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ELRCPartially AllowedNot disclosed on the face of the judgment (Memorandum of Claim dated 22nd August 2022)· [2024] KEELRC 1215 (KLR)

Awan v Canaan Developers Limited (Cause E588 of 2022) [2024] KEELRC 1215 (KLR)

Employment and Labour Relations Court
24 April 2024
DMD. K. Njagi Marete
1,736 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The Claimant, employed as a Human Resource Manager by contract dated 9th March 2020 at a gross salary of Kshs.235,000 per month, sued the Respondent alleging that her employment was unfairly, unlawfully and unilaterally terminated effective 12th July 2022 without cause or a hearing, and that she suffered a hostile and discriminatory working environment at the hands of the Chief Operating Officer. She sought a declaration of unfair termination, Kshs.2,870,000 in tabulated dues, damages for discrimination, salary from dismissal to judgment, reinstatement, costs and interest. The Respondent filed a bare denial and, at submissions, contended that the Claimant served on a two-year fixed-term contract expiring 1st August 2022 which was simply not renewed, relying on authority that non-renewal of a fixed-term contract is not unfair termination. The court framed three issues: lawfulness of the termination, entitlement to relief, and costs. Holding the Respondent's defence a sham and its fixed-term case not demonstrated in evidence, the court found that once the Claimant demonstrated lack of substantive and procedural fairness, the burden lay on the Respondent under section 47(5) of the Employment Act to justify the termination, which it failed to discharge. On a balance of probabilities, the termination was held unlawful. The court awarded salary for July and August 2022 (Kshs.340,000), service pay (Kshs.170,000), and eight months' compensation (Kshs.1,880,000), totalling Kshs.2,390,000, ordered a certificate of service within thirty days, and awarded costs to the Claimant. Claims for discrimination damages, bonus, fuel, unpaid leave, and reinstatement were not granted.

Key legal issues

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01

Whether the termination was wrongful, unfair and unlawful

Holding

Yes - the termination was unlawful; the Respondent failed to demonstrate the fixed-term contract it pleaded and failed to justify the termination under section 47(5).

Reasoning

The Claimant established she was employed and terminated without a disciplinary hearing or prior warnings, contrary to sections 41, 43 and 45 of the Employment Act. The Respondent's defence was a bare denial, and its assertion of a fixed-term contract that expired on 1st August 2022 was not demonstrated in evidence. Once the Claimant demonstrated the lack of substantive and procedural fairness, the Respondent failed to discharge its statutory burden of justifying the termination.

p. 4
02

Whether the Claimant is entitled to the relief sought

Holding

Partially - she was awarded salary for July and August 2022, service pay, eight months' compensation and a certificate of service; other heads (bonus, fuel, leave, discrimination damages, reinstatement) were not granted.

Reasoning

Having succeeded on unlawful termination, the court found her entitled to relief but exercised discretion in quantifying compensation at eight months' gross salary rather than the twelve months sought, and awarded only specific heads: unpaid salary for July and August 2022, service pay, compensation and the certificate of service.

p. 5
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Costs

Holding

Costs of the claim awarded to the Claimant, to be borne by the Respondent.

Reasoning

As the successful party in an employment cause where the defence was found to be a sham denial, the normal rule of costs following the event was applied.

p. 5

Legal principles established

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  • Where an employer pleads a fixed-term contract that is not demonstrated in evidence, and the employee establishes lack of substantive and procedural fairness, the burden under section 47(5) of the Employment Act to justify the termination rests on the employer.
  • Unlawful termination is determined on a balance of probabilities.

Court orders

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  1. 1.Payment of salary for July and August 2022 of Kshs.340,000.00
  2. 2.Payment of service pay of Kshs.170,000.00
  3. 3.Payment of eight (8) months' compensation for unlawful termination (Kshs.235,000.00 x 8) totalling Kshs.1,880,000.00
  4. 4.Total award of Kshs.2,390,000.00
  5. 5.The Respondent to issue a certificate of service to the Claimant within thirty (30) days of the judgment
  6. 6.Costs of the claim to be borne by the Respondent

Authorities

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Legislation

  • Employment Act, 2007section 45(3), (4) and (5)
  • Employment Act, 2007sections 41, 43, 45
  • Employment Act, 2007section 47(5)
  • Employment Act, 2007section 51
  • Employment Act, 2007section 46

Cases cited (2)

  • Transparency International-Kenya versus Teresa Carlo Omondi
    (KECA No. 174) (2023) eKLR
  • Samuel Chacha Mwita vs. Kenya Medical Research Institute
    [2024] eKLR
Jurisdiction invoked
Original jurisdiction under the Employment Act, 2007 (sections 41, 43, 45 and 47(5))

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, "Awan v Canaan Developers Limited (Cause E588 of 2022) [2024] KEELRC 1215 (KLR)", Case Analysis (2024). Not disclosed on the face of the judgment (Memorandum of Claim dated 22nd August 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1215/eng@2024-04-24

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