George Mbithi Mukwekwe v Pegrume Ltd [2016] KEELRC 1230 (KLR)
The bottom line
#A long-serving employee made redundant won severance pay of 15 days' salary per year of service, but lost claims he could not prove with documents.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to severance pay on redundancy
The termination was a redundancy; the Claimant, having served 21 full years, was entitled to 15 days' pay per complete year, computed at Kshs.371,752.50 on a gross pay of Kshs.35,405.00
The termination letter stated the company had changed its line of business and could no longer sustain the Claimant's employment, a no-fault redundancy situation. Section 40 of the Employment Act applies, entitling the affected employee to severance pay. The letter of appointment dated 1st March 1991 and termination effective 23rd June 2012 yielded 21 full years of service. Computing 15 days' pay for each of the 21 years at the gross monthly salary of Kshs.35,405.00 produced an award of Kshs.371,752.50.
Proof of salary arrears in an undefended claim
The claim for salary arrears of Kshs.200,368.00 failed for want of proof; the claimant bore the burden even without a defence
Although the Respondent did not file a defence or appear at the hearing, terminal dues must still be proved. The pay slips annexed did not indicate the months or years they related to, and the claimant's submissions did not explain how the sum of Kshs.200,368.00 arose or link it to annexure GMM 3. The evidential burden rested on the Claimant, and the court was not satisfied that any claim for salary arrears was established.
Notice pay where notice was given
Notice pay was refused because the termination letter expressly gave the Claimant one month's notice
The letter of termination dated 21st May 2012 stated the company would change its line of business and gave the Claimant one month's notice, releasing him forthwith on full pay until the end of June. Since sections 35 and 40 of the Employment Act require issuance of the requisite notice, and notice was in fact given, the Claimant could not claim payment in lieu of notice. The court accepted that the Respondent had complied with the notice requirement.
Legal principles established
#- A termination arising out of a redundancy situation due to no fault of the employee must comply with section 40 of the Employment Act and the affected employee is entitled to severance pay
- Even in an undefended suit, terminal dues can only be granted upon proof
- An employee given contractual notice of termination cannot claim payment in lieu of notice
Court orders
#- 1.Judgment entered for the Claimant against the Respondent with an award of Kshs.371,752.50 as severance pay (recorded in the order as kshs.371,752.00)
- 2.Costs awarded to the Claimant
- Jurisdiction invoked
- Employment and labour relations jurisdiction under the Employment Act and the Employment and Labour Relations Court Act (as the court of first instance in employment causes)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "George Mbithi Mukwekwe v Pegrume Ltd [2016] KEELRC 1230 (KLR)", Case Analysis (2016). Cause No. 1567 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1230/eng@2016-03-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.