John Kipkemoi Cheruiyot v Nakuru Water and Sanitation Company Limited [2014] KEELRC 1353 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Validity of reasons for termination
The reasons were valid because the contract lapsed on the expiry of the three-year term and the board rejected renewal based on the claimant's performance and conduct in contravention of the contract.
The claimant admitted the conduct set out in the termination letter. His contract obliged him to implement board decisions. The board considered his renewal application of 21.01.2014 against that conduct and declined renewal. The court held the contract terminated by lapse of time, with pay up to 21.07.2014, and that the reason for termination was therefore in accordance with the contract and valid.
Validity of the termination procedure
The procedure was legitimate as it entailed consideration of the contractual renewal clause.
Because the termination operated through non-renewal of a fixed-term contract, the disciplinary procedure under sections 41 and 44 was not triggered; the contractual renewal process was followed and was found legitimate.
Whether the claimant could act as managing director while on leave
No; he was contractually bound to implement board decisions and his actions while on leave contravened the board's decision that he remain on leave.
The claimant never questioned the board's composition when the leave decision was made and condoned any defect. The board's minutes stood on record and had not been set aside, so the claimant was bound by them.
Defamation claim arising from newspaper notices
The notices were not defamatory because they merely stated that the claimant was no longer an employee.
The court examined the actual wording of the notices, which only stated the claimant was no longer an employee and not authorised to act for the company. Readers' inferences of fraud or misuse of office were unfounded and went beyond the published content.
Respondent's counterclaim for Kshs.20,991,235.00
The counterclaim failed because no loss attributable to the claimant was proved.
The claimant's uncontradicted evidence was that Githui & Company Advocates had been instructed to appear in the taxation cases. The court found no reason to doubt that evidence and held that the respondent had not established any financial loss attributable to the claimant.
Legal principles established
#- A fixed-term contract terminates by effluxion of time upon non-renewal, and a decision not to renew made in accordance with the contractual renewal clause, taking account of performance, is a valid reason for termination.
- In defamation, liability is assessed on the content actually published and not on unreasonable inferences drawn by readers.
Court orders
#- 1.Dismissal of the memorandum of claim
- 2.Dismissal of the respondent's counterclaim
- 3.Each party to bear own costs of the suit
- Jurisdiction invoked
- Employment and labour relations jurisdiction under the Employment Act (specific provision not stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Kipkemoi Cheruiyot v Nakuru Water and Sanitation Company Limited [2014] KEELRC 1353 (KLR)", Case Analysis (2014). Cause No 308 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1353/eng@2014-10-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.