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ELRCPartially AllowedCause No 1748 of 2016· [2022] KEELRC 1163 (KLR)

Waite v Lets Go Travel Limited (Cause 1748 of 2016) [2022] KEELRC 1163 (KLR)

Employment and Labour Relations Court
27 May 2022
JRJames Rika
2,726 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 cut a dismissed manager's compensation to 3.5 months' salary because she secretly started a rival company, but still faulted her employer's flawed dismissal procedure.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent tours and travel company since 2001 and rising to Business Development Manager on a last salary of Kshs. 270,000, was dismissed on 17th June 2016 at a meeting held at Artcafe in Karen, on allegations that she had incorporated a rival company, Advantage Travel Limited, and diverted the Respondent's business. She claimed the termination was substantively and procedurally unfair under Sections 41 and 45 of the Employment Act, and sought a declaration, 12 months' salary (Kshs. 3,240,000), gratuity (Kshs. 4,050,000), a Certificate of Service and costs. The Respondent maintained she was summarily dismissed for gross misconduct, having set up a rival business with her colleague Stephen Obare, and that she was heard and paid her dues. The Court found a Registrar of Companies letter, an email forwarding the Respondent's business documents, and a Facebook advertisement established that she had set up a competing business. It held the Employer need not prove actual loss of business, and that implied duties of fidelity bound her despite no express non-competition clause; termination was therefore substantively fair. However, procedure was flawed: the termination letter was prepared before the meeting, and there was no show-cause letter, no invitation, no minutes and no charges presented in advance, breaching Section 41. The venue at Artcafe was held immaterial. The Court declared the termination procedurally unfair, awarded 3½ months' salary (Kshs. 945,000), refused gratuity, noted the Certificate of Service had been issued, and made no order on costs. Judgment delivered by James Rika, Judge, on 27th May 2022.

Key legal issues

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01

Whether there was a valid reason for termination

Holding

Yes - the Claimant had set up a rival business with a colleague, breaching her duty of fidelity

Reasoning

The Court found a Registrar of Companies letter showing the Claimant registered Advantage Travel Limited in February 2016, an email forwarding Respondent's business documents, and a Facebook advertisement. The Court held that the Employer need not prove actual loss; establishing a rival business sufficed as a valid reason under Section 43. Implied duties of fidelity and good faith bound the Claimant even without an express non-competition clause.

p. 4
02

Whether the termination procedure was fair under Section 41

Holding

No - procedure was flawed and termination procedurally unfair

Reasoning

The termination letter was prepared before the meeting; there was no show-cause letter, no invitation to a disciplinary hearing, no minutes, no charges presented in advance, and no advice on the right to be accompanied by a colleague of her choice. The change of venue to Artcafe was not itself irregular, but the basic standards of fairness were not observed.

p. 5
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What remedies merit award

Holding

3½ months' salary compensation; gratuity refused; Certificate of Service already issued

Reasoning

Although termination was procedurally unfair, the Claimant was largely at fault by placing herself in competition with her Employer, justifying a reduced award of 3½ months' gross salary. Gratuity had no basis in contract, law or policy. The Certificate of Service had been issued.

p. 5

Legal principles established

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  • Employees owe implied duties of fidelity and good faith to their Employers even absent an express contractual prohibition on competing
  • Under Section 43, the reasons for termination are those the Employer genuinely believed to exist at the time of termination
  • The venue of a disciplinary meeting is immaterial so long as minimum statutory procedural requirements under Section 41 are met
  • Termination preceded by a pre-drafted termination letter, with no show-cause letter, invitation or recorded hearing, breaches Section 41

Court orders

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  1. 1.It is declared that termination was procedurally infirm and therefore unfair
  2. 2.The Respondent shall pay to the Claimant equivalent of 3 ½ months' salary in compensation for unfair termination, at Kshs. 945,000
  3. 3.No order on the costs
  4. 4.Certificate of Service issued (noted as already issued)

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 43
  • Employment ActSection 45
  • Employment ActSection 47[5]
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes; Sections 41, 43, 45 and 47[5] of the Employment Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Waite v Lets Go Travel Limited (Cause 1748 of 2016) [2022] KEELRC 1163 (KLR)", Case Analysis (2022). Cause No 1748 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1163/eng@2022-05-27

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