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ELRCPartially AllowedNot stated in the judgment (Cause instituted on 23 April 2014)· [2018] KEELRC 1373 (KLR)

Milton Muyodi Maloba v Crown Paints Kenya Limited [2018] KEELRC 1373 (KLR)

Employment and Labour Relations Court
27 July 2018
1,062 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~4 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that skipping mandatory redundancy notice makes a dismissal unfair, but employees cannot claim salaries for their contract's unexpired years.

What this practically means

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Executive summary

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Crown Berger Kenya Ltd employed the Claimant, Milton Muyodi Maloba, as a Security Manager under a five-year fixed-term contract that was to lapse on 31 July 2017. On 27 March 2014, Crown Paints Kenya Ltd (the Respondent) declared his position superfluous and terminated his contract on account of redundancy with effect from 31 March 2014. The Claimant sued for unlawful and wrongful termination, seeking salaries to the end of the contract, salary for March 2014, pay in lieu of notice, accrued leave, damages, and Kshs 507,966/- on account of a car purchased with an employer loan. The Respondent defended the redundancy as lawful and counterclaimed for an outstanding car loan of Kshs 369,452/-, but the car loan dispute was compromised by a consent filed on 3 September 2014. The court framed a single issue: whether the redundancy was unfair and what remedies were appropriate. Relying on the Court of Appeal decision in Thomas De La Rue v David Opondo Omutelema, the court found the redundancy procedurally unfair because the Claimant was not given the mandatory one month advance written notice required by section 40 of the Employment Act, 2007, rendering it unnecessary to consider sections 43 and 45(2)(b)(ii). On remedies, the court awarded compensation of three months' gross wages (Kshs 555,000/-) given about two years of service, pay in lieu of notice of Kshs 125,000/- (based on basic pay), and accrued leave of Kshs 83,333/- as computed by the Respondent. It declined salary for March 2014, which had been paid, and rejected the claim for lost income to the end of the contract (Kshs 7,400,000/-), endorsing Bank of Uganda v Tinkamanyire that compensation for the unexpired term of a terminated contract is unattainable in law absent express contract or statute. Total award: Kshs 763,333/-, with costs to the Claimant.

Key legal issues

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01

Procedural fairness of redundancy under section 40 of the Employment Act, 2007

Holding

The termination was procedurally unfair because the Claimant was not given the requisite one month advance written notice of redundancy

Reasoning

Section 40 requires one month advance written notice to a non-unionised employee and notice to the local Labour Officer. The Labour Officer was notified by letter dated 1 February 2014, but the Claimant only received a termination letter on 27 March 2014 effective 31 March 2014. The Respondent's witness conceded in cross-examination that written notice was not given, contrary to the mandatory notice requirement in Thomas De La Rue.

p. 2
02

Lost income to the end of a fixed-term contract

Holding

Such relief is not tenable absent express contractual agreement or direct statutory provision

Reasoning

The Claimant relied on Ruth Gathoni Ngotho v PCEA Foundation and Francis Lawrence Oyatsi v Nzoia Sugar Co. Ltd, while the Respondent cited contrary authority. The court endorsed the persuasive Supreme Court of Uganda decision in Bank of Uganda v Tinkamanyire that compensation for the unexpired remainder of a terminated contract is unattainable in law, and declined the Kshs 7,400,000/- claim.

p. 2
03

Appropriate remedies for unfair redundancy

Holding

Compensation equivalent of 3 months gross wages for about 2 years of service, pay in lieu of notice based on basic pay, and accrued leave as computed by the employer

Reasoning

Gross pay is relevant for compensation under section 49(1)(c), while basic pay applies to pay in lieu of notice. Considering length of service of about 2 years, 3 months gross wages (Kshs 555,000/-) was awarded. Pay in lieu was admitted as outstanding, and accrued leave of Kshs 83,333/- was accepted on the employer's computation as custodian of records.

p. 2

Legal principles established

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  • Notice of redundancy to a non-unionised employee is mandatory under section 40 of the Employment Act, 2007, and failure to give it renders the redundancy procedurally unfair

Court orders

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  1. 1.Compensation of Kshs 555,000/- (equivalent of 3 months gross wages)
  2. 2.Pay in lieu of notice of Kshs 125,000/-
  3. 3.Accrued leave of Kshs 83,333/-
  4. 4.Total award of Kshs 763,333/- to the Claimant
  5. 5.Claimant to have costs
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment cause)

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, "Milton Muyodi Maloba v Crown Paints Kenya Limited [2018] KEELRC 1373 (KLR)", Case Analysis (2018). Not stated in the judgment (Cause instituted on 23 April 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1373/eng@2018-07-27

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