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ELRCPartially AllowedCause Number 529 of 2014· [2016] KEELRC 983 (KLR)

Said Ochieng Odhiambo v Randa Coach Limited [2016] KEELRC 983 (KLR)

Industrial Court of Kenya
8 July 2016
798 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 security guard was unfairly fired without notice or reasons, awarding him nearly Kshs. 99,000 from his former employer.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a Guard from 2008 to April 2013 at a monthly salary of Kshs. 8,000, sued for a declaration that his termination was unfair and unlawful, notice pay, 12 months' compensation, and terminal benefits totalling Kshs. 124,000. The Respondent was served but filed no Statement of Response and never attended court; the Claimant testified, submitted and closed his case unopposed on 16th March 2016. Rika J found the Claimant's pleadings, evidence and submissions without contestation: he was dismissed without notice or justification, was paid Kshs. 17,000 in terminal dues without any breakdown, and the Respondent failed to adhere to Sections 41, 43 and 45 of the Employment Act 2007, disregarding both substantive and procedural justice. The Court awarded compensation for unfair termination of 10 months' gross salary (Kshs. 80,000) under Section 49 of the Employment Act and Section 12 of the Employment and Labour Relations Court Act, and notice pay of Kshs. 8,000 under Section 36. The prayer for terminal benefits was treated as a claim for service pay, which the Court distinguished from severance pay and terminal benefits as separate legal concepts, and was awarded at Kshs. 27,692.30 using the Regulation of Wages (Protective Security Services) Order formula of 18 days' salary per completed year for guards with 5 years' service. The Kshs. 17,000 already paid was deducted, leaving Kshs. 98,692.30 payable within 30 days, with costs to the Claimant and interest at 14% per annum from the date of the Award. The claim thus partially succeeded: compensation and terminal benefits were awarded at figures lower than sought.

Key legal issues

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01

Whether termination was unfair and unlawful

Holding

Termination was unfair; the Respondent gave no notice or justification and did not adhere to Sections 41, 43 and 45 of the Employment Act 2007

Reasoning

The Claimant's uncontroverted evidence established 5 years' employment as a Guard at Kshs. 8,000 per month, dismissal without notice or reasons, and a payment of Kshs. 17,000 with no breakdown. The Respondent filed no response and adduced no rebutting evidence, so the Claimant's account stood unchallenged and both substantive and procedural fairness were found to have been disregarded.

p. 2
02

Quantum of compensation for unfair termination

Holding

Compensation of 10 months' gross salary (Kshs. 80,000) awarded under Section 49 of the Employment Act and Section 12 of the Employment and Labour Relations Court Act

Reasoning

The Court exercised its statutory discretion under Section 49 of the Employment Act 2007 and Section 12 of the Employment and Labour Relations Court Act, granting the equivalent of 10 months' gross salary rather than the 12 months claimed, having found the Claimant merited compensation for the unfair termination.

p. 2
03

Entitlement to and computation of service pay

Holding

Service pay awarded at Kshs. 27,692.30 computed at 18 days' salary per completed year for 5 years, less the Kshs. 17,000 already paid

Reasoning

The prayer for terminal benefits was understood as a claim for service pay under Section 35(5) of the Employment Act. Applying the Regulation of Wages (Protective Security Services) Order rate of 18 days' salary per completed year for guards with 5 years' service, the Court computed Kshs. 8,000/26 x 18 x 5 = Kshs. 27,692.30, and directed that the Kshs. 17,000 already paid be deducted.

p. 2
04

Entitlement to notice pay

Holding

One month's salary in lieu of notice (Kshs. 8,000) allowed as prayed under Section 36 of the Employment Act

Reasoning

The Court found the Claimant was dismissed without notice and held that notice pay was merited under Section 36 of the Employment Act, awarding it at the Kshs. 8,000 claimed, which matched his monthly salary.

p. 2

Legal principles established

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  • An employer who terminates employment without notice or justification breaches Sections 41, 43 and 45 of the Employment Act 2007 and compensation may be awarded under Section 49
  • Service pay, severance pay and terminal benefits are distinct concepts under employment law and should not be used interchangeably
  • Service pay for guards with 5 years' service and above is computed at 18 days' salary for every year completed under the Regulation of Wages (Protective Security Services) Order

Court orders

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  1. 1.A declaration that termination was unfair
  2. 2.The Respondent shall pay the Claimant 10 months' gross salary in compensation at Kshs. 80,000; 1 month salary as notice pay at Kshs. 8,000; and service pay at Kshs. 27,692.30, totalling Kshs. 115,692.30 less Kshs. 17,000 - total Kshs. 98,692.30
  3. 3.The sum shall be paid in full within 30 days of the delivery of the decision
  4. 4.Costs to the Claimant
  5. 5.Interest on the principal amount at 14% per annum from the date of the Award

Authorities

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Legislation

  • Industrial Court (Procedure) Rules 2010Rule 27(1)(a)
  • Employment Act 2007Sections 35(5), 36, 40, 41, 43, 45, 49
  • Employment and Labour Relations Court ActSection 12
  • Regulation of Wages (Protective Security Services) Orderservice/gratuity pay rate
Jurisdiction invoked
Section 49 of the Employment Act 2007 and Section 12 of the Employment and Labour Relations Court Act

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, "Said Ochieng Odhiambo v Randa Coach Limited [2016] KEELRC 983 (KLR)", Case Analysis (2016). Cause Number 529 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/983/eng@2016-07-08

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