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ELRCPartially AllowedNot stated in the judgment as provided

Wanjiru v Neuce Kenya Paint Industry Limited (Employment and Labour Relations Cause E007 of 2024) [2025] KEELRC 584 (KLR)

Employment and Labour Relations Court
26 February 2025
3,637 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~15 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that firing an employee with a letter giving no reason — even if he later signed a 'mutual' separation agreement — was unfair, awarding him two months' salary plus interest and costs.

What this practically means

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Executive summary

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The Claimant, employed as a sales representative from 11th July 2021 earning a net salary plus commission, was terminated by a notice dated 8th November 2023 that gave no reasons. He later executed mutual separation agreements dated 14th and 24th November 2023 upon which his terminal dues of Kshs.191,620 were paid, after a deduction of about Kshs.93,880 which he alleged was double taxation. He claimed unfair termination on account of redundancy contrary to sections 40, 41 and 45 of the Employment Act, violation of Article 41 of the Constitution, and sought 12 months' compensation, various dues, refund of the deduction and a certificate of service. The Respondent asserted the termination was by mutual agreement, or alternatively for misconduct, and that all dues were paid. The court framed three issues: whether the Claimant was declared redundant or terminated normally; whether the mutual agreement was binding; and entitlement to relief. It held the termination letter gave no reasons and did not invoke redundancy; the defence of misconduct was neither communicated in the letter nor subjected to a section 41 hearing, rendering the termination unfair and unprocedural. The mutual agreements, executed after termination, could not constitute mutual consent. Judgment was entered for the Claimant, but he was awarded only two months' compensation of Kshs.200,000 with interest at 14% per annum and costs, the court noting he had already been paid notice pay, leave, severance and commission.

Questions the Court framed

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

  1. 1.Whether the Respondent declared the Claimant redundant or he was terminated normally
  2. 2.Whether the mutual agreement is binding
  3. 3.Whether the Claimant is entitled to the relief sought

Key legal issues

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01

Whether the Claimant was declared redundant or terminated normally

Holding

The termination letter did not cite redundancy or any reason; it effected termination under section 35(1)(c). The defence case of misconduct was not communicated and no disciplinary hearing was held, so the termination was unfair and unprocedural

Reasoning

The notice of termination dated 8th November 2023 gave no reasons and did not mention redundancy, contrary to the requirements of section 40(1) of the Employment Act. Although the Respondent pleaded misconduct (irresponsibility, negligence, insubordination, absenteeism), those grounds were not stated in the termination letter and no hearing under section 41 was conducted. Under sections 45(1) and 47(5), the employer must both justify the reason and prove fair procedure; neither was met.

p. 8
02

Whether the mutual agreement is binding

Holding

Not binding; the agreements dated 14th and 24th November 2023 were executed after the Claimant had already been terminated, so they cannot amount to mutual consent

Reasoning

The court held that even if the Claimant signed the mutual separation agreements, they were executed after the service of the termination notice. Payment of terminal dues was pegged to execution, and the agreements therefore post-dated and could not cure the termination. Sequencing undermined any suggestion of genuine mutual agreement to end the employment.

p. 8
03

Whether the Claimant is entitled to the relief sought

Holding

Only partially; the court awarded 2 months' compensation of Kshs.200,000 with interest and costs, holding the Claimant was already paid notice pay, leave, severance and commission

Reasoning

Judgment was entered for the Claimant on unfair termination. However, the court declined the full 12 months' compensation, awarding only 2 months' salary given the short duration of employment. It noted the Claimant had been paid salary in lieu of notice, pending leave days, severance pay and commission, effectively rejecting the additional heads of claim.

p. 9

Legal principles established

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  • A mutual separation agreement executed after the employee has already been served with a termination notice cannot be regarded as mutual consent
  • For termination to pass the fairness test there must be both substantive justification and procedural fairness
  • A termination letter that gives no reason for termination, and a defence based on conduct not communicated or subjected to a disciplinary hearing, render the termination unfair and unprocedural under sections 41 and 45 of the Employment Act

Court orders

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  1. 1.Compensation equivalent to 2 months' salary of Kshs.200,000/=
  2. 2.Interest at 14% per annum at court rates from date of judgment till full payment
  3. 3.Costs of the suit to the Claimant

The bench

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

Wrote the judgment

Jurisdiction invoked
Article 41(1)(2)(a) of the Constitution 2010 and sections 35, 40, 41, 45, 47(5) and 49(1)(c) of the Employment Act; employment and labour relations dispute

Relief refused

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12 months' compensation under section 49(1)(c) (Kshs.1,869,900) and the other claimed dues

The court awarded only 2 months' compensation, noting the claimant worked for a short time and was already paid salary in lieu of notice, pending leave days, severance pay and commission

p. 9

Refund of Kshs.93,880/= deducted from terminal dues

Not separately granted in the final orders; the court found the claimant was paid salary in lieu of notice, pending leave days, severance pay and commission

p. 9

Declaration of violation of Article 41(1)(2)(a) and general, exemplary and aggravated damages under Article 23(3)

Not addressed in the analysis or granted in the final orders

Certificate of service

Not granted in the final orders

Costs

He is awarded costs of the suit.

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.

The two agreements were issued after claimant had already been terminated and so they cannot be regarded mutual consent.
p. 8mutual separation agreements post-termination
For termination to pass the fairness test, it ought to be shown that there was not only substantive justification of the termination but also procedural fairness.
p. 8fairness test for termination (quoting Walter Ogal Onuro v Teachers Service Commission)
The respondent terminated the claimant both unfairly and unprocedurally.
p. 8unfair termination finding
He is awarded costs of the suit.
p. 9costs order
Total awarded is Kshs.200,000/= plus interest at 14% per annum at court rates from date of judgment till full payment.
p. 9final orders

Issues in the judgment

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minor

The judgment gives conflicting dates for the termination - the termination letter is dated 8th November 2023 while the claim pleads termination by letter dated 8th December 2023

minor

The judgment does not name the respondent party or the case number of the suit

minor

The court awards interest 'at 14% per annum at court rates' which conflates a specific rate with court rates

minor

The relief list in paragraph 64 is followed by an incomplete closing line, 'Such evidence is lacking in this case.', which appears misplaced from the quoted passage in the Walter Ogal Onuro case

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, "Wanjiru v Neuce Kenya Paint Industry Limited (Employment and Labour Relations Cause E007 of 2024) [2025] KEELRC 584 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/584/eng@2025-02-26

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