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ELRCPartially AllowedNot stated in the judgment· [2016] KEELRC 686 (KLR)

Priscillah Nyanchama Onsembe & 4 others v Thuta Investment Company Limited [2016] KEELRC 686 (KLR)

Employment and Labour Relations Court
23 September 2016
1,372 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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Five claimants sued the respondent through Mwaniki Warima & Company Advocates. The 1st to 4th claimants, declared redundant, claimed one month pay in lieu of redundancy notice, annual leave, and severance pay. The 5th claimant, a supervisor employed in 2006, claimed unfair termination after he was denied entry to the workplace in October 2014 following his absence on 1st October 2014, for which he held a valid gate pass to attend to his wife in hospital. For the 1st to 4th claimants, the court awarded the dues as computed in the parties' submissions (Kshs. 26,400.00, 5,160.00, 26,400.00 and 9,000.00 respectively), holding that the discharge voucher signed by the 1st claimant did not preclude claims for breach of section 40 of the Employment Act, 2007, employers being strictly bound by statutory redundancy provisions. For the 5th claimant, the court found no hearing as envisaged in section 41 and, in view of the valid gate pass and the respondent's failure to produce the check in and checkout register, that the reason for termination was not valid under sections 43 and 47(5). The termination was declared unfair. He was awarded one month's pay in lieu of notice (Kshs. 6,450.00), public holiday pay (Kshs. 16,555.00) and 12 months' salary under section 49(1)(c) (Kshs. 77,400.00), netting Kshs. 97,519.00 after deduction of Kshs. 2,886.00 owed to the respondent. His 2006 leave claim was time barred, house allowance was refused as housing was provided, and severance pay was surrendered. Judgment was entered accordingly with costs to the claimants, less the costs of the counterclaim for the 5th claimant, payment due by 01.12.2016 failing interest at court rates.

Key legal issues

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01

Whether the 1st to 4th claimants were entitled to redundancy dues

Holding

Yes; the amounts as computed in the parties' submissions were awarded, the court holding that a discharge voucher did not bar claims for breach of section 40 of the Employment Act on redundancy.

Reasoning

There was no dispute about the 1st claimant's employment and wage; both parties' computations converged on the award amounts. The court held that signing a discharge voucher on payment of prorate leave did not preclude claims that the redundancy breached section 40, because employers are strictly bound by statutory redundancy provisions. The same reasoning applied to the 2nd, 3rd and 4th claimants, with only the 2nd claimant's period of service in dispute.

p. 1
02

Whether the termination of the 5th claimant was unfair

Holding

Yes; the termination was unfair both on procedure (no hearing under section 41) and on the validity of the reason (sections 43 and 47(5)).

Reasoning

The claimant had a valid gate pass for his absence on 01.10.2014, which the respondent's witness confirmed. The respondent, with the duty to keep records, failed to produce the check in and checkout register that would have rebutted the claimant's evidence of attendance on 02nd and 03rd October 2014. There was no hearing as envisaged in section 41. The respondent therefore failed to discharge the burden under sections 43(1) and 47(5) of showing a genuine and justifiable reason for termination.

p. 3
03

Whether the 5th claimant was entitled to the remedies prayed for

Holding

Partially; declaration of unfair termination, one month's pay in lieu of notice, public holiday pay, and 12 months' salary under section 49(1)(c) were awarded; leave claim for 2006 was time barred, house allowance refused, severance pay surrendered.

Reasoning

The court awarded the declaration, one month pay in lieu of notice (Kshs. 6,450.00), public holiday pay of Kshs. 16,555.00 established on a balance of probability, and maximum 12 months' compensation under section 49(1)(c) because the claimant served long with dedication, desired to continue in employment, and did not contribute to the termination. The 2006 leave claim was time barred and house allowance failed since housing was provided. The net award was Kshs. 97,519.00 after deducting Kshs. 2,886.00 owed to the respondent.

p. 3

Legal principles established

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  • A discharge voucher signed upon payment of prorate leave does not preclude an employee from alleging unlawful termination where the employer breached statutory redundancy provisions
  • An employer is strictly bound to adhere to the statutory provisions on redundancy
  • The burden is on the employer to prove that the reason for termination existed at the time of termination as a genuine and justifiable reason
  • Failure to keep and produce employee records such as a check in and checkout register weighs against the employer who bears the duty to keep employee records

Court orders

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  1. 1.Declaration that the termination of the 5th claimant's employment by the respondent was unfair
  2. 2.The respondent to pay the 1st claimant Kshs. 26,400.00, the 2nd claimant Kshs. 5,160.00, the 3rd claimant Kshs. 26,400.00, the 4th claimant Kshs. 9,000.00, and the 5th claimant Kshs. 97,519.00, all to be paid by 01.12.2016 failing interest at court rates from the date of judgment till full payment
  3. 3.The respondent to pay the costs of the suit for the 1st, 2nd, 3rd, 4th and 5th claimants, but for the 5th claimant, less the costs of the counterclaim

Authorities

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Legislation

  • Employment Actsection 40
  • Employment Act, 2007section 41
  • Employment Act, 2007section 43
  • Employment Act, 2007section 43(1)
  • Employment Act, 2007section 47(5)
  • Employment Act, 2007section 49(1)(c)
  • Employment Act, 2007section 90
  • Limitation of Actions Act, Cap. 22 Laws of Kenyasection 4
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (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, "Priscillah Nyanchama Onsembe & 4 others v Thuta Investment Company Limited [2016] KEELRC 686 (KLR)", Case Analysis (2016). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/686/eng@2016-09-23

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