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ELRCPartially AllowedCause No 2044 of 2012· [2013] KEELRC 893 (KLR)

Philemon Wachara Obenge v Easy Mart Limited [2013] KEELRC 893 (KLR)

Industrial Court of Kenya
19 November 2013
1,643 words in judgment
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The bottom line

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A Kenyan court awarded a dismissed manager KShs. 671,000 because his employer had no written contract and never gave him a hearing.

What this practically means

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Executive summary

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In this first-instance cause, the Claimant sued Easy Mart Limited for unfair termination of employment and unpaid terminal benefits, alleging he was orally employed as a Manager in February 2012 at an agreed salary of Kshs. 70,000 but paid only Kshs. 20,000, suspended without reason in August 2012, and then not allowed back to work after the suspension expired. The Respondent denied the salary agreement, contended the reasons for suspension were communicated orally, and asserted the Claimant was on probation. The court rejected a late submission that the Respondent was improperly joined due to a slight variation in its name, treating it as a mere technicality. Relying on Sections 9 and 10 of the Employment Act, 2007 and invoking Section 10(7), the court adopted Kshs. 70,000 as the monthly salary and allowed the underpayment claim. The probation defence failed because the contract did not meet the statutory definition of a probationary contract. On termination, the court held the Respondent failed to prove a valid reason and a fair procedure: the suspension letter was vague, the Claimant was never given a chance to respond to any investigation findings, and a detailed elaboration of reasons was only issued post termination in a 'to whom it may concern' letter. Applying Loice Otieno v Kenya Commercial Bank Ltd, the court found the termination unfair and awarded three months' salary as compensation, one month in lieu of notice, arrears for August 2012, full salary for the suspension period, and underpayments, totalling Kshs. 671,000, with costs to the Claimant.

Key legal issues

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01

Proper joinder of the Respondent given the name in the pleadings

Holding

The objection was dismissed as a mere technicality; the Respondent's identity and the employment relationship were not in doubt

Reasoning

The submission was raised late in final submissions, no documents proved the Respondent's actual name, the only missing word was 'Supermarket' in a business that was common cause to be a supermarket, and the existence of the employment relationship was undisputed. The court dispensed with the issue as a technicality and dealt with the case on its merits.

p. 2
02

The Claimant's monthly salary

Holding

The court adopted Kshs. 70,000 as the monthly salary under Section 10(7) because the employer failed to comply with Sections 9 and 10 of the Employment Act

Reasoning

Section 9(1) requires contracts of service of three months or more to be in writing and Section 9(2) places that responsibility on the employer; Section 10(2) requires remuneration particulars. The Respondent failed to fulfil these obligations, so the court invoked Section 10(7) and adopted the Claimant's stated salary. The underpayment claim therefore succeeded.

p. 2
03

Whether the Claimant was on probation

Holding

The employment contract did not meet the statutory definition of a probationary contract; the probation claim was misplaced

Reasoning

Section 2 of the Employment Act defines a probationary contract as one of not more than twelve months' duration, in writing and expressly stating it is probationary. The Claimant's oral employment contract did not satisfy these criteria, so the Respondent's contention that the Claimant was on probation at termination could not stand.

p. 3
04

Validity of the reason for termination

Holding

The Respondent failed to advance a valid reason for the termination

Reasoning

The suspension letter gave no clear reason; the results of the investigation were never communicated to the Claimant with an opportunity to respond; termination cited gross misconduct but a detailed elaboration of reasons was only issued nearly two months later in a 'to whom it may concern' letter. Such a post-termination general explanation falls below the Section 45(2) bar.

p. 3
05

Procedural fairness of the termination

Holding

The termination was procedurally unfair as the Claimant was never given an opportunity to defend himself

Reasoning

Following Loice Otieno v Kenya Commercial Bank Ltd, the doctrine of natural justice is an essential part of the employment relationship and section 41 procedures must be complied with even where summary dismissal is contemplated. The Respondent's own witness confirmed the Claimant was not given a chance to defend himself, so the termination was unfair within Section 45.

p. 4

Legal principles established

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  • Where an employer fails to draw up a written contract as required, the court may adopt the employee's stated salary under Section 10(7) of the Employment Act
  • A probationary contract must be in writing and expressly state that it is for a probationary period
  • An employee on suspension pending investigation has a legitimate expectation of being given an opportunity to respond to adverse findings; suspension is not a final disciplinary action
  • A general explanation of reasons for termination issued post termination falls below the bar set by Section 45(2)
  • An employer must comply with the procedures in section 41 of the Employment Act even where summary dismissal is contemplated

Court orders

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  1. 1.Salary underpayments (Kshs. 50,000 x 6 months) Kshs. 300,000
  2. 2.3 months' salary in compensation for unfair termination Kshs. 210,000
  3. 3.One month's salary in lieu of notice Kshs. 70,000
  4. 4.Salary for 1st-7th August 2012 Kshs. 16,333
  5. 5.Salary for the period of suspension (32 days) Kshs. 74,667
  6. 6.Total award of Kshs. 671,000 in favour of the Claimant
  7. 7.Respondent to meet the costs of the case

Authorities

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Legislation

  • Employment Act, 2007Section 9(1)
  • Employment Act, 2007Section 9(2)
  • Employment Act, 2007Section 10(2)
  • Employment Act, 2007Section 10(7)
  • Employment Act, 2007Section 2
  • Employment Act, 2007Section 45(2)
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 41

Cases cited (1)

  • Loice Otieno Vs Kenya Commercial Bank Ltd
    [2013] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction under the Industrial Court (first-instance unfair termination and terminal benefits claim under the Employment Act, 2007)

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, "Philemon Wachara Obenge v Easy Mart Limited [2013] KEELRC 893 (KLR)", Case Analysis (2013). Cause No 2044 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/893/eng@2013-11-19

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