Charles Muthama v Wananchi Group [K] Limited [2014] KEELRC 593 (KLR)
The bottom line
#A Kenyan court ruled that making an employee sign a 'resignation' letter after being fired does not hide unfair termination, awarding eight months' salary.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was terminated or resigned voluntarily
Termination was initiated by the Respondent; the subsequent resignation letter had no effect and was not a voluntary termination by resignation.
The Claimant attended the meeting of 23rd August 2010 to give a report, not to resign, and had not expressed an intention to end his contract. The Managing Director arrived with a termination letter already prepared. When the Claimant was clearing and handing over, he was told he would earn better terminal benefits if he signed a 'resignation' letter. He was in no state of mind to weigh the proposals, and under his contract a resignation would have required him to pay three months' salary in lieu of notice, yet he was offered notice pay instead.
Whether the termination was substantively justified
The stated reasons - failure to supply accurate and functional staff records - were not valid termination reasons; it was harsh and disproportionate to judge the Claimant on a single task.
The Claimant was first warned on 12th July 2010 and was working to deliver the Organizational Chart under conflicting instructions from Bell and Reinartz. Termination for a single task was harsh. Unstated factors, principally the Claimant's objection to the single-sourced recruitment of Salma recommended by Bell, appear to have informed the decision. An employee's objection to instructions, though inadvisable, could not constitute a valid reason for summary loss of employment.
Whether the termination procedure was fair
The procedure was fundamentally flawed: the deceitful resignation letter, the signing by an officer without a work permit, and the absence of any hearing under Section 41 of the Employment Act.
The attempt to shift responsibility for the termination to the Claimant through a resignation letter was the most glaring defect. Reinartz signed the termination letter while working without a permit, confirmed by the Chief Immigration Officer, so lacked capacity to act. No minutes, charges or disciplinary panel were produced evidencing a hearing as required by Section 41 of the Employment Act 2007 before the termination decision.
Whether the Claimant was racially discriminated against
No prima facie case of racial discrimination was shown; the 'silly' e-mail was anger at the process, not racist anger.
The Respondent employed over 340 Africans and staff of many nationalities; the Claimant was Kenyan African in Middle Management and had earned salary increments. The word 'silly' was directed at the impractical option proposed, and 'firm hand' is a common phrase not laden with racist innuendo. The Court got the impression the Claimant was playing the race card to bolster the unfair termination claim.
Quantum of compensation
Eight months' gross salary (Kshs. 4,480,000) awarded under Section 49 of the Employment Act and Section 15 of the Labour Institutions Act, not the 12 months claimed.
The violations were grave, involving both substantive and procedural breaches, but the Claimant mitigated his loss by securing reasonably well-paying employment including with Deloitte. He had already received Kshs. 1,680,000 notice pay and Kshs. 426,666 leave pay, and had a pending High Court claim for additional remedies. Section 49(4) required these factors to be considered in fixing the remedy.
Legal principles established
#- Termination may be voluntary, involuntary or consensual, and in all forms the law requires that termination be based on limited, objective and demonstrable grounds.
- Signing a letter of resignation after a termination letter has issued does not convert an involuntary termination into a voluntary resignation.
- A respondent who does not support its pleadings with evidence or submissions will find it difficult to discharge the statutory burden of justifying termination.
- A court should avoid making findings on facts that are the subject of proceedings before another judicial platform to avoid conflicting findings and prejudicing fair hearing.
Court orders
#- 1.The Respondent to pay the Claimant eight months' gross salary at Kshs. 4,480,000 as compensation for unfair termination
- 2.The Respondent to pay the costs of the Claim, assessable by the Deputy Registrar of the Court
- 3.No order on interest
- Jurisdiction invoked
- Employment and labour relations jurisdiction under the Labour Institutions Act 2007 and Employment Act 2007 (Industrial Court)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Charles Muthama v Wananchi Group [K] Limited [2014] KEELRC 593 (KLR)", Case Analysis (2014). Cause Number 1343 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/593/eng@2014-03-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.