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ELRCPartially AllowedCause No 136 of 2015· [2018] KEELRC 2336 (KLR)

Fedelix Mwendwa Muli v Bamburi Cement Limited [2018] KEELRC 2336 (KLR)

Employment and Labour Relations Court
9 March 2018
2,087 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A signed job offer is a binding employment contract in Kenya, so an employer who changes its mind owes notice pay, though probationary staff can't claim unfair termination.

What this practically means

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Executive summary

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The Claimant was offered employment as a Field Patroller by letter dated 14th October 2014, to take effect on 1st November 2014, at a consolidated annual salary of Kshs. 973,735. He accepted in writing on 22nd October 2014 and resigned from his previous job. On 31st October 2014 the Respondent revoked the offer, citing an unsatisfactory reference from the Claimant's former employer alleging sabotage of production lines. The Claimant sued for reinstatement of the offer, compensation for unfair termination and unfair labour practices, general and exemplary damages, costs and interest. The dispute was determined on pleadings, documents and submissions. The Court held that under Sections 9(2) and 9(3) of the Employment Act, a binding probationary employment contract was created on 22nd October 2014 when the Claimant signed acceptance, not on the stated appointment date. The Respondent therefore could not simply withdraw; it should have terminated the contract under its clause 2.1 (28 days' notice or pay in lieu). However, following Danish Jalang'o, the Court held that Section 42 of the Employment Act - permitting termination of probationary contracts without reasons - is a reasonable limitation on Article 41 rights, so the claims for unfair termination, unfair labour practices and damages failed. The Court awarded one month's notice pay of Kshs. 81,144, made no order on costs, and granted interest at 14% per annum from the date of judgment until payment in full. Judgment delivered at Mombasa on 9th March 2018 by James Rika, Judge.

Key legal issues

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01

Whether offer and acceptance created a binding employment contract

Holding

Yes - a binding probationary contract was created on 22nd October 2014 when the Claimant signed acceptance, satisfying Sections 9(2) and 9(3) of the Employment Act

Reasoning

The Respondent fulfilled Section 9(2) by issuing an offer with all particulars of employment, and the Claimant fulfilled Section 9(3) by signing acceptance witnessed by a third party. The letter of offer itself stated that offer and acceptance constituted a binding contract, and mentioned no other contract to be executed later. The stated appointment date of 1st November 2014 was not the date the legal relationship was created.

p. 2
02

Effect of withdrawal of the offer after acceptance

Holding

Withdrawal was ineffective; the Respondent should have terminated the probationary contract under its clause 2.1, paying notice, rather than purporting to withdraw from contractual obligations

Reasoning

Once the contract was concluded on acceptance, the Respondent was bound by its terms and the law. The adverse reference about sabotage should have been dealt with under the probation clause, which allowed the Respondent to monitor the Claimant's suitability. Clause 2.1 gave a 28-day notice period or pay in lieu, an improvement on the statutory minimum under Section 42, and the Respondent should have terminated under that clause.

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03

Whether termination of a probationary contract amounts to unfair termination

Holding

No - Section 42 does not oblige an employer to give reasons for ending a probationary relationship, so the unfair termination claim fails

Reasoning

The Court, following Danish Jalang'o, held that Section 42 is a reasonable limitation on Article 41 rights. The Respondent was entitled to seek information from former employers and assess suitability without consulting the Claimant. The sole remedy available to the Claimant was notice pay under his probationary contract.

p. 3

Legal principles established

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  • An employment contract is created when the employee signs acceptance of the offer, not on the stated date of appointment
  • An employer may not withdraw from a concluded employment contract without regard to its terms and governing law
  • Section 42 of the Employment Act (probationary termination without reasons) is a reasonable limitation on constitutional rights under Article 41

Court orders

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  1. 1.The Respondent shall pay to the Claimant notice pay at Kshs. 81,144
  2. 2.No order on the costs
  3. 3.Interest granted at the rate of 14% per annum, from the date of Judgment till payment is made in full

Authorities

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Legislation

  • Constitution of KenyaArticle 41
  • Employment ActSections 2, 9(2), 9(3), 10, 36, 41, 42, 42(4), 43, 45

Cases cited (2)

  • Danish Jalang'o & Another v. Amicabre Travel Services Limited
    [2014] e-KLR
  • Dixon Amdama V. Amani Tiwi Beach Resort
    [2015] e-KLR
Jurisdiction invoked
Article 41 of the Constitution and the Employment Act 2007 (first-instance employment dispute)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Fedelix Mwendwa Muli v Bamburi Cement Limited [2018] KEELRC 2336 (KLR)", Case Analysis (2018). Cause No 136 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2336/eng@2018-03-09

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