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ELRCPartially AllowedELRC Cause No. E079 of 2023 (lead file, consolidated claims)· [2023] KEELRC 3454 (KLR)

Obungu & 3 others v Bandari Football Club (Cause E079, E080, E078 & E077 of 2023 (Consolidated)) [2023] KEELRC 3454 (KLR)

Employment and Labour Relations Court
19 December 2023
MMM. Mbarũ
3,099 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that a football club couldn't fire staff on notice alone—employers must give reasons and a hearing, even with fixed-term contracts.

What this practically means

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Executive summary

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Four technical staff of a Coast region premier league football club - a goalkeeper trainer, an assistant coach, an assistant kit attendant and a performance analyst - sued over termination of their fixed term contracts by notices dated 6 July 2023, delivered by email while they were on annual leave and due to resume duty on 10 July 2023. Their contracts ran to dates between September 2024 and February 2025. They sought declarations of unfair termination, compensation for the full contract term, exemplary damages for mental anguish and reputational harm, and costs. The respondent maintained that clause 7 of each contract permitted termination on two months' notice or payment in lieu, which it honoured, and that no reasons were required. Its vice chairperson testified that a new board implemented a previous board's resolutions that the claimants had underperformed. The court, M. Mbarũ J, held that although fixed term contracts are lawful, the Employment Act abolished termination at will: an employer must have valid and fair reasons under Section 45(2), prove them under Section 43, and follow the mandatory procedure of Section 41, including notice of the reasons and a hearing. Reliance on alleged underperformance without notifying the claimants or hearing them rendered the terminations unlawful and unfair. Payment in lieu of notice did not cure the defect. Under Section 49 the court awarded compensation of four to five months' gross salary per claimant (totals of Kshs. 528,000; 482,135; 300,000 and 352,500), treating the distress and reputational harm within that compensation rather than as separate exemplary damages, and declined to award the full unexpired contract value. Judgment was entered for the claimants with costs, payable within 60 days failing which the awards attract interest.

Key legal issues

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01

Whether termination of fixed term contracts on notice or payment in lieu, without reasons or hearing, was unfair

Holding

Termination was unfair; payment in lieu of notice does not dispense with the statutory requirements of valid reasons, notice of reasons and a hearing

Reasoning

Fixed term contracts are lawful, but the Employment Act outlaws termination at will. Sections 35, 41, 43 and 45 must be read together. The respondent relied on alleged underperformance found in previous board minutes but never notified the claimants of these matters or gave them a chance to respond. Payment in lieu of notice could not cure the want of due process and substantive justification.

p. 5
02

Whether the claimants were entitled to compensation under Section 49

Holding

Each claimant awarded compensation of 4 to 5 months' gross salary based on length of service, stage of contract and circumstances of termination

Reasoning

The court exercised its discretion under Section 49, considering that the claimants were young in their careers, had performed well, and had their careers cut short upon return from annual leave. Immediate payment of notice pay in lieu was taken into account in moderating the awards.

p. 5
03

Whether exemplary damages for mental anguish and reputational damage should issue

Holding

Refused as a separate head; distress was subsumed in the compensation assessment

Reasoning

The court acknowledged that unfair termination causes distress, particularly where an employee returns from leave to find a termination notice, but treated these as factors already compounded within the Section 49 compensation, and noted the respondent had immediately paid notice pay in lieu.

p. 6

Legal principles established

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  • Even where a written contract allows termination on notice or payment in lieu, the Employment Act requires valid and fair reasons and due process before termination
  • Where poor performance is relied on, the employer must first notify the employee of the reasons and afford a hearing under Section 41

Court orders

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  1. 1.A declaration that the respondent terminated the claimants' employment unfairly
  2. 2.Wilson Oduor Obungu awarded compensation of Kshs. 528,000
  3. 3.Daniel Mnyaro Mshamba awarded compensation of Kshs. 482,135
  4. 4.Kenneth Onyach Othieno awarded compensation of Kshs. 300,000
  5. 5.David Kingatua Njuguini awarded compensation of Kshs. 352,500
  6. 6.Claimants awarded costs of the suit
  7. 7.Awards to be paid within 60 days, thereafter attracting interest
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, "Obungu & 3 others v Bandari Football Club (Cause E079, E080, E078 & E077 of 2023 (Consolidated)) [2023] KEELRC 3454 (KLR)", Case Analysis (2023). ELRC Cause No. E079 of 2023 (lead file, consolidated claims). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3454/eng@2023-12-19

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