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Court of AppealPartially AllowedCivil Appeal No. 302 of 2016· [2020] KECA 392 (KLR)

Moi University v Eric Kimani & 2 others [2020] KECA 392 (KLR)

Court of Appeal of Kenya
7 August 2020
WKW. KaranjaPKP.O. KiageFSF. Sichale
2,603 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that Moi University lawfully fired three staff by paying three months' salary in lieu of notice, with no damages beyond that.

What this practically means

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Executive summary

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Moi University appealed against the decision of Njagi Marete, J of the Industrial Court of Kenya in Industrial Cause No. 900 of 2010, in which Eric Kimani, Bernard Nzioka and Lydia Saya - employees dismissed on 22nd March 2006 - obtained declarations that their dismissals were unlawful, unfair, wrongful and null and void, orders of reinstatement without loss of benefits, payment of salaries for the entire period of termination, and costs. The University contended that the judge erred in applying the Labour Relations Act and the Trade Disputes Act to a dispute governed by the repealed Employment Act Cap 226; that reinstatement orders six years after termination were impermissible; and that the lawful remedy was payment of salary in lieu of notice under the contractual termination clauses and Section 16 of the repealed Act. Hearing the appeal as a first appeal by way of retrial, the Court of Appeal held that the law governing the relationship at the time of the 2006 dismissals was the repealed Employment Act Cap 226, under which an employer terminating by contractual notice or pay in lieu need not assign reasons or afford a hearing. Following its own precedents, the court held that reinstatement was not an appropriate remedy and that general damages for the manner of dismissal were irrecoverable under the Addis v Gramophone principle. The court allowed the appeal, set aside the trial judgment, dismissed the respondents' claim in its entirety, and directed each party to bear its own costs. The judgment binds subordinate courts and tribunals on the pre-2008 employment law regime.

Key legal issues

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01

Governing law at the time of the cause of action

Holding

The Employment Act Cap 226 (now repealed) governed the employer/employee relationship at the time of the 2006 terminations, not the later Labour Relations Act or the Industrial Court Act framework relied on by the trial judge

Reasoning

The cause of action arose on 22nd March 2006; the Employment Act Cap 226 was repealed only on 2nd June 2008. The court therefore applied the repealed Act and Section 16 thereof, which permitted termination without notice upon payment of wages in lieu of notice, and the University's contractual termination clauses. The trial judge erred in applying Section 84 of the Labour Relations Act and Section 15 of the Trade Disputes Act.

p. 3
02

Lawfulness of the dismissals

Holding

The dismissals were lawful: the University terminated the contracts by paying three months' salary in lieu of notice in accordance with Section 16 of the repealed Employment Act and the Terms of Service termination clauses

Reasoning

The contractual clauses permitted termination by notice or payment of basic salary in lieu thereof. Under Section 16 of the repealed Act and Rift Valley Textiles, an employer giving contractual notice or pay in lieu need not assign reasons or afford a hearing. Accordingly the respondents' claim that the dismissal was without due process fails under the law then applicable.

p. 4
03

Reinstatement as a remedy

Holding

Reinstatement was not an available or appropriate remedy under the law then in force; courts did not impose employees on reluctant employers

Reasoning

Relying on Dalmas B. Ogoye v KNTC, the court held that under the pre-2008 legal regime reinstatement orders were disfavoured as difficult to enforce and as wrongly imposing an employee who had fallen out of favour on a reluctant employer. The trial judge's reinstatement order of employees dismissed some six years earlier was therefore unsustainable.

p. 3
04

Damages for mental anguish

Holding

General damages for the manner of dismissal are not recoverable in Kenya; the Addis v Gramophone principle applies

Reasoning

Following Kenya Ports Authority v Edward Otieno, which adopted Addis v Gramophone Co, the manner of dismissal cannot affect damages and there is nothing in the Employment Act Cap 226 abrogating or modifying those general principles of the law of contract of employment.

p. 3

Legal principles established

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  • An appeal to the Court of Appeal from a first-instance decision is by way of retrial; the Court must reconsider and evaluate the evidence and draw its own conclusions while making allowance for not having seen or heard the witnesses
  • Under the repealed Employment Act Cap 226 and a contract containing a notice or salary-in-lieu-of-notice termination clause, an employer terminating on such terms need not assign reasons or afford a hearing
  • General damages for the manner of dismissal (mental anguish and suffering) are not recoverable in a contract of employment under Kenyan law
  • Courts will not order reinstatement of an employee who has fallen out of favour with an employer, such an order being difficult to enforce

Court orders

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  1. 1.Appeal allowed
  2. 2.Judgment of Njagi Marete, J dated 21st February 2013 set aside
  3. 3.Respondents' Memorandum of Claim dated 2nd August 2010 dismissed in its entirety
  4. 4.Each party to bear its/his/her own costs

Authorities

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Legislation

  • Labour Relations ActSection 84
  • Trade Disputes Act (now repealed)Section 15
  • Industrial Court Act 2011Section 12(3)(vii)
  • Employment Act, Chapter 226 (now repealed)Section 16
  • Employment Act, Chapter 226 (now repealed)Section 14(5) and proviso (referred to in quoted Section 16)
  • Moi University Terms of ServiceClause 14 and Clause 25(i); Clause 26 (referenced within quoted Clause 14)

Cases cited (6)

  • Selle vs. Associated Motor Boat Co. of Kenya & others
    [1968] EA 123
  • Abdul Hameed Saif – vs – Ali Mohamed Sholan
    (1955) 22 EACA 270
  • Rift Valley Textiles Limited vs. Edward Onyango Oganda
    [1992]
  • Kenya Ports Authority vs. Edward Otieno
    CA No. 120 of 1996
  • Addis =vs= Gramophone Co
    [1909] AC 488
  • Dalmas B. Ogoye vs. KNTC
    CA No. 125 of 1995
On appeal from
Industrial Court of Kenya (Employment and Labour Relations Court)
Industrial Cause No. 900 of 2010
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (the judgment treats the appeal as a first appeal by way of retrial, citing Selle vs. Associated Motor Boat Co.)

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, "Moi University v Eric Kimani & 2 others [2020] KECA 392 (KLR)", Case Analysis (2020). Civil Appeal No. 302 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/392/eng@2020-08-07

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