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Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No. 40 of 2019

John Njuru Ndung'u v AIC Kijabe Station Management [2020] KEELRC 982 (KLR)

Employment and Labour Relations Court of Kenya
2 June 2020
4,533 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled a church body unfairly dismissed its station manager, awarding notice pay and six months' salary but rejecting multi-million shilling claims for future earnings.

What this practically means

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Executive summary

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The claimant, a Station Manager employed by AIC Kijabe Station Management under successive fixed-term contracts (the last dated 28th July, 2018 for three years at Ksh.84,700 per month), was sent on one month's paid administrative leave on 13th February, 2019 to pave way for a financial audit, and on 13th March, 2019 was summarily dismissed with an offer of four months' pay in lieu of notice. He sued for notice pay, anticipatory salaries for 17 years to age 70, retirement benefits and gratuity, and a certificate of service. The respondent objected that the court lacked jurisdiction because of the church's internal dispute mechanism (CDT), that it was a non-entity incapable of being sued, and that the dismissal was justified by fraudulent activities. The court held it had jurisdiction under Article 162 of the Constitution and section 12 of the ELRC Act, that the internal mechanism could not oust jurisdiction and the respondent never invoked section 15 of the Act; and that the respondent was a proper employer under section 2 of the Employment Act, having executed the contracts and termination letter in its own name. On the merits, the court found the dismissal procedurally and substantively unfair: the claimant was never recalled from administrative leave, given a show cause notice, or heard contrary to sections 41, 43 and 45 of the Employment Act, notwithstanding the contractual notice clause. Judgment was entered for the claimant with a declaration of unfair termination, notice pay of Ksh.360,000, compensation of six months' salary (Ksh.508,200) based on the last recorded salary of Ksh.84,700, less any sums owed to the respondent (including tabulated salary overpayments), and a certificate of service. The claims for 17 years' anticipatory salaries and gratuity were declined as the gratuity was not a contractual term and anticipatory remuneration is not a fair remedy. The claimant was awarded 50% of his costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the court has jurisdiction;
  2. 2.Whether the respondent is an employer and or property party herein;
  3. 3.Whether there is unfair termination of employment;
  4. 4.Whether the remedies sought are due; and
  5. 5.Who should pay costs.

Key legal issues

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01

Jurisdiction notwithstanding existence of internal church dispute mechanism (CDT)

Holding

The court has jurisdiction; the internal mechanism did not oust it and the respondent never invoked section 15 of the ELRC Act to refer the dispute

Reasoning

Jurisdiction derives from Article 162 of the Constitution and section 12 of the ELRC Act. Both parties accepted an employment relationship existed. The existence of a Church Disputes Tribunal did not replace the court's jurisdiction, and the respondent could have sought referral under section 15 of the ELRC Act but did not. The claimant retained the right to pursue employment claims in court.

p. 3
02

Whether the respondent was a proper party/employer

Holding

Yes - the respondent contracted and terminated the claimant and is an employer under section 2 of the Employment Act as agent/manager

Reasoning

Both contracts of employment were executed by the claimant and the Chairman of the KSM Committee, the termination letter was issued under the respondent's name, and the respondent received payments from the claimant under its own name. Under section 2 of the Employment Act an employer includes an agent, foreman, manager or factor of a person or firm. The respondent therefore contracted the claimant as employer in its capacity as agent and administrative body.

p. 3
03

Whether termination was unfair

Holding

Yes - the respondent failed to adhere to mandatory provisions of sections 41 and 43, resulting in unfair termination under section 45

Reasoning

The claimant was sent on one month administrative leave to pave way for a financial audit, but was never recalled to address the audit findings or issued a show cause notice. Despite a contractual 4-month notice clause, section 43 required the employer to give reasons for termination and section 41 required notification of misconduct and a hearing in the presence of another employee. Neither was done, rendering the summary dismissal substantively and procedurally unfair.

p. 5
04

Remedies

Holding

Notice pay of Ksh.360,000 (per the termination letter's offer) and 6 months' compensation of Ksh.508,200 based on salary of Ksh.84,700; unexpired term and gratuity claims declined; certificate of service due; overpayments deductible

Reasoning

The last recorded salary was Ksh.84,700 as the claimant produced no evidence of the alleged increase. The respondent's offer in the termination letter to pay Ksh.90,000 x 4 in lieu of notice was accepted as generous. Compensation for substantive and procedural unfairness was assessed at 6 months' salary. Anticipatory salaries for 17 years were unreasonable, and gratuity was not a contractual term.

p. 5

Legal principles established

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  • A court's jurisdiction cannot be displaced by an internal dispute resolution mechanism; the employer could have invoked section 15 of the ELRC Act but did not
  • A termination clause in a contract does not excuse the employer from complying with sections 41 and 43 of the Employment Act
  • Administrative leave must serve its stated purpose, and where investigations follow, the employer must follow due process under sections 41 and 43
  • Anticipatory salaries for the unexpired term of a fixed-term contract are not a fair remedy for unfair termination
  • Gratuity must be a specific term of the employment contract unless covered by a collective agreement or private treaty

Court orders

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  1. 1.A declaration that the claimant's employment was terminated by the respondent unfairly
  2. 2.Notice pay awarded at ksh.360,000 if not yet paid in full
  3. 3.Compensation awarded at ksh.508,200
  4. 4.The above dues at (b) and (c) shall be paid less what the claimant is owing to the respondent
  5. 5.The claimant is awarded 50% of his costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Article 162 of the Constitution, 2010 read with section 12 of the Employment and Labour Relations Court Act, 2011

Relief refused

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Unexpired term contract pay of 17 years until age 70 (Ksh.23,864,328.70)

Claimant was on a fixed-term contract; anticipatory salaries for 17 years found unreasonable

p. 6

Retirement benefits per church laws and gratuity for 17 years (Ksh.24,829,430.20)

Gratuity was not an agreed term of the last contract of employment

p. 6

Costs

The claimant is awarded 50% of his costs.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Accordingly, judgement is hereby entered for the claimant against the respondent in the following terms; (a) A declaration that the claimant's employment was terminated by the respondent unfairly; (b) Notice pay awarded at ksh.360,000 if not yet paid in full; (c) Compensation awarded at ksh.508,200; (d) The above dues at (b) and (c ) shall be paid less what the claimant is owing to the respondent; (e) The claimant is awarded 50% of his costs.
p. 6Final orders/disposition
The court jurisdiction cannot be replaced by such mechanism and the claimant retained and still retains the right to urge his employment and labour relations claims with the court.
p. 3Jurisdiction vs internal dispute mechanisms
the respondent as the employer of the claimant failed to adhere to the mandatory provisions of the law under section 41 and 43 of the Act and this resulted in unfair termination of employment contrary to section 45 of the Act.
p. 5Unfair termination
Whereas the employer has the right and or prerogative to send an employee on an administrative leave and or compulsory leave, the administrative action on the employee should be for the stated purpose.
p. 4Administrative leave
An aggrieved employee must move on, and not sit back waiting to enjoy anticipatory remuneration.
p. 5Anticipatory salaries for unexpired term
The payment of gratuity unless covered in a collective agreement or other private treaty must be specifically be a term and condition of the employment contract.
p. 6Gratuity

Issues in the judgment

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minor

Inconsistent dates of commencement of employment: 'employed as Station Manager for three years renewable contract executed on 29th June, 2019' and commencement 'on 29th June, 2015' versus testimony 'the first contract was signed on 29th July, 2015' versus defence 'contract for a period of 3 years of 27th July, 2015' and the court's own finding of contracts 'dated 27th July, 2015 and 28th July, 2018'

minor

Renewal date of second contract stated variously as 29th June, 2018, 29th July, 2018, and 28th July, 2018 in different passages

minor

Claimant's age stated as 'he was aged 533 years at the time' - evident typographical error

minor

Date of summary dismissal demand stated as '13th March, 2017 the respondent demanded ksh.173,467' in the defence particulars though the dismissal was on 13th March, 2019

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, "John Njuru Ndung'u v AIC Kijabe Station Management [2020] KEELRC 982 (KLR)", Case Analysis (2020). Cause No. 40 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/982/eng@2020-06-02

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