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ELRCPartially AllowedEldoret ELRC Appeal arising from Eldoret CMEL No. 44 of 2018; Memorandum of Appeal dated 14th June 2023· [2024] KEELRC 2725 (KLR)

Ineet Millers Company Limited v Ombata (Employment and Labour Relations Appeal E008 of 2021) [2024] KEELRC 2725 (KLR)

Employment and Labour Relations Court
7 November 2024
MOMAUREEN ONYANGO
3,666 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court confirmed that locking an employee out for refusing a new contract is unfair termination, even if the refusal itself was a valid reason.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Eldoret against a judgment of the magistrate's court in Eldoret CMEL No. 44 of 2018, which had found that the Respondent's employment was unfairly terminated and awarded her compensation and terminal dues. The Respondent, employed from 2013 and moved to monthly terms in 2017, refused to sign new contract terms introduced in August 2018 and her employment ended; the employer said she absconded, while she said she was locked out for refusing to sign. The court, as a first appellate court, re-evaluated the evidence, noting RW1's admission that he instructed guards not to admit employees who had not signed the new contracts. It held the employer failed to prove abscondment or compliance with section 41 of the Employment Act, and upheld the finding of unfair termination, while rejecting the constructive-dismissal argument. On the awards, the court upheld one month's pay in lieu of notice (Kshs. 8,500); set aside severance pay (severance being confined to redundancy), the August 2018 salary award and the award for the remaining years of service (no legal basis beyond the 12-month compensation cap); reduced compensation for unfair termination to a few months' salary (the analysis says 2 months, the final orders say 3 months at Kshs. 25,500) because refusal to sign the contract was a valid reason and only procedure was wanting; recalculated leave at 21 days per year (Kshs. 34,326.90); and substituted the overtime award with Kshs. 124,324.20 based on 11-hour, 6-day work weeks. The appeal partially succeeded and each party was to bear its own costs of the appeal, with the lower court's costs award sustained.

Key legal issues

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01

Whether the Respondent was unfairly terminated

Holding

Yes - the trial court's finding was upheld; the employer locked out the employee for refusing to sign a new contract and failed to prove she absconded or complied with section 41

Reasoning

The employer alleged the employee absconded after refusing to sign new contracts, but did not demonstrate compliance with section 41 of the Employment Act. RW1 admitted instructing guards not to admit employees who had not signed the new contracts. The court therefore found the employer failed to prove abscondment on a balance of probability and that the termination was unlawful and unfair. Constructive dismissal was rejected since the employee did not resign.

p. 7
02

Whether the trial court's awards were properly made

Holding

Partially - notice pay upheld; severance, August 2018 salary and remaining-years pay set aside; compensation reduced; leave and overtime awards recalculated

Reasoning

The court applied the standard for interfering with discretionary awards. Severance pay is confined to redundancy. Compensation for unfair termination was reduced because the refusal to sign the contract was a valid reason and only procedure was lacking. Leave was computed at 21 days per year under section 28 rather than 30. Overtime was computed from uncontroverted testimony of 11-hour days, 6 days a week, at 1.5 times the hourly rate.

p. 7

Legal principles established

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  • On a first appeal the court must re-evaluate the evidence and draw its own conclusions, bearing in mind it did not hear the witnesses
  • A fair termination requires compliance with Sections 41, 43, 45 and 47(5) of the Employment Act as to procedure and validity/fairness of reasons
  • An appellate court will not interfere with the exercise of discretion unless satisfied the court misdirected itself and arrived at a wrong decision
  • Refusal to sign a contract may be a valid reason for termination, but termination remains unfair absent fair procedure such as where the employee is locked out
  • Constructive dismissal requires that the employee resigned by reason of the employer creating working conditions leaving no option but to resign

Court orders

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  1. 1.The award of one month's pay in lieu of notice is upheld at Kshs. 8,500
  2. 2.The award of severance pay is set aside
  3. 3.The award of 12 months' salary compensation for unfair termination is substituted with compensation at Kshs 25,500 (3 months' salary as per the final orders, 2 months' salary as per the analysis)
  4. 4.The award of salary for August 2018 is set aside
  5. 5.The award on leave days not taken is substituted with Kshs. 34,326.90
  6. 6.The award of overtime is substituted with Kshs 124,324.20
  7. 7.The award of payment for the remaining years is set aside
  8. 8.Each party shall bear its costs of the appeal; the award of costs in the lower court is sustained

Authorities

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Legislation

  • Employment Act, 2007Sections 9, 28, 40(1)(g), 41, 43, 44(4)(a), 45, 47(5), 51
  • Regulation of Wages and Conditions of Employment (General) Ordermaximum working hours (225 hours per month)
  • Constitution of Kenyareferred to generally in the statement of claim

Cases cited (5)

  • Selle & Another v Associated Motor Boat Company Ltd & Others
    [1968] EA 123
  • Kenneth Kimani Mburu & Another v Kibe Muigai Holdings Limited
    (2014) eKLR
  • Kenya Union of Commercial Food and Allied Workers v Mwana Black Smith Limited
    (2013) eKLR
  • Kenya Union of Sugarcane Plantation and Allied Workers v Othira
    (Appeal E005 of 2023) [2024] KEELRC 843 (KLR)
  • Kenya Revenue Authority & 2 others v Darasa Investments Limited
    (2018) eKLR
On appeal from
Chief Magistrate's Court at Eldoret (ELRC subordinate court)
Eldoret CMEL No. 44 of 2018
Jurisdiction invoked
First appellate jurisdiction over an appeal from the magistrates' court in an employment dispute (Memorandum of Appeal dated 14th June 2023)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Ineet Millers Company Limited v Ombata (Employment and Labour Relations Appeal E008 of 2021) [2024] KEELRC 2725 (KLR)", Case Analysis (2024). Eldoret ELRC Appeal arising from Eldoret CMEL No. 44 of 2018; Memorandum of Appeal dated 14th June 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2725/eng@2024-11-07

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