Wrongful Dismissal

Wrongful dismissal
The Employment Act, 2007 makes a distinction between termination and dismissal. It
distinguishes unfair termination and wrongful dismissal.
Section 41 (1) of the employment Act provides that an employer shall before terminating the
employment of an employee on the grounds of misconduct, poor performance or physical
incapacity explain to an employee in language the employee understands, the reasons for
termination and the employee shall be entitled to have another employee or a shop floor un
ion representative of his choice present during this explanation. The Claimant contends that
the Respondent never explained to him the reasons for intended dismissal.
Furthermore, Section 41 of the Employment Act, 2007 prescribes that in event of termination
on account of misconduct or poor performance, the employee will be given a notice and a
hearing. As was held in Shankar Saklani –Versus- DHL Global Forwarding (K) Limited
[2012]eKLR a notice and a hearing are mandatory and necessary even in cases of summary
dismissal only that in summary dismissal, the notice is permissible to be shorter than is
prescribe by statute or contract
In terms of section 44 of the Act an employer may only resort to summary dismissal when the
employee has, by his or her conduct fundamentally breached his or her obligations arising
under the contract of service. It is only a misconduct that is gross in nature that will entitle the
employer to summarily dismiss an employee. The following instances of misconduct will
amount to gross misconduct as to justify the summary dismissal of an employee, that is to say;
i. absenteeism from work without leave or other lawful cause,

ii. intoxication to the extent of being incapable of performing his or her duties during
working hours,
iii. willful neglect to perform his/her work or doing so carelessly and improperly;
iv. using abusive or insulting language towards his or her employer;
v. failing or refusing to obey lawful commands issued within the scope of his or her
employment by his or her employer or a person placed in authority over him/her by the
employer,
vi. if arrested for a cognizable offence punishable by imprisonment and is not released on
bail or bond or otherwise lawfully set at liberty within 14 days, or
vii. if an employee commits or, on reasonable and sufficient grounds, is suspected of having
committed a criminal offence against or to the substantial detriment of the employer or
the employer’s property.
This list is not exhaustive and there will be other instances not enumerated above.
Section 45 (2) provides that a termination of employment by an employer is unfair the

employer fails to proof:-
a) That the reason for termination is valid.
b) That the reason for the termination is a fair reason(s)
c) That the employment was terminated in accordance with fair procedure.

According to section 47(5) the burden of proving that the dismissal was wrongful rests on the
employee, while the burden of justifying the grounds of wrongful dismissal rests on the
employer.
The test to be applied is now settled. In the case of the Judicial Service Commission v
Gladys Boss Shollei, Civil Appeal No.50 of 2014, this Court cited with approval approval the
following passage from the Canadian Supreme Court decision in Mc Kinley v B.C.Tel. (2001)
2 S.C.R. 161
“Whether an employer is justified in dismissing an employee on the grounds

of dishonesty is a question that requires an assessment of the context of the
alleged misconduct. More Specifically the test is whether the employee’s
dishonesty gave rise to a breakdown in the employment relationship. This test
can be expressed in different ways. One could say, for example, that just
cause for dismissal exists where the dishonesty violates an essential condition
of the employment contract, breaches the faith inherent to the work
relationship, or is fundamentally or directly inconsistent with the employee’s
obligations to his or her employer.”
The remedies for wrongful dismissal are listed under section 49 of the Act and include:-
“(a) the wages which the employee would have earned had the employee
been given the period of notice to which he was entitled under this Act or his
contract of service;
(b) … the proportion of the wage due for the period of time for which the
employee has worked; and any other loss consequent upon the dismissal and
arising between the date of dismissal and the date of expiry of the period of
notice which the employee would have been entitled to by virtue of the
contract; or
(c) the equivalent of a number of months wages or salary not exceeding

twelve months based on the gross monthly wage or salary of the employee at
the time of dismissal,”
In deciding which remedy to give an employee who has wrongfully been dismissed the court
exercises a judicial discretion and like the labour officer will be guided only by the principles
contained in section 49 (4) namely, the wishes of the employee, the circumstances in which
the termination took place including the extent to which the employee contributed to the
termination, the employee’s length of service with the employer,
“(f) …the reasonable expectation of the employee as to the length of time for which
his employment with that employer might have continued but for the termination;
(g) the opportunities available to the employee for securing comparable or suitable
employment with another employer;
(h) the value of any severance payable by law;

(i) the right to press claims or any unpaid wages, expenses or other claims owing to
the employee;
(j) any expenses reasonably incurred by the employee as a consequence of the

termination;
(k) any conduct of the employee which to any extent caused or contributed to the
termination;
(l) any failure by the employee to reasonably mitigate the losses attributable to the
unjustified termination; and
(m) any compensation, including ex gratia payment, in respect of termination of

employment paid by the employer and received by the employee.”
Turning to the award of gratuity, the first thing that we must emphasise is that gratuity, as the
name implies, is a gratuitous payment for services rendered. It is paid to an employee or his
estate by an employer either at the end of a contract or upon resignation or retirement or upon
death of the employee, as a lump sum amount at the discretion of an employer. The employee
does not contribute any sum or portion of his salary towards payment of gratuity. An employer
may consider the option of gratuity in lieu of a pension scheme. Being a
gratuitions payment the contract of employment may provide that the employer shall not pay
gratuity if the termination of employment is through dismissal arising from gross or other
misconduct. But where, like here, the dismissal is not justified and is wrongful the employee
will be awarded gratuity if it is provided for in the contract of employment.

Wrongful Dismissal

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What is the difference between termination and dismissal according to the Employment Act?

What are the instances of misconduct that will amount to gross misconduct and justify summary dismissal of an employee?

Wrongful dismissal

i. absenteeism from work without leave or other lawful cause,

Section 45 (2) provides that a termination of employment by an employer is unfair the

a) That the reason for termination is valid.

b) That the reason for the termination is a fair reason(s)

c) That the employment was terminated in accordance with fair procedure.

“Whether an employer is justified in dismissing an employee on the grounds

(c) the equivalent of a number of months wages or salary not exceeding

(h) the value of any severance payable by law;

(j) any expenses reasonably incurred by the employee as a consequence of the

(m) any compensation, including ex gratia payment, in respect of termination of

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