Ochieng v Edge & Motion Group Limited (Appeal E058 of 2023) [2024] KEELRC 2322 (KLR)
The bottom line
#Kenya's Employment Court ruled that an employer who unilaterally downgrades a permanent job to contract terms without a hearing commits unfair termination and must compensate the employee.
What this practically means
#Executive summary
#Key legal issues
#Whether the Appellant discharged the burden of proving unfair termination
The Appellant discharged the burden of proof when the Respondent changed his contractual terms; the burden then shifted to the Respondent, which failed to justify the change or produce financial evidence supporting its stated reason.
Employment claims are civil, proof being on a balance of probabilities under sections 43, 45 and 47(5) of the Employment Act. The email of 17th June 2020 showed the Respondent terminating permanent contracts on two days' notice citing financial difficulties, without consultation or hearing. The court viewed this as a disguised termination; the Respondent produced no financial documents to justify it, so the trial magistrate erred in finding the burden not discharged.
Whether the termination followed a fair procedure
The termination was without notice, without consultation and violated sections 41, 43 and 45 of the Employment Act.
The Respondent's email communicated termination of permanent contracts effective 19th June 2020, only two days after the email of 17th June 2020, with no consultation or hearing. The court held that a fair procedure under section 41 was not followed, and the lack of substantiated reasons contravened sections 43 and 45, rendering the termination unfair.
Whether the Appellant was entitled to the reliefs sought
The Appellant was awarded one month's salary in lieu of notice, admitted salary arrears of Kshs. 210,600, and compensation of four months' salary under section 49(1)(c).
Compensation was assessed under section 49(1)(c) as read with section 49(4), considering the three years of service, expectation of continued employment, lack of notice and absence of contribution by the Appellant. The salary arrears were awarded because the Respondent expressly admitted the modalities of payment of the arrears in its email correspondence, and the trial court erred in failing to award the admitted amount.
Legal principles established
#- In a claim for unfair termination, the burden of proof is first on the employee to prove the occurrence of unfair termination, and upon discharge of that burden it shifts to the employer to justify the reasons for dismissal.
- A change to an employee's contractual terms without consultation or hearing amounts to a disguised termination which is procedurally unfair; an employer facing financial difficulty should follow the redundancy procedure laid down in law.
- An employer alleging financial difficulty as justification for termination must produce evidence such as audited financial statements to substantiate it.
Court orders
#- 1.The Appellant's Appeal is allowed by setting aside the judgment of the lower court dismissing the appellant's claim and substituting therefor judgment in favour of the appellant
- 2.One Month's salary in lieu of notice of Kshs. 50,726
- 3.Salary arrears of Kshs. 210,600
- 4.Four months' salary as compensation for unfair termination of Kshs. 202,904
- 5.Total award of Kshs. 456,534 plus costs of the suit
- 6.Items (a), (b) and (c) shall be subject to taxes and statutory deductions but shall attract interest at Court rates from the date of Judgment until payment in full
- On appeal from
- Senior Resident Magistrate's Court (Employment and Labour Relations)
- MCELRC No. E940 of 2020
- Jurisdiction invoked
- Appellate jurisdiction of the Employment and Labour Relations Court over appeals from the subordinate court in employment and labour relations matters
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ochieng v Edge & Motion Group Limited (Appeal E058 of 2023) [2024] KEELRC 2322 (KLR)", Case Analysis (2024). MCELRC/E940 of 2020 (Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2322/eng@2024-09-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.