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ELRCPartially AllowedNot stated in the extract· [2018] KEELRC 289 (KLR)

Hesbon Mose v Civicon Limited [2018] KEELRC 289 (KLR)

Employment and Labour Relations Court
21 December 2018
3,643 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 ruled an employer cannot switch an expatriate worker's salary currency mid-assignment and firing him for complaining earned 12 months' compensation.

What this practically means

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Executive summary

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The Claimant, an Accountant employed by the Respondent construction company from 2004 to May 2012, worked in Kenya, South Sudan and briefly in the DRC. He claimed he was contractually entitled to USD-denominated pay of USD 1,500 monthly, but was paid in SS Pounds at a hedged exchange rate of 2.65 in South Sudan and reduced to USD 743 in the DRC, and that his contract was terminated without notice or hearing when he questioned these discrepancies. He sought USD 65,125 across various heads. The Respondent contended remuneration was in SS Pounds in South Sudan and Kshs in the DRC, that no reduction occurred, and that termination was per the contractual 1-month notice clause. The Court held, on the contracts, e-mails of Maria, Mike Huth and Keith Murrer, and USD-denominated payrolls, that remuneration was always intended to be in USD and that the Respondent's mid-assignment switch to SS Pound at a fixed hedged rate wrongfully devalued the Claimant's salary, contrary to Section 10 of the Employment Act. It awarded USD 3,279 for South Sudan underpayment and USD 5,285 for DRC underpayment, holding the Respondent should have absorbed DRC taxation. The Court dismissed claims for 19-month underpayment, refund, overtime, resting days, April 2012 salary, DRC annual leave and travel expenses for want of proof, granted 1 month's notice pay at USD 1,500 and service pay for 3 years at USD 2,596, and found termination procedurally and substantively unfair, awarding 12 months' salary compensation of USD 18,000. Total award: USD 31,525, plus Certificate of Service, costs to the Claimant and 14% interest.

Key legal issues

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01

Currency of remuneration for cross-border employment

Holding

The parties intended remuneration to be USD-denominated; the Respondent wrongfully imposed the SS Pound at a hedged rate

Reasoning

The Court examined the initial contracts, e-mails from supervisors Maria, Mike Huth and Keith Murrer, and payroll records, which showed USD-denominated pay. The Respondent had options of home, host or third-country currency and chose USD, but altered it mid-assignment to SS Pound at a fixed hedged rate of 2.65, devaluing the Claimant's package contrary to Section 10 of the Employment Act.

p. 4
02

Unfair termination and compensation

Holding

Termination was procedurally and substantively unfair; 12 months' salary compensation awarded

Reasoning

The Claimant was dismissed for questioning the currency switch, a matter that also affected other employees and was reported to the SS Ministry of Labour. He was given no hearing or notification, contrary to Sections 41 and 43 of the Employment Act, and received no terminal benefits. The Court awarded the equivalent of 12 months' salary.

p. 5
03

Burden of proof on ancillary monetary claims

Holding

Claims unsupported by particulars, computation or documents fail

Reasoning

The Court declined the 19-month underpayment, refund, overtime and resting day claims because the Claimant provided no computations, time-sheets or evidence of approval, illustrating that a claimant must prove the basis of each monetary head of claim.

p. 4

Legal principles established

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  • Employers with staff assigned outside their home country must decide the currency of payment before the assignment begins and may not unilaterally alter it mid-assignment to the employee's detriment
  • Termination of an employee for persistently questioning unilateral changes to his remuneration, without a hearing, is substantively and procedurally unfair under Sections 41 and 43 of the Employment Act

Court orders

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  1. 1.Declaration that termination of the Claimant's contract was unfair
  2. 2.Payment to the Claimant of underpayment of salary in South Sudan at USD 3,279
  3. 3.Payment of underpayment in the DRC at USD 5,285
  4. 4.Payment of 1 month salary in lieu of notice at USD 1,500
  5. 5.Payment of service pay at USD 2,596
  6. 6.Payment of equivalent of 12 months' salary in compensation for unfair termination at USD 18,000 (total USD 31,525)
  7. 7.Certificate of Service to issue
  8. 8.Costs to the Claimant
  9. 9.Interest at 14% per annum from the date of Judgment until payment in full
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 and the Employment and Labour Relations Court [Procedure] Rules 2016 (claim determined under Rule 21)

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, "Hesbon Mose v Civicon Limited [2018] KEELRC 289 (KLR)", Case Analysis (2018). Not stated in the extract. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/289/eng@2018-12-21

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