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ELRCPartially AllowedCause No. 874 of 2011· [2015] KEELRC 904 (KLR)

Fredrick Obul Aloo v Operation G80 Limited [2015] KEELRC 904 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
10 June 2015
HWHellen S. Wasilwa
926 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 an employee 12 months' salary because his employer fired him without giving reasons or following fair procedure.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent on a one-year fixed-term contract from 1st February 2011 at a monthly salary of Kshs. 27,500, was terminated with immediate effect by letter dated 5th September 2011, which gave no reason for the termination. The suit was partially compromised by consent, leaving for determination only the question of damages for unlawful termination and costs, on which the parties filed submissions. The Claimant argued that the termination violated Sections 43(1) and 45 of the Employment Act and that he should be paid remuneration for the unexpired five months of his contract. The Respondent, invoking Section 49 of the Employment Act, suggested three months' compensation and no order as to costs. The court found that the Claimant was terminated without valid reasons and without adherence to the fair procedure mandated by Section 41 of the Employment Act, and that the Respondent had failed to discharge the burden under Section 45(2) of proving a valid and fair reason and fair procedure. The court declared the termination unfair and unjustified and, exercising its remedial powers under Section 12(3) of the Industrial Court Act 2011, awarded the Claimant compensation of twelve months' salary under Section 49(1)(c) of the Employment Act, being Kshs. 330,000 less statutory deductions, together with costs of the suit payable by the Respondent.

Key legal issues

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01

Whether the termination was for valid reasons and in accordance with fair procedure

Holding

The termination was unfair and unjustified; no reasons were given in the termination letter and the procedure under Section 41 of the Employment Act was not followed.

Reasoning

Section 43 of the Employment Act requires an employer to give reasons for termination. The termination letter of 5th September 2011 gave no reason. Section 45(2) requires the employer to prove a valid and fair reason and fair procedure, while Section 41 requires an explanation to the employee and a hearing before termination on grounds of misconduct, poor performance or incapacity. None of these requirements was met, so the termination was substantively and procedurally unfair.

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02

The appropriate remedy for unfair termination

Holding

Compensation of 12 months' gross salary under Section 49(1)(c) of the Employment Act, computed at Kshs. 27,500 per month, totalling Kshs. 330,000 less statutory deductions.

Reasoning

Relying on Section 12(3) of the Industrial Court Act 2011, which empowers the court to award compensation and damages, the court elected to award the maximum 12 months' salary as compensation under Section 49(1)(c) of the Employment Act, applied to the Claimant's monthly salary of Kshs. 27,500, less statutory deductions, in addition to costs.

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Legal principles established

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  • An employer who terminates employment without giving reasons and without following fair procedure effects an unfair termination
  • Section 45(2) of the Employment Act places the burden on the employer to prove that the reason for termination is valid and fair and that fair procedure was followed

Court orders

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  1. 1.Declaration that the termination of the Claimant by the Respondent was unfair and unjustified
  2. 2.Award of 12 months' salary as compensation for unfair termination, i.e. Kshs. 27,500 x 12 = Kshs. 330,000, less statutory deductions
  3. 3.Costs of the suit awarded to the Claimant, to be paid by the Respondent

Authorities

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Legislation

  • Employment ActSection 43(1)
  • Employment ActSection 45(2)
  • Employment ActSection 41(1) and (2)
  • Employment ActSection 42(1)
  • Employment ActSection 44(3) and (4)
  • Employment ActSection 49(1)(c) and Section 49
  • Industrial Court ActSection 12(3)
Jurisdiction invoked
Industrial Court Act 2011, Section 12(3)

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, "Fredrick Obul Aloo v Operation G80 Limited [2015] KEELRC 904 (KLR)", Case Analysis (2015). Cause No. 874 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/904/eng@2015-06-10

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