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ELRCPartially AllowedCause Number 418 of 2015· [2016] KEELRC 1035 (KLR)

Philomena Mutua Ndinda & another v Mega Garment Industries Kenya [EPZ] Limited [2016] KEELRC 1035 (KLR)

Employment and Labour Relations Court
27 June 2016
JRJames Rika
1,378 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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Two employees of Mega Garment Industries Kenya (EPZ) Limited — a Quality Checker and a Supervisor, Quality Checker — sued over their summary dismissal on 12th May 2015, seeking notice pay, annual leave pay, anticipated salaries for two months remaining on their contracts, and twelve months' salary as compensation for unfair termination, together with declarations, costs and interest, totalling Kshs. 423,216. The Respondent conceded the employment and termination but asserted the dismissal was fair, alleging the Claimants had been given a chance to show cause. It did not attend the hearing, and the Claimants' evidence went uncontroverted. The court held the Respondent gave no reasons in its Statement of Response, identified no employment offence, and produced no evidence of poor performance. The allegations against the Claimants were never tested through a Section 41 hearing. The court found the Respondent faced financial constraints and advised the Claimants to leave or take a pay cut, but instead of declaring a redundancy and invoking Section 40 of the Employment Act, it used summary dismissal on invalid grounds. Termination was declared unfair whether viewed as redundancy or summary dismissal. Each Claimant was awarded six months' salary as compensation under Section 49 of the Employment Act, one month's notice pay, and annual leave pay as prayed. The claim for anticipated salaries for the balance of the contracts was declined as it would duplicate the compensation remedy, the court having taken length of service and the two-month expectation into account. Judgment was entered for a total of Kshs. 217,232, payable within 30 days, with costs and interest at 14% per annum from delivery of the Award.

Key legal issues

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01

Validity of the grounds for summary dismissal

Holding

There were no valid grounds justifying termination; allegations of poor performance and failure to improve character were not substantiated and were not tested through a hearing

Reasoning

The Respondent's Statement of Response did not specify the employment offence the Claimants were to answer, and the Respondent failed to adduce evidence to contradict the Claimants. Allegations of poor performance and failure of character were never tested through a hearing under Section 41 of the Employment Act and were unsubstantiated. The employer bore the burden under Sections 41, 43 and 45 to justify the termination.

p. 2
02

Fairness of the process where the ostensible ground was diminished work (redundancy)

Holding

Whether viewed as redundancy or summary dismissal, the termination did not conform with Sections 40, 41, 43 and 45 of the Employment Act

Reasoning

The Claimants were told work had diminished and advised to take a break, yet the Respondent never declared a redundancy or followed Section 40 procedure. Instead it resorted to summary dismissal on invalid grounds. The court found the dismissal unfair and awarded each Claimant six months' salary as compensation under Section 49 of the Employment Act.

p. 3
03

Claim for unpaid annual leave

Holding

Annual leave pay granted as prayed because the claim was unchallenged

Reasoning

The Respondent did not attend the hearing and did not file annual leave records to discount what was claimed. The claims for unpaid leave were therefore unchallenged and granted in full.

p. 3

Legal principles established

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  • The employer bears the responsibility of showing that termination is based on valid and fair grounds and is carried out fairly, under Sections 41, 43 and 45 of the Employment Act
  • An employer that opts for redundancy must invoke Section 40 of the Employment Act and cannot disguise a redundancy as summary dismissal on invalid grounds

Court orders

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  1. 1.Declaration that termination was unfair
  2. 2.Respondent to pay the 1st Claimant 1 month salary in lieu of notice at Kshs. 11,248; annual leave pay at Kshs. 22,496; and 6 months' salary in compensation for unfair termination at Kshs. 67,488 – total Kshs. 101,232
  3. 3.Respondent to pay the 2nd Claimant 1 month salary in lieu of notice at Kshs. 14,500; annual leave pay at Kshs. 14,500; and 6 months' salary in compensation for unfair termination at Kshs. 87,000 – total Kshs. 116,000
  4. 4.Total sum of Kshs. 217,232 to be paid within 30 days of delivery of the Award
  5. 5.Claimants granted costs of the cause
  6. 6.Interest at 14% per annum from the date of delivery of the Award until payment in full

Authorities

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Legislation

  • Employment Act 2007Section 40
  • Employment Act 2007Section 41
  • Employment Act 2007Section 43
  • Employment Act 2007Section 45
  • Employment Act 2007Section 49(4)(e) and (f)
  • Employment and Labour Relations Court ActSection 12
  • Industrial Court [Procedure] Rules 2010Rule 27(1)(a)
Jurisdiction invoked
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, "Philomena Mutua Ndinda & another v Mega Garment Industries Kenya [EPZ] Limited [2016] KEELRC 1035 (KLR)", Case Analysis (2016). Cause Number 418 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1035/eng@2016-06-27

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