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ELRCPartially AllowedCause No. 131 of 2015· [2016] KEELRC 1697 (KLR)

Zachary Kibitok Kemboi v Eagle Motor Cycle Limited [2016] KEELRC 1697 (KLR)

Employment & Labour Relations Court of Kenya
17 February 2016
2,131 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer who skips the legal redundancy process must pay compensation, notice and costs, even for a low-earning employee.

What this practically means

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Executive summary

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The claimant, employed as a technician in the respondent's Eldoret shop from 1st June 2013 at a salary of Kshs. 7,500, was dismissed by letter dated 6th June 2014 on grounds of hard economic times, which the respondent framed as a redundancy. He claimed he was underpaid and dismissed without notice, consultation or compliance with Sections 40, 41 and 45 of the Employment Act, and sought notice pay, severance pay, leave dues, underpayment damages, maximum compensation, a responsibility allowance and a certificate of service. The respondent denied the employment relationship and defended the termination as lawful redundancy. The court framed five issues and found, on the testimony of the claimant's witnesses and notably the respondent's own witness DW1, that an employment relationship existed, the respondent's denial being 'mere denial'. Applying Section 40(1) and the Julie Tupiran Njeru authority on redundancy procedure, and Walter Ogal Anuro and Alphonce Machanga Mwachanya on fair termination, the court found no compliance with the redundancy process or fair hearing requirements and held the termination wrongful, unlawful and unfair. The claim was allowed in part: the court awarded one month's pay in lieu of notice (Kshs. 7,500), eight months' compensation for unfair termination (Kshs. 60,000), a certificate of service, and costs to the claimant. Several pleaded heads - severance pay, leave dues, underpayment and responsibility allowance - were not awarded in the final orders. Judgment was delivered on 17th February 2016.

Key legal issues

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01

Existence of an employment relationship

Holding

The claimant was an employee of the respondent as a technician earning Kshs. 7,500.

Reasoning

The claimant relied on a KUCFAW union membership card and identity card, supported by the testimony of CW1 and CW2. Notably the respondent's own witness DW1 attested to employment. The respondent's written submissions sought to recast the testimony as a trainee engagement, but the court preferred the witness's sworn testimony over the submission, finding the denial version unmerited.

p. 3
02

Substantive and procedural validity of the redundancy

Holding

The purported redundancy did not comply with Section 40(1) of the Employment Act and was therefore wrongful, unlawful and unfair.

Reasoning

The claimant invoked Section 40(1) and the authority of Julie Tupiran Njeru v Kenya Tourist Board, which requires procedural fairness, consultation, transparent selection criteria and notification. The respondent gave no evidence of compliance with the statutory notification to the union or labour officer, or of consultation. The court agreed with the claimant's submissions and found the redundancy process not pursued in accordance with the law.

p. 4
03

Fairness of termination generally

Holding

The termination offended Sections 41 and 45 of the Employment Act for want of valid reason and fair procedure.

Reasoning

Relying on Walter Ogal Anuro v Teachers Service Commission the court held that substantive justification and procedural fairness are both required. Alphonce Machanga Mwachanya v Operation 680 Limited set out the Section 41 requirements of explanation in a language the employee understands, presence of a representative, and hearing explanations. None of these were met in the summary dismissal on grounds of hard economic times.

p. 5

Legal principles established

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  • For a termination of employment to pass the fairness test, there must be both substantive justification and procedural fairness.
  • An employer declaring redundancy must strictly comply with the conditions in Section 40(1) of the Employment Act, including notification and consultation requirements.

Court orders

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  1. 1.Payment of one month's pay in lieu of notice of Kshs. 7,500.00
  2. 2.Payment of eight months' compensation for unfair termination of employment, 8 x Kshs. 7,500 = Kshs. 60,000.00
  3. 3.The respondent be and is hereby ordered to issue a certificate of service to the claimant
  4. 4.The costs of the claim to be borne by the respondent

Authorities

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Legislation

  • Employment Act, 2007Section 40(1)
  • Employment Act, 2007Section 44(4)
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 35(1)(c)
  • Employment Act, 2007Section 36
  • Employment Act, 2007Section 49(1)(c)
  • Employment Act, 2007Section 51
  • Labour Institutions ActSection 15
  • Legal Notice No. 197 of 1st May 2013

Cases cited (3)

  • Julie Tupiran Njeru v Kenya Tourist Board
    Industrial Cause Number 886 of 2010 (Rika, J on 12th April, 2011)
  • Walter Ogal Anuro v Teachers Service Commission
    (2013) eKLR
  • Alphonce Machanga Mwachanya v Operation 680 Limited
    (2013) eKLR
Jurisdiction invoked
Employment and Labour Relations Court established under Article 162(2) of the Constitution; 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, "Zachary Kibitok Kemboi v Eagle Motor Cycle Limited [2016] KEELRC 1697 (KLR)", Case Analysis (2016). Cause No. 131 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1697/eng@2016-02-17

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