Mtana v Sopa Lodges (Cause E177 of 2022) [2024] KEELRC 1125 (KLR)
The bottom line
#A signed Kenyan job contract with a future start date is binding, and even COVID-19 could not let the employer walk away without following termination procedures.
What this practically means
#Executive summary
#Key legal issues
#Existence of an employment relation before the effective date
A contract with both an execution date and an effective date is a valid, enforceable employment contract from the execution date; it is not an inchoate contract
The parties signed a complete contract on 14th February 2020 with all terms agreed, including a commencement date of 15th April 2020. All elements of a valid contract (offer, consideration, unconditional acceptance) were present. The Respondent conflated inchoate contracts (still under negotiation) with complete contracts having a future effective date. Such contracts are enforceable and give rise to legitimate expectation of implementation on the effective date.
Frustration by COVID-19 versus unfair termination
The contract was frustrated by the COVID-19 pandemic, but the Respondent was nonetheless obliged to disengage lawfully
The pandemic rendered commencement of the employment relation impracticable, discharging the parties from the obligation to perform. However, frustration did not permit the employer simply to let the relation lapse; it was required to invoke the notice clause in the contract or the procedure under sections 41, 43 and 45 of the Employment Act. Failure to do so entitled the Claimant to notice-period damages.
Applicability of section 45(3) of the Employment Act
The thirteen-month continuous-service threshold in section 45(3) cannot assist the Respondent because it was declared unconstitutional
The Respondent relied on section 45(3) to bar the claim for unfair termination compensation. The court noted this provision was declared invalid in Samuel G. Momanyi v. The Hon. Attorney General and Another [2012] eKLR and therefore could not assist the Respondent. In any event, the court limited relief to notice pay given that the Claimant never reported to work owing to events beyond the Respondent's control.
Quantum of relief
Claimant awarded one month's salary (Ksh. 500,000.00) as notice pay under the probation clause, not clause VII
The general notice clause (clause VII) was inapplicable because the parties parted ways during the probationary period. Under clause V, either party could terminate during probation by one month's notice or salary in lieu. Since the Respondent failed to invoke either avenue, the Claimant was awarded salary for one month, Ksh. 500,000.00, with interest and costs.
Legal principles established
#- Once parties execute an employment contract signifying offer and acceptance, it is valid and enforceable notwithstanding postponement of the implementation date
- Where performance of an employment contract is frustrated by supervening events, the parties must close it by invoking the notice clause or the Employment Act procedure (sections 41, 43 and 45), failing which the release is unfair
Court orders
#- 1.Declaration that the parties had a valid employment contract from 14th February 2020, implementation postponed to 15th April 2020
- 2.Finding that the contract was frustrated by unforeseen events outside the parties' control
- 3.Respondent to pay the Claimant damages equivalent to the notice period under clause V of the contract, Ksh. 500,000.00
- 4.Interest on the aforesaid sum at court rates from the date of the decision
- 5.Claimant awarded costs of the case
- 6.All other reliefs sought but not expressly granted deemed declined
- Jurisdiction invoked
- Original employment and labour relations jurisdiction under the Employment and Labour Relations Court Act (Employment Act reliefs)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
Cite this brief
#Cite this brief
Caselaw, "Mtana v Sopa Lodges (Cause E177 of 2022) [2024] KEELRC 1125 (KLR)", Case Analysis (2024). Cause No E177 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1125/eng@2024-05-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.