Rizwana Mohamed Salim v Coolxtreme Limited [2015] KEELRC 1649 (KLR)
The bottom line
#A Kisumu court ruled an employee's termination was an unlawful redundancy, awarding her over Shs.275,000 in terminal dues but refusing extra damages.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the claimant's employment was a lawful redundancy
The termination was in substance a redundancy but the Section 40 Employment Act procedure was not followed, rendering the termination unlawful and entitling the claimant to terminal dues including pay in lieu of notification, severance/service pay, annual leave and January 2014 salary
The closure or scaling down of the Kisumu branch caused involuntary loss of employment without fault, meeting the definition of redundancy. Section 40 requires at least one month's notification of intended redundancy, notification of the Labour Officer, and a termination notice. Only a termination notice was given; pay in lieu of the missing notification and other dues were awarded. Service pay in lieu of severance was at the same rate so no further payment was due.
Whether annual leave for 2011 was forfeited on taking maternity leave
No - the claimant is entitled to her 2011 annual leave of 21 days in addition to other accrued leave, totalling 94.75 days
Section 29(1) and (7) of the Employment Act entitles a female employee to three months' maternity leave with full pay and provides she does not forfeit her annual leave for that year. The respondent's omission of the 2011 leave from the final dues computation was therefore wrong, and leave was recalculated at 94.75 days.
Whether punitive and exemplary damages were payable
Rejected - the respondent's conduct did not fall within the Rookes v Barnard categories for exemplary damages
Following Rookes v Barnard as applied in Kenya Revenue Authority v Menginya Salim Murgani, exemplary damages lie only for oppressive, arbitrary or unconstitutional action by government servants, or conduct calculated to profit the defendant beyond compensation payable. Neither ingredient existed here; asking the claimant to conduct stock-taking of a branch she managed was not a breach of her contractual or constitutional rights.
Legal principles established
#- Closure or scaling down of operations leading to involuntary loss of employment without fault amounts to redundancy, attracting the procedure in Section 40 of the Employment Act
- Failure to follow the Section 40 redundancy procedure (one month's notification, notice, and notification of the Labour Officer) renders the termination unlawful
- A female employee on maternity leave does not forfeit her annual leave for that year
- Exemplary damages are available only in the two Rookes v Barnard categories - oppressive, arbitrary or unconstitutional action by government servants, or profit-making conduct exceeding compensation
Court orders
#- 1.Payment of terminal dues totalling Shs.275,695 less statutory deductions (notification Shs.35,999; severance Shs.90,000; annual leave Shs.113,697; pay for January 2014 Shs.35,999)
- 2.Interest on the award at court rates from the date of judgment
- Jurisdiction invoked
- Employment and labour relations jurisdiction of the Industrial Court of Kenya (employment claim for terminal dues)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Rizwana Mohamed Salim v Coolxtreme Limited [2015] KEELRC 1649 (KLR)", Case Analysis (2015). Case No. 4 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1649/eng@2015-11-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.