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ELRCAllowedCause Number 616 of 2014· [2016] KEELRC 1685 (KLR)

Abrahim Ndema & 2 others v Awanad Enterprises Limited [2016] KEELRC 1685 (KLR)

Industrial Court of Kenya
19 February 2016
JRJames Rika
782 words in judgment
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The bottom line

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A Mombasa court ordered Awanad Enterprises to pay three former workers over Kshs. 1.1 million because it followed no proper redundancy procedure.

What this practically means

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Executive summary

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Three claimants, employed by Awanad Enterprises Limited as a Verification Geng, Driver (formerly Turn Boy) and Security Guard respectively, jointly sued for unfair and unlawful termination arising from the termination of their contracts on 14th May 2014 on grounds of diminished work, effectively redundancy. They particularized twelve heads of claim including salary arrears for April 2014 and 14 days of May 2014, one month's notice pay, annual leave, house rent allowance at 15% of salary, severance pay at 15 days' salary per completed year of service, twelve months' salary as compensation for unfair termination, in-house savings deductions of Kshs. 300 per month, declarations, release of certificates of service, costs and interest, totalling Kshs. 1,169,750. The Respondent, though served with summons and hearing notice as evidenced by affidavits of a licensed court process server, filed no Response and did not attend the hearing. The Claimants gave uncontested evidence, closing their case on 28th September 2015 and filing submissions on 12th October 2015. Rika J found the employment relationship proved, and that the Respondent had adduced no evidence of compliance with Section 40 of the Employment Act 2007 redundancy procedure, nor that the redundancy was genuine and fairly carried out. Declaring the terminations unfair, the Court awarded the Claimants the full amounts claimed as particularized, with interest at 14% per annum from the date of the Award, ordered release of certificates of service, and granted costs to the Claimants. Judgment was dated and delivered at Mombasa on 19th February 2016.

Key legal issues

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01

Fairness of termination on grounds of redundancy

Holding

Termination was unfair as the Respondent did not comply with Section 40 of the Employment Act 2007

Reasoning

The Claimants gave uncontested evidence that they left employment at the instance of the Employer due to diminished work, i.e. redundancy. The Respondent neither filed a Response nor attended court. There was no evidence that the redundancy procedure under Section 40 of the Employment Act 2007 was applied, that the sums offered as terminal dues were properly computed under that section, or that the redundancy was genuine and fairly conducted. The claim was therefore well-founded.

p. 2
02

Entitlement to terminal dues and compensation on uncontested evidence

Holding

Claimed compensation and terminal dues were merited and awarded as particularized

Reasoning

With no appearance or Response from the Respondent, the Claimants' evidence stood uncontested. The Court found the employment relationship proved through letters of employment and held that compensation and terminal dues as claimed were merited, awarding the full sums particularized in the Statement of Claim plus interest, certificates of service and costs.

p. 2

Legal principles established

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  • An employer alleging redundancy must show compliance with Section 40 of the Employment Act 2007 and that the redundancy was genuine and carried out fairly

Court orders

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  1. 1.Declaration that termination was unfair
  2. 2.Respondent to pay 1st Claimant Kshs. 223,600; 2nd Claimant Kshs. 731,950; and 3rd Claimant Kshs. 214,200, as particularized in the Statement of Claim
  3. 3.Interest allowed at 14% p.a. from the date of delivery of the Award
  4. 4.Certificates of Service to be released by the Respondent to the Claimants forthwith
  5. 5.Costs to the Claimants

Authorities

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Legislation

  • Employment Act 2007Section 40
  • Industrial Court (Procedure) Rules 2010Rule 27(1)(a)
Jurisdiction invoked
Rule 27(1)(a) of the Industrial Court (Procedure) Rules 2010; jurisdiction over unfair and unlawful termination disputes under the Employment Act 2007

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, "Abrahim Ndema & 2 others v Awanad Enterprises Limited [2016] KEELRC 1685 (KLR)", Case Analysis (2016). Cause Number 616 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1685/eng@2016-02-19

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