimant with a Certificate of Service.
• House allowance 15% of basic salary for 15 months = 15/100 x 44,000 x 15 = 99,000/=-.
• Claim of surcharge not awarded as there is no proof that it was effected.
• TOTAL = 759,000/= less statutory deductions.
• Respondent will meet costs of this suit.

Monetary Damages

Legal Principles

• The court applied Section 43 of the Employment Act 2007, which places the burden on the employer to prove the reasons for termination. The employer failed to provide evidence corroborating the allegations against the Claimant, leading the court to deem the dismissal unfair under Section 45.
• The court emphasized that due process must be followed for fair termination under Section 41 of the Employment Act 2007. The Respondent did not prove that a proper disciplinary hearing occurred, violating the Claimant's right to be heard.

Cited Statute

Judge Name

Passage Text

• The Respondents have not led any evidence to prove allegations made against the Claimant. The Claimant's supervisor who had brought out complaints against the Claimant was not called as a witness and neither was any member of the team that investigated the Claimant. Thisleaves a gap in the accusations leveled against the Claimant.
• 1. 3 months salary in lieu of notice as per Clause 20 of Claimant's letter of appointment = 3 x 44,000 = 132,000/=-. ... TOTAL = 759,000/= less statutory deductions
• Section 43 of Employment Act 2007: 1. In any claim arising out of termination of a contract, the employer shall be required to prove the reason or reasons for the termination, and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of section 45.