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ELRCPartially AllowedCause No. 1552 of 2011· [2018] KEELRC 1062 (KLR)

Victor Owour Okeyo v African Banking Corporation Limited [2018] KEELRC 1062 (KLR)

Employment and Labour Relations Court
26 September 2018
HWHellen S. Wasilwa
982 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court confirmed probationary employees can be dismissed without a hearing, but employers must still pay all accrued salary, leave, and notice dues.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent bank as a Branch Manager on 1.11.2010 on a six-month probationary contract, was suspended on 24.1.2011 pending investigations into the loss of cash at the Libra House Branch. He was subsequently arrested and charged with stealing by servant contrary to Section 281 of the Penal Code, and on 10.2.2011 his employment was summarily terminated on the ground of desertion of duty. He claimed compensation totalling KShs 1,477,233.31 for unfair, unlawful and unprocedural termination. The Respondent denied the claim, asserting the dismissal was lawful under Section 44 of the Employment Act and that the Claimant had already been paid his entitlements totalling KShs 185,375.34. The court found the Claimant was dismissed while still on probation, under a contract terminable by either party on 7 days' notice. It held that Section 41 of the Employment Act does not apply to probationary contracts, so due process and reasons before termination were not required. The claim for unfair termination therefore failed. However, the court found the Claimant entitled to accrued dues: 10 days' salary for February 2011, January 2011 salary, leave encashment for 6 days, and 7 days' notice pay, totalling KShs 222,600 less statutory deductions, as tabulated in the Respondent's Exhibit 7. Since there was no evidence these dues had been paid, the Respondent was ordered to pay the award together with costs of the suit.

Key legal issues

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01

Whether termination of a probationary employee without a hearing was unlawful

Holding

No - the Claimant was dismissed while on probation, and Section 41 of the Employment Act does not apply to probationary contracts, so due process requirements did not apply

Reasoning

The employment contract dated 18/10/2010 provided for a 6-month probation period terminable by either party on 7 days' notice. The Claimant was dismissed in February 2011, within probation. The court held that the statutory protections under Section 41 relating to procedure and reasons before termination were inapplicable to probationary contracts, rendering the claim for unfair termination untenable save for accrued dues.

p. 2
02

What dues were payable to the Claimant

Holding

Salary for days worked, January salary, leave encashment for 6 days and 7 days' notice pay, totalling KShs 222,600 less statutory deductions

Reasoning

The court found the claim untenable except for accrued entitlements. It adopted the tabulation in the Respondent's Exhibit 7 and computed 10 days worked in February 2011, January 2011 salary, 6 days' leave encashment and 7 days' notice pay, finding no evidence the Respondent had paid these amounts.

p. 2

Legal principles established

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  • Section 41 of the Employment Act (requirements of procedure and reasons before termination) does not apply to contracts under probation
  • A probationary contract terminable on 7 days' notice may be lawfully terminated on notice without due-process hearings

Court orders

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  1. 1.Payment of 10 days salary for days worked in February 2011 (KShs 42,000)
  2. 2.Payment of January 2011 salary (KShs 126,000)
  3. 3.Leave encashment for 6 days (KShs 25,200)
  4. 4.Payment in lieu of 7 days termination notice (KShs 29,400)
  5. 5.Total award of KShs 222,600 less statutory deductions
  6. 6.Respondent to pay costs of the suit

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 44
  • Penal CodeSection 281
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair and unlawful termination of employment claims

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, "Victor Owour Okeyo v African Banking Corporation Limited [2018] KEELRC 1062 (KLR)", Case Analysis (2018). Cause No. 1552 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1062/eng@2018-09-26

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