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ELRCPartially AllowedMemorandum of Claim dated 15th August 2013, filed 16th August 2013· [2016] KEELRC 137 (KLR)

Duncan Muchina Kamau v Kenindia Assurance Company Limited [2016] KEELRC 137 (KLR)

Employment and Labour Relations Court
9 December 2016
1,347 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, formerly employed by Phoenix of East Africa Assurance Company, resigned at the Respondent's request on 28th June 2013 after accepting the Respondent's offer of employment as Chief Manager, Non-Life Business effective 8th July 2013 at a monthly salary of Kshs. 300,000. On 1st July 2013, following a background check, the Respondent withdrew the offer upon discovering that the Claimant had been surcharged as Chairman of Kenya Insurers Sacco Society. The Claimant sued for unlawful dismissal and terminal dues, contending that the Employment Act, 2007 does not provide for withdrawal of employment and that he was condemned unheard. The Respondent maintained that the Claimant had willfully suppressed material information in breach of the duty of good faith. The court framed three issues: validity of the contract, lawfulness of the withdrawal, and remedies. It held, applying its earlier decision in Tom Omondi Ngoko v Bank of Africa [2015] eKLR, that acceptance of the offer created a binding employment contract. However, it distinguished Ngoko and found the withdrawal justified because the Claimant failed to disclose crucial information about the surcharge, and because he was notified of the withdrawal and its reasons. The court awarded only Kshs. 626,340.80 being notice pay due to the former employer, which the Respondent had undertaken to pay, plus Kshs. 70,000 as seven days' probationary notice pay. The declaration of unlawful dismissal, constitutional compensation, 12 months' salary and other heads were refused. Each party was to bear their own costs.

Key legal issues

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01

Existence of a valid employment contract

Holding

A valid employment contract existed from the date of acceptance of the offer, before the effective date

Reasoning

The offer was made on 24th June 2013 and accepted on 28th June 2013. Following the court's own earlier decision in Tom Omondi Ngoko v Bank of Africa, acceptance of an offer of employment creates a binding contract which is not vitiated by non-deployment. Consequently, the withdrawal was a termination of an existing employment relationship, not a mere revocation of an offer.

p. 3
02

Lawfulness of withdrawal of the appointment

Holding

The Respondent acted lawfully because the Claimant failed to disclose material information about his surcharge as Chairman of Kenya Insurers Sacco Society

Reasoning

The Claimant admitted serving as Chairman of the Sacco and being surcharged. This was material information he was bound in good faith to disclose, particularly as the Sacco's membership was drawn from the insurance industry in which the Respondent operates. Unlike the Ngoko case, the Claimant was notified of the withdrawal and the reason for it.

p. 4
03

Remedies

Holding

The Claimant was awarded only the notice pay owed to his former employer which the Respondent had undertaken to pay, plus seven days' probationary notice pay

Reasoning

Having found the withdrawal justified, the court declined the declaratory and compensatory reliefs. However, the Respondent had specifically undertaken to pay the notice shortfall owed to the Claimant's former employer, and the contract provided for seven days' probationary notice pay, both of which were enforceable.

p. 4

Legal principles established

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  • An employment contract is concluded upon acceptance of the offer of employment and takes effect even without deployment
  • A prospective employee is under a duty of good faith to disclose crucial information relevant to the employment

Court orders

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  1. 1.Payment to the Claimant of Kshs. 626,340.80 being notice pay due to his former employer which the Respondent had undertaken to pay
  2. 2.Payment of Kshs. 70,000 being seven (7) days' probationary notice pay as per contract
  3. 3.Each party to bear their own costs

Authorities

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Legislation

  • Employment Actgeneral (No provision for withdrawal of employment cited)

Cases cited (1)

  • Tom Omondi Ngoko v Bank of Africa
    [2015] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute)

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, "Duncan Muchina Kamau v Kenindia Assurance Company Limited [2016] KEELRC 137 (KLR)", Case Analysis (2016). Memorandum of Claim dated 15th August 2013, filed 16th August 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/137/eng@2016-12-09

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