Mbotha v Usiku Entertainment Limited (Employment and Labour Relations Cause E651 of 2020) [2025] KEELRC 1993 (KLR)
The bottom line
#A Nairobi court awarded a dismissed employee over Kshs 1.4 million because the employer had no written contract and no fair dismissal process.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether an employment relationship existed between the Claimant and the Respondent
- 2.Whether the Respondent breached the Employment Act by failing to issue a written contract and job description
- 3.Whether there were valid and fair reasons for the termination of the Claimant's employment
- 4.Whether the termination was conducted in accordance with fair procedure
- 5.Whether the Respondent's counterclaim for harassment, economic sabotage and defamation is merited
- 6.What remedies, if any, the Claimant is entitled to
Key legal issues
#Existence of an employment relationship despite an oral contract
Both parties established that the claimant was an employee of the respondent notwithstanding the absence of a written contract
The Respondent admitted offering employment as Director of Partnerships at a gross monthly salary of Kshs 150,000 vide an oral agreement. Payment of monthly salary was evidenced by pay slips, and the Respondent's CEO confirmed the oral contract during the hearing. Section 8 of the Employment Act permits employment contracts to be oral or written, so the employment relationship was established.
Failure to issue a written contract and job description
The Respondent breached sections 9(1), (2) and 10(2) of the Employment Act by failing to issue a written contract setting out particulars including a job description
Sections 9 and 10 of the Employment Act require contracts of service of three months or more to be in writing, with the employer responsible for drawing up the contract stating particulars of employment including the job description. The Respondent admitted the contract was oral and no written contract was ever issued. The court found it unfortunate that the Respondent failed to issue the contract or set out the claimant's duties.
Validity of reason and fairness of procedure for termination on grounds of poor performance
The termination was unfair and unjustified as neither valid reason under section 43 nor fair procedure under section 41 was established
Although poor performance can be a valid reason for termination, the Respondent did not demonstrate that it examined the contract and periodically reviewed areas of non-compliance before termination. The Claimant was not subjected to any formal disciplinary hearing as envisaged by section 41, which requires an employer to explain the reasons and allow the employee a colleague or union representative present. The Respondent did not demonstrate compliance. Under section 45(2), a termination is unfair where the employer fails to prove a valid and fair reason and fair procedure.
The Respondent's counterclaim for harassment, economic sabotage and defamation
The counterclaim was not established and was dismissed
The Respondent alleged that the Claimant sent false and offensive emails to its CEO and made false reports to the BCLB and DCI, and sought general damages for harassment, economic sabotage and defamation. The court, having examined the evidence, found the counterclaim was not established and dismissed it accordingly. The judgment gives no detailed reasoning on the counterclaim beyond this finding.
Remedies for unfair termination
The Claimant was awarded 8 months' salary as compensation, one month's salary in lieu of notice, and prorated leave for 7 months
Having been unfairly dismissed, and considering that the Respondent failed to issue any employment contract, the court awarded compensation equivalent to 8 months' gross salary rather than the 12 months sought. The court also found the Claimant entitled to one month's salary in lieu of notice and prorated leave computed at 7/12 of monthly salary, less statutory deductions, plus costs and interest.
Legal principles established
#- An employer who fails to prove both a valid reason for termination and adherence to fair procedure unfairly terminates employment
- An employer terminating on grounds of poor performance must examine the contract and periodically review areas of non-compliance before termination
Court orders
#- 1.Compensation for unfair termination equivalent to 8 months' salary (8 x 150,000) = Kshs 1,200,000/-
- 2.One month's salary in lieu of notice = Kshs 150,000/-
- 3.Leave prorated at 7 months (7/12 x 150,000) = Kshs 7,500 as stated in the judgment
- 4.Total award of Kshs 1,437,500/- less statutory deductions
- 5.The Respondent to pay costs of the suit plus interest at court rates with effect from the date of the judgment
- 6.The counterclaim is dismissed
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Section 12(1) of the Employment and Labour Relations Court Act
Relief refused
#12 months' compensation for wrongful dismissal (Kshs 1,800,000)
The court awarded 8 months' salary instead, having regard to the circumstances including the Respondent's failure to issue a written contract
Respondent's counterclaim for general damages for harassment, economic sabotage and defamation
The counterclaim was not established
Costs
The respondent should pay costs of this suit plus interest at court rates with effect from the date of this judgment
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 view of the fact that the claimant was not subjected to any proper disciplinary process and neither was it established that there were valid reason for termination, it is my finding that his termination was unfair and unjustified.
It is however unfortunate that the respondent failed to issue the contract or even set out the duties that the claimant was to do.
This would be a valid reason for termination but the respondents were then duly bound to examine the contract and periodically review areas of non compliance before termination.
As concern counter claim this is not established and I dismiss it accordingly.
The respondent should pay costs of this suit pus interest at court rates with efiect from the date of this judgment.
Issues in the judgment
#Arithmetic inconsistency in the leave award: 7/12 x 150,000 computes to 87,500, but the judgment states 'kshs 7,500'. The stated TOTAL of Kshs 1,437,500 is consistent with 87,500, suggesting a typographical error in the itemised figure.
The gender of the claimant shifts within the judgment; the relief paragraph refers to 'her' while the body of the judgment throughout refers to the claimant as 'he'.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mbotha v Usiku Entertainment Limited (Employment and Labour Relations Cause E651 of 2020) [2025] KEELRC 1993 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1993/eng@2025-07-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.