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ELRCPartially AllowedCause No. 201 of 2015· [2016] KEELRC 414 (KLR)

Kenya Hotels & Allied Workers Union v Stanbradox Bar & Restaurant [2016] KEELRC 414 (KLR)

Employment & Labour Relations Court of Kenya at Kisumu
27 October 2016
2,695 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that suspending workers without written letters stating reasons and duration counts as unfair termination, awarding them compensation.

What this practically means

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Executive summary

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The Kenya Hotels & Allied Workers Union sued Stanbradox Bar & Restaurant on behalf of five grievants claiming notice pay, accrued annual leave, public holiday pay, unpaid days worked, service pay, underpayments, salary arrears and compensation after their employment ended between 2013 and 2014. The Respondent, through its manager Martin Minanga, alleged the grievants were poor performers who were suspended and never reported back, save for the 5th grievant who resigned on health grounds. The court found the case revealed a classical unfair labour practice: the Respondent issued no appointment letters, kept no records, charged employees a refundable Shs.5,000 'float' deposit, and imposed suspensions of two weeks to two months without letters stating grounds, duration, reporting dates or salary entitlement. The court held that such undocumented suspensions amounted to fundamental breach entitling the 1st to 4th grievants to presume termination. The Respondent's witness failed to deny that the grievants worked public holidays without pay, were unpaid for days worked, and were underpaid; these claims were awarded as prayed. Reinstatement was refused and compensation awarded instead - 8 months' salary for Harrison Hamisi, 3 months each for Job Elim and Gerald Obondo, and 6 months for Abdilahi Onyando. The 5th grievant, having resigned on ill-health, received his claimed dues but no compensation. Monetary awards totalled Kshs. 546,931 plus Shs. 286,692 in compensation. The court criticised the County Labour Office for abdicating its inspection mandate under Part V of the Labour Institutions Act. No costs order was made.

Key legal issues

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01

Lawfulness of termination effected through undefined suspensions

Holding

The termination of the 1st to 4th Grievants was unfair and unlawful because their suspensions were not documented

Reasoning

The court found the suspensions were imposed without letters stating the grounds, the period of suspension, dates to report back, or salary entitlement during suspension. This amounted to a fundamental breach of the employment contracts, entitling the Grievants to presume termination by the Respondent and to claim terminal dues. Only the 5th Grievant, who resigned due to ill-health, fell outside this finding.

p. 6
02

Employer's non-compliance with statutory minimum terms

Holding

The Respondent was a serial violator of minimum terms of employment, operating without appointment letters or records

Reasoning

The court characterised the case as a classic unfair labour practice: the Respondent issued no appointment letters, kept no records, charged employees a refundable 'float' deposit of Shs.5,000 upon employment, suspended staff on unspecified terms, and denied leave and public holiday pay. The court also criticised the County Labour Office for abdicating its inspection mandate under Part V of the Labour Institutions Act.

p. 5
03

Effect of uncontroverted evidence

Holding

Claims not denied by the Respondent's witness were awarded as prayed, including unpaid days, service pay, public holidays and underpayments

Reasoning

Mr. Minanga did not deny that Grievants were called to the office and paid their float (signifying termination), that they worked public holidays without pay or time off, that they were unpaid for days worked, or the underpayments claimed by the 3rd Grievant. He also did not respond to the service pay prayers. The court awarded all these heads, noting none of the Grievants was a member of NSSF.

p. 6
04

Choice of remedy between reinstatement and compensation

Holding

Compensation for unfair termination was awarded to the 1st to 4th Grievants in lieu of reinstatement, at 8, 3, 3 and 6 months' salary respectively

Reasoning

Reinstatement was refused as impracticable in the circumstances. The court instead exercised its discretion to award compensation scaled to each Grievant: 8 months for Harrison Hamisi, 3 months each for Job Elim and Gerald Obondo, and 6 months for Abdilahi Onyando. The 5th Grievant, having resigned on grounds of ill-health, received his claimed dues but no compensation.

p. 6

Legal principles established

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  • A suspension without a letter stating its grounds, duration, reporting-back dates and salary entitlement constitutes a fundamental breach entitling the employee to treat the employment as terminated
  • Allegations not denied or controverted by an employer's evidence are taken as proved
  • An employer bears the onus of proving that an employee declined to take annual leave; a bare assertion without proof does not defeat a leave claim

Court orders

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  1. 1.A finding that the termination of the 1st, 2nd, 3rd and 4th Grievants was unfair
  2. 2.Award of Kshs. 164,500.00 to Harrison Hamisi (notice, 3 years leave, public holidays, 16 days worked Dec 2014, salary arrears of Kshs. 95,000)
  3. 3.Award of Kshs. 61,000.00 to Job Elim (notice, 2 years leave, service pay, public holidays)
  4. 4.Award of Kshs. 155,831.00 to Gerald Obondo (notice, leave, prorate leave, May 2014 salary, 11 days June 2014, public holidays, service pay, underpayments)
  5. 5.Award of Kshs. 100,000.00 to Abdilahi Onyando (notice, 3 years leave, service pay, public holidays, 2 days June 2014)
  6. 6.Award of Kshs. 65,600.00 to Joseph Onguko (3 years leave, June salary, 3 years public holidays)
  7. 7.Compensation for unfair termination: Harrison Hamisi 8 months' salary (Shs. 120,000), Job Elim 3 months' salary (Shs. 45,000), Gerald Obondo 3 months' salary (Shs. 31,692), Abdilahi Onyando 6 months' salary (Shs. 90,000)

Authorities

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Legislation

  • Labour Institutions ActPart V (Labour Administration and Inspection)
Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court over a reported labour dispute after failed conciliation before the Minister for Labour / County Labour Office

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, "Kenya Hotels & Allied Workers Union v Stanbradox Bar & Restaurant [2016] KEELRC 414 (KLR)", Case Analysis (2016). Cause No. 201 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/414/eng@2016-10-27

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