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ELRCAllowedCause No E607 of 2022· [2024] KEELRC 1085 (KLR)

Wanjai v Mediamax Network Limited (Cause E607 of 2022) [2024] KEELRC 1085 (KLR)

Employment and Labour Relations Court
14 March 2024
4,416 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~18 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded an ex-employee over Kshs 14 million after finding his dismissal unfair and his salary cut unlawfully extended without his consent.

What this practically means

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Executive summary

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The Claimant, a Creative Director engaged in April 2015 at a gross salary that had risen to Kshs. 514,100/- by August 2019, sued the Respondent for unlawful and unfair termination of employment and withholding of terminal dues. In April 2020, citing Covid-19, the Respondent procured the Claimant's consent to a 50% salary reduction for a period of three to six months subject to review, but never reinstated the full salary, instead issuing partial reviews culminating in Kshs. 285,000/-. After a dispute over a commercial meeting of 29th March 2022 that was called off by the CEO, the Claimant received a show cause letter, answered it, was absolved of the two documented charges at a disciplinary hearing on 28th April 2022, but was confronted with a fresh allegation of absenteeism at that hearing, leading to termination on 13th June 2022. The court held the termination procedurally and substantively unfair under sections 41, 43 and 45 of the Employment Act, finding the Respondent did not follow lawful procedure and had no valid reason, the panel having 'had it in for' the Claimant. The court further held that the salary reduction beyond the six months consented to was unlawful and that non-remittance of NSSF deductions meant the Claimant was in law not an NSSF member, preserving his service pay entitlement. Judgment was entered for the Claimant for 12 months' salary compensation (Kshs. 6,169,200/-), one month's notice pay (Kshs. 514,100/-), salary for 13 days worked in June 2022 (Kshs. 222,776.66), a refund of Kshs. 4,795,890/- for 21 months of unlawful deductions, service pay of Kshs. 1,799,350/- for 7 years at 15 days per year, accrued leave of Kshs. 749,729.16, a certificate of service, costs of the suit and interest at court rates from the date of judgment. The suit was allowed in full.

Key legal issues

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01

Procedural fairness of the termination

Holding

The Respondent did not follow lawful procedure under section 41 of the Employment Act; the termination was unfair and unlawful

Reasoning

The Claimant was given only 24 hours to respond to a show cause letter based on a meeting that never took place. He was absolved of the two documented allegations at the disciplinary hearing, but a new allegation of absenteeism was introduced at that hearing without prior notice, denying him a fair chance to respond. The court found the process was aimed at terminating him regardless, and held the termination unfair and unlawful in the extreme.

p. 6
02

Substantive fairness and validity of reasons

Holding

There was no valid or fair reason for the termination since the alleged grounds (a meeting that never took place) were not proved and fresh allegations were introduced

Reasoning

The show cause letter was founded on the Claimant's failure to attend a commercial meeting that was called off by the CEO. No minutes of any such meeting were produced. Once the panel absolved him of insubordination and negligence, the introduction of a new absenteeism charge showed the panel was predisposed to dismissal. Accordingly the reasons failed the tests in sections 43 and 45 of the Employment Act.

p. 7
03

Lawfulness of the prolonged salary reduction

Holding

The salary reduction was lawful only for the six months consented to; extending it to 2022 was unlawful and the employee was entitled to the full pay from 2021 and 2022

Reasoning

The Claimant consented to a 50% salary reduction in April 2020 on the understanding it would be reviewed after three to six months. No evidence of a consultative meeting extending the reduction was produced, and the Respondent's own witness admitted the salary was never reinstated to Kshs. 514,100/-. Since consent is the touchstone for varying a fundamental term, the extension was unlawful and the deductions had to be refunded.

p. 7
04

Entitlement to service pay despite NSSF registration

Holding

Non-remittance of NSSF deductions placed the Claimant in the same position as a non-member, so he was entitled to service pay

Reasoning

Although section 35(6) of the Employment Act excludes service pay for NSSF members, the court found the Respondent deducted NSSF contributions but never remitted them. Membership connotes payment of deductions while in employment; without remittance the Claimant was effectively not a contributor, so the exclusion did not apply and service pay at 15 days per completed year was awarded.

p. 7
05

Quantum of compensation

Holding

The maximum of 12 months' salary compensation under section 49 of the Employment Act was awarded

Reasoning

Reinstatement or re-engagement being unavailable, the court fell back on compensation. Having found the termination manifestly unfair, that the Claimant was accosted with new allegations, and that the aim was to terminate him at whatever cost, the court took all factors into account and awarded the full 12 months' salary compensation calculated on the contractual salary of Kshs. 514,100/-.

p. 7

Legal principles established

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  • A unilateral or unagreed extension of a salary reduction beyond the period consented to is contrary to the law and the employee is entitled to the difference
  • Where an employer fails to remit NSSF deductions, the employee is in law not a member of NSSF and remains entitled to service pay
  • Confronting an employee with fresh allegations at a disciplinary hearing after absolving him of the documented charges renders the termination procedurally and substantively unfair

Court orders

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  1. 1.12 months' salary as compensation – Kshs. 6,169,200/-
  2. 2.One-month's salary in lieu of notice – Kshs. 514,100/-
  3. 3.Salary for 13 days worked in June 2022 – Kshs. 222,776.66
  4. 4.Kshs. 4,795,890/- being refund of salary unlawfully deducted for 21 months
  5. 5.Service pay at the rate of 15 days for each completed year of service for 7 years – Kshs. 1,799,350/-
  6. 6.Accrued and unpaid leave days – 43.75 days – Kshs. 749,729.16
  7. 7.A certificate of service strictly in terms of section 51 of the Employment Act
  8. 8.Costs of the suit to the Claimant
  9. 9.Interest at court rates on the sums in (a) to (f) from the date of judgment till payment in full

Authorities

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Legislation

  • Employment Actsection 10(5)
  • Employment Actsection 17
  • Employment Actsection 19
  • Employment Actsection 35(5)
  • Employment Actsection 35(6)
  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 44(4)(d) and (e)
  • Employment Actsection 45
  • Employment Actsection 49
  • Employment Actsection 51
  • Constitution of Kenya, 2010Article 41(1)

Cases cited (12)

  • Daniel Njuguna Mwangi v De La Rue Currency and Security Print Limited
    [2017] eKLR
  • Ibrahim Kamasi Amoni v Kenital Solar Limited
    [2018] eKLR
  • James Ang'awa Atanda & 10 others v Judicial Service Commission
    [2017] eKLR
  • Kenya Union of Commercial Food and Allied Workers v Tusker Mattresses Limited
    [2020] eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
  • Donald Odeke v Fidelity Security Limited
    [2012] eKLR
  • Mary Chemweno Kiptui v Kenya Pipeline Company Limited
    [2014] eKLR
  • Eddie Mutegi Njora v Mega Microfinance Co. Ltd
    [2015] eKLR
  • Abraham Gumba v Kenya Medical Supplies Authority
    [2014] eKLR
  • Sims v. the Board of Trustees Holly Springs Municipal Separate District School
    414 SO. 2d 431 [Miss. 1982]
  • James Angama & 10 others v Judicial Service Commission
    [2017] eKLR
  • Joseph Ngungu Wairiuko v Tassia Coffee Estate Limited
    [2022] eKLR
Jurisdiction invoked
Original jurisdiction of the Employment and Labour Relations Court under the Employment Act, 2007 and Article 41 of the Constitution of Kenya, 2010

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, "Wanjai v Mediamax Network Limited (Cause E607 of 2022) [2024] KEELRC 1085 (KLR)", Case Analysis (2024). Cause No E607 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1085/eng@2024-03-14

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