Nathan Kathiari Kalothi & 3 others v Kimilili Hauliers Limited [2018] KEELRC 2592 (KLR)
The bottom line
#Kenya's Employment Court ruled that a redundancy without one month's prior notice to the union and labour officer is unfair, entitling each worker to compensation.
What this practically means
#Executive summary
#Key legal issues
#Compliance with section 40 of the Employment Act in a redundancy
The respondent failed to comply with the mandatory notice requirements of section 40(1)(a): no notice to any trade union was demonstrated and the notice to the Labour Officer was issued only two days before termination instead of one month.
The court held section 40 conditions are mandatory, citing Barclays Bank of Kenya Ltd v Gladys Muthoni. Notice of the reasons and extent of the redundancy must issue to the union and labour officer at least one month before the redundancy takes effect. Here the notice to the Labour Officer was issued two days prior, and no notice to any trade union (either the Kenya Transport Workers Union or KUCFAW) was proved, rendering the termination substantively and procedurally unfair.
Unfair termination under sections 43 and 45 of the Employment Act
Failure to adhere to section 40 offended the mandatory provisions of sections 43 and 45, resulting in unfair termination entitling the claimants to compensation.
Section 45(2) requires the employer to prove a valid and fair reason and fair procedure. The employer bears a heavy burden of proof to justify termination. Having failed to issue and prove the requisite notices, the respondent could not discharge this burden, and the summary termination of 10th December 2016 was unfair, attracting compensation under section 49 as read with the court's assessment.
Unionisation and the appropriate trade union
The claimants did not demonstrate membership of KUCFAW, which covers a sector fundamentally different from transport; the referral to KUCFAW had no legal basis.
The court read section 14(1)(d)(i) of the Labour Relations Act, 2007 as requiring a union representing employees in a sector to address the trade or sector relevant to the employees' work. Receipts attached by the claimants showed only consultancy fees paid to advocates, not union membership dues. The respondent's agreement was with the Kenya Transport Workers Union, though that agreement was not produced as required by section 10(7) of the Employment Act.
Dates of employment and service pay
In the absence of employment contracts, the Certificates of Service remain the only legal records of employment dates; NSSF records are not proof of employment.
The claimants alleged earlier employment dates but produced no contracts of employment. The respondent also failed to submit work records beyond the Certificates of Service, which, though contested, the court took as the only legal records. The court accordingly found employment dates of 2009 (and 2004 for Isaac Akimanya) to December 2016 and held the terminal dues paid, including service pay, were a generous settlement.
Legal principles established
#- Section 40 of the Employment Act, 2007 sets out mandatory conditions precedent to a valid redundancy, including one month's notice of the reasons and extent of the redundancy to the union and the labour officer.
- Where an employer had an agreement with a trade union, redundancy notices must issue to that union and the statutory one-month notice to the labour officer must be observed.
- A trade union should represent employees in the sector relevant or closely related to their trade; a union covering a fundamentally different sector has no legal basis to pursue the claim.
Court orders
#- 1.Judgment entered for the claimants against the respondent with an award of one (1) month's gross salary for each claimant for unfair termination of employment
- 2.Costs of the suit awarded to the claimants
- Jurisdiction invoked
- Employment and labour relations jurisdiction under Article 162(2) of the Constitution (claim of unfair termination under the Employment Act, 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nathan Kathiari Kalothi & 3 others v Kimilili Hauliers Limited [2018] KEELRC 2592 (KLR)", Case Analysis (2018). Cause No. 159 of 2017 (Consolidated with Causes Nos. 160, 161 and 162 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2592/eng@2018-09-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.