Compensation for unfair termination: The case of Khamala v Robinson Security Ltd (Appeal E024 of 2023) [2024] KEELRC 2076 (KLR)

Court: Employment and Labour Relations Court (Appellate Jurisdiction)

Date: 6 August 2024
Case Number: Appeal E024 of 2023
Citation: [2024] KEELRC 2076 (KLR)

Background

Mr. Khamala (the Appellant) was employed by Robinson Security Ltd. The Appellant's employment was terminated, and he claimed that the termination was unfair. He appealed the decision of the lower court that had dismissed his claim and upheld the termination as justified. The central issue on appeal was whether the termination was unfair and whether the Appellant was entitled to compensation under the Employment Act.

Mr. Khamala, the Appellant, was employed by Robinson Security Ltd. His employment was terminated, and he subsequently filed a claim alleging unfair dismissal. While the Appellant argued that his termination was unjustified, the trial court found in favor of the Respondent, ruling that the dismissal was fair.

On appeal, the Appellant contested the decision, asserting that the termination was indeed unfair. He further sought compensation for the loss of income he claimed to have incurred as a result of the dismissal. However, the appellate court found that while the dismissal was unfair, the Appellant’s actions after the termination—specifically his ability to secure alternative employment almost immediately—significantly impacted the court’s decision regarding compensation.

Issue

The key issue in this case was whether the termination was unfair, and if so, whether the Appellant was entitled to compensation, taking into consideration his efforts to mitigate the loss.

Simply put, the key legal issues raised in this case were:

• Whether the termination of the Appellant was unfair.
• Whether the Appellant was entitled to compensation for the unfair termination, considering the fact that he secured alternative employment quickly.

Held

The appellate court held that the termination was unfair, overturning the trial court's decision. However, the court declined to award compensation to the Appellant. The court noted that the Appellant had successfully mitigated his loss by securing new employment just one day after his termination from the Respondent.

Legal Principles and Reasoning

1. Unfair Termination: The court affirmed the trial court's finding that the termination was indeed unfair, albeit the Respondent had provided reasons for the dismissal. However, in its analysis, the appellate court focused on the fairness of the procedure and the substantive justification for dismissal.

2. Mitigation of Loss: The court relied heavily on Section 49(4)(f) and (g) of the Employment Act, which provides that when determining compensation for unfair termination, the court must consider the likelihood of the employee securing comparable or suitable employment with another employer. Additionally, the court must assess the employee's efforts in mitigating the loss.

   • Section 49(4)(f) requires the court to take into account the opportunity the employee had to secure alternative employment.

   • Section 49(4)(g) requires the court to consider the employee’s actions in mitigating the loss resulting from the unfair termination.

3. Compensation Decision: In this case, the court emphasized the Appellant's quick re-employment, securing a job only a day after his termination. The court concluded that, given the Appellant's prompt action to mitigate his loss, compensation was not warranted. This ruling underscores the importance of an employee’s responsibility to minimize the impact of an unfair termination.

Significance

• Mitigation of Loss: This case underscores the principle that an employee’s failure to mitigate losses may limit their entitlement to compensation. Courts will likely take a more cautious approach to awarding damages where there is evidence that the employee has quickly found alternative employment.

• Judicial Discretion in Compensation: The case highlights the discretionary nature of compensation in unfair termination claims. Courts are not bound to award compensation even when a termination is found to be unfair. The court’s decision is influenced by factors such as the employee’s conduct post-termination and their ability to secure alternative employment.

• Section 49(4) of the Employment Act: This case offers valuable guidance on how Section 49(4)(f) and (g) of the Employment Act is applied by the courts in determining whether to grant compensation following an unfair termination.

Conclusion

The appellate court’s decision in Khamala v Robinson Security Ltd serves as an important reminder of the obligation employees have to mitigate their losses after an unfair termination. While the Appellant was found to have been unfairly dismissed, the court did not grant compensation due to his swift re-employment. This ruling reinforces the principle of mitigating loss and the court’s discretionary power in awarding compensation.

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