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ELRCPartially AllowedNot stated in judgment (Industrial Court Cause No. 379 of 2009 cited only as authority)

Momanyi v Kenya National Chamber of Commerce and Industry (Cause 1272 of 2018) [2024] KEELRC 98 (KLR)

Employment and Labour Relations Court
31 January 2024
JRJames Rika
2,067 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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A Nairobi court ruled an employee's firing on vague 'integrity' grounds was unfair, awarding him Kshs. 600,000 and rejecting the employer's fraud counterclaim.

What this practically means

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Executive summary

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The Claimant, employed as ICT Manager by written contract dated 19th February 2018 at Kshs. 150,000 monthly for 3 years, was suspended on 8th March 2018 over suspected conflict of interest in his appointment. He responded to the allegations, was exonerated, and reinstated on 26th March 2018 with an apology. On 22nd May 2018 the Respondent's Chairman terminated his contract summarily, citing an unspecified 'issue of integrity.' The Respondent's pleaded position was that the Claimant was irregularly appointed in connivance with the then CEO, that his contract was illegal and void ab initio, and it counterclaimed for general damages for fraud. The Respondent, however, failed to present evidence after the hearing was reopened for its benefit. The Court held the probationary period expired without extension and the Claimant was deemed confirmed. The letter of termination disclosed no detailed reason, merely rehashing settled allegations, so there was no valid reason for termination. Procedure was also deficient: no show-cause letter, no detailed charges, and no disciplinary hearing, contrary to Section 41 of the Employment Act. Termination was declared unfair. The counterclaim, unsupported by evidence and resting on allegations already resolved in the Claimant's favour, was rejected. On remedies, the Court declined 36 months' anticipated salary because the contract was terminable on notice, the Claimant served only 3 months, and he mitigated through ICT consultancy; employment remedies must not facilitate unjust enrichment, applying the Marete and Kibe authorities. The Court awarded 3 months' salary as compensation plus 1 month in lieu of notice, totalling Kshs. 600,000, with costs to the Claimant and interest at court rate from judgment until payment in full.

Questions the Court framed

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

  1. 1.Whether the Claimant's contract was terminated for valid reason
  2. 2.Whether termination was fairly executed
  3. 3.Whether the Counterclaim is merited
  4. 4.Whether remedies sought in either case have been established

Key legal issues

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01

Valid reason for termination

Holding

No valid reason existed; the Respondent rehashed settled allegations of conflict of interest

Reasoning

The letter of termination cited only 'an issue of integrity' without details. The same conflict-of-interest allegations had been investigated, the Claimant exonerated and reinstated with an apology. There was no evidence any new integrity issue had arisen by 22nd May 2018, so the reason cited was not substantiated.

p. 4
02

Fair procedure under Section 41 Employment Act

Holding

Procedure was manifestly deficient - no show-cause letter, no detailed charges, no disciplinary hearing

Reasoning

The termination letter was not preceded by a show-cause letter, the integrity allegations were not particularised as charges, and there was no record of a disciplinary hearing. Termination was effected by the Chairman's letter alone, contrary to the procedure contemplated under Section 41.

p. 4
03

Confirmation after probation

Holding

The Claimant was deemed confirmed after the probationary period ended on 19th May 2018 without extension

Reasoning

The contract had a 3-month probationary period which ended on 19th May 2018. There was no evidence of extension, so the Claimant was deemed confirmed and entitled to the benefits of a confirmed employee thereafter.

p. 3
04

Counterclaim for fraudulent appointment

Holding

Rejected for want of evidence

Reasoning

The Respondent alleged the Claimant connived with the then CEO to secure an unadvertised position and concealed a conflict of interest. The Court reopened the hearing to allow the Respondent to present evidence, but it did not. The same accusations had culminated in the Claimant's absolution, and the counterclaim was unsupported and unfounded.

p. 4
05

Quantum of compensation

Holding

3 months' salary compensation plus 1 month in lieu of notice, totalling Kshs. 600,000

Reasoning

The Claimant served 3 months of a 3-year contract, did not cause or contribute to termination, and mitigated through ICT consultancy. The contract was terminable by 1 month's notice or payment, so anticipated salaries for 33 months would unjustly enrich him. The Court applied Section 49 factors to award 3 months' compensation.

p. 5

Legal principles established

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  • Termination requires both a valid reason and fair procedure under the Employment Act
  • An allegation of lack of integrity must be supported by communicated facts and cannot stand on its own as a charge
  • Employment remedies are not aimed at facilitating unjust enrichment

Court orders

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  1. 1.It is declared that termination was unfair
  2. 2.The Respondent shall pay to the Claimant equivalent of 3 months' salary in compensation for unfair termination, and 1-month salary in lieu of notice, amounting to Kshs. 600,000
  3. 3.Costs to the Claimant
  4. 4.Interest allowed at court rate, from the date of Judgment till payment in full
  5. 5.The Counterclaim is declined

The bench

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

JR
majority

Wrote the judgment

Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act; Sections 41, 43, 45, 47[5] and 49 of the Employment Act

Relief refused

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36 months' salary for the remainder of the contract period (Kshs. 5,400,000)

Claimant worked only 3 months, mitigated loss through ICT consultancy, and the fixed-term contract had provisions for premature termination; employment remedies do not facilitate unjust enrichment

p. 4

Respondent's counterclaim for general damages for fraud

Counterclaim unsupported by evidence; the allegations had been investigated and the Claimant absolved

p. 4

Costs

Costs to the Claimant.

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.

Termination was unfair, for want of valid reason, and fair procedure.
p. 4unfair termination
Lack of integrity cannot be a charge standing on its own. There must be facts, disclosing lack of integrity, which were not communicated in a letter to show cause, or a letter inviting the Claimant for disciplinary hearing.
p. 4disciplinary charges
The Counterclaim is unfounded and is rejected.
p. 4counterclaim
The Respondent shall pay to the Claimant equivalent of 3 months' salary in compensation for unfair termination, and 1-month salary in lieu of notice, amounting to Kshs. 600,000.
p. 5final orders - compensation

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, "Momanyi v Kenya National Chamber of Commerce and Industry (Cause 1272 of 2018) [2024] KEELRC 98 (KLR)", Case Analysis (2024). Not stated in judgment (Industrial Court Cause No. 379 of 2009 cited only as authority). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/98/eng@2024-01-31

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