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ELRCPartially AllowedCause No. 2157 of 2014· [2015] KEELRC 42 (KLR)

Erwan Lanoe v Five Forty Aviation Limited [2015] KEELRC 42 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
9 December 2015
3,439 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court awarded a pilot over Kshs 11 million after his employer wrongly used a work permit issue to fire him without a hearing.

What this practically means

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Executive summary

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The claimant, a French national pilot, sued Five Forty Aviation Limited after his employment as Pilot/Chief Pilot was terminated on 13th November 2014 on the ground that he had failed to produce a valid work permit. He sought a declaration that the dismissal was unlawful and unfair and payment of benefits totalling over Kshs 227 million. The respondent contended the claimant held only a class H entry permit for business with his own company, High Power Services Limited, so the contract was illegal ab initio under the Immigration Act, and that termination on grounds of illegality required no disciplinary hearing. The court framed three issues: valid reason, fair procedure, and remedies. It found the claimant held a valid class H permit known to the respondent throughout the four years and five months of employment, that he had not misrepresented his status, and that the respondent raised the permit issue only as a smokescreen after the claimant demanded incentive arrears of Kshs 2,293,962. The purported addendum reducing salary to Kshs 540,000 was held not to vary the initial contract; remuneration remained US$6,000. Termination without a disciplinary hearing was found malicious and contrary to sections 43 and 45 of the Employment Act 2007. The court awarded notice pay of Kshs 925,560, salary for 13 days worked (Kshs 501,480.40), incentive arrears of Kshs 2,293,962, and eight months' compensation of Kshs 7,406,480, totalling Kshs 11,130,483 with interest at court rates from filing, and costs against the respondent. Compensation in lieu of the unserved term was refused as the contract was open-ended and the claimant's employment depended on renewable permits.

Key legal issues

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01

Whether the dismissal was for a valid reason

Holding

The termination was for no valid reason; the work permit objection was a pretext and the Claimant was legally resident and able to work on a class H permit.

Reasoning

The court found the Claimant held a valid class H permit granted in 2009 and renewed, which the Respondent knew throughout the four-year engagement. There was no evidence he misrepresented himself as a Kenyan. The Respondent only questioned the permit's validity after the Claimant demanded incentive arrears. The addendum reducing salary was found not to be a valid variation of the initial contract. The termination was therefore in breach of contract and contrary to sections 43 and 45 of the Employment Act.

p. 5
02

Whether the dismissal followed a fair procedure

Holding

The termination was summary and effected without any disciplinary hearing, in a malicious manner following the Claimant's demand for accrued incentives.

Reasoning

The Respondent admitted no disciplinary hearing was held, contending it was unnecessary because termination was for illegality. The court found the conduct mischievous: the Respondent had employed the Claimant in 2010 on the basis of the class H permit with full knowledge, and it was not illegal for the Claimant to provide flying services on that basis. The failure to give notice or pay for days worked aggravated the loss.

p. 5
03

What remedies are payable

Holding

One month's pay in lieu of notice, salary for 13 days worked, accrued incentive arrears of Kshs 2,293,962, and eight months' salary as compensation under section 49(1)(c); payment for the unserved term refused.

Reasoning

The contract was open-ended, so specific payment for the unserved term was inappropriate; compensation under section 49(1)(c) was granted considering length of service (four years and five months), good record, and aggravating factors including malicious failure to give notice and the ruse used to get rid of the Claimant. Incentives were payable as the Claimant proved on a balance of probability he flew the claimed extra hours.

p. 6

Legal principles established

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  • A foreign national working in Kenya on a valid class H entry/residence permit does not render the employment contract illegal where the employer knew of the permit throughout the engagement.
  • An employer who raises illegality (lack of work permit) only after the employee claims accrued dues may be found to have used the permit issue as a pretext for unfair termination.
  • Summary termination without a disciplinary hearing breaches the fair procedure requirement even where the employer alleges illegality.

Court orders

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  1. 1.Declaration that the Claimant's dismissal was unlawful and unfair (termination in breach of contract and contrary to sections 43 and 45 of the Employment Act)
  2. 2.Kshs 925,560 in lieu of notice
  3. 3.Kshs 501,480.40 for 13 days salary arrears
  4. 4.Kshs 2,293,962.00 accrued arrears incentives
  5. 5.Kshs 7,406,480 being 8 months' compensation for unlawful and unfair termination (total award Kshs 11,130,483)
  6. 6.Interest at court rates from date of filing suit till payment in full
  7. 7.Respondent to pay costs of the suit

Authorities

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Legislation

  • Kenya Citizenship and Immigration ActSection 41(1) (referred to as 411(1))
  • Immigration Act, Cap 172 Laws of KenyaSection 6(1)
  • Immigration Act, Cap 172Section 5 and Part III of the Regulations
  • Employment ActSections 43, 45, 49(1)(c), 49(4)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (first-instance employment cause)

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, "Erwan Lanoe v Five Forty Aviation Limited [2015] KEELRC 42 (KLR)", Case Analysis (2015). Cause No. 2157 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/42/eng@2015-12-09

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