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ELRCAllowedCause No 1076 of 2014· [2016] KEELRC 1183 (KLR)

Erick Shisiali Khahu v The Varga Limited t/a Kenya Motor Sports Club [2016] KEELRC 1183 (KLR)

Employment and Labour Relations Court
6 May 2016
MNMathews Nderi Nduma
915 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 sending an employee on indefinite compulsory leave without recalling them is wrongful dismissal, awarding eight months' salary compensation.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a waiter in April 2009 on a monthly salary of Kshs.12,000 and later promoted to barman on a salary he asserted was Kshs.25,000 per month, sued by memorandum of claim filed 30th June 2014 seeking compensation for wrongful and unlawful termination and terminal benefits. He averred that after issuing an ETR receipt to customers who paid Kshs.30,000 during a Polo tournament in July 2013, he was sent on leave and subsequently on thirty days' compulsory leave from 18th September 2013, with a promise of recall that never materialised. The respondent admitted the employment but denied the salary level, alleging instead that the claimant misappropriated bar sales and was placed on paid compulsory leave pending investigation, and maintained that the termination was lawful and fair. The respondent failed to attend the hearing on 10th November 2015 despite service, and the matter proceeded ex parte, leaving the claimant's testimony uncontroverted. The court found that the claimant served diligently and was wrongfully and unlawfully dismissed without notice and without a chance to show cause, having been humiliated by compulsory leave with a false promise of recall. Assessing his salary at Kshs.25,000 per month, the court awarded eight months' salary (Kshs.200,000) as compensation under section 49 of the Employment Act 2007, plus Kshs.25,000 in lieu of notice, Kshs.6,000 unremitted NSSF dues and Kshs.25,000 for the unpaid compulsory leave period, totalling Kshs.256,000 with interest at court rates from the date of filing suit, and ordered the respondent to pay the costs of the suit.

Key legal issues

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01

Whether termination by indefinite compulsory leave without recall amounts to wrongful dismissal

Holding

The court held that keeping the employee on compulsory leave with a false promise of recall, without notice or a show-cause opportunity, amounted to wrongful and unlawful termination.

Reasoning

The claimant was sent on compulsory leave on 18th September 2013 and told to wait for a call that never came. The respondent, though served with a hearing notice, failed to attend and the claimant's testimony was uncontroverted. The court found the claimant was humiliated, kept in limbo, deprived of income, denied a certificate of service and terminal benefits, and his career prospects curtailed.

p. 2
02

Quantum of compensation and terminal benefits

Holding

The claimant earned Kshs.25,000 per month at termination and was awarded eight months' salary as compensation plus notice pay, unremitted NSSF dues and pay for the unpaid compulsory leave period, totalling Kshs.256,000.00.

Reasoning

The court assessed the claimant's salary at Kshs.25,000 per month based on his uncontroverted testimony, noting the respondent's own payment vouchers did not reflect the salaries it alleged. Considering four years of diligent service and lost income, the court exercised its discretion under section 49 of the Employment Act 2007 to award eight months' salary and terminal benefits.

p. 3

Legal principles established

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  • An employee sent on compulsory leave pending investigation who is never recalled and is not given an opportunity to show cause is wrongfully and unlawfully terminated from employment.
  • A claimant who proves wrongful dismissal on a balance of probability is entitled to compensation under section 49 of the Employment Act 2007.

Court orders

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  1. 1.Award of eight months' salary as compensation for wrongful and unlawful dismissal in the sum of Kshs.200,000.00
  2. 2.Kshs.25,000.00 being one month in lieu of notice
  3. 3.Kshs.6,000.00 being unremitted NSSF dues
  4. 4.Kshs.25,000.00 for the period the claimant stayed on unpaid compulsory leave between 18th September and 13th October 2013
  5. 5.Total award of Kshs.256,000.00 payable with interest at court rates from date of filing suit till payment in full
  6. 6.Respondents to pay the costs of the suit

Authorities

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Legislation

  • Employment Actsection 49
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (section 49 compensation invoked)

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, "Erick Shisiali Khahu v The Varga Limited t/a Kenya Motor Sports Club [2016] KEELRC 1183 (KLR)", Case Analysis (2016). Cause No 1076 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1183/eng@2016-05-06

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