Varghese v Freightreach Limited (Cause E548 of 2022) [2024] KEELRC 2692 (KLR)
The bottom line
#A Kenyan court upheld a Dubai-transfer dismissal as fair but ordered the employer to pay USD 55,334 in wrongly computed terminal dues plus costs.
What this practically means
#Executive summary
#Key legal issues
#Whether the directive to relocate to Dubai amounted to a unilateral change of the duty station and a demotion
No. The court found the place of work remained Nairobi per the initial appointment letter, but the respondent invited the claimant to make a business proposal for the Dubai role rather than imposing a transfer; the claimant declined the offer and effectively requested termination per contract.
The initial contract fixed Nairobi as the duty station and was never amended as to station. The email of 30.05.2022 invited the claimant to draw a proposal and give feedback on the move to Dubai, and he replied declining the offer while acknowledging discussions. No new designation was imposed; benefits were not reduced, so no demotion was shown.
Whether the termination was unfair under section 45 of the Employment Act, 2007
No. The respondent adopted a fair procedure and had a fair reason; the parties separated per contract for want of agreement to change the work station.
The evidence, including minutes of the 10.06.2022 meeting, showed the claimant had declined the transfer severally and requested termination by mail. The respondent then served a one-month termination notice and computed final dues. The dispute that remained concerned the correct computation of terminal dues, not the fairness of the termination.
What final dues were payable to the claimant
The claimant was awarded USD 4,700 in lieu of notice, USD 28,200 service pay/gratuity, USD 6,268 for 40 leave days, USD 6,267 salary arrears for April to 10th July, and a USD 500 air ticket; house allowance and unfair termination compensation were refused.
The contractual notice period was two months but only one month was given, justifying payment in lieu. Service gratuity at 15 days per year of the 12 years served totalled USD 28,200. The employer's own final computation admitted the 40 leave days, salary arrears and the air ticket. The salary was consolidated, defeating the house allowance claim.
Whether the respondent's counterclaim for one month's pay in lieu of notice succeeds
No. It was the respondent who terminated the contract, so it cannot claim payment in lieu of notice from the claimant.
The court found the termination was effected by the respondent's email of 10.06.2022 serving one month's notice, not by the claimant's conduct. Having terminated, the respondent could not characterize the claimant as having repudiated and then counterclaim two months' notice pay.
Legal principles established
#- An employer does not unilaterally vary the contracted place of work where it invites the employee to submit a proposal and the employee declines the transfer; where the parties then separate per contract, termination under fair procedure and for fair reason is not unfair
- Where the employer terminates the contract, it cannot counterclaim payment in lieu of notice from the employee
- Terminal dues must be computed on the employee's actual last monthly salary
Court orders
#- 1.The respondent to pay the claimant terminal dues of USD 55,334.00 by 01.12.2024 failing interest at court rates from the date of filing the suit until full payment
- 2.The dismissal of the counterclaim with costs to the claimant
- 3.The respondent to pay the claimant's costs of the suit
- Jurisdiction invoked
- Employment and labour relations jurisdiction under Article 162(2) of the Constitution (Employment Act, 2007 applied)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Varghese v Freightreach Limited (Cause E548 of 2022) [2024] KEELRC 2692 (KLR)", Case Analysis (2024). Memorandum of Claim dated 01.08.2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2692/eng@2024-10-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.