Keith Wright v Kentegra Biotechnology (Epz) Ltd [2021] KEELRC 2408 (KLR)
The bottom line
#A Kenyan court ruled that a signed job offer is a binding contract, and withdrawing it unfairly cost the employer over $150,000.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether there existed an Employer/Employee relationship between the parties
- 2.Whether the rescinding of the aforesaid Contract was procedurally and lawfully effected
- 3.Whether the Claimant is entitled to the reliefs sought
Key legal issues
#Existence of an employer-employee relationship
A binding employment contract was formed upon the claimant's acceptance of the offer signed by the respondent's CEO; an employer-employee relationship ensued.
The offer dated 6th June 2019 was accepted on 31st May 2020 and executed by the CEO on behalf of the respondent. Under section 9 of the Employment Act the contract was in writing and consented to by the employee. The claimant was not privy to the respondent's internal board approval requirements, and the acts of the CEO for and on behalf of the employer bound the respondent. The contract therefore became legally binding.
Lawfulness and procedural fairness of the repudiation
The repudiation was not procedurally and lawfully effected; the respondent failed to prove the reasons for termination and did not engage the claimant.
Even if the substantive reasons (lack of board authority, cost) were accepted, the respondent never engaged the claimant before rescinding the contract. Under sections 43 and 47(5) of the Employment Act the burden of justifying termination rests on the employer, and under section 45 the termination is unfair where the reason is not proved. The justification for repudiation was left bare, and the board's own correspondence suggested financial incapacity rather than want of authority.
Compensation and notice pay
Compensation equivalent to six months' salary ($112,500) under sections 45 and 49 and one month's notice pay ($18,750) under section 35 were awarded.
Pursuant to sections 45 and 49 of the Employment Act compensation was assessed at six months of the contractual salary of $225,000 per annum. Notice pay was due for want of due process under section 35, read with clause VI of the contract which allowed termination without notice only for just cause; the repudiation did not satisfy that standard.
Discrimination
The respondent discriminated against the claimant contrary to Article 27 of the Constitution and section 5 of the Employment Act, attracting damages of Ksh.5,000,000.
Under section 5(7) of the Employment Act the employer bears the burden of proving that discrimination did not occur. The claimant particularised the discriminatory grounds and his unchallenged evidence showed he resigned from his US employment, arranged relocation and schooling on the faith of the contract. The respondent failed to discharge its burden, and the court drew on Supreme Court and Court of Appeal authority on the meaning of discrimination in fixing damages at Ksh.5,000,000.
Relocation, shipping and lease costs
Shipping costs of $18,000 and house lease costs of $8,000 were awarded; the separate moving expenses claim was declined as duplicative.
The claimant's evidence that he incurred shipping and relocation expenses in preparation for taking up employment was not challenged in any material way. The lease of accommodation in Nairobi was reasonably incurred on the background of the employment. However, moving expenses could not be claimed separately from shipping costs.
Legal principles established
#- Where an employee with apparent authority executes a contract for and on behalf of the employer, the employer is bound and cannot rely on internal approval procedures unknown to the counterparty to escape liability
- An employer terminating employment must satisfy both the substantive and procedural tests; failure to follow due process renders the termination unfair
- Once an offer of employment is accepted, a binding contract arises which can only be withdrawn by consent or in accordance with its terms and the Employment Act, 2007
Court orders
#- 1.A declaration that the claimant suffered wrongful repudiation of contract by the Respondent
- 2.Damages for discrimination of Ksh.5,000,000 [$44,642.85] (CBK exchange rates as at 1st December, 2021)
- 3.Compensation awarded at $112,500 (six months' salary equivalent)
- 4.Notice pay of $18,750 (one month's salary)
- 5.Shipping costs of $18,000
- 6.Awards in (b), (c), (d) and (e) to be paid within 30 days, failing which they shall attract interest from the date due until paid in full
- 7.Costs of the suit to the claimant
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- First-instance jurisdiction of the Employment and Labour Relations Court under the Employment Act, 2007 and the Constitution of Kenya, 2010 (Articles 27, 41, 50 invoked in submissions)
Relief refused
#Order quashing the alleged repudiation of contract
The court treated the declaration of wrongful repudiation and the awards as sufficient redress
Salary arrears for the entire period the Claimant has been out of employment
Addressed through the award of compensation and notice pay rather than full salary arrears
Moving expenses to the shipping company ($12,000)
Duplicative of the shipping costs claim; a party cannot claim both
Exemplary damages for lost opportunities
Not expressly granted; the court instead awarded general damages for discrimination at Ksh.5,000,000
Costs
Costs of the suit awarded to the claimant
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The upshot is that this court finds that upon execution by the parties, the contract became legally binding and an Employer-Employee relationship ensued.
The claimant was not privy to internal policies, operational procedures and his contract of employment was properly executed by an officer of the respondent.
For these reasons the respondent fell short of the procedural requirements and as such this court finds and holds that the rescinding of the aforesaid Contract was not procedurally and lawfully effected.
The Court therefore finds the Respondent guilty of discriminating against the Claimant on account of his employment status. This is contrary to Article 27 of the Constitution, 2010 and section 5 of the Employment Act, 2007.
The shipping of the goods and moving expenses can however not be separated and claimed under different vote head. To claim under both is declined.
Accordingly, judgement is hereby entered for the claimant against the respondent in the following terms
Issues in the judgment
#The judgment inconsistently dates the claimant's contract as 6th June 2019 and 6th May 2019
The respondent's witness is variously spelt 'David Payne' and 'Mr Paine' in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Keith Wright v Kentegra Biotechnology (Epz) Ltd [2021] KEELRC 2408 (KLR)", Case Analysis (2021). Not stated in the judgment (Employment and Labour Relations Court cause). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/2408/eng@2021-12-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.