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ELRCPartially AllowedNot stated in judgment· [2018] KEELRC 894 (KLR)

James Geita Kabindu v Auto Space Limited & another [2018] KEELRC 894 (KLR)

Employment and Labour Relations Court
23 October 2018
722 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 ruled that a letterhead termination letter proved who the employer was, and a redundancy without proper notices was unfair.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Nairobi, Radido Stephen J, determined four questions: the identity of the Claimant's employer, whether his termination was unfair, accrued leave, and entitlement to service pay and compensation. Part of the evidence had been taken by Nzioki wa Makau J in 2014, with the 3rd Party's witness testifying in 2018. On the employment relationship, the Court found the termination letter dated 1 November 2010 was on the Respondent's letterhead and the Claimant's pay slip bore the Respondent's logo, and the Respondent's director admitted the Respondent paid his remuneration to October 2010; it was therefore mischievous for the Respondent to deny employment and join a 3rd Party, and the Court reminded it that a limited liability company has a juristic life independent of its directors. The stated reason for termination was restructuring, which the Court equated with redundancy on operational requirements. Under section 40(1) of the Employment Act, 2007, one month advance written notice was required to both the employee and the local Labour Officer; the Respondent failed to discharge the burden of proving such notices, so the termination was unfair. The unrebutted leave computation of Kshs 119,476/- was allowed under sections 10(3) and (7) read with section 28. Service pay was refused because the Claimant contributed to the NSSF. Compensation was assessed at two months gross wages. The Respondent was ordered to pay a total of Kshs 331,276/- and the costs of the Claimant and the 3rd Party.

Key legal issues

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01

Identity of the employer

Holding

The Respondent, not the 3rd Party, was the Claimant's employer

Reasoning

The Claimant was initially employed by Farm Auto Spares Ltd, which terminated contracts in December 2008, and employees were taken over by the Respondent from January 2009. The termination letter of 1 November 2010 was on the Respondent's letterhead and his October 2010 pay slip bore the Respondent's logo. The Respondent's director admitted the Respondent paid the Claimant's remuneration up to October 2010. Denying employment and joining a 3rd Party was mischievous.

p. 1
02

Unfair termination by redundancy

Holding

Termination for restructuring was a redundancy effected without the statutory notices, hence unfair

Reasoning

The stated reason for termination was restructuring, which equates to redundancy on operational requirements. Section 40(1) of the Employment Act, 2007 requires one month advance written notice to both the employee and the local Labour Officer. The Respondent failed to discharge the burden of proving such notices were issued, so the termination was unfair.

p. 2
03

Accrued leave

Holding

Claim for leave for 2009-2010 of Kshs 119,476/- allowed as unrebutted

Reasoning

The Claimant prayed for leave days not taken, computing them at Kshs 119,476/-. The Respondent neither interrogated nor rebutted these computations. By dint of sections 10(3) and (7) as read with section 28 of the Employment Act, 2007, the Court allowed the head of claim.

p. 2
04

Service pay

Holding

Not entitled to service pay because he contributed to NSSF

Reasoning

Service pay is unavailable to an employee who is a member of the National Social Security Fund. The Claimant was making NSSF contributions, so this head of claim failed.

p. 2
05

Compensation

Holding

Compensation assessed at 2 months gross wages (Kshs 141,200/-)

Reasoning

In exercising discretion under the Employment Act, the Court considered the length of the Claimant's employment and assessed compensation equivalent to two months gross wages.

p. 2

Legal principles established

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  • A termination letter on an employer's letterhead plus pay slips bearing its logo are sufficient evidence of an employment relationship with that entity
  • In a redundancy, the employer bears the burden of proving one month advance written notice to the employee and the local Labour Officer under section 40(1) of the Employment Act, 2007

Court orders

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  1. 1.Respondent to pay the Claimant accrued leave of Kshs 119,476/-
  2. 2.Respondent to pay the Claimant pay in lieu of notice of Kshs 70,600/-
  3. 3.Respondent to pay the Claimant compensation equivalent to 2 months gross wages of Kshs 141,200/-
  4. 4.Total award of Kshs 331,276/-
  5. 5.Respondent to bear the costs of the Claimant and 3rd Party

Authorities

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Legislation

  • Employment Act, 2007section 40(1)
  • Employment Act, 2007section 10(3) and (7)
  • Employment Act, 2007section 28
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute)

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, "James Geita Kabindu v Auto Space Limited & another [2018] KEELRC 894 (KLR)", Case Analysis (2018). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/894/eng@2018-10-23

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