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ELRCPartially AllowedCause No E005 of 2023· [2023] KEELRC 1330 (KLR)

Tamimu v Ocean Freight (EA) Limited (Cause E005 of 2023) [2023] KEELRC 1330 (KLR)

Employment and Labour Relations Court
25 May 2023
MMM. Mbarũ
2,482 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer cannot force an employee into early retirement without written agreement; doing so is unfair termination under the Employment Act.

What this practically means

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Executive summary

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The claimant, employed by the respondent as export manager from 16th May 2007 on permanent and pensionable terms, returned from annual leave in September 2022 and was served with a letter dated 31st August 2022 terminating his employment by way of early retirement at age 55. He claimed unfair termination, discrimination and salaries until the retirement age of 60. The respondent's case was that following workplace conflicts and client complaints a show cause letter was issued, upon receipt of which the claimant orally requested that the matter be handled as early retirement, a request the respondent allegedly granted on humanitarian grounds, paying full terminal dues including severance and gratuity on 19th September 2022. The court found the alleged oral offer of early retirement was not evidenced in writing, and since employment was contracted in writing, termination required written notice and reasons under Sections 35 and 43 of the Employment Act. The unilateral early retirement was held unlawful, a trade-off between gross misconduct and retirement being a culture of impunity. However, in assessing compensation under Section 45(5), the court took account of the respondent's prompt payment of terminal dues and awarded only one month's salary of Ksh. 155,364. The discrimination claim failed for want of proof of comparable treatment, and the claim for salaries until age 60 failed because the claimant was expected to mitigate loss, applying D.K. Njagi Marete v Teachers Service Commission. Judgment was entered for the claimant with each party bearing their own costs.

Key legal issues

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01

Whether the termination by early retirement was fair and lawful

Holding

Termination was unilateral and unlawful for want of notice, reasons in writing, and proof of any mutual agreement to early retire

Reasoning

The respondent alleged the claimant orally offered early retirement upon receiving a show cause notice, but no such offer was evidenced in writing. Employment was created by written contract and termination had to be in writing with notice and reasons under Sections 35 and 43 of the Employment Act. Absent proof of the offer, the court accepted the claimant's position that retirement was imposed unilaterally.

02

What compensation is due for unfair termination

Holding

One month's compensation of Ksh. 155,364 was sufficient, considering the respondent's prompt payment of terminal dues

Reasoning

Under Section 45(5) of the Employment Act the court considers the conduct of the parties. The respondent processed and paid all terminal dues by 19th September 2022, which weighed in its favour. In the circumstances one month's gross salary was found adequate compensation.

p. 4
03

Whether the claimant was discriminated against

Holding

No discrimination proved; no comparable employees in similar circumstances identified

Reasoning

The claimant did not identify other employees facing similar circumstances who were treated differently. The unlawful manner of termination was addressed through compensation, and the defining elements of discriminatory treatment under Section 5 of the Act were absent.

p. 5

Legal principles established

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  • Termination of employment must be in accordance with the written contract and Section 35 of the Employment Act; unilateral early retirement imposed by an employer without written agreement is unlawful
  • A trade-off of gross misconduct for early retirement to avoid a disciplinary process entrenches impunity and should be treated with caution
  • An employee must mitigate loss after termination and cannot claim anticipatory salaries until retirement age

Court orders

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  1. 1.Judgment entered for the claimant against the respondent
  2. 2.Compensation awarded at Ksh. 155,364
  3. 3.Each party to bear own costs

Authorities

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Legislation

  • Employment Act, 2007Section 35(1)
  • Employment Act, 2007Section 35
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 44
  • Employment Act, 2007Section 45(5)
  • Employment Act, 2007Section 5

Cases cited (1)

  • D.K. Njagi Marete v Teachers Service Commission
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007

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, "Tamimu v Ocean Freight (EA) Limited (Cause E005 of 2023) [2023] KEELRC 1330 (KLR)", Case Analysis (2023). Cause No E005 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1330/eng@2023-05-25

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