Enoch Marita & 3 others v Maggies Restaurant Co Ltd & another [2014] KEELRC 1174 (KLR)
The bottom line
#Kenya's Industrial Court ruled employers must give employees one month's redundancy notice separately, not just pay salary in lieu, making such redundancies unfair termination.
What this practically means
#Executive summary
#Key legal issues
#Joinder of the 2nd Respondent (director)
Claim against the director struck out
The 2nd Respondent was a director of the 1st Respondent, a limited liability company. Applying Salomon v Salomon, a company is separate from its directors. The veil may be lifted only where used to defeat the ends of justice, and no such evidence was led.
Procedural validity of the redundancy
Redundancies were procedurally flawed and unfair
Although the labour officer was notified on 1st September 2011, employees first learnt of the redundancy on 27th September 2011, only three days before termination. The one month notice to affected employees is a legal requirement, and payment of one month's salary in lieu satisfied only the Section 35 termination notice, not the Section 40 redundancy notice.
House allowance
Claim for house allowance allowed at 15% of basic salary
Salary vouchers and the muster roll showed basic salary with no separate house allowance figure or consolidated salary. No written contracts existed as required by Section 9, so the Court interpreted the terms and found no intention that salaries were inclusive of house allowance.
Other terminal dues
Notice pay, severance pay, leave pay, overtime and underpayment claims dismissed
Vouchers showed the Claimants were paid basic pay, notice pay, severance pay and leave pay. Overtime and underpayment claims were not proved on the evidence.
Legal principles established
#- Failure to give the statutory one month redundancy notice renders the redundancy an unfair termination under Section 45 of the Employment Act
- Payment in lieu of notice under Section 35 does not satisfy the one month redundancy notification requirement under Section 40
- A company is a separate legal entity from its directors and the corporate veil is lifted only where used to defeat justice
- Where an employer fails to document terms of employment, the Court interprets the terms from the evidence
Court orders
#- 1.Struck out the Claimants' claim as against the 2nd Respondent, Roque Kamau Njau
- 2.Awarded Enoch Marita Kshs. 64,350 (house allowance Kshs. 26,400 and 3 months' salary compensation of Kshs. 37,950)
- 3.Awarded James Wachira Kshs. 89,562 (house allowance Kshs. 39,312 and 6 months' salary compensation of Kshs. 50,250)
- 4.Awarded Sylvia Mweu Kshs. 93,375 (house allowance Kshs. 41,625 and 6 months' salary compensation of Kshs. 51,750)
- 5.Each party to bear their own costs
- Jurisdiction invoked
- Employment and labour relations jurisdiction of the Industrial Court (claim for unlawful redundancy under the Employment Act, 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Enoch Marita & 3 others v Maggies Restaurant Co Ltd & another [2014] KEELRC 1174 (KLR)", Case Analysis (2014). Cause No 1910 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1174/eng@2014-07-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.