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ELRCPartially AllowedCause No 638 of 2012· [2012] KEELRC 189 (KLR)

PETER GICHANA MWAMBA v M/S EASY COACH LTD [2012] KEELRC 189 (KLR)

Employment and Labour Relations Court of Kenya
16 November 2012
1,481 words in judgment
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The bottom line

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What this practically means

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Executive summary

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Peter Gichana Mwamba, formerly Area Manager of Easy Coach Limited earning a gross monthly salary of Kshs.50,000, sued after the Respondent terminated his employment by letter dated 5th March 2012 which enclosed cheques described as full and final settlement. The Court first considered whether the letter operated as an effective discharge voucher. The Claimant testified he was forced to sign it, evidence the Respondent did not rebut, and the voucher did not state the amount received as settlement; lacking express and unambiguous consideration, it was not effectual and there was no effective discharge between the parties. On fairness, the alleged reason for termination was poor performance. Section 41 of the Employment Act, 2007 required the Respondent to explain the reason to the Claimant in a language he understood and to allow him another employee's presence; the Respondent did not comply, so the termination was unfair. On remedies, the Court awarded Kshs.105,000 being three months' salary in lieu of notice under Section 35(1)(c), holding that reasonable in the circumstances, and Kshs.600,000 being twelve months' gross salary for unfair termination. However, the claims for severance pay (no redundancy having occurred), Kshs.240,000 transfer disturbance allowance, and Kshs.21,000 house allowance balance all failed for want of proof. Judgment was entered for the Claimant for a declaration that the termination was unfair, Kshs.705,000 plus interest at court rates until full and final payment, and costs of the cause. Judgment was delivered at Nairobi on 16th November 2012 by Byram Ongaya, Judge.

Key legal issues

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01

Effect of the discharge voucher dated 5th March 2012

Holding

There was no effective discharge voucher; the alleged discharge did not state the amount received and lacked express and unambiguous consideration

Reasoning

The Claimant testified he was forced to sign the letter and the Respondent led no evidence to rebut this. The pay slip showed net entitlement of Kshs.133,708 plus February 2012 salary of Kshs.30,608 totalling Kshs.164,316, matching the voucher figure, but the Claimant said he received only one cheque of Kshs.105,000 for service pay. The voucher did not show the money actually received, so it lacked express and unambiguous consideration and was not effectual.

p. 2
02

Fairness of the termination

Holding

The termination was unfair because the Respondent did not comply with Section 41 of the Employment Act, 2007

Reasoning

The Respondent alleged poor performance as the reason for termination. Section 41 required the Respondent to explain the reason for termination to the Claimant in a language he understood and to allow him another employee's presence during the explanation. The Respondent did not comply with these statutory provisions, so the termination was unfair.

p. 3
03

Notice pay under Section 35(1)(c)

Holding

Claimant entitled to at least 28 days' notice; awarded three months' salary (Kshs.105,000) in lieu of notice

Reasoning

Section 35(1)(c) of the Employment Act entitled the Claimant to at least 28 days' notice, which was not served. As the parties had not agreed on a notice period and the Respondent had terminated on account of alleged retirement, the Court considered three months' salary in lieu of notice reasonable, awarding Kshs.105,000 at Kshs.35,000 per month.

p. 4
04

Compensation for unfair termination

Holding

Awarded twelve months' gross salary, Kshs.600,000

Reasoning

Having found the termination unfair, the Court exercised its remedial powers to award the equivalent of twelve months' gross salary, computed on the monthly gross income of Kshs.50,000, as compensation for the unfair termination.

p. 4

Legal principles established

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  • A discharge voucher must show express and unambiguous consideration to be binding and effectual
  • Termination on account of poor performance must comply with Section 41 of the Employment Act, 2007, including an explanation of the reason and the employee's right to have another employee present
  • Unrebutted evidence of duress in signing a discharge voucher, coupled with absence of contrary evidence from the employer, is accepted by the court

Court orders

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  1. 1.Declaration that the Claimant's termination of employment by the Respondent was unfair
  2. 2.Respondent to pay the Claimant Kshs.705,000/= plus interest at Court rates until full and final payment
  3. 3.Respondent to pay costs of the cause

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 35(1)(c)
Jurisdiction invoked
Employment Act, 2007 (first-instance employment cause under the Employment and Labour Relations Court's jurisdiction)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "PETER GICHANA MWAMBA v M/S EASY COACH LTD [2012] KEELRC 189 (KLR)", Case Analysis (2012). Cause No 638 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/189/eng@2012-11-16

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