Design firm to part with Sh1.2 million in unfair termination case

Mungai's contract was terminated a month after the end of his two months probationary period.

In Summary
  • In the absence of evidence from the company to support its computation, the court upheld and granted the claim for salary arrears as pleaded at Sh461,580.
  • Judge Rika also allowed the claimed house allowance, airtime and internet expenses, Sh153,200 (USD1,000) bonus and the notice pay.
Milimani Law Courts
Milimani Law Courts
Image: FILE

When he was employed as a product designer on March 9, 2020, Reynolds Mungai was offered a one-year contract with the first two months served under probation.

He agreed with his employer, Bullworks Design Factory Limited, that he would be paid a basic monthly salary of Sh170,000 with an eight per cent commission per project.

He was also eligible for health insurance, a monthly airtime allowance of Sh2,000, a monthly internet bundle of up to 1GB and monthly transport allowance with Bolt, as the service provider.

On April 1, 2020, the contract was amended and the net monthly basic salary was changed to Sh156,110.

It is important to note that the probation period was two months, which would end on May 9, 2020.

Upon the date, the period was extended and Mungai concluded that his employment had been confirmed.

Bullworks Design however failed to pay him, persistently, as he was only paid once, a sum of Sh81,000.

On June 15, 2020, Bullworks issued Mungai with a letter, purporting to terminate "your probation period".

This was well over a month after the end of the two-month probationary period.

Considering that he had only been paid once, Mungai calculated his salary arrears for March, April, May and June 2020 as Sh461,580.

In the letter, the company acknowledged the arrears but said the same was at Sh421, 297, and not the amount stated by the former employee.

Mungai then moved to the Employment and Labour Relations Court (ELRC) before Judge James Rika stating that after receiving the termination letter which was effective June 8, 2020, he was offered a week's salary, in lieu of notice. 

He told the court that the termination breached his right to fair labour practices, his salary was withheld, he was not given a reason to justify termination and was not accorded a hearing.

Mungai claimed Sh461,580 in salary arrears, Sh81,387 house allowance for the period from March to June and Sh6,332 airtime and internet expenses for May and June.

He also claimed a notice pay of Sh179,526, eight months' salary for the remainder of the contract period, at Sh1,436,212, USD 1,000 bonus, unlawfully withdrawn by his former employee.

Further, he prayed for damages for unfair termination.

The claim was undefended and upon determination, the court found that since Mungai's probationary period had ended, Bullworks Design was wrong in terminating "your probation period".

In the absence of evidence from the company to support its computation, or discount made by Mungai, the Court upheld and granted the claim for salary arrears as pleaded at Sh461,580.

Judge Rika also allowed the claimed house allowance, airtime and internet expenses, Sh153,200 (USD1,000) bonus and the notice pay.

The court considered the eight months remaining in the contract, acknowledging that it was relevant under Section 49 [4] of the Employment Act.

He considered the claim alongside other factors, including Mungai's length of service, which was quite short and settled for two months.

"He (Mungai) is granted compensation for unfair termination, equivalent of two months'  gross salary at Sh353,052," the judge ruled.

In the judgement dated December 8, 2023, Mungai was awarded Sh1,235,077.

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