Nzioka & another v Gateway Marine Services Limited (Cause E139 of 2023) [2024] KEELRC 2296 (KLR)
The bottom line
#Kenyan employers cannot hide behind contract termination clauses or notice pay—they must prove valid reasons and follow fair procedure before ending employment.
What this practically means
#Executive summary
#Key legal issues
#Validity of reasons for termination
Termination for alleged Covid-19 financial difficulties was not valid; claimants were employed post-Covid
The employer attributed terminations to Covid-19 financial constraints, but the court noted both claimants were engaged after the pandemic and the respondent had navigated it successfully. Under Sections 43 and 45 the employer bears the burden of proving valid and genuine reasons, which it failed to discharge.
Procedural fairness under Sections 40 and 41
No notice under Section 40, no report to the labour officer, and no hearing under Section 41; termination unfair
Where loss of employment stems from operational/financial difficulties amounting to redundancy, Section 40 procedures (notice and labour officer report) apply, and Section 41 hearing requirements must be met. The respondent invoked only the contractual termination clause and paid notice, which is insufficient.
Premature termination of fixed-term contracts
Early termination of fixed-term contracts without reasons was unfair for both claimants
Even where contracts had expiry dates, the respondent terminated them prematurely (2 months and 40 days respectively) citing only the termination clause. Section 45(2) requires proof of a valid and fair reason and fair procedure; notice pay alone does not satisfy the Act.
Unauthorised salary deductions
Deductions made without written consent must be refunded
The employer imposed Covid-related pay cuts without the employees' written consent as required by Section 10(5) of the Employment Act. The unpaid/deducted salaries were accordingly awarded: Ksh.295,800 for the 1st claimant and Ksh.156,000 for the 2nd claimant, with terminal dues recalculated on full salary.
Discrimination and trauma claims
Discrimination not established
Discrimination must be compared between similarly situated employees. The claimants were replaced by junior staff on lower wages who accepted half salary; this did not amount to discriminatory treatment, and the trauma claim was subsumed in the unfair termination finding.
Legal principles established
#- An employer must prove valid and fair reasons for termination and follow fair procedure; invoking a contractual termination clause at will is impermissible
- Salary deductions require the employee's prior written consent under Section 10(5) of the Employment Act
- Reliance on operational reasons/redress must be read with Sections 40, 43 and 45 of the Employment Act; failure to follow Section 40 renders termination unfair
Court orders
#- 1.Declaration that employment of both claimants was terminated unfairly
- 2.1st claimant awarded compensation of Ksh.522,000
- 3.1st claimant awarded unpaid salaries of Ksh.295,800
- 4.1st claimant awarded unpaid terminal dues of Ksh.346,249
- 5.2nd claimant awarded compensation of Ksh.240,000
- 6.2nd claimant awarded unpaid salary of Ksh.156,000
- 7.2nd claimant awarded unpaid terminal dues of Ksh.226,554.20
- 8.Each party bears its own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 40, 41, 43, 45, 49 applied)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nzioka & another v Gateway Marine Services Limited (Cause E139 of 2023) [2024] KEELRC 2296 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2296/eng@2024-09-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.