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ELRCDismissedELRC Appeal from Nakuru CMC ELRC No. 348 of 2019· [2023] KEELRC 137 (KLR)

Victonel Academy v Njuguna (Employment and Labour Relations Appeal E13 of 2021) [2023] KEELRC 137 (KLR)

Employment and Labour Relations Court
26 January 2023
2,409 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 confirmed that employers who underpay workers and skip fair disciplinary procedures will pay the price, even if the employee signed the contract.

What this practically means

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Executive summary

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This was a first appeal to the Employment and Labour Relations Court against the judgment of Hon. L Arika, Chief Magistrate, in Nakuru CMC ELRC No. 348 of 2019 delivered on November 22, 2021, in which the respondent, a driver employed by the appellant school from January 10, 2015, had been awarded relief for unfair termination. The appellant, a private school, contested the findings that it had unfairly terminated the driver on December 7, 2016 for allegedly negligent driving, and challenged the awards of 12 months' compensation, overtime and underpayment. The appeal proceeded by way of written submissions; the appellant filed none. The respondent submitted that the notice to show cause relied on by the appellant was dated October/November 2019 - long after the dismissal - and was an afterthought, that no disciplinary hearing invitation was exhibited, and that the negligence allegation was unsubstantiated. The court, re-evaluating the evidence as a first appellate court, found the notice to show case was unsigned, unproved as served, and dated after the dismissal; no evidence such as police records supported the negligent driving allegation. It held the claimant was terminated without an opportunity to be heard and without valid reason, contrary to section 45(2) of the Employment Act. On underpayment, applying Five Forty Aviation Ltd v Erwan Lanoe and Kenya Airways Ltd v Satwant Singh Flora, the court held the signed contract paying below the statutory minimum was an illegal and oppressive agreement whose enforcement courts must refuse. The overtime award was grounded on attendance registers. The court found the appeal unmerited, affirmed the trial court's judgment, and dismissed the appeal with costs to the respondent.

Key legal issues

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01

Whether the termination of the respondent was fair and lawful

Holding

The termination was procedurally and substantively unfair: the notice to show cause was dated long after the dismissal, no disciplinary hearing invitation was exhibited, and the reason (negligent driving) was unsubstantiated

Reasoning

The NTSC relied on by the appellant was dated November 30, 2019, nearly three years after the December 7, 2016 termination, and was unsigned and unproved as served. No invitation to a disciplinary hearing was exhibited. The allegation of careless driving was not backed by police records or charges. Section 45(2) of the Employment Act was therefore satisfied that termination was unfair.

p. 4
02

Whether the underpayment award was proper despite the claimant's signed agreement to the salary

Holding

Yes - the contractual salary was below the statutory minimum, rendering the agreement illegal and unenforceable as to that term

Reasoning

The employment agreement fixed an all-inclusive salary below the minimum wages order, and even shifted the tax obligation to the employee. Applying the illegality doctrine from Five Forty Aviation Ltd v Erwan Lanoe as restating Kenya Airways Ltd v Satwant Singh Flora, the court held the agreement oppressive and illegal and upheld the underpayment award based on the applicable legal notices.

p. 5
03

Whether the overtime and other awards were justified

Holding

The overtime award was based on the attendance register showing the claimant working past 8 hours a day; the December 2016 salary remained unpaid; the trial court properly exercised its discretion on 12 months' compensation

Reasoning

The court found the overtime awards were grounded on the attendance register, the claimant worked days in December 2016 that were unpaid, and the compensation award was a proper exercise of the trial court's discretion. The appellant filed no submissions to contest these findings, and the court declined to interfere.

p. 5

Legal principles established

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  • A court cannot enforce or advance an illegal contract, including one paying below the statutory minimum wage, even where the employee consented to it
  • No person may claim a right or remedy under an illegal transaction, and a court ought not to enforce an illegal contract once the illegality is brought to its notice
  • Under section 45(2) of the Employment Act, termination without valid reason and without an opportunity to be heard is unfair

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs of the appeal awarded to the Respondent

Authorities

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Legislation

  • Employment Actsection 45(2)

Cases cited (3)

  • Musera v Mwechelesi and another
    [2007] KLR 159
  • Five Forty Aviation Ltd vs Erwan Lanoe
    CA No. 55/2016
  • Kenya Airways Limited versus Satwant Singh Flora
On appeal from
Chief Magistrates Court at Nakuru (CMC ELRC No. 348 of 2019)
Nakuru CMC ELRC no 348 of 2019
Jurisdiction invoked
First appeal to the ELRC against the judgment of the Chief Magistrates Court (the judgment cites its duty to re-evaluate evidence as a first appellate 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, "Victonel Academy v Njuguna (Employment and Labour Relations Appeal E13 of 2021) [2023] KEELRC 137 (KLR)", Case Analysis (2023). ELRC Appeal from Nakuru CMC ELRC No. 348 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/137/eng@2023-01-26

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