Samuel Githinji Kariuki v Comply Industries Limited [2019] KEELRC 192 (KLR)
The bottom line
#A Kenyan court upheld an employer's redundancy as lawful but ordered it to pay a worker Kshs.12,300 for undercounting his years of service.
What this practically means
#Executive summary
#Key legal issues
#Lawfulness and procedure of the redundancy
The termination by redundancy was lawful and procedural under section 40(1); installation of CCTV cameras was a valid operational reason and one month's written notice was issued and acknowledged.
The court found that the respondent installed CCTV cameras reducing the need for security guards. The claimant received written notice on 28 September 2016 effective 28 October 2016, signed in acknowledgement, and was paid in lieu of notice. The respondent therefore complied with section 40, and no compensation for unfair termination was due.
House allowance claim
Rejected; the daily wage of Kshs.820.00 exceeded the applicable Wage Order minimum inclusive of house allowance.
The applicable Wage Orders for Njoro as of October 2016 entitled the claimant to a daily wage of Kshs.336.30 (about Kshs.10,089 monthly), inclusive of house allowance. The claimant's actual daily wage of Kshs.820.00 far exceeded that even when the monthly wage plus house allowance is applied, so a further house allowance claim amounts to unjust enrichment.
Severance pay tabulation
Partially allowed; severance should have been computed on 6 full years, not 5, entitling the claimant to Kshs.73,800.00, of which Kshs.12,300.00 remains unpaid.
Both parties confirmed employment subsisted from 11 January 2010 to 28 October 2016, being 6 full years and 3 months. At 15 days' pay per full year (820 x 15 x 6), severance is Kshs.73,800.00. The claimant was paid Kshs.61,500.00 based on 5 full years, in error, leaving a shortfall of Kshs.12,300.00.
Taxation of redundancy dues
The total redundancy dues are subject to mandatory taxable pay deduction under section 49(2).
The court held that the total dues payable in redundancy fall within section 49(2) of the Employment Act and any deductions therefrom are mandatory. This qualifies the net amount the claimant ultimately receives on the shortfall awarded.
Legal principles established
#- Section 40 of the Employment Act permits lawful termination by redundancy where the employee is issued notice and given operational reasons
- Where the wage paid already exceeds the statutory minimum inclusive of house allowance, no separate house allowance is payable
- Severance pay is due at 15 days' pay for each full year worked, and redundancy dues are subject to mandatory PAYE deduction
Court orders
#- 1.The claims made are found without merit and are dismissed
- 2.The respondent to pay the claimant Kshs.12,300.00 paid less in severance pay
- 3.Each party shall meet own costs
- Jurisdiction invoked
- Employment and labour relations dispute under the Employment Act, 2007 (ELRC original jurisdiction)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Samuel Githinji Kariuki v Comply Industries Limited [2019] KEELRC 192 (KLR)", Case Analysis (2019). Cause No. 94 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/192/eng@2019-11-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.