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ELRCPartially AllowedIndustrial Cause (Nairobi), transferred to Mombasa - Memorandum of Claim filed 15 March 2012· [2013] KEELRC 846 (KLR)

Mary Mutanu Mwendwa v Ayuda Ninos De Africa-Kenya (Anidan K [2013] KEELRC 846 (KLR)

Industrial Court of Kenya
11 October 2013
RSRadido Stephen
7,191 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~29 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a charity unfairly made a nurse redundant, awarding her a year's salary and capping damages at 12 months' pay regardless of contract length.

What this practically means

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Executive summary

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The Claimant, a nurse, was employed by the Respondent, a charitable organisation running a children's home and free hospital in Lamu reliant on donor funding, on a two-year fixed term contract effective 1 January 2009 at Kshs 35,000/- monthly. After a dispute with Dr. Loice and a complaint letter of 29 March 2009, she was sent on compulsory leave on 31 March 2009 and dismissed by letter dated 30 April 2009 on the ground of shortage of funds and sponsors during the economic recession, with one month's salary in lieu of notice offered. The Respondent pleaded that the termination was a redundancy under section 40 of the Employment Act on a Last In-First Out basis. The Court framed five issues: applicable law, unfairness of the dismissal, availability of general damages, loss of salary for premature termination of a fixed term contract, and appropriate relief. It held the dismissal was both procedurally and substantively unfair: the Respondent gave no notification of redundancy to the Claimant or the labour officer, disclosed no selection criteria or evaluation, and produced no financial statements or donor correspondence to prove the operational reasons. On remedies, the Court held that general damages for unfair termination are not separately available and that any award, including loss of earnings, is capped at the equivalent of twelve months' gross wages irrespective of the contract's duration, drawing on Kenyan Court of Appeal, English and South African authorities. Applying section 49(4) factors, the Court awarded the Claimant 12 months' compensation of Kshs 420,000/-, pro-rated her leave to 4 days, declined general damages, and ordered each party to bear its own costs given the Respondent's charitable status and both counsel's industry.

Key legal issues

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01

Whether the dismissal of the Claimant was procedurally fair as a redundancy

Holding

The dismissal was procedurally unfair: the Respondent gave no notification of the impending redundancy to the Claimant or the local labour office, and disclosed no criteria or evaluation for selecting the Claimant among the three nurses

Reasoning

The Respondent dismissed the Claimant for operational reasons (shortage of donor funds), which amounted to declaring her redundant. Section 40 of the Employment Act prescribes conditions for redundancy, including written notice to the employee and the labour officer and selection on the basis of seniority, skill, ability and reliability. None of these conditions, apart from payment of one month's wages in lieu of notice, was complied with, and the Respondent did not inform the Court of the selection criteria used.

p. 5
02

Whether the reasons for dismissal were substantively valid and fair

Holding

The dismissal was substantively unfair because the Respondent failed to prove, with evidence or documentation, that a shortage of donor funds validly and fairly warranted the dismissal

Reasoning

Section 45(2) of the Employment Act obliges the employer to prove the validity and fairness of the reasons for termination. The Respondent alleged donor funds had run out amid the European economic downturn, but produced no financial statements or donor correspondence, matters peculiarly within its knowledge. Within two or three months it advertised for two nurses and a doctor once finances improved, yet did not consider the Claimant for re-employment, which the Court found inconsistent with good faith and fair dealing.

p. 5
03

Whether general damages are available for unfair termination or wrongful dismissal

Holding

Whatever the label, the Court may award damages and compensation under the Industrial Court Act, but the award is capped by the Employment Act at the equivalent of a maximum of twelve months' gross wages; no separate award of general damages was made

Reasoning

Reviewing Kenyan Court of Appeal authorities (Kabute, Oganda, Murgani) and English and South African authorities, the Court concluded that the Industrial Court Act permits awards of compensation and damages, subject to any written law. The Employment Act caps such awards at twelve months' gross wages. The Court accordingly declined to make a separate award of general damages.

p. 7
04

Whether loss of salary for the unserved portion of a fixed term contract is an available remedy

Holding

Loss of earnings is a damage the Court can award, but it is capped at twelve months' gross wages irrespective of the contract's duration; parties may, by party autonomy, contractually provide for agreed sums for wrongful dismissal or unfair termination of fixed term contracts

Reasoning

The Court considered South African (Buthelezi, Fedlife) and English (Addis, Gunton, Knight, McQueen) authorities and the Kenyan statutory framework. It found no policy or legislative reason to treat fixed term contract employees differently from those on definite contracts, and held that the section 49 Employment Act remedies are not exhaustive given section 12(3)(viii) of the Industrial Court Act, but any award of lost income is still capped at twelve months' gross wages.

p. 11
05

Appropriate relief

Holding

The Claimant was awarded the equivalent of 12 months' gross wages (Kshs 420,000/-) as compensation, applying section 49(4) factors: her reasonable expectation of serving the two-year contract, her opportunity as a registered nurse to secure alternative employment, and negligible severance pay

Reasoning

Section 49 of the Employment Act permits compensation not exceeding twelve months' gross wages, discretionary and guided by the thirteen factors in section 49(4). The Court considered the Claimant's expectation of a full two-year term, her employability as a registered nurse, and that severance pay for three months' service would be minimal, concluding that 12 months' gross wages of Kshs 420,000/- would be just. Leave was pro-rated to 4 days and general damages declined.

p. 12

Legal principles established

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  • Under section 47(5) of the Employment Act, the burden of proving unfair termination rests on the employee while the burden of justifying the grounds for termination rests on the employer
  • An employer must prove the reason(s) for termination, which must be valid and fair, otherwise the termination is deemed unfair (sections 43 and 45(2) Employment Act)
  • Redundancy terminations must comply with the procedural conditions in section 40 of the Employment Act, including written notification of the employee and the local labour office and selection on the basis of seniority, skill, ability and reliability
  • It is the employer's duty to keep and maintain employment records; where the employer fails to produce records, adverse inferences may be drawn against it
  • Damages or compensation for unfair termination or wrongful dismissal under the Kenyan framework are capped at the equivalent of twelve months' gross wages irrespective of whether the contract is fixed term or definite
  • Loss of earnings/income qualifies as compensation and/or special or general damages which the Industrial Court may award under section 12(3) of the Industrial Court Act

Court orders

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  1. 1.Award of 12 months' compensation of Kshs 420,000/- for unfair termination through redundancy
  2. 2.Each party to bear its own costs

Authorities

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Legislation

  • Employment Actsection 40
  • Employment Actsection 40(1)(g)
  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 45(2)
  • Employment Actsection 45(2)(a) and (b)
  • Employment Actsection 47(5)
  • Employment Actsection 49
  • Employment Actsection 49(4)
  • Employment Actsection 2 (definition of redundancy)
  • Employment Actsections 74 and 10(7)
  • Industrial Court Actsection 12
  • Industrial Court Actsection 12(3)
  • Industrial Court Actsection 20
  • Employment Act (repealed), Cap 226 Laws of Kenyasection 16
  • Trade Disputes Act (repealed)section 15(1)(ii)
  • Labour Relations Act (South Africa)section 186
  • Labour Relations Act (South Africa)section 195

Cases cited (14)

  • Thomas de la Rue v David Opondo
    (2013) eKLR
  • Cyrus Nyaga Kabute v Kirinyaga County Council
    Civil Appeal No. 29 of 1985
  • Rift Valley Textiles Ltd v Edward Onyango Oganda
    Nakuru Civil Appeal No. 27 of 1992
  • Kenya Revenue Authority v Menginya Salim Murgani
    Nairobi Civil Appeal No. 108 of 2010
  • East African Airways v Knight
    (1975) EA 165
  • Ian Charles v The Board of Governors of the H. Lavity Stoutt Community College
    Claim No. BVHCV 2010/0049
  • Buthelezi v Municipal Demarcation Board
    (2004) ZALAC 15
  • Fedlife Assurance Ltd v Hendrik Johannes Wolfaardt
    (2001) ZASCA 91
  • Meyers v Abrahamson
    1952(3) SA 121
  • Addis v Gramophone Co Ltd
    (1909) AC 488
  • Gunton v Richmond-Upon-Thames London Borough Council
    (1981) Ch 448
  • Kenya Ports Authority v Silas Obengele
    Mombasa Civil Appeal No. 38 of 2005
  • Peter Onyango Onyiengo v Kenya Ports Authority
    Mombasa HCCC No. 496 of 1995
  • Southern Highlands Tobacco v McQueen
    (1960) EA 490
Jurisdiction invoked
Section 12 of the Industrial Court Act (exclusive and original jurisdiction over employment and labour relations disputes)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "Mary Mutanu Mwendwa v Ayuda Ninos De Africa-Kenya (Anidan K [2013] KEELRC 846 (KLR)", Case Analysis (2013). Industrial Cause (Nairobi), transferred to Mombasa - Memorandum of Claim filed 15 March 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/846/eng@2013-10-11

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