The court has ordered car dealer Toyota Kenya to pay its former staff Sh754,116 for using the wrong procedure to sack the employee for receiving a Sh20,000 gift.
The Employment and Labour Relations Court ruled that Toyota Kenya failed to give the employee, Mr CDO, adequate time to prepare for a disciplinary hearing, which triggered his dismissal.
However, the court upheld Toyota Kenya’s argument that he violated the company’s anti-bribery policy by accepting the Sh20,000 gift.
The court awarded him Sh754,116, equivalent to four months’ salary, as compensation for procedural flaws ahead of his sacking. He had sought Sh21.5 million in damages for wrongful termination, unpaid salaries, and allowances up to his retirement age.
“The timing and sequence of transactions point to a clear link between the customer’s payment and the amount he received through his supervisee,” said the presiding judge.
“It is irrelevant whether the respondent referred to the money as a ‘gift’ or a ‘bribe’; what matters is that it contravened company policy.”
Mr CDO, who had worked as a service adviser since 2005, was accused of receiving Sh20,000 in June 2018 from a customer as a token of appreciation after repairs were completed on the client’s vehicle at Toyota Kenya’s Kampala Road body shop.
Investigations revealed that the customer had sent Sh60,000 via M-Pesa to one of Mr CDO’s subordinates, who then distributed the money among five employees involved in the repair work. Mr CDO received the largest share (Sh20,000), while two others got Sh15,000 each and two more received Sh5,000 each.
As a service adviser, his role included recommending necessary services and repairs for customers’ vehicles.
Toyota Kenya argued that he breached the company’s Code of Conduct and Staff Handbook, which prohibits employees from accepting gifts or benefits exceeding Sh5,000 from third parties, including customers.
Mr CDO denied wrongdoing, claiming the money was repayment of a personal loan from a junior colleague.
However, the court dismissed this explanation as implausible, noting the timing of the transaction.
The customer had accused the employee of soliciting money to expedite the repair work, alleging that he initially demanded Sh100,000 before settling for Sh60,000.
Despite upholding the misconduct finding, the court criticized Toyota Kenya’s dismissal process.
The court noted that on July 6, 2018 he was summoned to a disciplinary hearing although the letter was backdated to July 4. He was required to attend the hearing on the very day. This left him with no time to prepare or secure a witness.
"The claimant was ambushed, and the inadequate notice impaired his defense," the court ruled, citing employment laws requiring fair notice and access to evidence.
The court also faulted the company for failing to provide Mr CDO with the investigation report beforehand and for keeping "scant" hearing minutes that obscured whether he was given a fair chance to defend himself.
"The court is satisfied that the respondent failed to adhere to the principles of procedural fairness in terminating the Claimant’s employment," it ruled, adding that an employee is entitled to access documents in the employer’s possession that would assist them in preparing their defence.
While rejecting Mr CDO’s claim for future salaries, the court ordered Toyota Kenya to compensate him for the flawed termination and cover legal costs.
The ruling balanced fairness and policy enforcement, upholding Toyota Kenya’s right to enforce its anti-gift policy while emphasizing that procedural fairness is non-negotiable under Section 41 of the Employment Act.
"An employee facing serious allegations must be given sufficient time to prepare," the judgement reiterated.
The ruling highlights Kenya’s labour laws requiring employers to balance disciplinary actions with fair procedures. Companies must ensure investigations are thorough, notices are timely, and employees are allowed proper representation even when misconduct seems clear-cut.
