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ELRCPartially AllowedCause No 770 of 2017· [2020] KEELRC 239 (KLR)

Alloise Ngugi Muia v Green Pot Enterprises Limited [2020] KEELRC 239 (KLR)

Employment and Labour Relations Court
13 November 2020
2,605 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 awarded an ex-employee over Kshs.536,000 because the employer never put a probation extension or termination in writing.

What this practically means

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Executive summary

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This first-instance claim before the Employment and Labour Relations Court at Nairobi, delivered by Maureen Onyango, J on 13th November 2020, concerned a Sales Manager engaged on a contract of employment who alleged his services were verbally terminated on 8th February 2017 on account of alleged redundancy, contrary to Section 40(1)(b) of the Employment Act and his contract. He sought notice pay, accrued leave, unpaid February 2017 salary, interest and costs. The Respondent admitted the engagement but contended the contract was dated 12th August 2016 with a three-month probation extended for a further three months under Clause 14.1 and Section 42(2) of the Employment Act; it argued the Claimant absconded, was still on probation, and that Section 45(3) barred his unfair termination claim given under one year of service. The court framed three issues: whether the Claimant was on probation; whether he absconded or was terminated and whether such termination was lawful and fair; and entitlement to reliefs. Relying on Lucy Wangui Wanyika v Nam Consult Limited, the court held the probation lapsed on 12th November 2016 because no written extension issued. It found the employment was verbally terminated, amounting to unfair summary dismissal, no notice or hearing having been given, and the employer having failed to discharge its statutory burden under Section 47(5). Invoking the declaration in Nelson Ogeto Mogaka that the 13-month threshold in Section 45(3) is unconstitutional, the court awarded compensation of two months' gross salary (Kshs.280,000), five weeks' notice pay (Kshs.172,666.62), accrued leave (Kshs.40,833.28), and 8 unpaid days' salary (Kshs.43,076.92), totalling Kshs.536,577, with costs and interest at court rates from the date of judgment.

Key legal issues

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01

Whether the Claimant was on probation at the time of separation

Holding

He was not; the three-month probation lapsed on 12th November 2016 and was never validly extended in writing

Reasoning

The contract at Clause 14.1 allowed a three-month probation extendable if the Respondent deemed it appropriate. The Respondent only verbally contended an extension on account of poor performance. Following Lucy Wangui Wanyika v Nam Consult Limited, an extension modifying the contract required clear and documented written communication, which was absent.

p. 3
02

Whether the Claimant absconded or was terminated, and the fairness of the termination

Holding

The Claimant's employment was verbally terminated on 8th February 2017 on account of alleged redundancy; the termination amounted to unfair summary dismissal as no notice or hearing was given

Reasoning

In the absence of any letter of termination, and on the evidence of witness Samuel Mudinyu, the court found the services were verbally terminated. Even on the absconding allegation, Section 41 of the Employment Act entitled the Claimant to a fair disciplinary process; the employer bore the burden of justifying the termination under Section 47(5) and discharged none of it.

p. 3
03

Whether the Claimant is entitled to the reliefs sought

Holding

Yes; compensation of 2 months' gross salary under Section 49, notice pay under Clause 14.3, accrued leave and unpaid February 2017 salary were all awarded

Reasoning

The court relied on Nelson Ogeto Mogaka v Geothermal Development Company Limited declaring unconstitutional the 13-month continuous-service limitation in Section 45(3), so the Claimant could claim unfair termination despite under one year of service. The employer failed to disprove accrued leave entitlement, being the party bound to keep employment records, and never controverted the claim for 8 unpaid days.

p. 4

Legal principles established

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  • Where an employer alleges an employee was on probation and seeks to extend probation, the extension must be communicated in writing
  • A termination without notice or hearing amounts to unfair summary dismissal; even desertion requires the employer to afford a fair disciplinary process
  • The burden of justifying the grounds for termination rests on the employer
  • For a termination to pass the fairness test there must be both substantive justification and procedural fairness

Court orders

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  1. 1.Judgment entered in favour of the Claimant against the Respondent in the total sum of Kshs.536,577/-
  2. 2.Compensation for unfair termination of Kshs.280,000/- (2 months' gross salary)
  3. 3.Five weeks' salary in lieu of notice of Kshs.172,666.62/-
  4. 4.Accrued leave days (8.75 days) of Kshs.40,833.28/-
  5. 5.Salary for 8 unpaid days worked in February 2017 of Kshs.43,076.92/-
  6. 6.Costs of the suit awarded to the Claimant plus interest at court rates from the date of the Judgment until payment in full

Authorities

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Legislation

  • Employment ActSection 40(1)(b)
  • Employment ActSection 42(1)
  • Employment ActSection 42(2)
  • Employment ActSection 42(4)
  • Employment ActSection 45(3)
  • Employment ActSection 41
  • Employment ActSection 47(5)
  • Employment ActSection 49
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (8)

  • Walter Ogal Anuro v Teachers Service Commission
    (2013) eKLR
  • Agnes Yahuma Digo v PJ Petroleum Equipment Limited
    (2013) eKLR
  • Lucy Wangui Wanyika v Nam Consult Limited
    (2016) eKLR
  • James O. Olaa v Tana and Athi River Development Authority
    (2016) eKLR
  • Narry Philemons Onaya-Odeck v Technical University of Kenya (Formerly, the Kenya Polytechnic University College)
    (2017) eKLR
  • Felistas Acheha Ikatwa v Charles Peter Otieno
    (2018) eKLR
  • Nelson Ogeto Mogaka & 15 others v Geothermal Development Company Limited
    (2013) eKLR
  • Meshack Kiio Ikulume v Prime Fuels Kenya Limited
    (2013) eKLR
Jurisdiction invoked
First-instance claim under the Employment Act, 2007 (Employment and Labour Relations Court)

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, "Alloise Ngugi Muia v Green Pot Enterprises Limited [2020] KEELRC 239 (KLR)", Case Analysis (2020). Cause No 770 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/239/eng@2020-11-13

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