Thairo v Sap East Africa Limited (Cause E659 of 2022) [2024] KEELRC 2048 (KLR)
The bottom line
#A Kenyan court dismissed an executive's Ksh 21 million unfair termination claim but confirmed that signing a terminal dues discharge never blocks you from suing over dismissal.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the parties were in a contract of service and the terms thereof
- 2.How and by what reasons the contract of service was terminated
- 3.Whether the termination was unfair (procedurally and substantively)
- 4.Whether the signed discharge of terminal dues barred the claim of unfair termination
- 5.What remedies, if any, are payable
Key legal issues
#Whether the termination was unfair in procedure and substance
The termination was fair both procedurally and substantively; the claimant received notice, a hearing, and the reasons for termination were valid and genuine
The claimant's own testimony established he understood the allegations, was given time, rights, and a representative option, and was content to proceed. He admitted poor management of meetings and communications, confirming he missed the summit after being informed to attend. His contradictory testimony could not be trusted, and the reasons related to his conduct and compatibility under section 45 of the Employment Act.
Whether the signed discharge of terminal dues barred the unfair termination claim
It did not; a contractual discharge cannot defeat the statutory obligation under section 45(1) that no employer shall terminate employment unfairly
Section 45(1) imposes a strict statutory liability on employers not subject to contractual arrangements, and section 35(4)(a) preserves the employee's right to dispute the lawfulness or fairness of termination notwithstanding payment. The discharge, being contractual at best, could not extinguish this inherent right.
Whether the claimant was entitled to house allowance in addition to his consolidated gross salary
No; the parties had agreed on a consolidated gross salary covering house rent under section 31 of the Employment Act
The evidence showed the parties agreed on a consolidated salary described as gross monthly pay, which was within section 31 on reasonable provision for house rent. No basis was shown to justify a separate house allowance claim.
Legal principles established
#- A discharge acknowledging receipt of terminal dues cannot extinguish an employee's statutory right to challenge the fairness or lawfulness of termination under sections 45(1) and 35(4)(a) of the Employment Act
- The fact that an employer's lawyer chairs a disciplinary panel does not of itself render the panel incompetent in administrative disciplinary proceedings where the employee raises no objection
Court orders
#- 1.The respondent to pay the claimant the sum of Kshs 11,950.00 by 01.08.2024, failing interest to be payable thereon at Court rates from the date of filing the suit until full payment
- 2.Each party to bear own costs of the suit
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original employment and labour relations jurisdiction (Employment Act, 2007; Employment and Labour Relations Court Act)
Relief refused
#Declaration that the respondent unfairly terminated the claimant's services
By his own testimony the claimant confirmed the procedure was fair and that the reasons for termination were valid and genuine
House allowance of Kshs 8,759,786 from March 2017 to July 2022
Parties had agreed on a consolidated gross salary inclusive of house rent provision under section 31 of the Employment Act
Compensation for unfair termination equivalent to 12 months' salary (Kshs 21,516,852)
No unfair termination was found, so the compensation claim collapses
Costs
Each party to bear own costs of the suit, considering the margins of success.
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.
In conclusion, judgment is hereby entered for parties with orders: a. The respondent to pay the claimant the sum of Kshs 11, 950.00 by 01.08.2024 failing interest to be payable thereon at Court rates from the date of filing the suit until full payment. b. Each party to bear own costs of the suit.
even where the employee has acknowledged receipt of terminal dues with a discharge of the employer, such discharge cannot extinguish the employees' inherent right to allege and pursue a claim of unlawfulness of the termination.
the mere fact that he was the respondent's lawyer did not render him incompetent in view of the nature of administrative disciplinary proceedings.
Issues in the judgment
#The quantum of compensation for unfair termination is pleaded inconsistently: Kshs 21,516,852 in the memorandum of claim but Kshs 12,745,116 in the further pleading
The claimant's designation is stated as 'Industry Value Advisor' in paragraph 13 although the claimant pleaded promotion to 'Industry Value Senior Advisor'
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Thairo v Sap East Africa Limited (Cause E659 of 2022) [2024] KEELRC 2048 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2048/eng@2024-07-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.