Procedural Fairness in Disciplinary Hearings: Lessons from Downtown Hotel v Mutua

Case: Downtown Hotel v Mutua (Appeal 131 of 2022) [2026] KEELRC 222 (KLR) (29 January2026) (Judgment)

Introduction

A recent decision by the Employment and Labour Relations Court reinforces a critical principle in employment law: employers must strictly adhere to the charges communicated to an employee when initiating disciplinary proceedings. Any deviation from those charges risks rendering the entire process unfair and unlawful.

Background of the Case

In Downtown Hotel v Mutua, the employee was suspended on allegations of theft and subsequently invited to attend a disciplinary hearing. However, the suspension and invitation letters lacked essential details—such as the amount allegedly stolen or the specific circumstances surrounding the accusation.

When the disciplinary hearing took place, the employer introduced new and different allegations that had not been previously disclosed to the employee. Compounding the issue, the eventual dismissal letter failed to clearly state the reasons for termination.

Key Legal Issue

The central issue before the Court was whether the employer complied with the requirements of procedural fairness, particularly under Employment Act, in dismissing the employee.

Court’s Findings

The Court found that the dismissal was procedurally unfair and therefore unlawful. It emphasized several important points:

• Consistency of Charges:
  An employer must rely on the specific allegations communicated to the employee prior to the disciplinary hearing. Introducing new accusations during the hearing undermines fairness.
• Adequate Notice:
  Employees must be given sufficient detail about the allegations they face to enable them to prepare an effective defence.
• Clarity in Termination:
  A dismissal letter must clearly state the reasons for termination. Failure to do so raises doubt about the legitimacy of the employer’s decision.
• No “Shifting Goalposts”:
  The Court strongly criticized the employer’s conduct as a “wild goose chase,” noting that shifting allegations mid-process denies the employee a fair hearing.

Legal Framework

Under Section 41 of the Employment Act, an employer is required to:

1. Explain to the employee the reasons for which termination is being considered, in a language the employee understands;
2. Allow the employee an opportunity to respond; and
3. Permit the employee to be accompanied by a fellow employee or shop floor representative.

This case clarifies that compliance with Section 41 is not merely procedural formality—it requires substantive fairness and transparency.

Practical Implications for Employers

This decision offers important guidance for employers:

• Draft clear and detailed charge letters: Specify the exact allegations, including dates, amounts, and conduct in question.
• Avoid introducing new allegations mid-process: If new evidence arises, restart the disciplinary process with proper notice.
• Ensure consistency throughout: The suspension letter, hearing, and dismissal letter must align in substance.
• Document reasons clearly: A well-reasoned dismissal letter is essential in defending claims of unfair termination.

Practical Implications for Employees

Employees should be aware that:

• They are entitled to full disclosure of allegations before a disciplinary hearing;
• They have the right to adequate time and information to prepare a defence; and
• Any dismissal based on unclear or shifting allegations may be successfully challenged in court.

Conclusion

The Downtown Hotel v Mutua decision underscores that fairness in disciplinary processes is not optional. Employers must act with transparency, consistency, and good faith throughout. Failure to do so will likely result in a finding of unfair termination, even where misconduct may have been suspected.