Lewela v Oracle Technology Systems (Kenya) Limited (Cause 392 of 2019) [2023] KEELRC 913 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Entitlement to clawed-back commissions of Kshs 6,431,427
Claimant had earned and been paid the commissions before resignation; the clawback was unjustified and constituted breach of contract; commission awarded
The contract and Clauses 14 and 20 of the Sales Compensation Plan permitted recovery only in limited circumstances, including where an account was deemed uncollectible and written off. IEBC had acknowledged the debt and was willing to pay upon budgetary allocation, so the account was not uncollectible. The claimant had fulfilled payment conditions for subsequent deals; the clawback was a unilateral act at resignation. Clause 20 governed ability to earn, not payment of commissions already earned.
Notice pay for the garden leave period
Respondent owed one month's basic salary of Kshs 666,666.67 for the notice period served
The claimant tendered resignation effective 31st July 2018 and served one month's notice as garden leave under the contract. The claimant testified he served the notice period but was not paid salary for it, and the respondent did not contradict that evidence. The court therefore found the respondent bound to pay full salary for the garden leave period.
Payment in lieu of untaken leave
Claim for leave pay failed for want of evidence
The claimant adduced no evidence of the number of untaken leave days owed at resignation. Further, the fact that he served one month of garden leave contradicted the claim for payment in lieu of untaken leave days. The court therefore declined to award any payment in lieu of leave.
Claimed constitutional violations (Articles 27 and 41) and general damages
No constitutional violation established; general damages refused
The court characterized the claim as purely contractual. Although the failure to pay earned dues breached the contract, that breach did not amount to a violation of Articles 27(1) and (5) or 41(1) and 2(b) of the Constitution, so no general damages were awarded beyond the special damages proved and awarded.
Legal principles established
#- Where an employee has already earned and been paid commissions before resignation, an employer may not unilaterally claw back those commissions absent proof that the account was deemed uncollectible under the applicable compensation plan
- A compensation plan clause on ability to earn commissions upon termination does not extinguish the employer's responsibility to pay commissions already earned
Court orders
#- 1.Kshs 666,666.67 being one month's basic salary for the notice period served
- 2.Kshs 6,431,427 being commission duly earned, paid and clawed back by the respondent
- 3.Interest at Court rates from the date of termination of contract on 31st July, 2018 till payment in full
- 4.Costs of the suit to the claimant
- Jurisdiction invoked
- Original jurisdiction of the Employment and Labour Relations Court over employment and labour relations disputes (claim based on contract of employment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lewela v Oracle Technology Systems (Kenya) Limited (Cause 392 of 2019) [2023] KEELRC 913 (KLR)", Case Analysis (2023). Cause No 392 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/913/eng@2023-04-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.