Remedies Issued by the Employment and Labour Relations Court in Kenya

Remedies Issued by the Employment and Labour Relations Court in Kenya

When the Employment and Labour Relations Court (ELRC) find that an employee was unfairly or wrongfully terminated, it possesses expansive statutory powers to penalize the employer and remedy the wrong. Governed primarily by Section 49 of the Employment Act, 2007, these remedies range from steep financial compensation payouts to orders that physically force the restoration of the workplace relationship.

1. The Core Legal Framework: Section 49

Under Section 49, the ELRC holds the exclusive mandate to grant three distinct categories of relief to an aggrieved employee:

a) Monetary Compensation: Under Section 49(1)(c), the court can award the employee a maximum of twelve (12) months' gross salary as compensation for the unfair loss of employment. This is calculated based on the employee's wage at the time of dismissal and is awarded in addition to notice pay and accrued wages for work done.

b) Restorative Remedies (Reinstatement): Under Section 49(3)(a), the court can order full reinstatement, forcing the employer to take the worker back as if the termination never happened restoring all their benefits, back-pay, seniority, and continuity of service.

c) Restorative Remedies (Re-engagement): Under Section 49(3)(b), the court can order re-engagement, requiring the employer to place the worker in a comparable or alternative position at the same wage structure.

2. How the Court Exercises Its Discretion

Judges do not award the maximum 12 months' compensation automatically. Section 49(4) mandates the court to evaluate several strict factors before deciding on a final financial figure:

  1. The expressed wishes and desired outcome of the employee.
  2. The severity of the circumstances surrounding the termination.
  3. The practical capability or safety of ordering reinstatement.
  4. The employee's length of service and future career prospects.
  5. Whether the employee's own misconduct contributed to the dismissal (which can slash an award by 25% to 75%).
  6. Whether the employee actively tried to mitigate their losses by searching for alternative work.
  7. Any ex-gratia or severance payments already made by the employer.

3. Recent 2025 and 2026 Judicial Trends

Modern court rulings highlight a strict reality: procedural fairness is non-negotiable. Even if an employer has a perfectly valid reason to fire someone, failing to follow the strict notice-and-hearing rules under Section 41 will lead to massive financial losses in court.

  • In Kensalt Limited v Abukuse [2026], the court slapped the employer with a heavy 10-month salary award purely because they bypassed standard Section 41 disciplinary procedures.
  • In Wachira v CIB Bank [2026], the court awarded the maximum 12 months' gross salary for constructive dismissal, finding the bank liable for creating a hostile work environment and demoting the worker without a fair hearing.
  • In Vivian Nyakerario Ongwae v Kenya Civil Aviation Authority [2025], the court issued an injunction forcing the employer to renew a contract for 3 years, proving that re-engagement remains an active, powerful tool when an employer acts maliciously.

4. Notice Pay & Missing Records Risk

If an employer fails to give proper statutory notice (typically one month for monthly employees), courts routinely order full pay in lieu of notice. Furthermore, under Section 74 of the Employment Act, if an employer fails to produce complete, accurate employment records during a trial, the law presumes the employee's claims are true. Poor corporate record-keeping is the single biggest cause of employer losses at the ELRC.

5. The Rise of Constitutional Damages

The ELRC is aggressively awarding additional financial damages when a termination violates fundamental rights. Article 41 protects fair labour practices, Article 47 guarantees fair administrative action, and Article 28 protects human dignity.

In Margaret Wanjiku Gichuki v Kenya Power & Lighting Company [2025], an employee was kept on short-term consecutive contracts for eight years. The court held that this practice was exploitative and violated Article 41, awarding an extra KES 450,000 in constitutional damages. Courts are also punishing employers who conduct terminations via WhatsApp, SMS, or through public shaming and escorting staff out by security guards.

6. Certificate of Service, Costs, and Interest

Regardless of whether a firing was fair or unfair, Section 51 mandates that the employer must issue a formal Certificate of Service. Additionally, successful litigants are typically awarded the legal costs of the suit. Once a judgment is delivered, statutory interest accrues against the losing party at a rate of 14% per annum from the date of filing or judgment until it is paid in full.

Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal advice. Prior results do not guarantee a similar outcome. Reading or relying on the contents of this article does not create an advocate-client relationship with our firm. For advice regarding your specific situation, please contact us to obtain professional legal advice with respect to your particular legal matter.

By Ivy Ndirangu