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ELRCPartially AllowedCause No. 528 of 2015 (as stated in the judgment: 'the Cause')· [2018] KEELRC 2065 (KLR)

Dorcas Kemunto Wainaina v IPAS [2018] KEELRC 2065 (KLR)

Employment and Labour Relations Court of Kenya
13 April 2018
RSRadido Stephen
4,660 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that a US-based employer could not use an 'at will' clause to skip mandatory redundancy notice, awarding the employee over Kshs 1.5 million.

What this practically means

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Executive summary

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The Claimant, a Kenyan national, was employed by IPAS, a United States (North Carolina) based employer, as a Senior International Human Resource Associate by letter dated 9 October 2012, operating from Nairobi with regional work visits. By letter of 19 November 2014 her position was declared redundant. She sued for wrongful, unlawful and unfair termination, unpaid terminal benefits, house allowance, leave, notice pay and damages; the Respondent filed a Statement of Response, Counterclaim and Set-off alleging negligence. The threshold issues were jurisdiction and choice of law, as the contract contained no express choice of law or forum clause. The Court distinguished jurisdiction from choice of law, held it had jurisdiction under Article 162 of the Constitution, sections 3 and 87 of the Employment Act, 2007 and section 12 of the ELRC Act, and found that the dominant connecting features (domicile, place of contracting and performance, payment and taxation in Kenya) connected the contract to Kenya, applying the objective 'most real connection' test drawn from South African authority and the persuasive Rome Convention. It held the 'employment at will' clause unenforceable, and that the redundancy was procedurally unfair for want of one month's written notice to the Claimant and the labour officer. The health cover cancellation breached the Respondent's representation. The Counterclaim failed as spurious and vague. The Court awarded the balance of notice pay, three months' gross salary as compensation and actual medical expenses totalling Kshs 1,578,157/-, declining house allowance, November salary, enhanced severance, 13th month bonus, pension, premium for medical cover and general damages. The Claimant received costs.

Key legal issues

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01

Jurisdiction of the ELRC over an international employment contract

Holding

The Court had jurisdiction; the dispute arose out of a contract of employment, partly performed from Nairobi, remuneration subject to Kenyan tax, and the Respondent admitted jurisdiction.

Reasoning

The Court distinguished jurisdiction from choice of law, noting parties may not confer jurisdiction by consent. The dispute arose from a contract of service performed mainly from Nairobi, salary was paid in Kenya with deductions under Kenyan Income Tax, and the Respondent admitted jurisdiction. Sections 3 and 87 of the Employment Act, 2007 and section 12 of the ELRC Act anchored jurisdiction.

p. 4
02

Proper law of the international contract of employment

Holding

Kenyan law governed the contract; the dominant/connecting features connected the contract to Kenya rather than the United States.

Reasoning

The contract documents were silent on choice of law and the Personnel Policies were indecisive. Applying the objective test from South African authority (most real connection) and the persuasive Rome Convention, the Court weighed locus contractus, locus solutionis, domicile and place of performance: the Claimant signed in Kenya, was domiciled in Kenya, worked from Nairobi, was paid in Kenya and taxed in Kenya. No evidence showed compliance with Part XI of the Employment Act for a foreign contract of service.

p. 7
03

Whether termination by redundancy was unfair

Holding

The termination was procedurally unfair because the Claimant and the labour officer were not given one month's advance written notice as required by section 40 of the Employment Act.

Reasoning

An 'at will' clause cannot override mandatory provisions of sections 35, 40, 41, 43, 45 and 47 of the Employment Act, 2007, which express Kenyan public policy. Since the separation was on account of redundancy, sections 40, 43 and 45(2)(a),(b)(ii) were implicated. Failure to issue the statutory one-month written notice to the Claimant and the labour officer rendered the redundancy procedurally unfair. Performance or negligence was immaterial.

04

Whether the cancellation of health cover was unlawful

Holding

The Respondent was bound by its representation that health cover would run to 30 November 2015 and was liable for medical expenses incurred when it stopped the cover mid-way.

Reasoning

The separation letter represented that the health cover would run through 30 November 2015. The Respondent did not dispute stopping the cover mid-way, arguing instead that the unsigned Severance Agreement created no obligation. The Court held the Respondent was bound to ensure premiums were paid to the promised date, and if the 3 months' premium was inadequate, it was liable for medical expenses incurred.

p. 9
05

The Respondent's Counterclaim and Set-off for the Claimant's alleged negligence

Holding

The counterclaim failed; the allegations of negligence were spurious, general and vague and unsupported by particulars or documentary proof.

Reasoning

The employee (Francis Kooli) whose suit spawned the counterclaim had his position declared redundant for financial reasons, not due to the Claimant's negligence. Other negligence allegations lacked particulars. The contract alleged to be non-compliant was drawn in 2011 before the Claimant joined, and when rectified in November 2012 she had just come on board. The Respondent should have produced documentary proof or show-cause evidence.

p. 9

Legal principles established

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  • Jurisdiction and choice of law are conceptually distinct; a Kenyan court may assume jurisdiction over an international employment contract yet apply foreign law where the parties so agreed or where connecting features so dictate.
  • Where an international employment contract has no express choice of law, is performed majorly from Kenya by a Kenyan citizen, and the employer has a presence in Kenya, the ELRC will have jurisdiction and Kenyan law applies.
  • A contractual 'employment at will' termination clause is unenforceable under the mandatory provisions of the Employment Act, 2007.
  • Parties cannot by consent confer jurisdiction on a court not granted by law.

Court orders

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  1. 1.Respondent to pay Claimant balance of pay in lieu of notice Kshs 310,816/-
  2. 2.Respondent to pay Claimant compensation (damages for unfair termination) Kshs 1,243,264/-
  3. 3.Respondent to pay Claimant medical expenses Kshs 24,077/-
  4. 4.Total award of Kshs 1,578,157/- against the Respondent
  5. 5.Claimant to have costs of the Cause

Authorities

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Legislation

  • Constitution of KenyaArticle 162
  • Employment Actsections 3, 31, 35, 35(1)(c), 40, 40(1)(g), 41, 43, 45, 45(2)(a),(b)(ii), 47, 83, 84, 86, 87, Part XI
  • Employment and Labour Relations Court Actsection 12
  • Labour Relations Act (referred to as Labour Relations Court Act, 2007)
  • Regulation of Wages (General) Order
  • Convention on the Law Applicable to Contractual Obligations (Rome Convention) 80/934/EECArticle 6

Cases cited (5)

  • Kleinhans v Parmalat SA (Pty) Ltd
    (2002) ILJ 1418
  • Standard Bank of SA v Efroiken & Newman
    1924 AD 171
  • Ex parte Spinazze & Another NNO
    1985 (3) SA 650 (A)
  • Parry v Astral Operations Ltd
    10 BLLR 989
  • Sertfontein v Balmoral Control Contracts SA (Pty) Ltd
    (2002) 21 ILJ 1091 (CCMA)
Jurisdiction invoked
Article 162 of the Constitution, sections 3 and 87 of the Employment Act, 2007 and section 12 of the Employment and Labour Relations Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "Dorcas Kemunto Wainaina v IPAS [2018] KEELRC 2065 (KLR)", Case Analysis (2018). Cause No. 528 of 2015 (as stated in the judgment: 'the Cause'). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2065/eng@2018-04-13

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