Kamlesh V. Rawal v Achelis Material Handling Limited [2017] KEELRC 1728 (KLR)
The bottom line
#Kenya's Employment Court ruled an employer must pay a former manager Kshs. 12.3 million in overseas commission because vague contract terms are interpreted in the employee's favour.
What this practically means
#Executive summary
#Key legal issues
#Scope of the commission clause: whether 1% commission on 'paid-up total sales, Mombasa Office' covered overseas (indent) sales
The clause covered indent sales; it did not expressly exclude overseas commissions, and ambiguity must be resolved in favour of the Employee.
The letter of appointment did not restrict commission to day-to-day local sales. The Respondent was engaged in local and international trade, and any exclusion of overseas commission should have been expressly stated. The Final Dues Computation form contained separate slots for local and overseas commission and referred to 'indent', showing both forms were contemplated. Section 10 of the Employment Act obliged the employer to give clear details of remuneration. Ambiguity was therefore resolved in the Claimant's favour.
Whether the Respondent was a middleman/local agent of the European Companies, making the KPA and KFS transactions indent sales
The Court found the Respondent was a middleman and local agent of the European Companies; the KPA and KFS transactions were indent sales made through the Mombasa Office.
The Court preferred the Claimant's evidence. The European Companies tendered and procured business through the Respondent, did not bid directly, and did not set foot in Kenya. Contracts between KPA and Hyster were signed by the Respondent's Director on behalf of Hyster Europe. The Claimant, as local manager, bought tender documents, processed tenders and even gave evidence for the Respondent in procurement disputes. The details of the underlying agency agreements and commissions between principals and agent were irrelevant to his claim.
Whether the 'LD to advise' comment signified recognition of liability and whether silence could amount to a denial
The comment suggested the Respondent acknowledged the overseas commission was payable, and the Managing Director's silence could not amount to a denial; the Respondent acknowledged the item was real and payable.
Any reasonable person would read 'LD to advise' as a promise to advise on pending overseas commission, its value and payment date, or to explain why it was not payable. The Respondent could have written 'Nil' as done for indent in January 2008. Hundreds of e-mails from the Claimant went unanswered. The Industrial Relations Charter requires parties to respond to correspondence; silence is not a response and could not be construed as a rejection of the claim.
Limitation under Section 90 of the Employment Act
The claim, filed on 12th February 2010 after resignation on 22nd January 2008, was within the three-year period and not time-barred.
The Claimant was entitled to claim benefits which accrued during the entire period of employment. The Respondent alleged time-bar without stating when the overseas commission became due. Since the claim was filed within three years of resignation, the Claimant was not barred from recovering the contractual benefit.
Legal principles established
#- In a contract of employment, ambiguity in a remuneration clause is resolved in favour of the Employee; the test is whether the clause expressly excluded the benefit, not whether it expressly included it.
- An employer cannot respond to an employee's demand for terminal dues through silence; industrial relations require responses to correspondence.
- A claim for benefits which accrued during employment is not time-barred where brought within the three-year period under Section 90 of the Employment Act.
Court orders
#- 1.The Respondent shall pay to the Claimant the sum of Kshs. 12,341,079.90 as commission.
- 2.Interest on the principal sum granted at 14% per annum from 12th February 2010, till payment is made in full.
- 3.Costs to the Claimant.
- Jurisdiction invoked
- Original jurisdiction of the Industrial Court under the Employment Act 2007 (claim of employment benefits; limitation under Section 90)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kamlesh V. Rawal v Achelis Material Handling Limited [2017] KEELRC 1728 (KLR)", Case Analysis (2017). Industrial Court of Kenya Cause (Nairobi), filed 12th February 2010 (Statement of Claim dated 8th February 2010). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1728/eng@2017-02-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.