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ELRCPartially AllowedCause No 1654 of 2015· [2020] KEELRC 1124 (KLR)

James Mwangi Muigai v Murban Movers Respondent [2020] KEELRC 1124 (KLR)

Employment and Labour Relations Court of Kenya
6 May 2020
ANAbuodha Jorum Nelson
1,282 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 an employer didn't unfairly dismiss its manager, but must pay agreed exit dues once the employee clears outstanding issues at his former station.

What this practically means

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Executive summary

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The claimant, employed by the respondent as station manager from 13 April 2008 (initially at a Beni, DR Congo outstation trading as Kivu Oil), was terminated on 31 July 2015 by one month's notice on grounds of cost cutting. He earned Kshs 66,100 for work under the respondent and USD 600 for outstation work, and at termination earned Kshs 126,100 per month per the claimant (the respondent said Kshs 92,000). Through counsel, the parties reached a mutual separation agreement on terminal dues on condition that no claim for wrongful dismissal would be filed, but the respondent paid only part, withholding USD 2,508 pending the claimant clearing issues concerning unpaid credit sales to Oxfam and ICCN at Beni station, per standard company procedure. The claimant sued for unlawful and wrongful termination, alleging a replacement was hired immediately. The respondent denied unfair termination, asserting due notice under clause 10 of the Employment Agreement and a lawful set-off, with its witness Festus Kioko testifying that no invoices or payment records existed and that an Oxfam email was fake. The court found the respondent never refused to pay the agreed terminal dues but made clearance a precondition, which the claimant neither cleared nor attempted to clear. It dismissed the unfair termination claim and ordered payment of the agreed terminal dues only after the claimant satisfactorily clears the Beni Station issues, with no order as to costs.

Key legal issues

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01

Unfair termination

Holding

The claim for unfair termination failed; the claimant was given one month's notice per his employment contract and agreed terminal dues with the respondent

Reasoning

The court found that the claimant was terminated on account of cost cutting, that a mutual separation agreement was reached on terminal dues on condition that no unfair termination claim be filed, and that the respondent never refused to pay the agreed dues. Since the claimant did not show he cleared the outstanding issues at Beni Station as required, the court found the unfair termination claim without merit.

p. 3
02

Outstanding terminal dues of USD 2,508

Holding

The respondent is to pay the agreed terminal dues but only after the claimant satisfactorily clears the issues at Beni Station

Reasoning

The court accepted that the parties agreed on terminal dues and that the respondent did not deny liability, only making payment conditional on the claimant clearing pending issues concerning debtors and funds at his last station in DR Congo, as per standard company procedure. The claimant did not allege or demonstrate that he cleared these issues, so payment was ordered subject to that clearance.

p. 3

Legal principles established

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  • An employer who has agreed to pay terminal dues under a mutual separation agreement does not renege where payment is made subject to a clearance precondition under its standard exit procedure
  • A party seeking to enforce an agreement conditional on clearance must demonstrate that it cleared or attempted to clear

Court orders

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  1. 1.The respondent to pay the claimant the agreed terminal dues after the claimant satisfactorily clears issues at Beni Station
  2. 2.The claim for unfair termination is dismissed with no order as to costs
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Act (employment dispute)

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, "James Mwangi Muigai v Murban Movers Respondent [2020] KEELRC 1124 (KLR)", Case Analysis (2020). Cause No 1654 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1124/eng@2020-05-06

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