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ELRCPartially AllowedCause No 474 of 2013· [2015] KEELRC 1310 (KLR)

Tom Omondi Ngoko v Bank of Africa [2015] KEELRC 1310 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
18 March 2015
LNLINNET NDOLO
2,092 words in judgment
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The bottom line

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A Kenyan bank that withdrew a signed job offer before the employee ever started work was ordered to pay compensation for unfair termination.

What this practically means

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Executive summary

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The Claimant, Tom Omondi Ngoko, was interviewed by Bank of Africa on 4th October 2011 for the position of Branch Manager, Machakos, signed an employment contract on 12th October 2011 indicating he had reported for work that day, but was never deployed. He had resigned from Barclays Bank of Kenya on 15th September 2011. At a meeting allegedly held on 18th October 2011, the Respondent withdrew the offer, citing false information the Claimant had given about his employment status and last salary with Barclays. The Claimant sued for a declaration that the contract remained in force, salary until lawful termination, notice pay, twelve months' compensation for unfair termination, medical costs, loan clearance and exemplary damages. The Respondent argued no employment relationship arose because the Claimant never took up employment and that the Court lacked jurisdiction. The Court held that the signed and initialed contract, executed by the Respondent's Senior Human Resources Manager and Deputy Managing Director, was binding from acceptance and that non-deployment did not vitiate it, following the South African Labour Appeal Court decision in Wyeth SA (Pty) Ltd v Manqele. It further held the Claimant was an employee under Section 2 of the Employment Act, 2007, and that denying protection to non-deployed employees would offend Article 41 of the Constitution. Although the false information gave the Respondent a valid reason to rescind, the failure to communicate the decision in writing meant the rescission did not follow due process and amounted to unfair termination under Section 45. The Court awarded three months' salary (Kshs. 420,000.00) in compensation, one month's salary in lieu of notice (Kshs. 140,000.00), costs and interest, while dismissing the claims for salary arrears, medical costs, loan clearance and exemplary damages.

Key legal issues

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01

Existence of a valid employment contract despite non-deployment

Holding

The signed employment contract was binding from the Claimant's acceptance; non-deployment did not vitiate it, and the Claimant qualified as an employee under Section 2 of the Employment Act.

Reasoning

The Court distinguished commercial from employment contracts, noting employment's far-reaching implications on an employee's life, including resignation and relocation made to take up an offer. The contract was signed and initialed by senior officers of the Respondent and carried full terms, so it was not a mere draft offer. Following the South African Wyeth decision, a signed contract creates an enforceable employment relationship regardless of deployment, and excluding non-deployed employees from Section 2's definition would absurdly deny them Article 41 protections.

p. 4
02

Whether rescission of the appointment amounted to unfair termination

Holding

The rescission followed no due process and amounted to unfair termination under Section 45 of the Employment Act, despite the Respondent having a valid reason.

Reasoning

Although the Claimant had given false information about his employment status and salary, giving the Respondent a valid reason to rescind, the Respondent failed to communicate its decision in writing. The witness's account of an 18th October 2011 meeting was controverted and could not be verified absent a written record. Procedural fairness therefore having been absent, the rescission constituted unfair termination within Section 45, attracting compensation.

p. 4

Legal principles established

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  • A signed and executed contract of employment is binding from acceptance even where the employee is never deployed
  • A person duly employed but not deployed is an employee entitled to protection from unfair labour practices under Article 41 of the Constitution

Court orders

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  1. 1.Award of 3 months' salary (Kshs. 420,000.00) in compensation for unfair termination
  2. 2.Award of 1 month's salary in lieu of notice (Kshs. 140,000.00)
  3. 3.Total award of Kshs. 560,000.00 in favour of the Claimant
  4. 4.Costs of the case awarded to the Claimant
  5. 5.Interest on the award at court rates from the date of the award until payment in full
  6. 6.Dismissal of claims for salary arrears, medical costs, clearance of loans with Barclays Bank and exemplary damages

Authorities

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Legislation

  • Employment ActSection 2
  • Employment ActSection 45
  • Constitution of KenyaArticle 41

Cases cited (1)

  • Wyeth SA (Pty) Ltd Vs Manqele and Others
    (JA 50/03)[2005] ZALAC 1 (23 March 2005)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (claim of unfair termination under Section 45; employee defined in Section 2)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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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, "Tom Omondi Ngoko v Bank of Africa [2015] KEELRC 1310 (KLR)", Case Analysis (2015). Cause No 474 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1310/eng@2015-03-18

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