Kenya Hotels and Allied Workers Union v Sheshe Beach Resort T/A Tabora Enterprises Limited & 2 others [2015] KEELRC 1304 (KLR)
The bottom line
#A Kenyan court ruled that closing a hotel for the 'low season' without promising to rehire staff was a redundancy requiring full redundancy benefits.
What this practically means
#Executive summary
#Key legal issues
#Whether the Interested Party was an Employer notwithstanding his resignation as Director
He was an Employer within Section 2 of the Employment Act; his role in inquiring into debts, commissioning auditors, receiving money to pay Employees and overseeing the business made him an Employer.
The court held that the question was not whether Buffa was a Director at the material time but whether he was an Employer. Section 2 of the Employment Act defines an employer to include an agent, foreman, manager or factor of a company. Buffa's own evidence showed he inquired into the Respondent's debts including staff dues, commissioned auditors, received money from Italy to pay salaries and oversaw the business, effectively making the response for the absent Respondents.
Whether the closure of the Hotel amounted to redundancy
Yes; the Employees lost their jobs involuntarily and permanently on economic grounds, with no intention or evidence of recall on reopening.
Although the Respondents asserted they merely closed for the low season, an intention to reopen in July was never fulfilled and there was no evidence of reopening. The definition of redundancy in Section 2 covers involuntary loss of employment at the initiative of the Employer where services are superfluous. The loss was permanent and dictated by economic or operational reasons.
Validity of the County Labour Office's consensual computation of terminal dues
The Report was adopted as it was consensual, made pursuant to a court order, involved all parties, and was never questioned by the Respondents.
The Court had ordered the parties to meet with the Labour Office to compute redundancy dues. The Labour Officers examined employment records at the workplace and tabulated dues by consensus. The Respondents never questioned the Report and the Interested Party could not turn around and challenge matters agreed upon at that late stage. Objections on union membership and CBA validity were dilatory and never raised during the proceedings or conciliation.
Whether the Claimant Union had locus standi and the Claim was premature
Both objections failed; union membership and CBA validity were never challenged during the proceedings, and the Claim was certified urgent, not premature.
The dispute was never about membership of the Employees in the Claimant Union or CBA validity; these were never challenged by the Respondents or Interested Party during proceedings or conciliation and were raised belatedly as dilatory tactics. Prematurity failed because the Claim was filed under a certificate of urgency certified by the Court, which cannot be the same thing as prematurity.
Legal principles established
#- An employer under Section 2 of the Employment Act includes a manager, agent or factor; Directorship or shareholding is irrelevant to employer liability.
- Closure of business with no intention or commitment to recall Employees amounts to redundancy despite a low-season justification.
- A Hotel Manager fits the description of an Employer under Section 2 of the Employment Act 2007 and his actions bind the Employer.
Court orders
#- 1.The Respondents shall pay to the 42 Grievants redundancy benefits as computed in the Report filed in Court by the County Labour Office
- 2.The 5 names added to that list from the original list of 42 Grievants are expunged from the list
- 3.The redundancy benefits shall be paid within 30 days of the delivery of this Award
- Jurisdiction invoked
- Industrial Court (Procedure) Rules 2010, Rule 27(1)(a); dispute referred under the Industrial Court's jurisdiction over employment and labour relations
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Hotels and Allied Workers Union v Sheshe Beach Resort T/A Tabora Enterprises Limited & 2 others [2015] KEELRC 1304 (KLR)", Case Analysis (2015). Cause Number 232 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1304/eng@2015-03-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.