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ELRCPartially AllowedMemorandum of Claim dated 21st February 2011· [2014] KEELRC 859 (KLR)

Wycliffe Makhoha Ouma v Security Guards Services Limited [2014] KEELRC 859 (KLR)

Industrial Court (Employment and Labour Relations Court)
28 January 2014
2,962 words in judgment
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The bottom line

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A Kenyan court ruled a security guard was unfairly dismissed without a hearing, winning notice pay, gratuity for 28 years' service and maximum compensation.

What this practically means

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Executive summary

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The claimant, a security guard, sued for breach of contract and terminal benefits following events of 31st December 2010, when guards gathered at K-REP Bank, Kawangware Branch demanding unpaid salaries. The respondent alleged the claimant participated in a disturbance, required him to sign a warning letter, and treated him as having deserted his employment after he refused. The court framed five issues: date of employment, existence of a pay slip collection policy, participation in the disturbance, the rate of pay for terminal benefits, and entitlement to the prayers sought. The court found the respondent failed to discharge its burden of proving a 1990 start date where no written contract was produced, and accepted employment from 2nd February 1982. It found no proof of the alleged pay slip policy and, relying on the bank manager's own letters absolving the claimant, found he did not participate in the disturbance. Refusal to sign a pre-determined warning letter, followed by exclusion from work, amounted to constructive and unfair termination without a hearing or valid reason. The court awarded one month's salary in lieu of notice (Kshs. 8,651.00), service gratuity of Kshs. 145,336.80 at 18 days' pay per year for 28 years under the Regulation of Wages (Protective Security) Order 1998, and maximum compensation of 12 months' salary (Kshs. 103,812.00). Claims for accrued leave, weekday overtime and severance pay were dismissed for want of proof, limitation and absence of redundancy respectively. The claimant was awarded costs, with interest from the date of judgment.

Key legal issues

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01

Date of employment

Holding

The claimant was employed on 2nd February 1982; the respondent failed to disprove this

Reasoning

Section 9 of the Employment Act requires written contracts, and under section 10(7) the employer bears the burden of proving terms where no written contract is produced. The respondent produced no contract specifying February 1990. The NSSF certificate proved only registration (1991) and covered contributions only for 1991-1998, so it could not reflect the full employment period.

p. 3
02

Alleged pay slip collection policy

Holding

No proof that the policy existed or was brought to the claimant's attention

Reasoning

Although section 20(1) of the Employment Act requires written statements with payment of wages, the respondent did not produce any written particulars of the alleged salary payment policy under section 10, did not show the claimant knew of it, and did not explain why many other employees collected salaries at the bank without pay slips.

p. 4
03

Participation in the bank disturbance

Holding

The claimant did not participate in the disturbance

Reasoning

The claimant denied involvement, gave a detailed account, and obtained letters from Mr. Oyaro - the very person who made the complaint - absolving him. The bank's letters were produced by the respondent itself, constituting the best evidence of the claimant's innocence.

p. 4
04

Unfair termination and remedies

Holding

Constructive and unfair termination established; claimant entitled to notice, service gratuity and maximum 12 months' compensation

Reasoning

The warning letter was pre-determined before the claimant was heard, and refusal to sign led to him being barred from work and required to return uniforms - a constructive dismissal. Without a hearing or valid reason the termination was unfair. Given 28 years' service, maximum compensation of 12 months was awarded, plus one month's notice and service gratuity at 18 days' pay per year under the Regulation of Wages (Protective Security) Order 1998.

p. 5
05

Rate of pay for terminal benefits

Holding

Basic pay plus house allowance, totalling Kshs. 8,651.00

Reasoning

Section 49 of the Employment Act sets the rate as gross monthly wage or salary at termination. Regular remuneration excludes one-off payments such as leave pay. From the pay slip produced, the appropriate components were basic pay and house allowance.

p. 4

Legal principles established

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  • Where an employer fails to produce a written contract, the burden lies on the employer to prove or disprove an alleged term of employment including the date of employment
  • Terminating an employee for refusal to sign a warning letter issued without a hearing and without valid reason amounts to constructive and unfair dismissal
  • Terminal dues are computed on basic pay plus house allowance, excluding one-off payments such as leave pay
  • An employee covered by a wages order providing service gratuity is entitled to it irrespective of NSSF membership, and wages order terms may not be varied to the employee's disadvantage

Court orders

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  1. 1.One month's salary in lieu of notice of Kshs. 8,651.00
  2. 2.Dismissal of the claims for accrued leave, weekday overtime and severance pay
  3. 3.Service gratuity of Kshs. 145,336.80 for 28 years worked
  4. 4.Maximum compensation of 12 months' salary amounting to Kshs. 103,812.00 for unfair termination
  5. 5.Costs of the claim to the claimant
  6. 6.Interest to accrue from the date of judgment

Authorities

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Legislation

  • Employment ActSection 9
  • Employment ActSection 10
  • Employment ActSection 10(7)
  • Employment ActSection 20(1)
  • Employment ActSection 35(5)
  • Employment ActSection 35(6)
  • Employment ActSection 40
  • Employment ActSection 49
  • Labour Institutions ActSection 48
  • Regulation of Wages (Protective Security) Order 1998service gratuity at 18 days pay for each year worked

Cases cited (1)

  • Wallen Nyaberi Onsario v Protective Custody Limited
    (2013) eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction (Employment Act, 2007; Labour Institutions Act)

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, "Wycliffe Makhoha Ouma v Security Guards Services Limited [2014] KEELRC 859 (KLR)", Case Analysis (2014). Memorandum of Claim dated 21st February 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/859/eng@2014-01-28

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