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ELRCPartially AllowedCause No 1512 of 2010· [2013] KEELRC 923 (KLR)

David Namu Kariuki v Metal Crowns Limited [2013] KEELRC 923 (KLR)

Industrial Court of Kenya
9 December 2013
LNLinnet Ndolo
834 words in judgment
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The bottom line

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Kenya's Industrial Court ruled that even probationary employees must be terminated fairly, in writing, and with notice that works both ways.

What this practically means

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Executive summary

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The Claimant, employed as Chief Accountant of the Respondent's Group of Companies effective 1st April 2010 at a net salary of Kshs. 140,000, sued for unfair termination after his employment was ended on 3rd June 2010, within what the Respondent said was a six-month probation period. He found his office locked and was told verbally of the termination; he was paid Kshs. 35,000 for seven days' notice. He sought one month's notice pay (less the week paid), one year's salary as compensation, and any other just relief. The Respondent admitted the termination but argued it was entitled under Section 42(1) of the Employment Act, 2007 to terminate a probationary contract without reasons, having duly paid one week's notice pay. The Court identified a single issue: whether the termination was lawful. It accepted that probationary contracts enjoy flexibility under Section 42(4) (seven days' notice), but held that probation cannot be used to escape employment obligations. Since the appointment was in writing, termination should have been in writing too, especially for a senior position. The pleaded reason of unsatisfactory performance was never communicated to the Claimant, who did not know why he was terminated. The Court also found the probation clause unconscionable for imposing one month's notice on the employee while allowing the employer seven days, and substituted one month's notice. It awarded two months' salary (Kshs. 280,000) as compensation plus three weeks' notice pay (Kshs. 105,000), totalling Kshs. 385,000 net of statutory deductions to be borne by the Respondent, with costs to the Claimant. Judgment delivered by Linnet Ndolo, Judge, on 9th December 2013.

Key legal issues

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01

Whether termination of a probationary employee without written notice or communicated reasons was lawful

Holding

The termination was unfair because it was effected verbally, the reason for termination was never communicated to the Claimant, and the probation clause was unconscionable

Reasoning

Although Section 42 of the Employment Act, 2007 relaxes procedural protections for probationary contracts, the Court held probation cannot be used to escape obligations. The Claimant's written appointment ought to have been matched by written termination, especially given his senior role as Chief Accountant. The Respondent alleged unsatisfactory performance but produced no evidence it was ever communicated to the Claimant, who did not know why he was terminated.

p. 2
02

The unconscionability of the lopsided probation clause in the letter of appointment

Holding

The probation clause imposing one month's notice on the Claimant but only seven days on the Respondent was unconscionable and was substituted with one month's notice on the Respondent

Reasoning

The Court noted the probation clause imposed a longer termination notice of one month on the Claimant while allowing the Respondent to terminate on only seven days' statutory notice. Finding the provision unconscionable, the Court exercised its remedial power to substitute the Respondent's notice period, which informed the notice-pay award of three weeks' shortfall.

p. 2

Legal principles established

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  • Probation should not be used by a party to escape obligations under the employment relationship
  • Where employment is formalised in writing, termination should also be evidenced in writing, particularly for senior positions
  • A probation clause imposing asymmetric and harsher notice requirements on the employee is unconscionable and will not be enforced

Court orders

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  1. 1.Award of Kshs. 280,000 being two months' pay in compensation for unfair termination
  2. 2.Award of Kshs. 105,000 being three weeks' pay in lieu of notice
  3. 3.Total award of Kshs. 385,000, net of statutory deductions to be borne by the Respondent
  4. 4.Substitution of the seven days' notice requirement on the Respondent with one month's notice
  5. 5.Costs of the case awarded to the Claimant

Authorities

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Legislation

  • Employment Act, 2007Section 42(1)
  • Employment Act, 2007Section 42(4)
Jurisdiction invoked
Industrial Court of Kenya jurisdiction over employment and labour relations disputes (Employment Act, 2007)

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 Namu Kariuki v Metal Crowns Limited [2013] KEELRC 923 (KLR)", Case Analysis (2013). Cause No 1512 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/923/eng@2013-12-09

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