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ELRCDismissedNot stated in judgment· [2012] KEELRC 123 (KLR)

FREDRICK COLLINS AFWANDE v SUSTAINABLE HEALTHCARE FOUNDANTION [2012] KEELRC 123 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
24 October 2012
HWHellen Wasilwa
1,642 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court dismissed an employee's Ksh.1.29 million terminal dues claim because his written contract did not support the pay, bonus and notice he demanded.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 24th January 2005, claimed Ksh.1,291,146 in terminal dues, alleging he served as Regional Logistics Officer and Procurement Officer from August 2008 without corresponding pay, that he was owed 10% annual bonuses for 2006-2008 under the service manual, and was entitled to three months' salary in lieu of notice upon the termination of his contract on 31st January 2009. He also sought a letter of service, costs and interest. The Respondent maintained he was at all times a Logistics Clerk/Logistics Officer, that acting appointments are made in writing with an acting allowance, that the department was transferred to Surgipharm, and that all terminal dues including redundancy pay had already been paid. The parties proceeded by written memoranda and submissions. The court framed two issues: whether the Claimant was paid what was due upon termination and, if not, what he was entitled to. The court found from the appointment letters and renewals that the Claimant served as Logistics Officer and then Logistics Clerk, not in the higher posts claimed, and there was no proof of unpaid salary. The bonus clause was discretionary, subject to Board approval, and expressly not payable where employment terminated before contract expiry, rendering the bonus claim unenforceable. The contract provided only one month's notice or pay in lieu, so the claim for three months' notice failed. The Court of Appeal decision in Central Bank of Kenya v Martin Kingori, cited by the Respondent on damages for wrongful termination, was distinguished as predating the 2007 labour law amendments. The claim was dismissed with each party bearing their own costs, and the Claimant was awarded only a certificate of service.

Key legal issues

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01

The capacity in which the claimant served and the corresponding salary entitlement

Holding

Claimant served as Logistics Officer/Logistics Clerk per the contracts, not as Regional Logistics Officer or Procurement Officer

Reasoning

The appointment letters show the claimant was engaged as Logistics Officer in 2006 and renewed as Logistics Clerk in 2007 and 2008. Claims of service in higher positions required proof, and a scrutiny of the contracts showed he never held those posts or was appointed to act in them.

p. 3
02

Entitlement to unpaid bonuses for 2006-2008

Holding

Bonus was discretionary and unenforceable, and not payable where employment was terminated before contract end

Reasoning

Exhibit FCA 5 relied on by the claimant was a termination letter, not the bonus provision. The contracts themselves made the bonus payable at the employer's sole discretion, subject to Board approval, and excluded if employment terminated before expiry of the contract period.

p. 3
03

Entitlement to 3 months' salary in lieu of notice

Holding

Claim failed; the contract provided only one month's notice or pay in lieu

Reasoning

The termination clause allowed either party to terminate on one month's written notice or one month's pay in lieu. The claimant accepted and signed the contract, so the claimed 3 months' notice pay had no contractual basis. The Court of Appeal authority cited by the Respondent was inapplicable as it predates the 2007 labour law reforms.

p. 3

Legal principles established

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  • A discretionary bonus clause exercisable at the employer's sole discretion and not payable if employment is terminated before the end of the contract period cannot be enforced by the employee.
  • The notice period governing termination is that which the contract itself provides and which the employee accepted and signed.

Court orders

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  1. 1.Claim dismissed
  2. 2.Claimant to be issued with a certificate of service
  3. 3.Each party to bear their own costs

Authorities

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Legislation

  • Labour laws amendments2007 amendments introducing a new labour regime

Cases cited (1)

  • Central Bank of Kenya Vs Martin Kingori
    CA No. 334/2002
Jurisdiction invoked
Employment and labour relations dispute under the Employment Act 2007 regime; memorandum of claim filed in the Industrial Court

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, "FREDRICK COLLINS AFWANDE v SUSTAINABLE HEALTHCARE FOUNDANTION [2012] KEELRC 123 (KLR)", Case Analysis (2012). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/123/eng@2012-10-24

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