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ELRCPartially AllowedNot stated in the judgment· [2025] KEELRC 2959 (KLR)

Kibanga & 2 others v Kasha Technologies Limited (Cause E021 of 2025) [2025] KEELRC 2959 (KLR)

Employment and Labour Relations Court
30 October 2025
2,701 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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Kenyan employers cannot hide behind a contract's termination clause; they must still give fair reasons and follow due process before dismissing employees.

What this practically means

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Executive summary

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The 1st and 3rd claimants, former employees of the respondent, sued for unlawful and unfair termination of employment following letters dated 25 October 2024. The 2nd claimant withdrew her claim upon settlement. The claimants alleged that the terminations were by way of redundancy but without prior notice, without compliance with section 40 of the Employment Act, without any selection criteria being shared, and without payment of terminal dues. The respondent asserted that the contracts contained a termination clause upon notice, which it invoked, and that severance pay was not a contractual term. The court held that following the Constitution 2010 and Article 41, the Employment Act introduced a paradigm shift away from termination at will. Even where a written contract contains a termination clause, procedural and substantive fairness under sections 41, 43 and 45 of the Act remain mandatory. The respondent's simple reliance on the termination clause, without assigning any reasons or observing due process, was devoid of lawful or justified grounds, rendering the terminations unfair. However, the court found there was no redundancy, so severance pay was not due. Notice pay and leave days were deemed addressed in the termination notices. The court awarded the 1st claimant 10 months' gross salary (Ksh. 5,750,000) and the 3rd claimant 5 months' gross salary (Ksh. 1,500,000) as compensation for unfair termination, plus costs, holding the needless invocation of the termination clause to be an abuse of fair labour practices.

Key legal issues

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01

Whether invoking a contractual termination clause satisfies the Employment Act

Holding

No - the termination clause is now regulated in law, and the employer must still observe procedural and substantive fairness under sections 41, 43 and 45 of the Act

Reasoning

The Constitution 2010 entrenched fair labour practices under Article 41. The Employment Act introduced minimum terms and a duty to give reasons, departing from the traditional power of employers to terminate at will. Even where a written contract allows termination on notice, the mandatory due process of the Act applies; simple reliance on the clause without reasons or process was empty in the context of the Act.

p. 4
02

Whether there was a redundancy entitling the claimants to severance pay

Holding

No - there was no redundancy under section 40 of the Act; the termination notices assigned no reasons and mentioned no financial constraints

Reasoning

The notices dated 25 October 2024 assigned no particular reasons and made no mention of financial constraints that would infer a redundancy. The one-month notice corroborated the respondent's invocation of the contractual termination clause, not a redundancy declaration. Severance pay under section 40 was therefore not due.

p. 5
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What compensation is appropriate for the unfair termination

Holding

10 months' gross salary for the 1st claimant (Ksh. 5,750,000) and 5 months' gross salary for the 3rd claimant (Ksh. 1,500,000)

Reasoning

The 1st claimant served 4 complete years with no adverse performance record, and would have continued but for the respondent's unlawful conduct. The 3rd claimant served one year and 2 months, was diligent, and had even secured insurance against redundancy. The court assessed compensation at 10 months' and 5 months' gross salary respectively.

p. 6

Legal principles established

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  • The Employment Act, read with Article 41 of the Constitution, introduced a paradigm shift: an employer cannot rely on a contractual termination clause at will; procedural and substantive fairness under sections 41, 43 and 45 of the Act remain mandatory even where the written contract allows termination on notice
  • Reliance on a termination clause without lawful or justified grounds renders termination unfair

Court orders

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  1. 1.A declaration that employment was terminated unfairly
  2. 2.1st claimant awarded compensation Ksh. 5,750,000
  3. 3.3rd claimant awarded compensation Ksh. 1,500,000
  4. 4.Claimants awarded costs

Authorities

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Legislation

  • Employment Actsection 40
  • Employment Actsection 40(1)(c)
  • Employment Actsection 40(1)(g)
  • Employment Actsections 41, 43 and 45
  • Employment Actsections 41, 43, 45
  • Constitution of Kenya 2010Article 41
  • Constitution of Kenya 2010section 7 of the Sixth Schedule

Cases cited (10)

  • George Musamali v G4S Security Services Kenya Ltd
    [2016] eKLR
  • Richarge Kibet Yegon v Aguventure Ltd
    [2018] eKLR
  • Kenya Revenue Authority v Menginya Salim Murgani
    Civil Appeal No. 108 of 2010
  • Kosgei v Mvita Management Company Limited
    Petition E022 of 2022
  • Ibrahim v Reliance Hospital Limited
    (Employment and Labour Relations Cause E816 of 2021) [2023] KEELRC 2539 (KLR)
  • Njaramba v Mombasa Water Supply & Sanitation Co. Limited
    [2025] KEELRC 2360 (KLR)
  • Kenfreight (E.A.) Limited v Benson K. Nguti
    [2016] eKLR
  • International Planned Parenthood Federation v Pamela Ebot Arrey Efiom
    [2016] KECA 429 (KLR)
  • Gateway Marine Services Limited v Muia
    (Employment and Labour Relations Appeal E010 of 2023) [2023] KEELRC
  • Agatha Bugosi Said v Vegpro Kenya Limited
    [2014] KEELRC 1154 (KLR)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Article 41 of the Constitution (fair labour practices)

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, "Kibanga & 2 others v Kasha Technologies Limited (Cause E021 of 2025) [2025] KEELRC 2959 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2959/eng@2025-10-30

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