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ELRCPartially AllowedCause Number 1262 of 2012· [2014] KEELRC 679 (KLR)

Cosmas Mutua Kimatu v Wema Technical Services Limited [2014] KEELRC 679 (KLR)

Industrial Court at Nairobi
21 January 2014
1,230 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 ruled M-Pesa payment records can prove employment, and an employer who cuts staff without following redundancy law must pay compensation.

What this practically means

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Executive summary

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The Industrial Court at Nairobi (Rika J) determined a claim by Cosmas Mutua Kimatu against Wema Technical Services Limited for unfair and unlawful termination. The Claimant testified he was employed in 2007 as a Turn Boy on a monthly salary of Kshs. 7,500 and was terminated on 9th June 2012 without notice or reason and without a hearing, contrary to Section 41 of the Employment Act 2007. He sought notice pay, severance pay, annual leave pay, 12 months' compensation, and a Certificate of Service. The Respondent adduced no testimonial evidence, contending instead that the Claimant failed to prove employment, having produced M-Pesa statements for only about three months with inconsistent sums, and that he was a casual, part-time worker engaged to offload merchandise. The Court found the M-Pesa statements, with the Claimant's explanation that payments came in instalments for errands and salaries, sufficient to establish a regular employment relationship, uncontradicted by any Respondent evidence. The Court held the termination, justified only by diminished volume of work, was in substance a redundancy carried out without compliance with Sections 40, 43 and 45 of the Employment Act, rendering it unfair. The Court awarded severance pay of Kshs. 21,634 (15 days' salary per year over 5 years), notice pay of Kshs. 7,500, annual leave pay of Kshs. 26,250, and compensation of 4 months' salary (Kshs. 30,000), totalling Kshs. 85,384, payable within 30 days, with the Certificate of Service to be released forthwith. Compensation was reduced from the 12 months sought to 4 months. No order was made on costs.

Key legal issues

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01

Existence of an employment relationship

Holding

The Claimant was a regular employee of the Respondent, engaged as a Turn Boy from 2007, evidenced by M-Pesa payment statements

Reasoning

M-Pesa statements showed money flowing from the business owner to the Claimant. The Witness explained the Respondent initially paid employees through the Cooperative Bank, then M-Pesa or cash. Payment by instalments explained inconsistent amounts. The Respondent offered no evidence to contradict the nature or purpose of the transactions.

p. 2
02

Fairness of termination

Holding

The termination was unfair; the contract ended through redundancy but without compliance with Sections 40, 43 and 45 of the Employment Act

Reasoning

The Respondent gave no valid reason for terminating the contract after 5 years of service, adducing no evidence. The Claimant's testimony that work volume had diminished pointed to redundancy, but the redundancy process under Sections 40, 43 and 45 was not followed, and the Claimant was not heard as required under Section 41.

p. 2
03

Entitlement to severance, notice and leave pay

Holding

Severance pay at 15 days' salary per year for 5 years, one month's notice pay, and annual leave pay as claimed were granted; the Respondent bore the burden of showing leave records

Reasoning

The contract ended through redundancy, entitling the Claimant to severance. Notice pay had good ground in law and fact. The Respondent produced no leave records showing the Claimant took or sold his leave days, so the leave claim was allowed in full as claimed.

p. 3

Legal principles established

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  • A sampled period of payment records is sufficient to establish an employment relationship where the respondent offers no contradictory evidence
  • Termination justified only by diminished volume of work amounts to redundancy, which must follow the statutory procedure under Sections 40, 43 and 45 of the Employment Act

Court orders

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  1. 1.Declaration that termination of the Claimant's contract of employment was unfair
  2. 2.Respondent to pay the Claimant severance pay of Kshs. 21,634; one month salary notice pay at Kshs. 7,500; 4 months' salary compensation at Kshs. 30,000; and annual leave pay at Kshs. 26,250 - total Kshs. 85,384
  3. 3.Total amount of Kshs. 85,384 to be paid within 30 days of delivery of the Award
  4. 4.Respondent to release the Certificate of Service to the Claimant forthwith
  5. 5.No order on costs

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSections 40, 43 and 45

Cases cited (2)

  • Joseph Okelo Odhiambo & Another v. Y.J. Elmi & 2 Others
    [2013] e-KLR
  • Harrison Meshack Lusimbo v. Mareba Enterprise Limited
    [2013] e-KLR
Jurisdiction invoked
Employment and labour relations dispute under the Employment Act 2007, vested in the Industrial Court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Cosmas Mutua Kimatu v Wema Technical Services Limited [2014] KEELRC 679 (KLR)", Case Analysis (2014). Cause Number 1262 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/679/eng@2014-01-21

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