Githachuri v Engplan Consulting Engineers Ltd (Cause 525 of 2017) [2023] KEELRC 509 (KLR)
The bottom line
#A Kenyan court ruled that paying notice alone isn't enough to fire an employee fairly — the employer must also give a valid reason and a hearing.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was unfairly terminated
Yes - the termination was unfair both substantively and procedurally. The reason given (inability to pay after the Claimant refused a salary cut) was not a valid reason, and the mandatory procedure in section 41 of the Employment Act was not followed.
The Respondent terminated the Claimant by letter dated 24th December 2016 stating it could not afford to pay him, without declaring redundancy or alleging misconduct. The Claimant was given no opportunity to give feedback or explanation. The Court, guided by section 45 of the Employment Act and the Court of Appeal decision in Kenfreight E.A. Limited v Benson K. Nguti, held that contractual notice alone does not cure the absence of the mandatory hearing under section 41. Judgment was entered for the Claimant.
Whether the Claimant was entitled to the reliefs sought
Partially. Five days' unpaid salary (Kshs 39,167) and 4 months' salary as damages for unfair termination (Kshs 940,000) were awarded; severance pay, pay in lieu of notice, unpaid commission and unpaid leave were declined.
The Court held that severance pay attaches only to redundancy, notice had already been given per contract, commission was unproved special damages, and leave had been utilised. For damages, the Claimant served about 3 years and was not terminated for gross misconduct or poor performance, so the Court exercised discretion to award 4 months' salary. The alleged salary increment to Kshs 333,333 net was rejected for lack of official documentation.
Whether the Kshs 162,800 monthly payments were a salary increment or a bonus
They were not proved to be a salary increment; the Court worked with the contractual salary of Kshs 235,000 (Kshs 233,000 per the contract as pleaded).
The Claimant alleged a salary increment conveyed by a complimentary slip dated 27th November 2013, raising his net pay to Kshs 333,333, and invoked estoppel. The Respondent's witness testified the payments were a fixed bonus compensating for commission. The Court found no official letter of salary increment and treated the complimentary slip as mere rough working, electing to work with facts proved, namely the contractual salary.
Legal principles established
#- An employer must show both a valid reason and a fair procedure before terminating employment; contractual notice alone does not satisfy the statutory procedure under sections 41 and 45 of the Employment Act
- Section 41 of the Employment Act is mandatory - an employee must be heard and explained the reasons for termination before the decision is taken, notwithstanding payment of notice
- Under the present statutory regime, freedom to contract is subject to the irreducible minimum terms of the Employment Act; contracts terminable at will no longer hold
- An employee's refusal to accept a salary reduction is not sufficient ground to terminate employment where a contract fixing salary exists
Court orders
#- 1.Judgment entered in favour of the Claimant on the claim for unfair termination
- 2.Award of Kshs 39,167/- being 5 days of unpaid salary at the contractual salary of Kshs 235,000
- 3.Award of damages for unlawful termination equivalent to 4 months' salary (Kshs 235,000 x 4 = Kshs 940,000)
- 4.Total award of Kshs 979,167/-
- 5.Costs of the suit awarded to the Claimant
- 6.Interest on the award from the date of judgment until full payment
- Jurisdiction invoked
- Jurisdiction under the Employment Act, 2007 (first-instance employment claim under the ELRC); no specific constitutional article pleaded as basis of jurisdiction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Githachuri v Engplan Consulting Engineers Ltd (Cause 525 of 2017) [2023] KEELRC 509 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/509/eng@2023-02-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.