ABEL MARCEL OKOTH OKELLO V KENYA MEDICAL RESEARCH INSTITUTE [2013] KEELRC 342 (KLR)

Industrial Court of Kenya

19 March 2013

MOMaureen Onyango

1,262 words in judgment

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The bottom line

Kenya's Industrial Court awarded a KEMRI employee over Kshs 1.8 million after ruling his termination, done with no reason or procedure, was unfair.

What this practically means

Executive summary

The Claimant, employed by the Respondent from 15th August 2008 as a Space and Safety Manager on a six-year contract, was suspended in 2010 for allegedly using the Respondent's power generator without authority and for lying to a security officer. His suspension was lifted by a Disciplinary Committee and he was reinstated on 24th May 2010. Just over a month later, while on paternity leave, he was served with a termination letter dated 23rd June 2010 whose only stated reason was that the contract provided for voluntary exit by either party on one month's notice. He sued for unfair and unlawful termination, claiming salary for the 49 unexpired months of his contract, gratuity, additional awards, severance pay, costs and interest. The matter proceeded ex parte on 7th November 2012 as the Respondent failed to attend a consent-fixed hearing. The court held that under Sections 41 and 45 of the Employment Act the employer must prove a valid and fair reason and fair procedure; the termination letter disclosed no reason and no procedure was followed, rendering the termination unfair and actuated by bad faith. The court awarded the statutory maximum of 12 months' salary (Kshs.1,560,972) plus uncontested gratuity of Kshs.241,956.24, totalling Kshs.1,802,928.24, with costs. Claims for additional awards, severance pay and interest were dismissed, severance pay being unavailable absent redundancy. Judgment read in open court on 19th March 2013.

Key legal issues

Whether the termination of the Claimant's employment was lawful

Holding

The termination was unfair because no valid and fair reason was given and no procedure was followed; the termination letter invoked only a voluntary exit clause

Reasoning

The termination letter gave as the only reason that the contract provided for voluntary exit by either party. The court found the suspension and termination timed during paternity leave and shortly after reinstatement demonstrated bad faith. Under Sections 41 and 45 of the Employment Act the employer had to prove valid reason and fair procedure, which it did not.

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Whether the Claimant is entitled to compensation and in what quantum

Holding

Maximum compensation of 12 months' salary (Kshs.1,560,972) awarded, plus unchallenged gratuity of Kshs.241,956.24

Reasoning

Given the absence of any reason for termination, the bad faith shown by terminating while the Claimant was on paternity leave and within a month of reinstatement after unlawful suspension without salary, the court awarded the statutory maximum of 12 months' salary. Gratuity at 31% of basic salary per month worked was uncontested.

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Legal principles established

For termination to be lawful, the employer must prove a valid and fair reason for termination and that fair procedure was applied
Termination effected without any reason and without fair procedure under Sections 41 and 45 of the Employment Act is unfair
Compensation for unfair termination is capped at a maximum of 12 months' salary

Court orders

1.Judgment for the Claimant in the total sum of Kshs.1,802,928.24, comprising Kshs.1,560,972 being 12 months' salary as compensation for unfair termination and Kshs.241,956.24 gratuity
2.Dismissal of the claim for additional awards for want of proof
3.Dismissal of the claim for severance pay
4.Respondent to pay the Claimant's costs
5.Claim for interest rejected

Authorities

Legislation

Employment ActSection 41(1) and (2)
Employment ActSection 45
Employment ActSection 40
Employment ActSection 42(1) and Section 44(3) and (4) (referred to within Section 41)

Jurisdiction invoked: Employment and labour relations jurisdiction over unfair and unlawful termination of employment (Employment Act)

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "ABEL MARCEL OKOTH OKELLO V KENYA MEDICAL RESEARCH INSTITUTE [2013] KEELRC 342 (KLR)", Case Analysis (2013). Cause 1800 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/342/eng@2013-03-19

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