Kuria v Badoer (Cause E149 of 2022) [2023] KEELRC 833 (KLR)
The bottom line
#A Kenyan court ruled that a share sale agreement did not wipe out employment rights, awarding a dismissed executive notice pay, one month's compensation, and costs.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was an employee of the Respondent
Yes - the Claimant proved on a balance of probabilities that he was an employee of the Respondent personally, not a mere director or shareholder
The Respondent admitted on cross-examination that the Claimant was his employee paid a monthly salary. The Respondent's counsel's letter of 13th March 2020 confirmed the relationship and catalogued duties. The Respondent offered no evidence of directorship terms, and directors are not employees. Email evidence of salary payments was uncontroverted.
Effect of the Settlement Agreement dated 21st July 2020
The Deed of Settlement governed only the transfer of shares, not the employment relationship, and did not discharge employment claims
The court read the Deed of Settlement and found its terms exclusively concerned surrender and purchase of shares in seven companies for Kshs.2,000,000. It was silent on the employment relationship, so Coastal Bottlers on discharge vouchers was inapplicable, and the Respondent still had to justify termination.
Whether termination of employment was unfair
Yes - the Respondent established neither a valid reason nor a fair procedure
Under Sections 43, 41 and 45(2) of the Employment Act, the employer must prove valid reasons and procedural fairness including a hearing. The Respondent gave no notice (admitting he was in Spain), conducted no investigation response, and adduced no evidence of a valid reason, instead relying on the Deed of Settlement.
Quantum of compensation under Section 49(1)(c)
Equivalent of one month's salary awarded instead of the 12 months sought
The court considered Section 49(4) factors: short service of about 1 year 5 months, receipt of Kshs.2,000,000 for shares not paid for, uncertainty whether the Claimant wished to continue, and the Claimant's failure to deny allegations of kickbacks in the 13th March 2020 letter.
Legal principles established
#- For a termination to be fair, the employer must prove both substantive justification and procedural fairness
- It is the employer's obligation to prove the reason(s) for termination and to comply with the mandatory procedural requirements of Section 41 of the Employment Act
Court orders
#- 1.One month's salary in lieu of notice
- 2.Equivalent of one month's salary compensation
- 3.Costs of the suit to the Claimant
- 4.Interest at court rates from date of judgment till payment in full
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 over a claim of unfair termination of employment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kuria v Badoer (Cause E149 of 2022) [2023] KEELRC 833 (KLR)", Case Analysis (2023). Cause No E149 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/833/eng@2023-04-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.