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ELRCPartially AllowedCause not stated in the judgment (filed 28th August 2014)· [2015] KEELRC 837 (KLR)

Andrea Turuke Olinga v Powerview Solutions Limited [2015] KEELRC 837 (KLR)

Employment and Labour Relations Court
10 June 2015
1,337 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employee fired without written notice, reasons or a hearing won Kshs.479,500 plus costs after her employer ignored the court case entirely.

What this practically means

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Executive summary

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This was an unopposed Employment and Labour Relations Court claim decided on formal proof. The Claimant, Andrea Turuke Olinga, was employed by the Respondent, Powerview Solutions Limited, as operations manager on an annual renewable contract at Kshs.30,000 per month, effective 19th June 2013. She was not paid for June to August 2013 until September, and in November 2013 she arranged with the Respondent director that her salary be diverted toward purchase of shares in the company valued at Kshs.242,000, of which she contributed Kshs.210,000. On 2nd May 2014, shortly after reporting illness, she was told not to report back to work. No termination letter, notice or reasons were issued, and her dues and shares contributions were never paid. The Respondent entered no appearance and filed no defence despite proper service of summonses and hearing notice. The court, applying sections 8, 35, 36, 41, 43 and 45 of the Employment Act and following Frederick Kariuki Kamau v Bank of India, held the termination unfair for want of notice, reasons and a hearing. It declared the termination unfair and awarded: Kshs.242,000 for due salaries and shares contribution; Kshs.30,000 notice pay; Kshs.27,500 prorated leave; and Kshs.180,000 compensation equivalent to six months' salary, plus costs. Service gratuity was refused because service pay accrues per completed year of service and the Claimant served only 11 months.

Key legal issues

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01

Unfair termination for want of notice, reasons and hearing

Holding

The termination was unfair under section 45 of the Employment Act because the Claimant was terminated without notice, reasons or a hearing, contrary to sections 35, 43 and 41

Reasoning

The respondent entered no appearance and filed no defence, so the Claimant's uncontroverted evidence stood. She was employed as operations manager, fell ill, and was told not to report back. No termination letter or reasons issued. Applying section 8 (written contract), sections 35 and 41 (notice and hearing) and section 43/45(2) (valid and fair reasons), the court held the termination unfair in an unopposed formal proof suit.

p. 2
02

Due salaries and shares contribution

Holding

Salaries due at termination and sums contributed toward an unconsummated shares purchase are payable as of right; Kshs.242,000 awarded

Reasoning

The Claimant had Kshs.42,000 in unpaid salary and had contributed Kshs.210,000 toward purchase of shares in the respondent company, an arrangement never effected before termination. Since accrued salaries are payable as of right and the share contributions were never applied, the court aggregated the amounts due as Kshs.242,000.

p. 2
03

Notice pay

Holding

One month's salary of Kshs.30,000 awarded in lieu of notice under sections 35 and 36 of the Employment Act

Reasoning

Because the termination was abrupt and without due cause, notice pay is due. The Claimant's monthly salary was Kshs.30,000, and the court awarded one month's salary in lieu of the statutory notice that was never given.

p. 2
04

Prorated leave

Holding

Leave pay prorated at Kshs.27,500 given the Claimant served only 11 months

Reasoning

Leave was claimed but the Claimant served only 11 months of a 12-month contract, so the leave entitlement was prorated to Kshs.27,500 and awarded.

p. 2
05

Service gratuity

Holding

Service pay refused because it accrues only on each completed year of service and the Claimant served 11 months

Reasoning

Although there was no indication that statutory dues were remitted to NSSF or NHIF, which would ordinarily ground a service pay claim, service pay is computed per completed year of service. Having served only 11 months, the Claimant did not qualify notwithstanding the absence of a defence.

p. 2
06

Compensation for unfair termination

Holding

Compensation equivalent to six months' salary, Kshs.180,000, awarded for the unfair termination

Reasoning

Finding no notice issued, no reasons given and no compliance with the applicable law, the court held compensation due and fixed it at six months' gross salary, yielding Kshs.180,000.

p. 3

Legal principles established

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  • An employer must issue a written contract of service and a written notice of termination stating reasons, failing which the statutory terms apply and the termination may be proved unfair on grounds of no notice, no reasons or no hearing
  • Whatever salaries are due upon termination are payable as of right
  • Service pay is based on each completed year of service and requires proof that no statutory dues were remitted to NSSF or NHIF

Court orders

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  1. 1.A declaration that the Claimant was unfairly terminated by the respondent
  2. 2.Compensation granted at kshs.180,000.00
  3. 3.Salaries due and shares contribution at Kshs.242,000.00
  4. 4.Notice pay at Kshs.30,000.00
  5. 5.Prorated leave at kshs.27,500.00
  6. 6.Costs of the suit

Authorities

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Legislation

  • Employment Actsection 8
  • Employment Actsection 35
  • Employment Actsection 35(1)
  • Employment Actsection 36
  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 45
  • Employment Actsection 45(2)(a) and (b)
  • Employment Actsection 47(5)

Cases cited (1)

  • Frederick Kariuki Kamau versus Bank of India
    Cause No. 2424 of 2012
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (unfair termination and terminal dues); specific provision not cited in the judgment

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, "Andrea Turuke Olinga v Powerview Solutions Limited [2015] KEELRC 837 (KLR)", Case Analysis (2015). Cause not stated in the judgment (filed 28th August 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/837/eng@2015-06-10

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