Abubakar Ali Shee v Tourism Promotion Services (Kenya) Limited [2019] KEELRC 2282 (KLR)
The bottom line
#A Kenyan court awarded a former manager Kshs.975,975 in terminal dues plus interest and costs, but rejected bigger claims because pre-2007 law allowed termination without a hearing.
What this practically means
#Executive summary
#Key legal issues
#Whether the 2005 termination was wrongful, unfair and unlawful
The termination was lawful under the law then applicable; the repealed Employment Act did not require a hearing or reasons, and the contract allowed termination on notice or payment in lieu.
The court accepted that the applicable law was the repealed Employment Act (1976). It adopted authorities holding that prior to the Employment Act, 2007, employers could terminate for good cause, bad cause or no cause, on notice or payment in lieu, with no obligation to notify or hear the employee. The contract itself provided for notice or payment in lieu, which the Claimant had acknowledged in his letter of protest.
What terminal dues and reliefs the Claimant is entitled to
The Claimant is entitled only to the terminal dues of Kshs.975,975.00/- itemised in the termination letter, with interest from filing suit; all other heads fail.
The court confined the award to the heads listed in the termination letter (salary up to 22nd May 2005, four months' salary in lieu of notice, leave days and off days). Service gratuity, statutory compensation, allowances and pension tax claims all failed as unsupported by contract, evidence or the law applicable in 2005.
Whether the Respondent's failure to pay dues at termination defeats or delays interest
The Respondent should have computed and paid the dues on termination; interest is awarded but only from the date of filing suit, not termination.
The termination letter gave heads without figures, so dues were never tendered. The employer had a statutory duty under section 5(4) of the repealed Act to ensure payment. Because the employer traded with the Claimant's money, interest was fair as opportunity cost, but the court exercised discretion to run it from filing suit rather than termination as prayed.
Who bears the costs of the suit
The Respondent pays the Claimant's costs.
Having succeeded in the claim for terminal dues, the Claimant was awarded costs against the Respondent in the final orders.
Legal principles established
#- Under the repealed Employment Act regime, prior to the Employment Act, 2007, employers were not obliged to afford a hearing or observe natural justice before terminating employment; termination on notice or payment in lieu was lawful even without a reason.
- Upon termination, it is the employer's duty to compute and pay terminal dues; the employer cannot wait for the employee to accept an offer of unquantified dues before paying.
- An employer that withholds terminal dues must pay the opportunity cost of that money, by way of interest.
Court orders
#- 1.The Claimant is entitled to terminal dues of Kshs.975,975.00/- only, being the heads set out in the termination letter
- 2.Interest on the terminal dues from the date of filing suit
- 3.The Respondent shall pay the Claimant's costs of the case
- Jurisdiction invoked
- First-instance employment and labour relations claim under the Employment and Labour Relations Court's jurisdiction; employment terminated in 2005 so the repealed Employment Act (1976) applies
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Abubakar Ali Shee v Tourism Promotion Services (Kenya) Limited [2019] KEELRC 2282 (KLR)", Case Analysis (2019). Cause No 70 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2282/eng@2019-01-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.