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Court of AppealPartially AllowedCivil Appeal No. 64 of 2017

Flora Printers v Abdulkader M. Musani [2018] KECA 621 (KLR)

Court of Appeal of Kenya
17 May 2018
2,057 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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Even if an employer claims it 'rescinded' a job offer, Kenyan law still requires notice or pay in lieu during probation.

What this practically means

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Executive summary

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Flora Printers offered Abdulkader Musani the position of Chief Accountant by letter dated 16th December 2015, on a monthly salary of Kshs.140,000 and a 3-month probationary period, reporting date 16th January 2016. On learning that Musani's previous employment with Nyati Auto Parts had been terminated for misappropriation of funds and that this had not been disclosed, a partner informed him via WhatsApp that the offer would not proceed. Musani nonetheless reported for duty and was turned away. The ELRC (Makau, J.) found the probationary contract had been terminated without notice and awarded Kshs.420,000, being 3 months' salary in lieu of notice, plus costs and interest. The employer appealed, contending the contract had been rescinded for misrepresentation of material facts, that the ELRC had no discretion to imply a notice period, and that 3 months' salary was unwarranted. The Court of Appeal, as a first appellate court, held that whether the withdrawal of the offer was characterized as termination or rescission, notice or payment in lieu was required under Section 42(4) of the Employment Act, which sets a minimum of seven days' notice; Section 26(2) allows more favourable terms, and in the silence of the contract the ELRC may imply a reasonable notice. Finding 3 months excessive, the Court substituted one month's salary of Kshs.140,000. The appeal succeeded only in part; each party was ordered to bear its own costs of the appeal, while the ELRC costs award in the respondent's favour was left undisturbed. The Court also declined to revisit the finding that termination was not unfair since no cross-appeal was filed.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the appellant rescinded rather than terminated the contract on the ground of misrepresentation of material facts, and with what legal consequences
  2. 2.Whether the ELRC had discretion to imply a reasonable notice period for termination of a probationary contract where the contract was silent
  3. 3.Whether the 3 months' salary in lieu of notice awarded by the trial court was reasonable

Key legal issues

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01

Rescission for misrepresentation versus termination of a probationary contract

Holding

Even on the appellant's own framing (rescission for misrepresentation), notice or payment in lieu was still required; the characterization did not escape the notice obligation.

Reasoning

The court accepted that the parties contracted on 16th December 2015 with a 3-month probation clause. Section 42 of the Employment Act applied, which allows termination of a probationary contract on seven days' notice or wages in lieu. Since neither the contract nor the statute dispensed with notice altogether, the appellant could not avoid liability by labelling its withdrawal a rescission.

p. 3
02

Implied reasonable notice where the probationary contract is silent

Holding

In the absence of an agreed notice period, the ELRC may imply a reasonable notice; the statutory seven days is a minimum that may be enhanced.

Reasoning

Section 42(4) fixes the minimum notice at seven days, but Section 26(2) permits more favourable terms agreed by the parties, in a CBA, or decreed by a judgment or order. Relying on the Kenya Tea Growers decision, the court held the ELRC is empowered to issue such favourable terms, and thus could imply a notice period longer than seven days.

p. 3
03

Quantum of salary in lieu of notice

Holding

Three months' salary was unreasonable; one month's notice was reasonable on the circumstances, and the award was reduced accordingly.

Reasoning

Applying the principle that an appellate court interferes with damages only where the trial judge acted on a wrong principle or the award was so high or low as to be an entirely erroneous estimate, the court found three months excessive. It substituted one month's salary of Kshs.140,000 for the Kshs.420,000 awarded below.

p. 3
04

Scope of first appellate review and absence of cross-appeal

Holding

A party who has not filed a notice of cross-appeal cannot invite the first appellate court to disturb findings in its favour; the respondent's challenge to the unfair-termination finding failed for that reason.

Reasoning

The court noted that jurisdiction to determine an appeal is invoked by filing a Notice of Appeal. The respondent filed no cross-appeal against the finding that termination was not unfair, and the appellant did not challenge it either, so that line of submission was misconceived and failed.

p. 2

Legal principles established

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  • A probationary contract may be terminated only on not less than seven days' notice or payment of seven days' wages in lieu, but parties or the ELRC may agree to or enhance more favourable terms.
  • Where a contract of employment is silent on a notice period for termination of a probationary contract, the ELRC has discretion to imply a reasonable notice period.

Court orders

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  1. 1.Set aside the ELRC decision with regard to payment of 3 months' salary of Kshs.420,000 in lieu of notice
  2. 2.Substitute it with payment of one month's salary of Kshs.140,000
  3. 3.Each party to bear its own costs of the appeal
  4. 4.No interference with the ELRC award of costs in favour of the respondent

The bench

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

majority
majority
Martha Karambu Koome
M.K. KoomeJA
Currently serving
majority
On appeal from
Employment and Labour Relations Court at Mombasa
Cause No. 246 of 2016
Jurisdiction invoked
First appellate jurisdiction over the Employment and Labour Relations Court under Article 164(3) of the Constitution and the Employment and Labour Relations Court Act

Relief refused

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Appellant's plea that the contract was void ab initio for misrepresentation and that no notice was payable

The court held that whether by termination or rescission, notice or payment in lieu was required under Section 42(4) of the Employment Act

p. 3

Respondent's invitation to affirm the 3 months' salary in lieu of notice

The court found the implied 3-month notice unreasonable and substituted one month

p. 3

Costs

The appeal having succeeded partially, each party to bear its own costs of the appeal; the ELRC award of costs in favour of the respondent left undisturbed.

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.

It follows that whether the contract was determined through termination or rescission as suggested by the appellant, notice of such termination or rescission or payment in lieu of such notice was required to be given by the appellant.
p. 3Notice obligation on termination or rescission of a probationary contract
We concur with the learned Judge that in the absence of an agreed period of notice in the contract the ELRC has discretion to imply a reasonable notice.
p. 3Implied reasonable notice in probationary contracts
We hereby set aside the ELRC decision with regard to the payment of the 3 months’ salary of Kshs.420,000 in lieu of notice and substitute it with payment of one month salary of Kshs.140,000.
p. 3Final orders - substitution of quantum
The appeal having succeeded partially we direct each party to bear its costs.
p. 3Final orders - costs of the appeal

Issues in the judgment

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minor

The probation clause as quoted contains an apparent typographical error: 'will either be confirmed on terminated' where 'or' seems intended.

minor

Jurisdiction basis is not expressly stated in the judgment; the constitutional/statutory basis of appeal is inferred from the appeal being a first appeal from the ELRC.

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, "Flora Printers v Abdulkader M. Musani [2018] KECA 621 (KLR)", Case Analysis (2018). Civil Appeal No. 64 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/621/eng@2018-05-17

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