Ogaro & 34 others v Kenya Revenue Authority (Cause E1058 of 2023) [2025] KEELRC 3694 (KLR)
The bottom line
#Kenya's Employment Court confirmed KRA wrongly ended 23 employees' fixed-term contracts, awarding each four months' salary, interest and costs.
What this practically means
#Executive summary
#Key legal issues
#Substantive fairness of termination for 'change in business strategy'
Termination was substantively unfair because the Respondent proved no valid reason; particulars of the alleged change in business strategy were never given to the Claimants or the Court.
Section 45(2) places the burden on the employer to prove both a valid and fair reason and fair procedure. The Respondent's reason was 'changes in business strategy', but its own witness admitted under cross-examination that particulars were not communicated to the Claimants and none were given at trial. Without proof of the reason, the termination was substantively unfair.
Whether a contractual termination clause displaces statutory unfair termination protections
No - a notice/payment-in-lieu clause may only be invoked where the employer has a valid reason to terminate.
The contracts allowed either party to terminate on three months' notice or pay in lieu, and the Respondent relied on Clause 5. Following the court's earlier decision in Benson Muriithi Kagai v Kenga Equatorial Hotels, the court held such a clause does not authorise termination without a valid reason; statutory protection under the Employment Act prevails.
Characterisation of the termination - redundancy or contractual termination
Though the letters referenced Section 40 (redundancy) severance, termination was on Clause 5 grounds, bringing it within Section 45.
The termination letters cited 'change in business strategy' and Clause 5, not redundancy, although they promised severance under Section 40. RW-1 admitted the Section 40 procedure (30 days' notice, selection criteria, consultation) was not followed. The court therefore assessed fairness under Section 45 rather than redundancy procedure.
Quantum of compensation
Four months' gross salary awarded to each remaining Claimant, consistent with the Court of Appeal award to similarly terminated colleagues.
Taking into account the abrupt and unexpected manner of termination, the court awarded four months' gross salary. This aligned with the Court of Appeal decision in Kenya Revenue Authority v Victor Odhiambo Otieno concerning colleagues terminated on the same date, where P.O. Kiage JA awarded four months' gross salary.
Legal principles established
#- An employer must prove a valid and fair reason for termination even where the contract contains a termination/notice clause; the clause cannot be invoked without a valid reason.
- Where the employer fails to prove the reason for termination, the termination is deemed unfair under Sections 43 and 45 of the Employment Act.
- A claim for salaries for the remainder of a fixed term contract is not an available relief under Section 49(1) of the Employment Act.
Court orders
#- 1.Declaration that termination of the Claimants' employment by the Respondent was unfair.
- 2.Each of the 23 Claimants listed at paragraph 22 awarded the equivalent of four (4) months' gross salary as compensation for unfair termination of employment (Kshs.181,000/= x 4 = Kshs.724,000/=) less PAYE.
- 3.Interest on the awarded sum at court rates from the date of the Judgment.
- 4.Costs of the suit awarded to the 23 Claimants.
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Employment and Labour Relations Court Act not expressly cited in judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ogaro & 34 others v Kenya Revenue Authority (Cause E1058 of 2023) [2025] KEELRC 3694 (KLR)", Case Analysis (2025). Memorandum of Claim dated 20th December, 2023 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/3694/eng@2025-12-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.