Five Forty Aviation Limited v Erwan Lanoe
The bottom line
#Kenya's Court of Appeal ruled that an employer's failure to get a foreign pilot's work permit didn't void his contract, but cutting his compensation.
What this practically means
#Executive summary
#Key legal issues
#Legality of the employment contract executed on the basis of a class 'H' entry permit
The contract was lawful and enforceable; possession of a work permit was not a contractual precondition and the entry permit authorised the respondent's professional pilot services
The contract complied with sections 9 and 10 of the Employment Act, 2007. The appellant's own witness conceded no work permit was a precondition. The class 'H' entry permit authorised the respondent to train pilots and fly aeroplanes, as he was not engaged in a 'prescribed' profession under the repealed Immigration Act, and he practised through M/S Higher Power Services Limited whose objects covered such services.
Effect of the employer's failure to obtain a work permit under section 45(2) of the Kenya Citizenship and Immigration Act, 2011
The failure did not render the contract illegal; it frustrated the contract, which could then have been terminated per the contract's clause 9 or the Employment Act procedures
Applying the Kenya Airways v Satwant Singh Flora guidelines and the doctrine of frustration, the change in immigration law placed the statutory obligation to obtain a work permit on the employer. Its default created intervening circumstances making continued performance impossible, exciting frustration rather than illegality, so the employer could not rely on its own default to escape the contract.
Whether the termination of the frustrated contract was fair and lawful
The termination was unfair and unlawful because the appellant neither invoked clause 9 of the contract nor the sections 41, 43 and 45 Employment Act procedures
The contract allowed either party to terminate on one month's notice or salary in lieu. Alternatively, as the contract was executed in compliance with the Employment Act, the employer could have invoked sections 41, 43 and 45 procedures requiring valid reason and fair procedure. The appellant did neither, and the trial Judge's finding to that effect was affirmed.
Whether the award of eight months' salary as compensation was excessive
The award was reduced to five months' salary (Kshs 4,627,800.00) as the respondent had been fully compensated for the other items
Section 49 remedies are discretionary, guided by the thirteen considerations in section 49(4). Interference is warranted only on the United India Insurance principles. Here the court found the eight-month award high considering the respondent's full compensation on the other heads, and substituted five months as reasonable and fair.
Legal principles established
#- Courts are bound by the terms of contracts parties willingly enter into and will not rewrite them absent coercion, fraud or undue influence
- An employer's failure to comply with section 45(2) of the Kenya Citizenship and Immigration Act does not render the employment contract illegal but may found frustration of the contract
- Section 49 remedies under the Employment Act are discretionary and must be granted on the peculiar facts of each case having regard to the thirteen considerations in section 49(4)
- An appellate court will not interfere with a discretionary award except on the established grounds: misdirection in law, misapprehension of facts, wrong considerations taken or omitted, or a plainly wrong decision
- On a first appeal, the court has a duty to re-evaluate the evidence and draw its own conclusions while making due allowance for not having seen or heard the witnesses
Court orders
#- 1.Judgment of the ELRC affirmed save for the compensation for unfair termination which is reduced from eight (8) months' salary to five (5) months' salary, i.e. Kshs 4,627,800.00
- 2.Appeal against the notice pay, accrued incentive payment arrears and payment for thirteen days worked dismissed
- 3.Costs of the appeal and the court below taxed against the appellant, reduced by ¼
- On appeal from
- Employment & Labour Relations Court of Kenya at Nairobi
- Cause No. 2157 of 2014
- Jurisdiction invoked
- First appeal to the Court of Appeal against the judgment of the Employment & Labour Relations Court
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Emerg Investment Limited v Skyline Sacco Limited (Environment and Land Case E048 of 2024) [2025] KEELC 5192 (KLR)[2025] KEELC 5192 (KLR)10 Jul 2025applied
Cite this brief
#Cite this brief
Caselaw, "Five Forty Aviation Limited v Erwan Lanoe", Case Analysis (2019). Civil Appeal No. 55 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/763/eng@2019-05-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.