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Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No 268 of 2014· [2019] KEELRC 1590 (KLR)

Kenneth Wanjohi Kareithi v Olympia Capital Holdings Limited [2019] KEELRC 1590 (KLR)

Employment and Labour Relations Court
24 May 2019
1,369 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 a CEO's mutual separation was fair, but ordered his employer to refund money docked from his final dues.

What this practically means

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Executive summary

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The claimant, formerly Chief Executive Officer of the respondent, sued for Kshs.11,229,398.30 comprising unpaid salary, leave pay, ex gratia, gratuity, compensation for unfair termination and a Safaricom bill, together with a declaration that his termination was unlawful and unfair; alternatively, payment of Kshs.441,985.50 for a dishonoured cheque plus bank charges. The respondent filed a defence and counterclaim seeking dismissal of the claim and Kshs.233,750 paid under protest to Forbes Africa Magazine for an advertisement allegedly placed unilaterally and in breach of procurement rules. The Court found the claimant was employed by the respondent by letter dated 04.09.2013 at Kshs.700,000 gross monthly pay, having previously served on secondment. On termination, the Court relied on the respondent's letter describing a mutual separation following Group HR restructuring, with no disciplinary case against the claimant, and his failure to object until filing suit; it held the termination was by mutual agreement and not unfair, collapsing the declaration and unfair-termination claims. The dishonoured cheque sum was found to have been paid after filing suit. On the counterclaim, the respondent failed to exhibit the procurement rules and budget allegedly breached, gave no particulars, and initiated no disciplinary proceedings; the advertisement was published, benefited the respondent, and fell within the claimant's marketing duties. Judgment was entered for the claimant for Kshs.233,750 (unfairly deducted from his dues) payable by 01.07.2019 with interest at court rates thereafter; the counterclaim was dismissed and the respondent ordered to pay the costs of both the claim and counterclaim.

Key legal issues

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01

Existence of a contract of service with the respondent

Holding

The claimant was employed by the respondent by the letter dated 04.09.2013, having previously served on secondment while CEO of Mather and Platt Kenya Limited

Reasoning

The Court examined the appointment letters and salary arrangement under which Mather and Platt Kenya Limited paid Kshs.500,000 and the respondent topped up Kshs.200,000. It found that following the claimant's resignation from the subsidiary, the respondent appointed him full-time CEO at Kshs.700,000, establishing a contract of service.

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02

Whether the termination was unfair or unlawful

Holding

The termination was by mutual agreement arising from a restructuring and strategic differences, and was not unfair

Reasoning

The respondent's letter of 04.12.2013 described a mutual separation following Group HR restructuring with no disciplinary case. The claimant never objected until filing suit, and all prior correspondence concerned computation of dues. RW confirmed board involvement and agreement to separate on strategic grounds.

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03

The respondent's counterclaim for Kshs.233,750 paid to Forbes Africa Magazine

Holding

The counterclaim failed; the advertisement was lawfully undertaken within the claimant's duties and the respondent benefited from it

Reasoning

The respondent did not file the procurement rules allegedly breached, did not exhibit the approved budget, gave no particulars of breach, and initiated no disciplinary proceedings. The advertisement was published and benefited the respondent, falling within the claimant's duty to market the company's products and good name.

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Legal principles established

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  • Termination effected by mutual agreement between employer and employee is not unfair or unlawful termination
  • A party alleging breach of procurement rules must exhibit the rules and the budget allegedly breached and prove particulars of the breach

Court orders

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  1. 1.The respondent to pay the claimant a sum of Kshs.233,750.00 by 01.07.2019 failing which interest at Court rates from the date of filing the suit till full payment
  2. 2.The counterclaim is dismissed
  3. 3.The respondent to pay costs of the claimant's claim and counterclaim
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and the Labour Relations Act (not expressly quoted in the excerpt)

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, "Kenneth Wanjohi Kareithi v Olympia Capital Holdings Limited [2019] KEELRC 1590 (KLR)", Case Analysis (2019). Cause No 268 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1590/eng@2019-05-24

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