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ELRCPartially AllowedCause Number 336 of 2013· [2015] KEELRC 1405 (KLR)

John Kinyua Maina v Florimon Limited [2015] KEELRC 1405 (KLR)

Industrial Court
27 February 2015
JRJames Rika
1,566 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court ruled an employee unfairly terminated during a business takeover, awarding him Kshs. 485,760 including five months' salary compensation.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent on 1st November 1996 as a Driver and later Personnel Officer for both the Casino and Night Club businesses, had his contract terminated on 12th September 2013 while on annual leave. He claimed the termination was unfair and unlawful, effected without notice or procedural compliance, and sought general damages, 12 days' salary, loss of earnings, 4 months' notice pay and service pay. The Respondent conceded the employment and termination, asserting redundancy following a change of management on 26th August 2013 after the Casino's poor performance, and that terminal dues per the CBA were offered but refused. At hearing, the parties consented to amend the general damages prayer to compensation for unfair termination and to allow the prayers for 12 days' salary, notice pay and service pay. The sole contested issue was whether the termination was unfair. The Court found the Claimant was kept in the dark about the takeover, was not called from leave, and was denied the chance to reapply for his job while other employees were reabsorbed; the Respondent gave no substantive justification for treating his position as Casino-based. The Court held the termination disregarded the procedural standards of Sections 41 and 45 of the Employment Act 2007 and awarded compensation of 5 months' gross salary (Kshs. 141,195). In total the Respondent was ordered to pay Kshs. 485,760 within 30 days, with no order on costs.

Key legal issues

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01

Whether termination was unfair

Holding

Termination was unfair both substantively and procedurally

Reasoning

The Claimant, Personnel Officer for both the Casino and Night Club arms, was kept unaware of the takeover while on leave, found a termination letter on his desk, and was given no chance to reapply while other employees were reabsorbed. The Respondent showed no substantive justification for treating his cross-cutting position as Casino-based, and disregarded Sections 41 and 45 of the Employment Act.

p. 3
02

Whether the Claimant merits compensation for unfair termination

Holding

Awarded 5 months' gross salary, Kshs. 141,195

Reasoning

Having found the termination unfair and lacking substantive justification, the Court exercised its discretion under the Employment Act to grant compensation equivalent to 5 months' gross salary, on top of the consented terminal dues.

p. 3

Legal principles established

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  • Termination without notice to the employee of intended business changes, and without an opportunity to participate or reapply, breaches the minimum procedural standards of fair termination under Sections 41 and 45 of the Employment Act 2007
  • Absence of substantive justification renders a termination unfair

Court orders

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  1. 1.Declaration that termination of the Claimant's contract was unfair
  2. 2.Respondent to pay the Claimant within 30 days: 5 months' gross salary compensation at Kshs. 141,195; 12 days' salary at Kshs. 11,295; 4 months' notice pay at Kshs. 104,956; and service pay at Kshs. 228,314 - total Kshs. 485,760
  3. 3.No order on the costs

Authorities

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Legislation

  • Employment ActSections 41 and 45
  • Industrial Court (Procedure) RulesRule 27(1)(a)
Jurisdiction invoked
Industrial Court jurisdiction under the Industrial Court Act over employment disputes; Award issued under Rule 27(1)(a) of the Industrial Court (Procedure) Rules 2010

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, "John Kinyua Maina v Florimon Limited [2015] KEELRC 1405 (KLR)", Case Analysis (2015). Cause Number 336 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1405/eng@2015-02-27

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