Nyaachi v Rembo Shuttle Savings & Credit Co-operative Society (Cause 746 of 2017) [2023] KEELRC 687 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the termination was substantively and procedurally fair
Termination was unfair - the Respondent failed to avail the alleged circular of January 9, 2017 or any evidence of a performance appraisal; the termination letter showed termination, not non-renewal, and no notice or hearing preceded it
The Respondent pleaded a fixed-term contract ended by circular but never produced the circular or evidence of an appraisal. The termination letter expressly stated the board resolved to terminate the contract. No notice to show cause or disciplinary process preceded termination. Without evidence, the Respondent's pleadings were ineffectual and the Claimant's version was more probable.
Whether the unilateral demotion and salary deduction were lawful
The variation of terms without consultation was unlawful and unfair; Kshs 80,000 awarded for unlawful deductions
By letter dated June 8, 2016 the Respondent unilaterally demoted the Claimant and reduced salary without consultation as required by Section 10(5) of the Employment Act. Such unilateral variation is a repudiation, breach of contract and unfair labour practice.
Entitlement to house allowance
Awarded only for the period of the second written contract (January 15, 2016 to January 31, 2017), i.e. 12½ months at Kshs 65,625, because continuity of service from August 2014 was not proved
The contract made no reference to housing allowance or a consolidated salary, a statutory right under Section 31. However, there was no evidence the three-month first contract was renewed or that the contracts were back to back, so house allowance was limited to the period of the second contract.
Quantum of compensation under Section 49(1)(c)
One month's compensation (Kshs 41,000) instead of the 12 months claimed
The court considered Section 49(4) factors: the Claimant's conduct (compulsory leave followed by demotion) substantially contributed to the termination; he did not appeal the decision; and his service was fairly short. One month's compensation was therefore fair.
Legal principles established
#- A valid termination of employment requires both substantive justification and procedural fairness
- A party who asserts facts bears the burden of proving them; uncontroverted pleadings without evidence remain allegations
- Unilateral variation of contractual terms of employment without consultation is a repudiatory breach and an unfair labour practice
- Before termination on grounds of poor performance, an employee must be called and given an opportunity to address their weaknesses
Court orders
#- 1.Declaration that termination of the Claimant's employment was unfair
- 2.Unlawful deductions Kshs 80,000/=
- 3.House allowance Kshs 65,625/=
- 4.Pay in lieu of notice Kshs 41,000/=
- 5.Compensation Kshs 41,000/= (total Kshs 227,625/=)
- 6.Certificate of service
- 7.Costs of this suit to the Claimant
- 8.Interest at court rates from the date of judgment till payment in full
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment and labour relations disputes (Employment Act, 2007; Employment and Labour Relations Court Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nyaachi v Rembo Shuttle Savings & Credit Co-operative Society (Cause 746 of 2017) [2023] KEELRC 687 (KLR)", Case Analysis (2023). Cause No 746 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/687/eng@2023-03-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.