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ELRCPartially AllowedCause No 1872 of 2014· [2016] KEELRC 892 (KLR)

Anthony Mutuku Musyoki v Crown Industries Limited [2016] KEELRC 892 (KLR)

Employment and Labour Relations Court
21 June 2016
3,562 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 a redundancy was unfair because the employer skipped required one-month notice to the worker and the Ministry of Labour.

What this practically means

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Executive summary

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The Claimant sued his erstwhile employer seeking a declaration that his termination was unlawful, 12 months' compensation, one month's pay in lieu of notice, severance pay from 2004 to 2013, and costs. He alleged employment from 2004 as a casual paint mixer, later confirmed on contract in 2011 as a machine attendant. The Respondent maintained he was employed on 1st April 2011 and that the termination on redundancy grounds was lawful and all dues paid. The court found that although the Respondent claimed redundancy, it failed to comply with Section 40 of the Employment Act: the Claimant was not personally notified in writing one month in advance and the Ministry of Labour was not notified. On the evidence, the Claimant failed to prove employment prior to 1st April 2011, so service was only 2 years. The court held the termination unprocedural and unfair and recalculated the terminal dues, finding the Respondent had used the wrong base pay (omitting house allowance), producing an erroneous figure. The suit was partially allowed: the Claimant received a notice pay balance of Kshs. 1,470/-, severance balance of Kshs. 1,470/-, compensation of 3 months' salary (Kshs. 33,810/-), costs, and interest at court rates from judgment until payment in full. The claim for severance from 2004 and 12 months' compensation was refused.

Key legal issues

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01

Whether the redundancy complied with Section 40 of the Employment Act

Holding

The termination was unprocedural and unfair because the Claimant was not notified at least one month in advance and the Ministry of Labour was not notified

Reasoning

The court found that the employer gave the Claimant a termination letter dated 16th August 2013 with immediate effect without prior personal notice and without notifying the Ministry of Labour as Section 40(1)(b) requires. The respondent's witness admitted there was no letter informing the Labour Officer and that the Claimant was not personally notified. Non-compliance rendered the termination procedurally unfair, entitling the Claimant to recompense.

p. 5
02

Length of service for purposes of severance pay

Holding

The Claimant served from 1st April 2011 only, having failed to prove employment from 2004

Reasoning

Although the Claimant alleged employment from 2004 with the Respondent's predecessor, he produced no documents proving employment prior to the letter of appointment dated 1st April 2011. The court therefore computed severance pay for only 2 completed years, at 15 days' pay per year under Section 40(1)(g), based on the monthly salary of Kshs. 11,270/-.

p. 5
03

Whether the terminal dues paid were correct

Holding

The Respondent applied the wrong salary figure, arriving at an erroneous computation, leaving balances due

Reasoning

The Respondent computed dues on Kshs. 9,800/- ignoring the house allowance of Kshs. 1,470/-, making the correct monthly salary Kshs. 11,270/-. The court recalculated notice pay, severance pay, salary for the month worked, pro rata leave and August 2013 overtime, offsetting the Kshs. 3,872.53/- absence deduction, and found a balance of Kshs. 1,470/- each on notice and severance payable.

p. 5

Legal principles established

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  • An employer declaring redundancy must comply with the conditions in Section 40 of the Employment Act, including notifying the employee personally in writing and the labour officer at least one month in advance
  • Section 40 of the Employment Act places the burden on the employer to avail the Court of the reasons for the declaration of redundancy

Court orders

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  1. 1.Notice pay balance of Kshs. 1,470/-
  2. 2.Severance balance of Kshs. 1,470/-
  3. 3.Compensation for unfair dismissal being 3 months' salary Kshs. 33,810/-
  4. 4.Costs of the suit
  5. 5.Interest on the sums above at Court rates from the date of judgment till payment in full

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 2(5)
  • Employment Act, 2007Section 2
  • Employment Act, 2007Section 35
  • Employment Act, 2007Section 40
  • Employment Act, 2007Section 45
  • Labour Relations Act, No. 14 of 2007Section 2
  • ILO Convention No. 158, Termination of Employment Convention 1982Article 13

Cases cited (5)

  • Alex Bundi v Kakuzi Limited
    [2012] eKLR
  • Mkandawire v World Vision International Industrial Relations Court IRC 254 of 2005
  • Barclays Bank of Kenya v Joseph Mwaura Njau
    [2006] eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR
  • Lucus Mzee Wamukota v Riley Falcon Security Ltd
    [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment dispute (Employment Act 2007; Article 2(5) of the Constitution invoked for international law)

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, "Anthony Mutuku Musyoki v Crown Industries Limited [2016] KEELRC 892 (KLR)", Case Analysis (2016). Cause No 1872 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/892/eng@2016-06-21

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