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ELRCAllowedMemorandum of Claim dated 3rd August 2017, filed 4th August 2017· [2018] KEELRC 556 (KLR)

Benson Muriithi Kagai v Kenga Equatorial Hotels Ltd t/a Mombasa Continental Resort [2018] KEELRC 556 (KLR)

Employment and Labour Relations Court
27 November 2018
LNLINNET NDOLO
2,047 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 ordered a Mombasa hotel to pay an ex-employee 12 months' salary because it could not prove its redundancy was genuine or follow the required procedure.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as Purchasing Manager on 10th December 2015, had his employment terminated on 30th April 2016 on account of redundancy. He claimed Kshs. 720,000 being twelve months' salary as compensation for wrongful and unfair termination, plus costs and interest. The Respondent denied unfair termination, asserting a lawful redundancy under Section 40 of the Employment Act and, alternatively, that the Claimant's four months of service barred the claim under Section 45(3). The Court framed two issues: whether there was unlawful termination and whether remedies were due. It found the notice to the Labour Officer and the employee did not satisfy the statutory notice requirements; the Respondent failed to produce the alleged staff notice and meeting records; and it failed to provide financial reports to substantiate the claimed financial difficulties. The Court also noted the unusual pattern of the Claimant having been terminated on redundancy in 2013, re-employed in 2015, and terminated again on redundancy four months later, which the Respondent did not explain. Relying on Thomas De La Rue and Fredrick Mulwa Mutiso, the Court held there was no genuine redundancy and the procedure was flawed. Section 45(3) was not applied as a bar, following its declaration of unconstitutionality in Samuel G. Momanyi. Judgment was entered for the Claimant for Kshs. 720,000 with interest at court rates from the date of judgment and costs of the case.

Key legal issues

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01

Whether the termination on account of redundancy was justified and procedurally fair

Holding

The Respondent failed to establish a genuine redundancy and violated the procedural requirements of Section 40 of the Employment Act.

Reasoning

The notification to the Labour Officer (29 April 2016) and to the Claimant (30 April 2016) did not meet the statutory notice periods. The Respondent failed to produce the staff notice or meeting records it alleged, and failed to provide financial reports to substantiate the claimed financial difficulties. The pattern of re-employing the Claimant after a prior redundancy termination and firing him again four months later on the same ground was unexplained.

p. 4
02

Whether Section 45(3) of the Employment Act bars a claim by an employee with fewer than thirteen months' service

Holding

The Court declined to apply Section 45(3) as a bar, relying on the declaration of unconstitutionality in Samuel G. Momanyi v Attorney General.

Reasoning

The Respondent invoked Section 45(3), which imposes a thirteen-month minimum employment period for unfair termination claims. The Court was persuaded by Lenaola J's decision in Samuel G. Momanyi v Attorney General & another, where that provision was declared unconstitutional, and proceeded to award compensation despite the Claimant's four months of service in the second stint.

p. 4

Legal principles established

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  • In determining a redundancy termination claim, the court asks whether there was a genuine case of redundancy and whether due procedure was followed.
  • The employer bears the duty to prove a genuine redundancy, including financial evidence supporting the assertion of financial difficulty.
  • Failure to comply with the notice requirements of Section 40 of the Employment Act renders a redundancy unfair.

Court orders

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  1. 1.Award of Kshs. 720,000 being twelve (12) months' salary in compensation for unlawful and unfair termination of employment
  2. 2.Interest on the award at court rates from the date of judgment until payment in full
  3. 3.Costs of the case to the Claimant

Authorities

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Legislation

  • Employment ActSection 2 (definition of redundancy)
  • Employment ActSection 40(1)(a)-(g)
  • Employment ActSection 45(3)

Cases cited (5)

  • Geoffrey Nyabuti Onguko v Blow Plant Limited
    [2013] eKLR
  • Thomas De La Rue (K) Ltd v David Opondo Omutelema
    [2013] eKLR
  • Fredrick Mulwa Mutiso v Kenya Commercial Bank Limited
    [2017] eKLR
  • Benson Muriithi Kagai v Kenya Equatorial Hotels Limited T/A Mombasa Continental Resort Limited
    [2014] eKLR
  • Samuel G. Momanyi v Attorney General & another
    [2012] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Section 40 and Section 45)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Benson Muriithi Kagai v Kenga Equatorial Hotels Ltd t/a Mombasa Continental Resort [2018] KEELRC 556 (KLR)", Case Analysis (2018). Memorandum of Claim dated 3rd August 2017, filed 4th August 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/556/eng@2018-11-27

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