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ELRCPartially AllowedNot stated in judgment· [2021] KEELRC 875 (KLR)

Patrick Kasyoka Nzomo & another v Paul Mopel t/a. California Bar and Butchery [2021] KEELRC 875 (KLR)

Employment and Labour Relations Court
30 September 2021
OMOnesmus N. Makau
3,102 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that firing workers for refusing to sign new contracts is unfair, and employers must prove any dismissal was justified.

What this practically means

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Executive summary

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Two cooks employed at the Respondent's restaurant (since 2008 and 2004 respectively, without written contracts) sued on 21.8.2015 claiming their employment was unfairly and unlawfully terminated on 16.2.2015 after they refused to sign new contracts which did not recognise their prior years of service. They sought declarations, terminal benefits of Kshs. 4,145,419, certificates of service, costs and interest. The Respondent denied dismissing them, contending they absconded after refusing to sign contracts and never responded to his letter of 13.3.2015 asking them to report back by 20.3.2015, and counterclaimed for salary in lieu of notice. The court framed five issues and found, on the evidence, that the Claimants were dismissed on 16.2.2015 for refusing to sign the contracts; the Respondent's assertion of a one-week reading period was unsupported by documents or pleadings. Relying on sections 43, 45 and 41 of the Employment Act, the court held that the employer bore the burden of justifying termination, that refusal to sign a freely negotiated contract was not a valid and fair reason, and that no hearing was accorded, rendering the dismissal substantively and procedurally unfair. The Claimants were awarded notice pay, 10 months' compensation, one year's leave (24 days) and service pay at 15 days per completed year, based on basic salaries of Kshs. 9,000 and 7,000 plus 15% house allowance. Claims for salary arrears, overtime, public holidays and off days were declined for lack of evidence and particulars. The counterclaim was dismissed. Awards are subject to statutory deductions, with costs and interest to the Claimants.

Key legal issues

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01

Whether the Claimants resigned/absconded or were dismissed

Holding

On a balance of probability the Claimants were dismissed on 16.2.2015 for refusing to sign the new contract

Reasoning

The court found the Claimants' evidence truthful and consistent: after being told to go away for refusing to sign contracts they immediately instructed a lawyer to serve a demand letter. The Respondent's claim that the Claimants were given one week to read and sign the contracts was unsupported by any document or pleading. The Respondent only acted after receipt of the demand letter.

p. 3
02

Validity of the reason for termination

Holding

Refusal to sign a new contract was not a valid and fair reason for dismissal

Reasoning

Under sections 43 and 45 of the Employment Act the burden of justifying termination lies on the employer. A contract is a freely negotiated document and no party should be forced to sign; the Claimants' only 'offence' was refusing to sign a contract whose terms they found unfavourable after years of continuous service.

p. 4
03

Whether fair procedure under section 41 was followed

Holding

The Claimants were not accorded any hearing before dismissal, hence the termination was procedurally unfair under section 45(2)(c)

Reasoning

Section 41 requires the employer to explain the reasons for contemplated termination and hear the employee's representations. The Claimants, who had worked continuously for 7 and 11 years, were entitled to a hearing before dismissal for whatever reason; none was accorded.

p. 4
04

Entitlement to reliefs

Holding

Claimants entitled to notice pay, 10 months' compensation, one year's leave (24 days), service pay at 15 days per year and certificate of service

Reasoning

Damages flow from the finding of unfair termination under sections 45 and 49. Compensation of 10 months' salary was awarded based on the basic salaries of Kshs. 9,000 and 7,000 plus 15% house allowance. Leave limited to one year (24 days) per the Hotels and Caterers Trade Regulations; service pay granted as NSSF non-contribution was unrebutted.

p. 4

Legal principles established

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  • The burden of proving or justifying the reason for termination lies with the employer under sections 43 and 45 of the Employment Act
  • Refusal by an employee to sign a new contract on unfavourable terms is not a valid and fair reason for dismissal
  • Employees are entitled to a hearing under section 41 of the Employment Act before dismissal for whatever reason

Court orders

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  1. 1.Declaration that the dismissal of the Claimants was unfair and unlawful within the meaning of section 45 of the Employment Act
  2. 2.Judgment for the 1st Claimant of Kshs. 153,657.70 (notice Kshs. 10,350; compensation Kshs. 103,500; leave Kshs. 8,307.70; service pay Kshs. 31,500)
  3. 3.Judgment for the 2nd Claimant of Kshs. 133,511.50 (notice Kshs. 8,050; compensation Kshs. 80,500; leave Kshs. 6,461.50; service pay Kshs. 38,500)
  4. 4.Certificate of Service to be issued to the Claimants as prayed
  5. 5.Counterclaim dismissed
  6. 6.Awards subject to statutory deductions, with costs and interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment Actsection 41(1) and (2)
  • Employment Actsection 42(1)
  • Employment Actsection 43
  • Employment Actsection 44(3) and (4)
  • Employment Actsection 45
  • Employment Actsection 45(2)(c)
  • Employment Actsection 49
  • Regulation for Hotels and Caterers Tradeleave accumulation and minimum 24 leave days per year
  • ELRC Procedure RulesRule 28(3)

Cases cited (3)

  • Kenya Hotels and Allied Workers Union v Mada Holdings Ltd
    [2020] eKLR
  • Banking Insurance & Finance Union (Kenya) v Barclays Bank Kenya Ltd.
    [2014] eKLR
  • Simon Mbithi Mbane v Inter Security Services Ltd
    [2018] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (suit for unfair termination)

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, "Patrick Kasyoka Nzomo & another v Paul Mopel t/a. California Bar and Butchery [2021] KEELRC 875 (KLR)", Case Analysis (2021). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/875/eng@2021-09-30

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