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ELRCPartially AllowedCause 583 of 2011· [2013] KEELRC 508 (KLR)

DAVID MUTEGI NJUE V TANATHI WATER SERVICES BOARD & ANOTHER [2013] KEELRC 508 (KLR)

Industrial Court of Kenya
5 January 2013
MNMathews N. Nduma
1,575 words in judgment
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The bottom line

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A Kenyan court ruled that probationary employees can be fired at will with just one month's notice, but unpaid salary must still be paid in full.

What this practically means

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Executive summary

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The Claimant, engaged by the 1st Respondent on 1st September 2010 on a six-month probation and seconded to serve as Managing Director of the 2nd Respondent, alleged that the Respondents induced him to decline a better offer from IGIP Africa by promising a salary review to Kshs.300,000 which was never honoured, leaving salary arrears of Kshs.700,000. His employment was terminated on 23rd February 2011 for failure to provide leadership to the 2nd Respondent, with one month's salary offered in lieu of notice. He claimed twelve months' salary as compensation for unfair termination, general damages for loss of expected earnings, costs, and the salary arrears. The Respondents denied the claim, asserting due process and that the Claimant forfeited his benefits, and raised the absence of a letter of demand. They failed to appear at the formal proof hearing, leaving their response a bare denial. The court held that the Claimant was still on probation and thus outside the protections of Section 41(1) of the Employment Act, the employer not being required to prove valid reason or fair procedure; each party could terminate at will subject to one month's notice or salary in lieu. The court awarded Kshs.300,000 in lieu of notice and Kshs.700,000 unpaid salary arrears, with interest at court rates from filing and costs of the suit. The compensation and general damages claims were refused. Judgment delivered at Nairobi on 5th January 2013 by Mathews N. Nduma, Principal Judge.

Key legal issues

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01

Status of probationary employment and protection from unfair termination

Holding

The Claimant, serving a six-month probation at termination, was not entitled to the protection of Section 41(1) of the Employment Act and was only entitled to one month's salary in lieu of notice as contractually provided

Reasoning

Section 42(2) caps probation at six months, extendable by agreement. The Claimant from his own evidence was still on probation at termination. Since probation is a period of testing or observing a person new to a role, each party is free to terminate at will subject to one month's notice or salary in lieu. The employer was thus not obliged to prove valid reason or fair procedure under Section 45(2)(a) and (c), and the twelve months' compensation claim failed.

p. 4
02

Unpaid salary arrears

Holding

The claim for Kshs.700,000 in unpaid salary arrears was proved on a balance of probabilities, the Respondent having failed to appear and offer any evidence, and having admitted non-payment of full salary

Reasoning

The Respondent neither appeared at the formal proof hearing nor attached documentary evidence to its statement of response, leaving a bare denial. It expressly did not dispute that the Claimant did not receive full salary for the period worked, only that it had not computed the arrears because the Claimant had not completed clearance. The court found the claim proved on a balance of probabilities and awarded the full amount claimed.

p. 4

Legal principles established

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  • An employee on probation is not entitled to the procedural protections under Section 41(1) of the Employment Act, and the employer need not prove validity of the reason or fair procedure under Section 45(2)(a) and (c); each party may terminate at will subject to contractual notice
  • Unpaid salary arrears proved on a balance of probabilities are recoverable notwithstanding an unpaid-for clearance requirement

Court orders

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  1. 1.Award of Kshs.300,000 being one month's salary in lieu of notice
  2. 2.Award of Kshs.700,000 being unpaid salary arrears
  3. 3.Interest at court rates from the date of filing the suit to the date of payment
  4. 4.Costs of the suit to the Claimant

Authorities

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Legislation

  • Employment ActSection 42(2)
  • Employment ActSection 41(1)
  • Employment ActSection 45(2)(a) and (c)
Jurisdiction invoked
Employment and labour relations jurisdiction over the employment claim (Industrial Court Cause; Employment Act No. 11 of 2007 applied)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "DAVID MUTEGI NJUE V TANATHI WATER SERVICES BOARD & ANOTHER [2013] KEELRC 508 (KLR)", Case Analysis (2013). Cause 583 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/508/eng@2013-01-05

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