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ELRCPartially AllowedMemorandum of Claim dated 29th March 2018· [2025] KEELRC 302 (KLR)

Sabwa v Fargo Courier Limited (Cause 488 of 2018) [2025] KEELRC 302 (KLR)

Employment and Labour Relations Court
30 January 2025
3,735 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled a signed discharge certificate can't block an unfair termination claim, and even probationary employees are protected from dismissal without a valid, proved reason.

What this practically means

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Executive summary

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The Claimant, employed as a Logistics and Warehousing Manager from 1st August 2017 at a gross monthly salary of KShs. 600,000, was terminated on 23rd January 2018 while still within his six-month probation period. He was handed a termination letter that gave no reasons, and the following day he signed a discharge certificate acknowledging KShs. 443,443 as full payment of contractual dues. He sued for a declaration of unfair termination, 12 months' salary compensation under section 49 of the Employment Act, one month's notice pay, costs and interest. The court framed three issues. First, it held the discharge certificate did not bar the claim: on its plain wording, read as a whole and applying the objective theory of contract interpretation, it covered only contractual dues payable at termination, not future awards from litigation. Second, on fairness, the court held that section 42(1) of the Employment Act excludes only section 41 (procedure) from probationary contracts; the substantive fairness provisions in sections 43 and 45 still apply. The Monica Munira Kibuchi decision declaring section 42(1) unconstitutional was noted but held not to apply retrospectively. Since the termination letter, pleadings and witness statement disclosed no reason for termination, and poor performance was never pleaded and could not be considered, the Respondent failed to discharge its legal burden and the termination was substantively unfair. Third, on reliefs, the court awarded compensation of ten months' gross salary (KShs. 6,000,000), declined notice pay as the contract provided for seven days' notice during probation, and awarded interest and costs to the Claimant.

Key legal issues

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01

Effect of the discharge certificate

Holding

The discharge certificate did not bar the claim; on its plain meaning it covered only contractual dues payable at termination, not future awards from unfair-termination litigation.

Reasoning

The court analysed the entire document, holding that paragraphs must not be read in isolation. Paragraph one limited the payment of KShs. 443,443 to dues under the employment contract. Following the objective/four-corners theory of interpretation, the court found no wording showing an intention to waive future claims arising from litigation, applying the Court of Appeal's guidance in Thomas De La Rue.

p. 6
02

Applicability of sections 41, 43 and 45 to probationary contracts

Holding

Section 41 (procedure) does not apply to probationary contracts per section 42(1), but the substantive fairness provisions (sections 43 and 45) apply to probationary contracts.

Reasoning

Section 42(1) expressly excludes only section 41(1); had the legislature intended to oust sections 43, 45 and 47 it would have said so expressly. The three-judge decision in Monica Munira Kibuchi declaring section 42(1) unconstitutional was noted but held inapplicable retrospectively, since it came long after the termination.

p. 7
03

Whether termination was unfair

Holding

The termination was substantively unfair; the Respondent failed to prove the reason for termination, which was neither in the termination letter, the pleadings, nor explained to the Claimant.

Reasoning

Section 43 places the legal burden on the employer to prove the reason for termination. The termination letter gave no reason and neither did the witness statement or Statement of Response. Poor performance, though urged at trial, was never pleaded and could not be considered, per the Supreme Court's pronouncement on pleadings in the Odinga case.

p. 7
04

Reliefs

Holding

Compensation of 10 months' gross salary (KShs. 6,000,000) awarded under section 49(1)(c); notice pay refused as the contract allowed seven days' notice during probation.

Reasoning

The court exercised discretion considering the short tenure (about 5 months) but was moved by the Claimant's headhunting from a Country Director role, the permanent and pensionable contract, termination without cause allegedly at the instance of a key client, and the inhumane disregard of employment as a livelihood.

p. 8

Legal principles established

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  • A discharge certificate does not necessarily bar an employment claim; it has contractual effect only as to matters it unambiguously addresses, and payments under a contract of service do not include future dues from successful unfair-termination litigation.
  • Section 42(1) of the Employment Act excludes only section 41(1) from probationary contracts; the substantive fairness provisions (sections 43 and 45) still apply to probationary contracts.
  • The employer bears the legal burden under sections 43 and 45 of the Employment Act to prove the reason for termination; failure renders the termination unfair.
  • A court cannot consider evidence on facts not pleaded; parties are bound by their pleadings.

Court orders

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  1. 1.A declaration that the termination of the Claimant's employment was substantively unfair.
  2. 2.Compensation pursuant to section 49(1)(c) of the Employment Act of KShs. 6,000,000 (six million).
  3. 3.Interest on the awarded sum at court rates from the date of Judgment till full payment.
  4. 4.Costs of the suit.

Authorities

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Legislation

  • Employment Act, 2007Section 49 (incl. 49(1)(c))
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 42(1)
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 45 (incl. 45(2))
  • Employment Act, 2007Section 47

Cases cited (5)

  • Coastal Bottlers Limited vs- Kimathi Mithika
    [2018] eKLR
  • Thomas De La Rue Ltd v David Opondo Omutelema
    [2013] eKLR
  • Fidelity & Commercial Bank Ltd V Kenya Grange Vehicle Industries Ltd
    [2017] eKLR
  • Monica Munira Kibuchi & 6 others v Mount Kenya University, Attorney General [Interested Party]
    [2021] eKLR
  • Raila Amolo Odinga & Another v IEBC & 2 others
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 41, 42, 43, 45, 47 and 49) over an unfair termination 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, "Sabwa v Fargo Courier Limited (Cause 488 of 2018) [2025] KEELRC 302 (KLR)", Case Analysis (2025). Memorandum of Claim dated 29th March 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/302/eng@2025-01-30

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