Leodip Lemuse v Wadia Construction Company [2014] KEELRC 989 (KLR)
The bottom line
#Kenya's Industrial Court ruled that ending a worker's job for lack of work is a redundancy requiring legal procedures, and awarded Kshs. 78,000.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the Claimant's employment on completion of the construction project was unfair termination or lawful lapse of a fixed contract
The termination was in substance a redundancy, and because the Respondent complied with none of the conditions in Section 40 of the Employment Act, it was unfair under Section 45; compensation of 3 months' salary plus one month's salary in lieu of notice awarded.
The Respondent's Memorandum of Reply indicated the Claimant's employment ended because there was no more work, which fits the statutory definition of redundancy. Section 40 prescribes conditions precedent, including notification of the union and labour officer, payment of leave, one month's notice and severance at fifteen days' pay per completed year. No evidence of compliance with any condition was adduced, so the termination was unfair, entitling the Claimant to compensation.
Whether the Claimant was entitled to house allowance
House allowance awarded at 15% of salary, raising the monthly salary adopted for tabulation to Kshs. 8,625, since the Respondent did not document terms and no intention that salary was inclusive of house allowance was shown.
Section 31(1) and (2) of the Employment Act obliges the employer to provide housing or pay a rent sum unless the contract consolidates a housing element into the wage. As the employer failed to issue a written contract, the court interpreted the terms, found no expressed intention that salary included house allowance, and awarded 15% of salary as house allowance, adopting Kshs. 8,625 as the monthly salary.
Whether the Claimant was entitled to service pay
Service pay for 2 completed years of service awarded at the adopted monthly salary of Kshs. 8,625 as there was no evidence of membership in a pension scheme.
Service pay is payable under the Employment Act where an employee is not a member of a pension or provident fund scheme. The court found no evidence that the Claimant belonged to any such scheme, and therefore allowed the claim for service pay computed on the adopted salary for the two completed years of service.
Undocumented terms of employment
In the absence of a written contract, the court adopts the Claimant's account of terms under Section 10(7) of the Employment Act.
It was common ground that the Claimant was employed but that terms and conditions were not documented as required by law. Section 9(2) places responsibility for drawing the contract on the employer; the sanction for failure is that the court adopts the employee's version of terms under Section 10(7). This underpinned the awards on house allowance and service pay.
Legal principles established
#- Where an employer fails to draw a written contract of employment as required by section 9(2) of the Employment Act, the court will adopt the employee's account of the terms and conditions of employment under section 10(7).
- Termination of employment on account of redundancy must comply with the conditions in Section 40 of the Employment Act, failing which it is unfair under Section 45.
- Where an employer fails to document terms of employment, it is left to the court to interpret those terms, including whether salary was inclusive of house allowance.
Court orders
#- 1.Award of 3 months' salary (Kshs. 25,875) in compensation for unfair termination
- 2.Award of 1 month's salary in lieu of notice (Kshs. 8,625)
- 3.Award of house allowance for 31 months (Kshs. 34,875)
- 4.Award of service pay for 2 completed years of service (Kshs. 8,625)
- 5.Total award of Kshs. 78,000 in favour of the Claimant
- 6.Award of the costs of the case to the Claimant
- 7.Award amount to attract interest at court rates from the date of the award until payment in full
- Jurisdiction invoked
- Jurisdiction of the Industrial Court of Kenya over employment and labour relations disputes (Cause No 1356 of 2011)
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.
- David Ongera Nyang’au v Gilberx Electro Services Limited [2015] KEELRC 1221 (KLR)[2015] KEELRC 1221 (KLR)10 Feb 2015
Cite this brief
#Cite this brief
Caselaw, "Leodip Lemuse v Wadia Construction Company [2014] KEELRC 989 (KLR)", Case Analysis (2014). Cause No 1356 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/989/eng@2014-05-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.