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ELRCPartially AllowedMemorandum of Claim dated 20th December, 2023 (number not stated in judgment)

Ogaro & 34 others v Kenya Revenue Authority (Cause E1058 of 2023) [2025] KEELRC 3694 (KLR)

Employment and Labour Relations Court
19 December 2025
3,440 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed KRA wrongly ended 23 employees' fixed-term contracts, awarding each four months' salary, interest and costs.

What this practically means

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Executive summary

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Twenty-three of thirty-five claimants, former analysts in the Respondent's Intelligence and Strategic Operations Department employed on three-year fixed term contracts from 1st July 2021, sued over termination of their contracts by letters dated 31st March 2023 but delivered on 3rd April 2023, citing 'change in business strategy' and invoking Clause 5 of their contracts with three months' pay in lieu. Twelve claimants withdrew before trial. The Respondent defended the terminations as lawful exercises of the contractual notice clause, while its witness conceded in cross-examination that no particulars of the change in business strategy were given, that the Section 40 redundancy procedure was not followed despite the letters promising severance, and that there was no notice, selection criteria or consultation. The court found the terminations substantively unfair: the employer bore the burden under Sections 43 and 45 to prove a valid reason, and a contractual termination clause could not substitute for one, applying the court's own decision in Benson Muriithi Kagai v Kenga Equatorial Hotels and aligning quantum with the Court of Appeal's award in Kenya Revenue Authority v Victor Odhiambo Otieno concerning colleagues terminated the same day. Each remaining claimant was awarded four months' gross salary (Kshs.724,000/= less PAYE) with interest from judgment and costs. Claims for salaries for the remainder of the contracts, general and aggravated damages, and discrimination findings were declined.

Questions the Court framed

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

  1. 1.Whether termination of the Claimants' respective fixed term contracts of employment by the Respondent was unfair.
  2. 2.Whether the reliefs sought are merited.

Key legal issues

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01

Substantive fairness of termination for 'change in business strategy'

Holding

Termination was substantively unfair because the Respondent proved no valid reason; particulars of the alleged change in business strategy were never given to the Claimants or the Court.

Reasoning

Section 45(2) places the burden on the employer to prove both a valid and fair reason and fair procedure. The Respondent's reason was 'changes in business strategy', but its own witness admitted under cross-examination that particulars were not communicated to the Claimants and none were given at trial. Without proof of the reason, the termination was substantively unfair.

p. 8
02

Whether a contractual termination clause displaces statutory unfair termination protections

Holding

No - a notice/payment-in-lieu clause may only be invoked where the employer has a valid reason to terminate.

Reasoning

The contracts allowed either party to terminate on three months' notice or pay in lieu, and the Respondent relied on Clause 5. Following the court's earlier decision in Benson Muriithi Kagai v Kenga Equatorial Hotels, the court held such a clause does not authorise termination without a valid reason; statutory protection under the Employment Act prevails.

p. 8
03

Characterisation of the termination - redundancy or contractual termination

Holding

Though the letters referenced Section 40 (redundancy) severance, termination was on Clause 5 grounds, bringing it within Section 45.

Reasoning

The termination letters cited 'change in business strategy' and Clause 5, not redundancy, although they promised severance under Section 40. RW-1 admitted the Section 40 procedure (30 days' notice, selection criteria, consultation) was not followed. The court therefore assessed fairness under Section 45 rather than redundancy procedure.

p. 7
04

Quantum of compensation

Holding

Four months' gross salary awarded to each remaining Claimant, consistent with the Court of Appeal award to similarly terminated colleagues.

Reasoning

Taking into account the abrupt and unexpected manner of termination, the court awarded four months' gross salary. This aligned with the Court of Appeal decision in Kenya Revenue Authority v Victor Odhiambo Otieno concerning colleagues terminated on the same date, where P.O. Kiage JA awarded four months' gross salary.

p. 9

Legal principles established

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  • An employer must prove a valid and fair reason for termination even where the contract contains a termination/notice clause; the clause cannot be invoked without a valid reason.
  • Where the employer fails to prove the reason for termination, the termination is deemed unfair under Sections 43 and 45 of the Employment Act.
  • A claim for salaries for the remainder of a fixed term contract is not an available relief under Section 49(1) of the Employment Act.

Court orders

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  1. 1.Declaration that termination of the Claimants' employment by the Respondent was unfair.
  2. 2.Each of the 23 Claimants listed at paragraph 22 awarded the equivalent of four (4) months' gross salary as compensation for unfair termination of employment (Kshs.181,000/= x 4 = Kshs.724,000/=) less PAYE.
  3. 3.Interest on the awarded sum at court rates from the date of the Judgment.
  4. 4.Costs of the suit awarded to the 23 Claimants.

The bench

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

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Employment and Labour Relations Court Act not expressly cited in judgment)

Relief refused

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Salaries for the remainder of the fixed term contracts from the date of termination

Not one of the reliefs set out in Section 49(1) of the Employment Act

p. 10

General and aggravated damages

Compensation for unfair termination is itself in the nature of damages; separate award would duplicate

p. 10

Compensation under s.49 at 12 months' pay

Court awarded 4 months' pay, aligned with the Court of Appeal award for similarly terminated colleagues

p. 10

Damages for discrimination and violation of constitutional rights

Not proved

p. 10

Costs

Costs of the suit awarded to the 23 Claimants ("The said Claimants are 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 existence of a termination clause in the Claimants' employment contracts was no valid reason for the Respondent to terminate the Claimants' employment without a valid reason.
p. 8Termination clause cannot displace need for valid reason
I return a finding that termination of the Claimants' employment by the Respondent was unfair, and I so declare.
p. 8Declaration of unfair termination
Each of the Claimants listed at paragraph 22 of this Judgment is awarded the equivalent of four (4) months' gross salary being compensation for unfair termination of employment (Kshs.181,000/= x 4) = Kshs.724,000/= less PAYE.
p. 10Final orders - compensation awarded
Each of the said Claimants is awarded interest on the awarded sum, to be calculated at Court rates from the date of this Judgment.
p. 10Final orders - interest
The claim for salaries for the remainder of the fixed term contracts, as from the date of termination, is declined, as it is not one of the reliefs set out in Section 49(1) of the Employment Act.
p. 10Relief refused - remainder of contract salary

Issues in the judgment

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minor

Respondent's Amended Response to Claim dated 20th February, 2023 is dated before the Claim filed on 20th December, 2023, an internal date inconsistency.

minor

Contract end date stated as '31st June, 2024' in the Claim, which is an impossible date; the Respondent pleads 30th June, 2024.

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, "Ogaro & 34 others v Kenya Revenue Authority (Cause E1058 of 2023) [2025] KEELRC 3694 (KLR)", Case Analysis (2025). Memorandum of Claim dated 20th December, 2023 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/3694/eng@2025-12-19

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