Koskei v Brandlife Kenya Limited (Cause 315 of 2020) [2023] KEELRC 2647 (KLR)
The bottom line
#A Kenyan court awarded a former Country Manager nearly Kes 4 million after finding her employer cut her salary without consent and fired her without valid reasons or a fair hearing.
What this practically means
#Executive summary
#Key legal issues
#Whether the unilateral 40% reduction of the claimant's salary was lawful
The reduction from Kes 400,000 to Kes 232,758 was an unlawful breach of contract; the claimant was entitled to refund of Kes 1,280,000 in deducted salary.
The contract guaranteed Kes 400,000 monthly salary; bringing new business carried only a 10% commission incentive and was not a condition of the fixed salary. The employee's general cost-saving suggestions at a strategic level did not constitute consent to a personal salary cut. No fresh agreement was signed. The court found the deduction a blatant breach entitling the claimant to a full refund of the deductions made over eight months.
Whether the reasons for termination (dishonesty/misrepresentation and insubordination) were valid and proved
The respondent failed to prove either charge; there was no valid reason for termination.
On insubordination, no particulars of any specific disobeyed instruction were provided despite request, and RW1 could not recall the date; RW2 contradicted the termination letter by saying insubordination was not a reason. On dishonesty, the claimant communicated budgets and obtained RW1's approval; no loss was proved, the final 18% profit margin being merely 'not good enough'. The accusations were baseless.
Whether the disciplinary procedure was fair under section 41 of the Employment Act
The procedure was unfair: the hearing was conducted by a single new director unfamiliar with the allegations, without the claimant's supervisor or HR, and requested particulars and documents were withheld.
A Country Manager could not be subjected to a one-on-one session with a director who admitted he was removed from day-to-day operations and was not well-versed with the allegations. RW1 and HR did not attend. The requested particulars of insubordination were never supplied, negating the process. The court found sections 41, 43 and 45 all breached.
Entitlement to payment in lieu of leave and notice
The claimant was awarded Kes 279,993 for 21 untaken leave days in 2019 and Kes 400,000 being one month's notice shortfall, the contract providing for two months' notice.
Maternity leave in 2019 did not extinguish the annual leave entitlement under section 37 of the Employment Act; payment for only five 2020 leave days violated the statute. Although one month's salary in lieu of notice was paid, the contract on confirmation provided for two months' notice, leaving one month unpaid.
Quantum of compensation under section 49(1)(c) and (4)
The equivalent of five months' salary, Kes 2,000,000, was awarded as compensation for unlawful and unfair dismissal.
Aggravating factors included the timing of the notice to show cause on the very day the claimant proceeded on maternity leave, the inhuman attitude to her pregnancy-related sick leave, the unlawful salary cut while she was expectant, and breach of the two-month notice term. Comparable authorities supported five months' salary despite the relatively short service of about one year and five months.
Legal principles established
#- Under section 43(1) of the Employment Act, the employer bears the burden of proving the reasons for termination, failing which the termination is unfair under section 45.
- An employer may not unilaterally reduce an employee's contractual salary without the employee's agreement; a general strategic suggestion by an employee on cost-cutting does not amount to consent to a cut in her own salary.
- Both valid reason (substantive fairness) and fair procedure are required for a lawful termination under sections 41, 43 and 45 of the Employment Act.
- Section 37 of the Employment Act entitles an employee to at least 21 working days leave for every completed year of service, and maternity leave does not extinguish the annual leave entitlement for that year.
Court orders
#- 1.Kes 400,000 in lieu of one month notice
- 2.Kes 279,993 in lieu of 21 days annual leave
- 3.Kes 1,280,000 being arrear salary deducted from 2/9/2019
- 4.Kes 2,000,000 compensation for unlawful and unfair termination
- 5.Interest at Court rates on the notice, leave and salary arrears from date of termination till payment in full, and from date of judgment in respect of the compensation
- 6.Costs of the suit to the claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment claim); specific enabling provision not quoted in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Koskei v Brandlife Kenya Limited (Cause 315 of 2020) [2023] KEELRC 2647 (KLR)", Case Analysis (2023). Cause No 315 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2647/eng@2023-10-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.