Kimani v Langata Hotel Development Ltd (Cause E067 of 2021) [2025] KEELRC 701 (KLR)
The bottom line
#A Kenyan court ruled that a hotel unfairly cut a manager's salary and fired her during COVID-19, awarding her Kshs 975,000 because employers must consult before pay changes.
What this practically means
#Executive summary
#Key legal issues
#Lawfulness of the salary reduction
The downward variation of remuneration breached section 10(5) of the Employment Act because the employer did not consult the Claimant.
The employer reduced the salary twice in March/April 2020 citing COVID-19 austerity and Government directives, but produced no directive and served the variation letters only on 7 May 2020, the same day as the termination notice. Section 10(5) requires consultation before varying remuneration; consent is not needed but consultation is key. No material suggested consultation, so the variation fell below the statutory standard.
Frustration of contract by COVID-19
COVID-19 did not operate to frustrate the Claimant's employment contract.
Following the Supreme Court in Kwanza Estates, financial hardship alone, even from an extraordinary event like the pandemic, does not automatically discharge contractual obligations. The Respondent faced booking cancellations and hotel closure, but like the University in Kwanza Estates, this was not absolute impossibility of performance; the Respondent had the option of terminating on redundancy grounds per the Tripartite Memorandum of Understanding.
Unfair termination
The termination was unfair both contractually and statutorily.
The contract provided for 3 months' notice or pay in lieu, which was neither given nor offered. The employer also failed to notify the Claimant of contemplated termination on operational requirements or invite representations as required by sections 35(1), 41 and 43 of the Employment Act. Notably, the employer had secretly prepared a termination notice on 29 April 2020 while negotiating salary reductions.
Remedies
Five months' gross salary (Kshs 975,000/-) awarded as compensation for unfair termination.
Considering the roughly 4 years of service and the breach found on salary reduction for which no relief was pleaded, the Court deemed the equivalent of 5 months' gross salary (at Kshs 195,000/-) appropriate. Accrued leave claim failed for want of evidential foundation.
Legal principles established
#- Section 10(5) of the Employment Act requires consultation, though not consent, before varying remuneration; failure to consult is a breach of contract/statute.
- Financial hardship alone, even from the COVID-19 pandemic, does not discharge contractual obligations; COVID-19 was not a frustrating event of the employment contract.
Court orders
#- 1.Declaration that the Respondent unfairly terminated the Claimant's employment
- 2.Award of compensation equivalent to 5 months' gross salary, Kshs 975,000/-
- 3.The award to attract interest at court rates from the date of judgment
- 4.The Claimant to have costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kimani v Langata Hotel Development Ltd (Cause E067 of 2021) [2025] KEELRC 701 (KLR)", Case Analysis (2025). Cause filed 27 January 2021 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/701/eng@2025-03-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.