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ELRCPartially AllowedCause No E005 of 2023· [2024] KEELRC 1871 (KLR)

Theobald v Osani Community Health and Development Centre (Cause E005 of 2023) [2024] KEELRC 1871 (KLR)

Employment and Labour Relations Court
18 July 2024
3,561 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that a foreign employee was unfairly terminated, holding employers must follow fair procedure even when staff allegedly abandon duty.

What this practically means

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Executive summary

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The Claimant, engaged as a Medical Superintendent at a monthly salary rising from Kshs 90,000 to Kshs 111,000, sued the Respondent alleging verbal termination on 27th May 2022 after the Respondent computed outstanding salary arrears of Kshs 238,000. The Respondent denied an employment relationship, contending the Claimant was a consultant who absconded duty when pressed for immigration and tax documents, and argued that lack of a work permit vitiated the contract as illegal. The court framed three issues: employment status, lawfulness of the termination, and remedies. Applying the control, economic reality and mutuality-of-obligation tests drawn from Christine Adot Lopeyio and Shena Security, it held the Claimant was an employee under a contract of service. It distinguished Maso v Leopard Point and found the contract was not vitiated by illegality, since the Claimant produced an uncontroverted permit and temporary practising licence, and Section 45 of the Kenya Citizenship and Immigration Act places the permit obligation on the employer. On fairness, even abscondment requires Section 41 procedure; none was followed, and no grounds for dismissal were advanced, so the termination failed both procedural and substantive fairness tests. The court awarded salary arrears of Kshs 238,000, notice pay of Kshs 222,000, compensation for unfair termination, house allowance of Kshs 157,950, a certificate of service, and costs to the Claimant. Notably, the reasoning deems three months' salary as compensation while the final order states two months' salary (Kshs 222,000), an internal inconsistency.

Key legal issues

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01

Employment status: employee or independent contractor

Holding

The Claimant was an employee under a contract of service, established through the control, economic reality and mutuality of obligation tests.

Reasoning

Applying the tests in Christine Adot Lopeyio v Wycliffe Mwathi Pere and Shena Security Co. Ltd v Afropak, the court found the Claimant was paid a monthly salary, was subject to the Respondent's disciplinary measures (control), was not in business on his own account, and there was mutuality of obligation. The written contract referring to him as an employee supported this conclusion.

p. 6
02

Effect of lack of a work permit on the employment contract

Holding

The contract was not vitiated by illegality; the Claimant produced an uncontroverted permit and temporary practising licence, and the obligation to procure a work permit lies on the employer under Section 45 of the Kenya Citizenship and Immigration Act.

Reasoning

The court distinguished Maso v Leopard Point, noting the Claimant there was on probation, and observed that Section 45 of the Kenya Citizenship and Immigration Act obligates the employer to procure a work permit before employing a foreigner. The Claimant's permit and practising licence were uncontroverted, so his employment was lawful.

p. 6
03

Procedural and substantive fairness of the termination

Holding

The termination was procedurally and substantively unfair; the Respondent followed neither Section 41 procedure nor proved any valid grounds for termination.

Reasoning

Section 41 requires notice of contemplated disciplinary action and an opportunity to make representations, and this applies even to abscondment. The Claimant was merely verbally told to stop working, and the Respondent (which alleged abscondment) issued no notice or hearing. No grounds for dismissal were advanced, failing the substantive fairness tests under Sections 43, 45 and 47(5).

p. 7
04

Remedies

Holding

Salary arrears, two months' salary in lieu of notice, compensation for unfair termination, house allowance and a certificate of service were awarded.

Reasoning

The salary arrears were based on an uncontroverted computation (CEX8); notice pay was contractual and statutory; compensation was moderated by the remaining contract term, the Claimant's new comparable employment and the Respondent's financial constraints; house allowance was payable because the Respondent did not prove it was consolidated in salary; a certificate of service is a statutory right under Section 51.

p. 8

Legal principles established

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  • Even in cases of abscondment of duty, the procedural fairness requirements of Section 41 of the Employment Act must still be followed.
  • The distinction between an employee and an independent contractor lies in the nature of the contractual relationship: a contract of service versus a contract for service.
  • Absence of a work permit does not by itself vitiate an employment contract; Section 45 of the Kenya Citizenship and Immigration Act places the obligation to procure the permit on the employer.

Court orders

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  1. 1.A declaration that the Claimant was unfairly terminated.
  2. 2.An award of salary arrears in the sum of Kshs 238,000/=
  3. 3.Salary in lieu of notice Kshs 222,000/=
  4. 4.Compensation for unfair termination (final order states two months' salary Kshs 222,000/=, though the reasoning indicates three months' salary)
  5. 5.House Allowance Kshs 157,950/=
  6. 6.The Respondent is directed to issue a certificate of service to the Claimant
  7. 7.Costs of the suit shall be borne by the Respondent

Authorities

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Legislation

  • Employment ActSection 2 (definition of employee)
  • Employment ActSection 20 (itemised pay statement)
  • Employment ActSection 31 (house allowance)
  • Employment ActSection 35
  • Employment ActSection 36
  • Employment ActSection 41
  • Employment ActSection 43
  • Employment ActSection 45
  • Employment ActSection 47(5)
  • Employment ActSection 51 (certificate of service)
  • Kenya Citizenship and Immigration ActSection 45(2)

Cases cited (10)

  • Kenneth Kimani Mburu & another v Kibe Mungai Holdings
    [2014] eKLR
  • Stevenson Jordan and Harrison Ltd v Macdonald and Evans
    [1952] 1 TLR 101
  • Five Forty Aviation v Erwan Lance
    (2019) eKLR
  • Nicola Romano v Master Mind Tobacco (K) Limited
    eKLR
  • Ayub Kombe Ziro v Umoja Rubber Products Limited
    [2022] eKLR
  • Grain Pro Kenya Inc v Andrew Waithaka Kiragu
    [2019] eKLR
  • Martin Juma Kundu v KEMU Salt Packers Production Ltd
    [2016] eKLR
  • Maso v Leopard Point Luxury Beach Management Ltd
    [2022] eKLR
  • Shena Security Co. Ltd v Afropak (Nig.) Ltd & 2 others
    [2008] 18 NWLR
  • Christine Adot Lopeyio v Wycliffe Mwathi Pere
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "Theobald v Osani Community Health and Development Centre (Cause E005 of 2023) [2024] KEELRC 1871 (KLR)", Case Analysis (2024). Cause No E005 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1871/eng@2024-07-18

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