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ELRCPartially AllowedAppeal No E031 of 2021· [2023] KEELRC 730 (KLR)

Jumbo Nile Limited v Oginga (Appeal E031 of 2021) [2023] KEELRC 730 (KLR)

Employment and Labour Relations Court
23 March 2023
2,162 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 firing without reasons or a disciplinary process is unfair, but a signed discharge voucher bars further terminal dues claims.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Kisumu against a magistrate's judgment of August 3, 2021, in which the respondent (former employee) was awarded terminal benefits, compensatory damages, costs and interest. The appellant (employer) contended that the employee had been procedurally terminated, had been paid all dues and had signed a discharge voucher, and that the 12-month compensation award was excessive for six months of service. The respondent supported the trial court's decision. Applying Gitobu Imanyara, the court framed three issues: whether the termination was unfair, whether payment and the discharge voucher barred the claims, and whether the damages award was excessive. The court upheld the finding of unfair termination, holding that issuing only a termination notice without a disciplinary process or reasons breached section 46 of the Employment Act. However, it found that the payment voucher and cheque dated August 8, 2019 showed the employee served his notice period and was paid for leave and days worked; following Coastal Bottlers Limited v Kimathi Mithika, the executed discharge voucher, being a binding contract, barred further claims. The awards of one month's salary in lieu of notice and terminal benefits were set aside. The award of two months' salary as compensation under section 49(4) was found reasonable and upheld. Each party was ordered to bear its own costs of the appeal.

Key legal issues

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01

Whether the termination was unfair

Holding

Termination was unfair because the employee was issued only a termination notice without a disciplinary process or reasons, contrary to section 46 of the Employment Act

Reasoning

The court found that the respondent was issued a notice of termination dated July 8, 2019 but was not taken through any disciplinary process and was not given reasons for the termination. Absent compliance with section 46 of the Employment Act, the termination, though procedurally communicated, was unprocedural and therefore unfair. The trial court's declaration to that effect was upheld.

p. 4
02

Effect of the discharge voucher and prior payments on terminal dues and notice pay

Holding

The employee's acknowledged receipt of leave pay and days worked, and his execution of a discharge voucher, barred further terminal dues claims; the awards on notice and terminal benefits were set aside

Reasoning

The payment voucher and cheque dated August 8, 2019 confirmed the respondent served the notice period and was paid for leave not taken and days worked. Being a binding contract, the discharge voucher barred further claims, following Coastal Bottlers Limited v Kimathi Mithika. The respondent did not deny signing it, so the awards for notice and terminal benefits lacked justification.

p. 4
03

Whether the compensatory damages award was excessive

Holding

An award of two months' salary as compensation under section 49(4) of the Employment Act was reasonable and was upheld

Reasoning

The appellant contended the award of 12 months' salary was excessive for an employee of six months' service, but the judgment showed the actual award was only two months' salary. Given the finding of unfair termination, compensation under section 49(4) was properly payable, and two months' salary was proportionate and reasonable in the circumstances. The award was accordingly upheld.

p. 5

Legal principles established

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  • Termination by notice without compliance with section 46 of the Employment Act (failure to accord a disciplinary process or give reasons) renders the termination unprocedural and unfair
  • A discharge voucher voluntarily executed by an employee is a binding contract that bars further claims arising from the employment and its termination, irrespective of the adequacy of the amount paid

Court orders

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  1. 1.The declaration that the respondent was unfairly terminated is upheld
  2. 2.The award of two (2) months' salary as compensation for unfair termination is upheld
  3. 3.The award of one month's salary in lieu of termination notice is set aside
  4. 4.The award of terminal benefits is set aside
  5. 5.Parties shall bear their own costs of the appeal

Authorities

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Legislation

  • Employment Actsection 46
  • Employment Actsection 49(4)

Cases cited (4)

  • United States International University v Eric Rading Outa
    [2016] eKLR, Court of Appeal Civil Appeal No. 146 of 2013 (Nairobi)
  • Paddy Chris Adhola v Orpower 4 INC. Limited
    [2021] eKLR
  • Coastal Bottlers Limited v Kimathi Mithika
    [2018] eKLR
  • Gitobu Imanyara & 2 others v Attorney General
    [2016] eKLR
On appeal from
Magistrates' Court (trial court)
Not stated
Jurisdiction invoked
First appeal from the trial magistrate's judgment in an employment claim (Employment and Labour Relations Court appellate jurisdiction); no specific provision cited in the judgment text supplied

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, "Jumbo Nile Limited v Oginga (Appeal E031 of 2021) [2023] KEELRC 730 (KLR)", Case Analysis (2023). Appeal No E031 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/730/eng@2023-03-23

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