Central Bank of Kenya v James Kabinga Kibugu & another [2019] KECA 710 (KLR)
The bottom line
#Kenya's Court of Appeal scrapped a Kshs. 2 million wrongful dismissal award, confirming employees can only claim the remedies that existed when they were terminated.
What this practically means
#Executive summary
#Key legal issues
#Interference with discretionary award of damages
The trial judge misdirected herself on the law and her decision, though discretionary, was plainly wrong, inviting appellate intervention.
The judge ignored this Court's settled authorities holding that damages for wrongful dismissal under a contract with a notice clause are limited to salary in lieu of notice, and instead hinged her decision on the genuineness of the reasons for termination, awarding damages unsupported by the applicable law.
Governing legal regime for a 1994 termination
The repealed Employment Act (Cap 226) applied; the remedies available were limited to salary in lieu of notice, which the appellant had already paid.
The cause of action arose in 1994 and the suits were filed in 1997, before the Employment Act, 2007. Under section 16 of the repealed Act, a contract terminable on notice could be ended on payment of salary in lieu of notice. The respondents conceded receipt of three months' salary in lieu of notice and had no further entitlement.
Retrospectivity of Article 41 of the Constitution of Kenya, 2010
Article 41 could not be applied retrospectively to a termination effected in 1994; section 7 of the Sixth Schedule did not assist the respondents.
The respondents' cause of action predated the promulgation of the Constitution on 27th August 2010. The point was not canvassed before the High Court and the respondents failed to demonstrate how Article 41 should apply retrospectively. Following Mary Wakhabubi Wafula v British Airways PLC, only remedies available when the cause of action arose may be awarded.
Legal principles established
#- An appellate court will only interfere with an award of damages where the trial judge acted on wrong principles or the award is so inordinately high or low as to be an entirely erroneous estimate
- Where a contract of employment contains a notice/termination clause, damages for wrongful dismissal are limited to salary in lieu of notice, even where the dismissal was wrongful or unlawful
- General damages are not recoverable in cases of alleged breach of contract
- A court can only award the remedies available under the law in force when the cause of action arose; later statutes and constitutional provisions do not apply retrospectively absent clear intention
Court orders
#- 1.The judgment and decree dated 20th July, 2016 together with consequential orders are set aside
- 2.No order as to costs
- On appeal from
- Employment and Labour Relations Court of Kenya at Nairobi
- ELRC Cause No. 470 of 2015
- Jurisdiction invoked
- First appeal to the Court of Appeal from the Employment and Labour Relations Court (Exercise of appellate jurisdiction over the ELRC; the judgment does not expressly invoke a specific article)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Hesbone Gavunji Mafunya v Kenya Commercial Bank Limited [2019] KEELRC 725 (KLR)[2019] KEELRC 725 (KLR)27 Sept 2019followed
Cite this brief
#Cite this brief
Caselaw, "Central Bank of Kenya v James Kabinga Kibugu & another [2019] KECA 710 (KLR)", Case Analysis (2019). Civil Appeal No. 61 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/710/eng@2019-06-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.