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ELRCPartially AllowedCause No 1580 of 2013· [2014] KEELRC 414 (KLR)

Benard A. Kagasi v For You Chinese Restaurant [2014] KEELRC 414 (KLR)

Industrial Court of Kenya
24 June 2014
LNLinnet Ndolo
1,288 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court awarded a chef over Kshs. 500,000 after his employer, facing low business, fired him without following redundancy rules.

What this practically means

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Executive summary

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In this ex parte unfair termination claim, the Claimant alleged he was employed by the Respondent restaurant as a Chef by oral agreement from 3rd July 2003 at a basic salary that rose from Kshs. 10,000 to Kshs. 17,000, without a letter of appointment or payslip, and that on 17th February 2013 his employment was terminated owing to low business. Served, the Respondent did not enter appearance or file a defence, and the matter proceeded ex parte. The court framed three issues: existence of an employment relationship, lawfulness and fairness of the termination, and entitlement to relief. Relying on Section 9(2) and Section 10(7) of the Employment Act, 2007, the court found an employment relationship on the Claimant's stated terms, proof being a staff identification card. Termination for low business was held to amount to redundancy; since none of the Section 40 conditions (notice, selection criteria, leave payment, notice pay and severance) was complied with, the termination was unfair under Section 45. The court awarded six months' pay in compensation, one month's pay in lieu of notice, severance pay at fifteen days' pay per completed year for nine years, and house allowance at 15% of basic salary, totalling Kshs. 501,925. Claims for February salary, accrued leave, overtime, leave traveling allowance, general damages and loss of income were dismissed as unproved or paid. The Respondent was directed to issue a certificate of service and pay costs.

Key legal issues

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01

Existence of employment relationship

Holding

An employment relationship existed on the Claimant's stated terms despite absence of written contract or payslip, proof being the staff identification card.

Reasoning

The Claimant was employed orally and had no letter of appointment or payslip, but produced a staff identification card. Section 9(2) of the Employment Act places the duty of drawing a written contract on the employer, and Section 10(7) provides that where the employer fails, the court adopts the employee's account of the terms. The court therefore found the relationship established.

p. 2
02

Lawfulness and fairness of termination

Holding

Termination on account of low business was redundancy; non-compliance with Section 40 conditions rendered it unfair under Section 45.

Reasoning

Termination due to low business falls within the statutory definition of redundancy. Section 40 prescribes conditions including one month's notice to the employee and labour officer, payment of leave in cash, notice pay and severance pay at fifteen days' pay per completed year. No evidence of compliance was adduced, so the termination was unfair.

p. 3
03

Entitlement to reliefs

Holding

Six months' pay compensation, one month's notice pay, severance pay at 15 days' pay per completed year and house allowance at 15% awarded; unproved claims dismissed.

Reasoning

For unfair termination the court exercised discretion under Section 49 to award six months' pay plus notice pay. Severance was computed at 15 days' pay per completed year for 9 years. House allowance at 15% raised the monthly salary to Kshs. 19,550. Claims for 17 days' salary, accrued leave, overtime, leave traveling allowance, general damages and loss of income failed for want of proof or payment.

p. 3

Legal principles established

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  • Where the employer fails to draw up a written contract of employment as required by Section 9(2) of the Employment Act, the court will adopt the claimant's account of the terms and conditions of employment under Section 10(7) of the Act.
  • Termination of employment on account of low business constitutes redundancy and must comply with the conditions in Section 40 of the Employment Act, failing which it is unfair under Section 45.
  • In the absence of evidence that salary was inclusive of house allowance, house allowance is awarded at 15% of the basic salary.

Court orders

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  1. 1.Six months' pay in compensation for unfair termination (Kshs. 117,300)
  2. 2.One month's pay in lieu of notice (Kshs. 19,550)
  3. 3.Severance pay for 9 completed years of service (Kshs. 87,975)
  4. 4.House allowance for 108 months 20 days (Kshs. 277,100)
  5. 5.Total award of Kshs. 501,925 in favour of the Claimant
  6. 6.Respondent to issue the Claimant with a certificate of service
  7. 7.Respondent to pay the costs of the case

Authorities

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Legislation

  • Employment Act, 2007Section 2
  • Employment Act, 2007Section 9(2)
  • Employment Act, 2007Section 10(7)
  • Employment Act, 2007Section 31(1) and (2)
  • Employment Act, 2007Section 40
  • Employment Act, 2007Section 45
  • Labour Relations Act, 2007Corresponding definition of redundancy
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007; Labour Relations Act, 2007)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Benard A. Kagasi v For You Chinese Restaurant [2014] KEELRC 414 (KLR)", Case Analysis (2014). Cause No 1580 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/414/eng@2014-06-24

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