Daniel Muchiri Ndungu v Comply Industries Limited [2019] KEELRC 122 (KLR)
The bottom line
#A Kenyan court upheld an employer's redundancy process but ordered extra severance pay for a long-serving 'casual' worker treated as a full-time employee.
What this practically means
#Executive summary
#Key legal issues
#Lawfulness and fairness of the redundancy procedure
The respondent followed due process under section 40 of the Employment Act, 2007, having issued notices and paid an amount equivalent to one month's pay.
The court found that redundancy for operational reasons - installation of CCTV cameras reducing the need for security personnel affecting 10 employees - was a valid and fair reason. The claimant was called by the personnel officer, issued with a one-month notice of redundancy which he accepted and signed, and his terminal dues were calculated and paid. This satisfied both the substantive fairness test under section 45(2)(b) and the procedural requirements of section 40.
Status of the claimant as casual employee versus full-time employee
Though defined as a casual employee paid a daily rate, the claimant's continuous service from 2010 to 2016 converted him to a full-time employee entitled to benefits under section 37 of the Employment Act, 2007.
Both parties accepted the claimant was engaged on casual terms at a daily rate of Ksh. 820.00 paid weekly. However, he served continuously for over six years until redundancy. The court held that such prolonged service under casual terms converts the engagement into full-time employment with statutory benefits, entitling him to accrued leave, notice pay and severance pay on redundancy.
Correct calculation of severance pay
Severance pay was under-calculated; the claimant was entitled to Ksh. 73,800 for 6 full years at 15 days' pay per year, leaving a balance of Ksh. 12,300.00 due.
The claimant worked from 1st January 2010 to October 2016, completing 6 full years of service. Severance at 15 days' pay per year on a daily wage of Ksh. 820.00 yields Ksh. 73,800. Since the respondent had paid Ksh. 61,500, the shortfall of Ksh. 12,300.00 was the only error identified in the terminal dues computation.
Legal principles established
#- Termination of employment for operational reasons (redundancy) is a lawful and fair mode of ending employment under section 45(2)(b) of the Employment Act, provided a fair procedure under section 40 is followed.
- An employee engaged under casual terms who serves continuously converts to a full-time employee with benefits under section 37 of the Employment Act, 2007.
- Where the daily wage paid exceeds the minimum wage, the actual wage rather than the minimum wage is used in assessing terminal dues, as applying the minimum wage would disadvantage the employee.
- Severance pay for redundancy is computed at 15 days' pay for each completed year of service.
Court orders
#- 1.A declaration that the termination of employment was lawful and followed due process under section 40 of the Employment Act, 2007
- 2.Payment to the claimant of the balance of severance pay of Ksh. 12,300.00
- 3.The respondent to issue the claimant with a Certificate of Service
- 4.Each party to bear own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (claim for unlawful termination and terminal dues)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Mwangi v Jiangxi Water & Hydropower Construction [K] Limited (Cause 1706 of 2017) [2022] KEELRC 1247 (KLR)[2022] KEELRC 1247 (KLR)14 Jul 2022
Cite this brief
#Cite this brief
Caselaw, "Daniel Muchiri Ndungu v Comply Industries Limited [2019] KEELRC 122 (KLR)", Case Analysis (2019). Cause No. 96 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/122/eng@2019-11-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.