Benson Muriithi Kagai v Kenya Equatorial Hotels Limited T/A Mombasa Intercontinental Resort Limited [2014] KEELRC 88 (KLR)
The bottom line
#A Kenyan hotel was ordered to pay an employee a full year's salary after skipping the mandatory legal steps for declaring redundancy.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination by way of lay off/redundancy complied with Section 40 of the Employment Act
The termination breached Section 40 as no one-month notice was served on the employee and Labour Officer, selection criteria were unexplained and no severance pay was offered, rendering the termination unfair and unjustified
The court construed the termination letter's statement that services were no longer required as a lay off or redundancy. Section 40 mandatorily requires one month's written notice to the employee and Labour Officer, fair selection, payment of accrued benefits, pay in lieu of notice and severance pay. None of these were done; the lay off occurred before investigations were complete, and no evidence showed whether the person or the office was abolished.
What remedies flow from the unfair termination
Maximum compensation of 12 months' salary (Kshs.720,000) awarded because the employer acted capriciously and in breach of express provisions of the law; severance pay, lost earnings and general breach-of-contract damages refused
Under Section 49 of the Employment Act an unfairly terminated employee is entitled to pay in lieu of notice, accrued benefits and compensation. The employer suspended the claimant for alleged wrongdoing, then before hearing him declared him redundant unprocedurally, warranting maximum compensation. Severance pay was displaced by compensation; lost earnings suits physical injury cases; breach-of-contract damages were unpleaded.
Whether the claimant was accorded a fair hearing before termination
He was never given any chance to defend himself during the investigations by the committee of inquiry, the Auditor or at all, rendering the termination procedurally unfair
It was undisputed that the claimant was suspended to pave way for investigations, was never heard at any stage, and was dismissed on 19.8.2013 before the Auditor completed investigations on 9.9.2013. The Audit Report implicating him was prepared after his dismissal, and only he was dismissed among those probed.
Legal principles established
#- Redundancy done in breach of Section 40 of the Employment Act results in an unfair termination
- Once redundancy is declared unfair termination, the remedy shifts from severance pay to compensation for unfair termination
Court orders
#- 1.Judgment entered for the Claimant in the sum of Kshs.720,000
- 2.Costs of the suit to the Claimant
- 3.Interest on the decretal sum
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Diana Gaceri Kigunda v Mombasa Continental Resort [2019] KEELRC 1138 (KLR)[2019] KEELRC 1138 (KLR)19 Jul 2019distinguished
Cite this brief
#Cite this brief
Caselaw, "Benson Muriithi Kagai v Kenya Equatorial Hotels Limited T/A Mombasa Intercontinental Resort Limited [2014] KEELRC 88 (KLR)", Case Analysis (2014). Re-amended Memorandum of Claim dated 12.5.2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/88/eng@2014-12-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.