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ELRCPartially Allowed· [2016] KEELRC 287 (KLR)

Stephen Sagana Kipkut v Laminate Tube Industries Limited [2016] KEELRC 287 (KLR)

Employment and Labour Relations Court
11 November 2016
872 words in judgment
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The bottom line

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A Kenyan court ruled that paying an employee one month's salary instead of proper notice and a hearing makes a dismissal unfair, awarding 12 months' wages.

What this practically means

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Executive summary

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In this Employment and Labour Relations Cause at Nakuru, the Claimant, Stephen Sagana Kipkut, sued for unfair termination of employment, underpayments and terminal dues. The Respondent called no witness and its advocate was absent during the hearing on 4 October 2016. The court framed four issues: the law on termination of employment, whether the termination was unfair, whether the Claimant was underpaid, and appropriate remedies. Relying on sections 35, 41, 43, 45 and 47(5) of the Employment Act, 2007, the court held the termination unfair: the Claimant's uncontroverted testimony showed no written notice was issued and no hearing was held. The Respondent had relied on a contractual clause permitting termination on payment of one month's salary in lieu of notice, which the court held could only pass legal muster in the pre-2007 period, since even summary dismissal requires a hearing under section 41(2). It was therefore unnecessary to consider sections 43 and 45. The underpayment claim failed because its legal foundation - the applicable minimum wage, sector and locality - was neither pleaded nor disclosed in testimony. On remedies, the Claimant was entitled to one day's wage for November 2013 (Kshs 406/15), but claims for October 2013 wages, pay in lieu of notice and gratuity were dismissed as paid and acknowledged in a letter dated 1 November 2013 which the Claimant tactfully failed to produce. For his roughly 15 years of service, the court awarded the maximum compensation of 12 months gross wages, Kshs 285,216/29. Each party was ordered to bear its own costs. Judgment delivered on 11 November 2016 by Radido Stephen, Judge.

Key legal issues

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01

Procedural fairness in termination of employment

Holding

The termination was unfair because the Claimant was not given written notice and no hearing under section 41 of the Employment Act, 2007 was held.

Reasoning

The Claimant's uncontroverted testimony was that he received no notice of termination, which ought to be in writing. The Respondent did not file any document showing written notification, did not plead that a section 41 hearing was held, and instead sought to rely on a contractual provision allowing termination by payment of one month's salary in lieu of notice. The court held such a termination could only pass muster pre-2007, since even summary dismissal requires a hearing under section 41(2).

p. 2
02

Underpayment claim

Holding

The underpayment claim failed for want of pleading and evidence.

Reasoning

Although the Claimant testified he was underpaid basic wages and house allowance, the legal foundation of the claim was neither pleaded nor disclosed in testimony. The court was not told whether the underpayments arose from payments below prescribed minimum wages, nor in which sector, industry or locality the Respondent operated, making the claim legally and evidentially unsustainable.

p. 2
03

Appropriate remedies for unfair termination

Holding

The Claimant, having served about 15 years, was awarded the maximum 12 months gross wages as compensation (Kshs 285,216/29), plus one day's wage for November 2013.

Reasoning

The Claimant was entitled as of right to wages up to the date of termination. Given his approximately 15 years of service, the court considered the equivalent of the maximum 12 months gross wages fair and appropriate, using the June 2011 payslip gross pay of Kshs 23,768/- as the basis. Other heads of relief (October 2013 wages, pay in lieu of notice, gratuity) were dismissed because the Respondent's letter of 1 November 2013 showed they had been paid and acknowledged.

p. 3

Legal principles established

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  • Termination by paying one month salary in lieu of notice, without written notice and without a hearing, can no longer pass legal muster under the Employment Act, 2007; even in summary dismissal a hearing under section 41(2) is envisaged.
  • An employer bears the statutory obligations of written notice under section 35, a hearing under section 41, and proof of valid and fair reasons under sections 43 and 45 of the Employment Act, 2007.

Court orders

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  1. 1.Compensation of Kshs 285,216/29 (equivalent of 12 months gross wages) payable by the Respondent to the Claimant
  2. 2.One day wage for November 2013 of Kshs 406/15
  3. 3.Other heads of relief (October 2013 wages, pay in lieu of notice, gratuity, underpayments) dismissed as acknowledged payment or unproved
  4. 4.Each party to bear own costs

Authorities

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Legislation

  • Employment Act, 2007section 35
  • Employment Act, 2007section 41
  • Employment Act, 2007section 41(2)
  • Employment Act, 2007section 43
  • Employment Act, 2007section 45
  • Employment Act, 2007section 47(5)
Jurisdiction invoked
Employment and labour relations jurisdiction (Employment Act, 2007 and the Employment and Labour Relations Court Act); specific enabling provision not stated 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, "Stephen Sagana Kipkut v Laminate Tube Industries Limited [2016] KEELRC 287 (KLR)", Case Analysis (2016). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/287/eng@2016-11-11

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