Gideon v Elsabi Share Company Limited (Cause E920 of 2021) [2024] KEELRC 689 (KLR)
The bottom line
#A Kenyan employer who fired an employee without a hearing was ordered to pay Kshs. 5.6 million, but the court refused salaries for the unexpired contract period.
What this practically means
#Executive summary
#Key legal issues
#Fairness of termination
Termination was unfair - no hearing, no communicated allegations, and a paradoxical letter purporting to give 30 days' notice while terminating with immediate effect
The Claimant was locked out and subsequently received an undated termination letter that purported to give one month's notice while terminating the contract with immediate effect. No disciplinary hearing was held, no allegations were communicated with an opportunity to respond, contrary to Sections 41, 43 and 45 of the Employment Act and Article 47 of the Constitution. The Respondent filed no defence to controvert the Claimant's evidence.
Compensation for unfair termination
Compensation awarded at the equivalent of 12 months' salary (Kshs. 4,800,000), taking into account the 9 months worked, the remaining 27 months of the contract, and expectation of renewal
The Claimant worked 9 months of a 3-year renewable contract and did not contribute to the termination. The Respondent filed no evidence to limit compensation. The Court granted the maximum of 12 months' salary as compensation, taking into account the remaining contract period and expectation of renewal.
Anticipatory salaries
Refused - such a claim would constitute unjust enrichment and an unhealthy trend in employment litigation
The Claimant sought salaries for the unexpired contract period of Kshs. 10.8 million. The Court held that compensation for unfair termination already accounted for the contract's remaining duration and expectation of renewal; paying salaries for services never rendered would unjustly enrich the Claimant and entrench a 'cash-grab' trend in unfair termination claims.
Undefended claim procedure
The Claimant took every step to bring the Respondent to Court; the Respondent filed no Response and kept away, and the Claim proceeded ex parte
Service was effected and a Memorandum of Appearance was filed, but the Respondent attended sporadically, never filed a Response despite several adjournments and scheduling dates, and was absent at the final hearing. The Court proceeded ex parte on the evidence of the Claimant alone.
Legal principles established
#- Termination without a hearing and without communicated reasons and an opportunity to respond violates Sections 41, 43 and 45 of the Employment Act and Article 47 of the Constitution
- Claims for anticipatory salaries beyond compensation for unfair termination are unreasonable and risk turning unfair termination claims into unjust enrichment
Court orders
#- 1.Declaration that the termination was unfair
- 2.Respondent to pay September 2021 salary at Kshs. 400,000
- 3.Respondent to pay notice at Kshs. 400,000
- 4.Respondent to pay compensation for unfair termination at Kshs. 4,800,000 (total Kshs. 5,600,000)
- 5.Costs to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment claims (Employment Act; Article 47 of the Constitution invoked)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gideon v Elsabi Share Company Limited (Cause E920 of 2021) [2024] KEELRC 689 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/689/eng@2024-03-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.