Dorcas Kemunto Wainaina v IPAS [2018] eKLR

Key Facts

Transaction Type

Issues

• Whether Claimant is entitled to 3 months' pay in lieu of notice.
• What are the remedies available to the Claimant/Is the Claimant entitled to the remedies sought?
• Claim for leave and 13th month bonus.
• Whether the law of estoppel can apply in the case herein as regards to the cancelled medical cover.
• Who can enforce the law at the workplace when it is not being complied with by an organisation.
• Whether the Claimant could be terminated at will without reasons being given.
• Whether the Claimant is entitled to a claim for severance pay at 3 months' pay.
• Counterclaim.
• Does the Employment and Labour Relations Court of Kenya have jurisdiction to determine the dispute herein and if so which labour laws apply in the case at hand, the American labour laws or Kenyan labour laws.
• Whether the Claimant is entitled to basic salary for 19 days in November.
• Whether in deed there was redundancy at the Respondent organisation.
• Whether due process was followed in declaring the Claimant redundant.
• Whether Claimant was entitled to the equivalent of 1 year premiums on medical cover.
• Whether the claim for house allowance is warranted.
• Who bears the costs of the suit herein?
• Whether the Claimant was paid house allowance for the period she worked for the Respondent.

Holdings

• The court found the Respondent's allegations of breach of duties by the Claimant to be spurious, as the employee's redundancy was declared by a Director for financial reasons, and the Claimant could not be blamed for later contract rectifications. The allegations of negligence in local labor laws were dismissed as vague and unsubstantiated.
• The court awarded the Claimant Kshs 310,816/- as the balance of pay in lieu of notice (1 month's salary minus 2 weeks already paid), Kshs 1,243,264/- in compensation for wrongful dismissal, and Kshs 24,077/- for medical expenses. Total award: Kshs 1,578,157/-.
• The termination was deemed procedurally unfair under Kenyan law because the Claimant was not given the required one-month advance written notice. The at-will termination clause in the contract was found invalid under Kenya's mandatory statutory provisions.
• The court held that Kenyan labor laws, not U.S. law, govern the contract because the Claimant habitually worked in Kenya, and the contract's dominant connection was to Kenya. This aligns with international standards like the Rome Convention, which prioritize the employee's habitual workplace jurisdiction.
• Claims for house allowance (Kshs 1,019,998/-) and pension scheme (no evidence provided) were dismissed. The court noted the Claimant never raised house allowance issues during employment and found no statutory or contractual basis for the claim.
• The 13th month bonus and severance pay claims were partially addressed. The Claimant was paid Kshs 549,187/- for the 13th month bonus, and the court ruled it unconscionable to pay twice. Severance pay was calculated under Kenyan law as per the Respondent's formula (15 days per year worked).
• The Respondent breached its promise to maintain the Claimant's health insurance until 30 November 2015 by terminating it early. The court held the Respondent liable for medical expenses incurred during the period the cover was prematurely stopped.
• General damages for embarrassment and psychological torture were dismissed, as Kenyan labor law does not provide for such remedies in unfair termination cases. The court emphasized statutory remedies over common law damages.
• The Employment and Labour Relations Court of Kenya determined it had jurisdiction over the dispute, citing the Claimant's work in Nairobi, Kenyan tax deductions, and the applicability of Kenyan labor laws despite the international nature of the contract. The court emphasized jurisdiction under the Kenyan Constitution and relevant statutes.

Remedies

• Medical expenses: Kshs 24,077/- awarded based on provided receipts
• Pay in lieu of notice: Kshs 310,816/- awarded as balance of entitlement
• Compensation for wrongful dismissal: Kshs 1,243,264/- awarded based on 3 months' gross salary

Monetary Damages

Legal Principles

Precedent Name

• Ex parte Spinazze & Another
• Kleinhans v Parmalat SA (Pty) Ltd
• Sertfontein v Balmoral Control Contracts SA (Pty) Ltd
• Parry v Astral Operations Ltd
• Standard Bank of SA v Efroiken & Newman

Key Disputed Contract Clauses

• The contract promised health insurance until 30 November 2015. The Respondent terminated it mid-term, breaching the agreement. The court held the Respondent liable for medical expenses incurred during the coverage gap.
• The contract included an 'employment at will' clause, which the Respondent argued justified termination without notice. The court rejected this, finding it invalid under Kenyan labor law's mandatory requirements for termination procedures.
• The termination was framed as redundancy due to restructuring. The court ruled it procedurally unfair as the Claimant received no advance written notice as required by Kenyan employment law.

Cited Statute

• Regulation of Wages (General) Order
• Employment Act, 2007
• Rome Convention on Law Applicable to Contractual Obligations

Judge Name

Passage Text

• The Court finds that the termination on account of redundancy was tainted with procedural unfairness.
• The Court must categorise the dispute presented to it for adjudication. It cannot be disputed that the dispute before Court arises out of a contract of service... the Court will have jurisdiction over the dispute presented before it.
• Considering the deficiencies in the contractual documents... the Court finds that it has jurisdiction and the laws of Kenya are applicable.

Damages / Relief Type

• Awarded Kshs 1,243,264/- for wrongful dismissal compensation
• Awarded Kshs 310,816/- for pay in lieu of notice
• Awarded Kshs 24,077/- for medical expenses reimbursement