Godfrey Makindu v Trans Business Machines Limited [2013] KEELRC 660 (KLR)
The bottom line
#A Kenyan employee lost a Kshs.34 million claim because moonlighting for a competitor justified his summary dismissal and his commission claim ignored the contract's own terms.
What this practically means
#Executive summary
#Key legal issues
#Employment status of a claimant never confirmed after probation
The respondent's unilateral extension of probation beyond six months without the claimant's consent violated sections 42(2) and (3) of the Employment Act; the claimant became a confirmed full employee by operation of law.
The letter of appointment provided a six-month probation terminable by one day's notice. No confirmation occurred. The Act caps probation at six months, extendable by a further six months only with the employee's agreement. Unilateral extension offends the statute, and continued employment without confirmation results in deemed confirmation, entitling the claimant to full employee rights thereafter.
Whether the claimant was entitled to commissions of Kshs.32 million
Claim dismissed; the commissions claimed did not meet the conditions precedent in the letter of appointment and no evidence supported the 15% calculation of sale price.
The contract allowed commissions of 10%, 3% or 2% of gross profit depending on payment within 30, 60 or 90 days, and only if the monthly quota of Kshs.8 million was met. The claimant's claim was based on 15% of the sale price without proof of targets met or payments received within the stipulated periods, so the court could not go against the express contractual terms.
Whether the summary dismissal was lawful
Lawful. The claimant moonlighted through Infomark Limited, a competitor, using the respondent's resources, contrary to an express clause that any moonlighting or dishonest activities would generate immediate dismissal without benefits, attracting section 44 of the Employment Act.
The letter of appointment required exclusive marketing of TBM and expressly warned that moonlighting or dishonesty would generate immediate dismissal without benefits. Documents discovered on the respondent's networked system from the claimant's computer showed quotations and invoices for Infomark Limited, a competitor directed by the claimant and his wife. The claimant admitted directorship. This was a fundamental breach justifying summary dismissal without notice or hearing under section 44.
The respondent's counter-claim for overpaid commission and allowances
Overpaid commission of Kshs.137,311 (paid at 15% instead of the contractual 10%) recoverable; claim for allowances dismissed.
The respondent proved a payment erroneously computed at 15% when the contract allowed a maximum of 10%, so the excess was recoverable. The allowances claim failed because the respondent did not establish that the allowances were exclusively used for private business; monitoring the employee's use of allowances was the employer's own duty.
Legal principles established
#- A probationary period may only be extended beyond six months with the employee's agreement; continued employment without confirmation after the probation period lapses amounts to confirmation by operation of the law.
- Summary dismissal is lawful only where the employee has by his conduct fundamentally breached his obligations under the contract of service; moonlighting in breach of an express exclusive-service clause amounts to such fundamental breach.
- Courts will enforce the express terms and conditions of a contract of employment freely entered into, provided they are legal and not procured by coercion, misrepresentation or fraud.
Court orders
#- 1.Dismissal of the claimant's claim in its entirety
- 2.Judgment entered for the respondent on the counter-claim in the sum of Kshs. 137,311.00
- 3.Costs of the suit awarded to the respondent
- Jurisdiction invoked
- Industrial Court of Kenya jurisdiction under the Labour Relations Act over employment disputes (Cause No. 2265 of 2012)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Godfrey Makindu v Trans Business Machines Limited [2013] KEELRC 660 (KLR)", Case Analysis (2013). Cause No. 2265 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/660/eng@2013-07-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.