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ELRCPartially AllowedMemorandum of Claim dated 17th September 2013· [2016] KEELRC 1831 (KLR)

Samuel Maina Gichuhi v Nature Phamacy Limited & Ndubai Ngeera [2016] KEELRC 1831 (KLR)

Employment and Labour Relations Court
12 February 2016
657 words in judgment
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The bottom line

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A Kenyan court awarded a pharmacy assistant Kshs.429,000 after his employer closed shop and dismissed him without notice, a letter, or any terminal benefits.

What this practically means

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Executive summary

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The claimant, employed as a pharmacy assistant by the respondents from August 1995 until October 2011 on a monthly salary of Kshs.22,000, sued for notice pay, October 2011 salary, leave pay, severance pay and twelve months' compensation for unlawful termination. He had no written contract; his employment was evidenced by a 2003 NSSF registration letter written by the 2nd respondent. On 1st October 2011 he reported to work to find the shop closing down and was asked to pack stock without notice, a termination letter or any terminal benefits. The respondents were served but filed no statement of defence, and the matter proceeded to formal proof on 22nd October 2015, where the claimant testified under oath. The court found the claims proved on a balance of probability except the leave pay claim, which the claimant's own evidence defeated since he was not owed leave days. The court held that the closure of the business without following the redundancy procedure in section 40 of the Employment Act rendered the termination ipso facto unlawful for want of procedural fairness, entitling the claimant to compensation under section 49(1)(c) as read with section 49(4). Considering his sixteen years of service with no adverse record and that he went home penniless, the court awarded ten months' salary as compensation. Judgment was entered against the 1st and 2nd respondents jointly and severally for Kshs.429,000.00, with costs of the suit and interest at court rates from the date of filing until payment in full.

Key legal issues

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01

Lawfulness of termination on redundancy without notice

Holding

Termination was unlawful for want of procedural fairness under section 40 of the Employment Act

Reasoning

The claimant was employed since 1995 and on 1st October 2011 found the shop closing down and was asked to pack stock. He received no termination letter and no terminal benefits. The respondent did not file a defence and the claim proceeded by formal proof. The court found the closure amounted to redundancy without the section 40 procedure, rendering it ipso facto unlawful.

p. 2
02

Compensation for unfair termination

Holding

Ten months' salary awarded as compensation under section 49(1)(c) as read with section 49(4)

Reasoning

The claimant served sixteen years with no adverse record, went home penniless without terminal benefits, and suffered loss and pain from the sudden, unprocedural loss of employment. These factors justified a substantial award of ten months' salary under section 49.

p. 2
03

Leave pay claim

Holding

Claim for payment in lieu of leave days failed

Reasoning

The claimant conceded on his own evidence that he had no pending leave days, so this head of the claim was not proved despite the undefended suit.

p. 2

Legal principles established

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  • An employer who does not follow the redundancy procedure under section 40 of the Employment Act terminates employment ipso facto unlawfully for want of procedural fairness
  • An employee terminated without notice for operational reasons is entitled to terminal benefits and compensation under section 49(1)(c) as read with section 49(4) of the Employment Act

Court orders

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  1. 1.One month salary in lieu of notice in the sum of Kshs.22,000
  2. 2.Fifteen (15) days salary for the month of October 2011 in the sum of Kshs.11,00
  3. 3.Severance pay at the rate of fifteen (15) days salary for sixteen (16) years completed service in the sum of Kshs.176,000.00
  4. 4.Ten (10) months salary as compensation for the unlawful and unfair termination of employment in the sum of Kshs.220,000.00
  5. 5.Total award of Kshs.429,000.00 payable against the 1st and 2nd respondents jointly and severally
  6. 6.Costs of the suit to the claimant
  7. 7.Interest at court rates from date of filing the suit until payment in full
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (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, "Samuel Maina Gichuhi v Nature Phamacy Limited & Ndubai Ngeera [2016] KEELRC 1831 (KLR)", Case Analysis (2016). Memorandum of Claim dated 17th September 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1831/eng@2016-02-12

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