Punchlines Limited v Joseph Mugo Kibaria & 8 others
The bottom line
#Kenya's Court of Appeal ruled that when a job ends normally, employers owe only one month's notice pay and service pay per year worked—not six months' salary.
What this practically means
#Executive summary
#Key legal issues
#Whether the 5th and 11th respondents should have been included in the award for normal termination
The trial Judge was right to include them because there was no amendment to pleadings or consent order withdrawing their claims.
The appellant contended the 5th and 11th respondents had resumed work after the downing of tools and should not have been compensated. The court examined the record and found no amendment of pleadings and no consent order withdrawing those claims, so they remained parties to the litigation at the conclusion of the trial and the Judge could not be faulted for including them in the award.
Whether the reliefs awarded by the trial Judge were well founded in law
The finding of normal termination was sound, but the award of six months' salary as terminal dues exceeded the statutory remedies for normal termination and was substituted with service pay for each year worked.
There was no evidentiary proof that the respondents absconded duty or were dismissed, so normal termination was correctly found. Remedies for normal termination are those in sections 35(5) and 36 of the Employment Act: one month's salary in lieu of notice and service pay for each year worked. The trial Judge gave no indication that the six months' salary represented service pay, so the Court of Appeal set it aside and substituted the correct remedy, remitting quantification to the trial court.
Whether the trial court's order on costs should be disturbed
The costs order was affirmed because the respondents substantially succeeded and the discretion was properly exercised.
Costs follow the event under section 27 of the Civil Procedure Act unless the court orders otherwise for good reason. The appellant had substantially satisfied the decree by consent save for item 4, and the substitution of the service pay award was also in the respondents' favour. The respondents were deemed to have substantially succeeded, so there was no justification for interfering with the trial Judge's discretion.
Legal principles established
#- Remedies for normal termination of employment are confined to those stipulated under sections 35(5) and 36 of the Employment Act, 2007, namely one month's salary in lieu of notice and service pay for each year worked; a court cannot award six months' salary as terminal dues under a normal termination without indicating it is service pay
- On a first appeal, the appellate court must re-evaluate the evidence and draw its own conclusions, making allowance for not having seen or heard the witnesses, and is not bound by the trial judge's findings of fact where the judge failed to appreciate the facts or misapplied the law
- An appellate court will not interfere with a trial court's exercise of discretion on costs unless the discretion was exercised injudiciously or on wrong principles, or no reasons were given, or the reasons do not constitute good reason within the meaning of the rule
- A claim by a party who remained a party to the litigation at the conclusion of the trial, and whose claim was neither withdrawn by amendment nor by consent order, cannot be excluded from the award
Court orders
#- 1.Item four (4) of the trial court's award of six (6) months' salary as terminal dues is set aside, and substituted with an order for payment of service pay for each year worked payable to all the respondents and as worked out and fixed by the trial court
- 2.The matter is remitted back to the trial court to work out an award for service pay for each year worked payable to each respondent as provided for under section 35 (5) and 36 of the Employment Act
- 3.The order on costs as awarded by the trial court is affirmed
- 4.The respondents will also have costs of this appeal
- On appeal from
- Employment and Labour Relations Court at Nairobi
- H.C. Cause No. 622 of 2014
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal rules (Rule 31 of the rules of the court); appellate jurisdiction over a decision of the Employment and Labour Relations Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Punchlines Limited v Joseph Mugo Kibaria & 8 others", Case Analysis (2018). Civil Appeal Number 298 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/217/eng@2018-10-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.