Frigoken Limited v Musotsi (Employment and Labour Relations Appeal E021 of 2024) [2025] KEELRC 2119 (KLR)
The bottom line
#Kenya's ELRC confirmed a Frigoken employee was unlawfully made redundant, but a signed full-and-final settlement agreement wiped out her Kshs.224,440 compensation award.
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 termination was on account of redundancy
- 2.Whether fair procedure was followed
- 3.Whether the award of damages by the trial court should stand
Key legal issues
#Whether the termination was on account of redundancy
Yes - the termination was due to low plantings/low season, a business decision for which the employee was not at fault, constituting redundancy under section 2 of the Employment Act.
The termination letter cited low plantings. The appellant's own witness confirmed the termination was due to low plantings and low season and admitted the respondent had nothing to do with those circumstances. The court applied the statutory definition of redundancy in section 2 of the Employment Act and concluded the loss of employment was involuntary, at the employer's initiative, and through no fault of the employee.
Whether fair procedure under section 40 was followed
No - the redundancy was carried out without the mandatory section 40 procedure, making it an unlawful termination.
Section 40 of the Employment Act prescribes a mandatory procedure for redundancy, including one month's prior notice, fair selection criteria and payment of dues including severance pay. The respondent's evidence that this was not done was unrebutted by the appellant. The court therefore agreed with the trial court's finding of unlawful redundancy.
Whether the award of compensatory damages should stand despite the settlement agreements
No - the respondent was bound by the settlement agreements and estopped from claiming further, so the award of 12 months' salary was set aside.
The respondent willingly signed two settlement agreements acknowledging payment as full and final settlement and discharging the employer from further claims. She did not plead or prove any vitiating factor such as misrepresentation or incapacity. Applying Coastal Bottlers Ltd v Kimathi Mithika, the court held the agreements were binding contracts and the trial court erred in awarding compensatory damages notwithstanding them.
Legal principles established
#- Where an employee voluntarily executes a settlement agreement discharging the employer from further employment claims, the employee is estopped from making future claims unless she pleads and proves a factor vitiating the contract.
- On a first appeal the court must re-evaluate the evidence and draw its own conclusions, making allowance for not having seen the witnesses.
Court orders
#- 1.Appeal allowed in part
- 2.Award of Kshs.224,440 being 12 months' salary compensation for unlawful termination set aside
- 3.Each party to bear own costs of the appeal and the court below
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Trial Court (ELRC / Magistrates' Court) - Hon. Susan Mwangi, PM
- Jurisdiction invoked
- First appellate jurisdiction over the trial court's judgment (Employment and Labour Relations Court Procedure Rules; Employment Act)
Relief refused
#Entire appeal allowed and full reversal of trial judgment (as sought by appellant)
The court upheld the trial court's finding that the termination amounted to unlawful redundancy; only the compensatory award was set aside
Costs
Each party bears own costs of the appeal and the court below
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.
Consequently, I allow the appeal, set aside the award of Kshs.224,440 being 12 months salary compensation for the unlawful termination of the respondent’s employment.
Since the appeal succeeded partially, I direct that each party bears own costs of the appeal and the court below.
the employee is estopped from making future claims unless the employee specifically pleads and proves that the settlement agreement was tainted with any factor that vitiates a contract at common law
I am satisfied that there is evidence to prove that the respondent’s employment contract was terminated on account of redundancy and not due to his misconduct or poor performance.
Issues in the judgment
#Inconsistent dates and amounts in the second settlement agreement: paragraph 5 of the judgment describes it as signed 1st July 2020 but the quoted document bears the date 4/7/2020; paragraph 4/11 refer to Kshs.53,061 while the quoted agreement states Kshs.53016.
The judgment alternates between referring to the respondent as 'she/her' and 'his/him'.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Frigoken Limited v Musotsi (Employment and Labour Relations Appeal E021 of 2024) [2025] KEELRC 2119 (KLR)", Case Analysis (2025). Memorandum of Appeal dated 14th October 2024 (ELRC Appeal, Nyeri). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2119/eng@2025-07-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.