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ELRCPartially AllowedCause 1478 of 2010· [2012] KEELRC 24 (KLR)

JAVAN WERE MBANGO V H. YOUNG & CO. (EA) LTD [2012] KEELRC 24 (KLR)

Industrial Court of Kenya
14 November 2012
MMMonica Mbaru
3,103 words in judgment
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The bottom line

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A Kenyan court ruled that redundancy pay, leave, and rest-day entitlements are guaranteed by law and cannot be removed by employment contracts.

What this practically means

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Executive summary

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The claimant, employed from 2000/2001 as a mechanic/foreman at a monthly salary of Kshs.30,000, was declared redundant and terminated on 9th October 2010. He claimed Kshs.1,119,228 in terminal dues: severance pay, notice pay, leave balance, pay for public holidays worked and weekly rest days, plus nine days worked in October 2010. The respondent admitted the termination was by redundancy and contended all dues were settled, including gratuity at 15 days per year, accumulated leave, notice pay and days worked, less a Kshs.231,912 Sacco loan deduction. The court held that an employee declared redundant who does not challenge the redundancy is still entitled to remedies under Section 40 of the Employment Act: leave due paid in cash, one month's notice or wages in lieu, and severance at 15 days per completed year. Gratuity paid was not equivalent to severance. Statutory minimums on leave and weekly rest days cannot be contracted out, so the claimant's 2007 changed status to senior staff did not defeat his rest-day claim; 492 rest days were awarded at Kshs.98,400. Leave balance was awarded at Kshs.165,000, notice pay at Kshs.30,000 and nine days' pay at Kshs.10,384. The public holidays claim failed for want of particularisation. The Sacco loan deduction of Kshs.231,912 was upheld as lawful under Section 19. Judgment was entered for the claimant for a net total of Kshs.196,488.

Key legal issues

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01

Entitlement to terminal dues upon redundancy

Holding

The claimant, declared redundant, was entitled to leave balance paid in cash, one month's notice pay and severance pay at 15 days per completed year of service under Section 40 of the Employment Act.

Reasoning

The court applied Section 40(1)(e) to (g) of the Employment Act, which mandates payment of accrued leave in cash, one month's notice or wages in lieu, and severance pay of not less than fifteen days' pay per completed year of service. The respondent had paid only what it described as gratuity, which the court held is not equivalent to severance pay in a redundancy situation, leaving severance outstanding.

p. 5
02

Weekly rest days entitlement

Holding

The claimant was entitled to one rest day per week notwithstanding his changed status to senior staff; payment for 492 rest days worked at double the daily rate was awarded at Kshs.98,400.00.

Reasoning

The court held the right to at least one rest day per week under Section 27(2) of the Employment Act, 2007 and the repealed Act cannot be contracted out. The claimant worked 492 weeks from 26th February 2001 to 9th October 2010. Applying the sector practice of double the daily rate (Kshs.1,000 per day on a Kshs.30,000 salary), the court awarded Kshs.98,400.00.

p. 4
03

Public holidays claim

Holding

The claim for 110 public holidays worked was declined for lack of particularisation and proof.

Reasoning

The court found the claim was pleaded generally without particulars. Each year brings a different set of public holidays, and it was the claimant's duty to prove which specific days he worked. The evidence did not confirm how the claimed 110 days arose, so no order was made under this head.

p. 5
04

Deduction of Sacco loan from terminal dues

Holding

The deduction of Kshs.231,912.00 owed to Wanachuma Sacco was lawful under Section 19 of the Employment Act and was subtracted from the award.

Reasoning

Employees who voluntarily join a Sacco by virtue of their employment authorise deductions for the collective good. Having enjoyed loan facilities, the claimant was under a duty to make good the dues upon termination of employment. The employer was obliged under Section 19 to make authorised deductions, including the loan balance owed to the cooperative society.

p. 5

Legal principles established

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  • An employee declared redundant is entitled under Section 40 of the Employment Act to payment of leave due in cash, one month's notice or wages in lieu, and severance pay at not less than fifteen days' pay per completed year of service.
  • Statutory minimum entitlements such as annual leave and weekly rest days cannot be negated by private contract, including agreements on changed employment status.
  • An employee who has voluntarily joined a Sacco and enjoyed loan facilities authorises deductions from terminal dues; the employer must make such deductions under Section 19 of the Employment Act.

Court orders

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  1. 1.Pay for 9 days worked in October 2010 unpaid amounting to Kshs.10,384.00
  2. 2.Notice pay amounting to Kshs. 30,000.00
  3. 3.6 days balance leave amounting to Kshs.165,000.00
  4. 4.492 rest days worked amounting to Kshs.98,400.00
  5. 5.Severance pay amounting to Kshs.135,000.00
  6. 6.Less loan due amounting to Kshs. 231,912.00
  7. 7.Total due Kshs. 196,488.00

Authorities

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Legislation

  • Employment ActSection 40(1)(e), (f), (g)
  • Employment ActSection 28
  • Employment ActSection 35
  • Employment ActSection 27(2)
  • Employment ActSection 19
  • Employment Act, 2007 (No. 11 of 2007)Section 2 (definition of redundancy)
  • Labour Relations Act, 2007 (No. 14 of 2007)Section 2 (definition of redundancy)
Jurisdiction invoked
Original jurisdiction of the Industrial Court over employment and labour relations disputes (Cause filed under the Industrial Court's mandate)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (15)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "JAVAN WERE MBANGO V H. YOUNG & CO. (EA) LTD [2012] KEELRC 24 (KLR)", Case Analysis (2012). Cause 1478 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/24/eng@2012-11-14

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.