Maurice Ndiku Kilonzo v Dawa Limited [2015] KEELRC 906 (KLR)
The bottom line
#A Kenyan court confirmed that NSSF contributors cannot claim service pay, but employers must still follow fair procedure before firing anyone.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to service pay for an NSSF contributor
The Claimant was not entitled to service pay or gratuity because he was a contributor to the NSSF
Section 35(5) of the Employment Act entitles an employee whose contract is terminated to service pay, but Section 35(6) excludes employees who are members of a registered scheme including the NSSF. The court held that subsection 6(d) is a mandatory term that precludes payment of service pay to NSSF contributors. The Claimant's reliance on the Tonui case did not displace the statutory bar.
Fairness of the termination process
The termination was unfair because the Claimant was not accorded due process before termination
Section 41 of the Employment Act requires a fair hearing before termination. The Claimant was suspended after questioning by police on 30th June 2014 and terminated from 1st July 2014, with no indication that he was heard. The court therefore found the termination unfair in that regard and awarded compensation of six months' salary under Section 49 of the Employment Act.
Quantum of compensation for unlawful termination
Six months' salary (Kshs. 258,600) awarded as compensation for unlawful termination
Although the Claimant sought 12 months' salary under Section 49 of the Employment Act, the court, noting that the parties had partially consented to payment of certain dues including one month's salary in lieu of notice, exercised its discretion to award six months' salary as compensation for the unlawful termination.
Legal principles established
#- An employee who is a member of the National Social Security Fund is not entitled to service pay under Section 35(6)(d) of the Employment Act
- A termination effected without according the employee a fair hearing as required by Section 41 of the Employment Act is unfair
Court orders
#- 1.Consent terms adopted: Claimant entitled to 1 month salary in lieu of notice (Kshs. 43,000)
- 2.Consent terms adopted: salary for July and August 2014 (Kshs. 86,000)
- 3.Consent terms adopted: accrued leave in the sum of Kshs. 17,405
- 4.Party and party costs as agreed in the consent
- 5.Claimant awarded 6 months' salary as compensation for unlawful termination (Kshs. 258,600)
- 6.Claim on service pay/gratuity disallowed
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (Cause No. 1666 of 2014)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Maurice Ndiku Kilonzo v Dawa Limited [2015] KEELRC 906 (KLR)", Case Analysis (2015). Cause No. 1666 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/906/eng@2015-06-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.