Five Forty Aviation Limited v Erwan Lanoe [2019] KECA 763 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that an employer's failure to get a foreign pilot's work permit didn't void his contract, but cutting his compensation.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the learned Judge erred in law and fact by enforcing an illegal contract
- 2.Whether the learned Judge failed to properly appreciate and apply the law to the facts of the case and thereby arrived at a wrong conclusion
- 3.Whether the reliefs awarded by the trial court, particularly the eight months' salary compensation, were within the law
Key legal issues
#Legality of the employment contract executed on the basis of a class 'H' entry permit
The contract was lawful and enforceable; possession of a work permit was not a contractual precondition and the entry permit authorised the respondent's professional pilot services
The contract complied with sections 9 and 10 of the Employment Act, 2007. The appellant's own witness conceded no work permit was a precondition. The class 'H' entry permit authorised the respondent to train pilots and fly aeroplanes, as he was not engaged in a 'prescribed' profession under the repealed Immigration Act, and he practised through M/S Higher Power Services Limited whose objects covered such services.
Effect of the employer's failure to obtain a work permit under section 45(2) of the Kenya Citizenship and Immigration Act, 2011
The failure did not render the contract illegal; it frustrated the contract, which could then have been terminated per the contract's clause 9 or the Employment Act procedures
Applying the Kenya Airways v Satwant Singh Flora guidelines and the doctrine of frustration, the change in immigration law placed the statutory obligation to obtain a work permit on the employer. Its default created intervening circumstances making continued performance impossible, exciting frustration rather than illegality, so the employer could not rely on its own default to escape the contract.
Whether the termination of the frustrated contract was fair and lawful
The termination was unfair and unlawful because the appellant neither invoked clause 9 of the contract nor the sections 41, 43 and 45 Employment Act procedures
The contract allowed either party to terminate on one month's notice or salary in lieu. Alternatively, as the contract was executed in compliance with the Employment Act, the employer could have invoked sections 41, 43 and 45 procedures requiring valid reason and fair procedure. The appellant did neither, and the trial Judge's finding to that effect was affirmed.
Whether the award of eight months' salary as compensation was excessive
The award was reduced to five months' salary (Kshs 4,627,800.00) as the respondent had been fully compensated for the other items
Section 49 remedies are discretionary, guided by the thirteen considerations in section 49(4). Interference is warranted only on the United India Insurance principles. Here the court found the eight-month award high considering the respondent's full compensation on the other heads, and substituted five months as reasonable and fair.
Legal principles established
#- Courts are bound by the terms of contracts parties willingly enter into and will not rewrite them absent coercion, fraud or undue influence
- An employer's failure to comply with section 45(2) of the Kenya Citizenship and Immigration Act does not render the employment contract illegal but may found frustration of the contract
- Section 49 remedies under the Employment Act are discretionary and must be granted on the peculiar facts of each case having regard to the thirteen considerations in section 49(4)
- An appellate court will not interfere with a discretionary award except on the established grounds: misdirection in law, misapprehension of facts, wrong considerations taken or omitted, or a plainly wrong decision
- On a first appeal, the court has a duty to re-evaluate the evidence and draw its own conclusions while making due allowance for not having seen or heard the witnesses
Court orders
#- 1.Judgment of the ELRC affirmed save for the compensation for unfair termination which is reduced from eight (8) months' salary to five (5) months' salary, i.e. Kshs 4,627,800.00
- 2.Appeal against the notice pay, accrued incentive payment arrears and payment for thirteen days worked dismissed
- 3.Costs of the appeal and the court below taxed against the appellant, reduced by ¼
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment & Labour Relations Court of Kenya at Nairobi
- Cause No. 2157 of 2014
- Jurisdiction invoked
- First appeal to the Court of Appeal against the judgment of the Employment & Labour Relations Court
Relief refused
#Reduction of the other heads of award (notice pay, arrears, days worked)
These items were well founded both on the facts and the law and were affirmed
Costs
The appellant who has not substantially succeeded on the appeal will therefore have costs taxed against it both before this Court and the court below reduced by ¼. It is so ordered.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The appellant who has not substantially succeeded on the appeal will therefore have costs taxed against it both before this Court and the court below reduced by ¼. It is so ordered.
it is our finding that the appellant’s failure to comply with the prerequisites in section 45 (2) of the Act did not render the said contract illegal, but gave rise to intervening circumstances which rendered the continued sustenance of the said contract as initially executed between the parties impossible.
the contract executed between the parties was not illegal, null and void as contended by the appellant but valid and binding on the disputing parties as contended by the respondent. It’s unfair and unlawful breach was therefore enforceable.
an award of eight (8) months’ salary compensation for the unfair and unlawful termination of his contract with the appellant was rather on the high side. It is reduced to five (5) months’ salary compensation which in our view, would not only be reasonable but also fair.
We are alive to the hallowed legal maxim that it is not the business of Courts to rewrite contracts between parties. They are bound by the terms of their contracts, unless coercion, Fraud or undue influence are pleaded and proved.
Issues in the judgment
#The judgment inconsistently states the contract execution date, referring to 15th June 2010 and later 16th June 2010
The judgment records that thirteen days were worked in November 2014 whereas the contract was terminated on 13th November 2013
The quotation from National Bank of Kenya Ltd versus Pipe Plastic Samkolit contains typographical errors ('para adventure', 'releave')
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.
- Emerg Investment Limited v Skyline Sacco Limited (Environment and Land Case E048 of 2024) [2025] KEELC 5192 (KLR)[2025] KEELC 5192 (KLR)10 Jul 2025applied
Cite this brief
#Cite this brief
Caselaw, "Five Forty Aviation Limited v Erwan Lanoe [2019] KECA 763 (KLR)", Case Analysis (2019). Civil Appeal No. 55 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/763/eng@2019-05-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.