The Dhow House Limited v Gisebe (Appeal E081 of 2023) [2024] KEELRC 2332 (KLR)
The bottom line
#Kenya's Employment Court confirmed firing a worker for refusing a wage cut is unfair, but slashed the compensation because maximum awards need justification.
What this practically means
#Executive summary
#Key legal issues
#Unfair termination for refusal of wage reduction
The termination on 17 March 2021 was unfair as the respondent declined the wage reduction and there was no written consent to the change
Section 10(5) of the Employment Act requires changes to contract terms to be made in consultation with the employee, reflected in the contract and notified in writing. The appellant had no record of consent to the wage reduction or reasons for termination. The trial court's finding of unfair termination, though for different reasons, could not be faulted.
Maximum compensation requires justification
The trial court's award of the maximum 12 months' compensation without stated reasons was an error warranting interference; one month's gross wage was justified
The jurisprudence of the Court of Appeal requires that maximum compensation of 12 months be awarded only in exceptional cases with sound judicial principles and stated justification. The respondent worked only 6 months in the last phase, and the employer made an effort to discuss retention despite failing the legal threshold. Compensation of one gross wage of Ksh.17,000 was justified.
Duty of first appellate court
The court must re-evaluate and re-assess the evidence while bearing in mind the trial court's advantage of observing witness demeanour
Being a first appeal under section 78 of the Civil Procedure Act, the court has a duty to re-evaluate and re-assess the evidence and draw its own conclusions, while remaining mindful that the trial court heard the evidence first-hand and observed witness demeanour.
Legal principles established
#- A maximum award of 12 months' compensation must be justified with stated reasons and is reserved for exceptional cases
- An employer cannot unilaterally vary fundamental terms of employment; changes must be in writing with the employee's consent
- Terminating an employee for declining a wage reduction is unlawful and unfair
Court orders
#- 1.Notice pay Ksh.7,000 (less the loan amount)
- 2.Compensation Ksh.17,000
- 3.Work on public holidays Ksh.20,769
- 4.For the appeal, each party to bear its costs
- 5.For the lower court proceedings, costs as awarded
- On appeal from
- Magistrates' Court (Mombasa)
- CM ELRC No. E330 of 2021
- Jurisdiction invoked
- First appeal under section 78 of the Civil Procedure Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "The Dhow House Limited v Gisebe (Appeal E081 of 2023) [2024] KEELRC 2332 (KLR)", Case Analysis (2024). Mombasa CM ELRC No. E330 of 2021 (Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2332/eng@2024-09-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.