Stephen Kathenya v Keroche Breweries Limited [2019] KEELRC 218 (KLR)
The bottom line
#A Kenyan court upheld Keroche's redundancy process but ordered the brewer to pay an ex-employee Ksh.145,000 in unpaid overtime and leave because it kept no records.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy declaration was unfair
The redundancy was not unfair; the claimant was advised of the operational reasons and notice was issued, satisfying section 40(1) of the Employment Act.
The court applied section 45(2) of the Employment Act on unfair termination and section 40 on redundancy. The claimant himself pleaded he was advised of termination on account of restructuring/redundancy. Notice was given and reasons relating to operational requirements were stated; there was no claim of being singled out. The court distinguished Court of Appeal authorities on consultation requirements and found no unfairness.
Whether further severance pay was due
No further severance was due; the payment of 60 days' pay for 4 years exceeded the statutory minimum of 15 days per completed year for the claimant's roughly 2 years of service.
Section 40(1)(g) requires severance of not less than 15 days' pay per completed year. The written contract dated 1st June 2014 governed, giving about 1.9 years to termination on 3rd May 2016. Severance already paid at 60 days for 4 years was generous, more than the minimum of about Ksh.25,000 based on gross salary.
Whether overtime pay was due
Overtime pay of Ksh.135,000.00 awarded for 1,296 hours, the respondent having produced no work records to rebut the claim.
The respondent alleged overtime was computed and remitted monthly but filed no work records or evidence of payment. The claimant testified he worked 7am to 7pm shifts. The court allowed 18 months of overtime (after deducting annual leave) at 3 hours per day over 6 days weekly, computing 1,296 hours worth Ksh.135,000 on the salary paid.
Whether outstanding leave days were due
The claimant is entitled to Ksh.10,000.00 for 6 leave days not taken, computed on gross salary.
The defence asserted leave days owing at termination were encashed and paid in full, but no records were produced. The court found 6 leave days outstanding and valued them at Ksh.10,000 on the gross salary of Ksh.50,000 per month.
Legal principles established
#- An employer declaring redundancy must pay severance pay at the rate of not less than fifteen days' pay for each completed year of service.
- An employer bears the burden of proving valid reason and fair procedure for termination; failure to produce work records means unchallenged claims of unpaid overtime may be accepted.
- A new contract of employment with specific terms supersedes and removes any prior subsisting employment terms.
Court orders
#- 1.Judgment entered for the claimant against the respondent for overtime pay of Ksh.135,000.00
- 2.Award of Ksh.10,000.00 for 6 leave days not taken
- 3.Costs of the suit awarded to the claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (unfair termination and terminal dues claim)
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.
- Ken Knit (Kenya) Limited v Sarara (Employment and Labour Relations Appeal E025 of 2023) [2025] KEELRC 848 (KLR)[2025] KEELRC 848 (KLR)14 Mar 2025
Cite this brief
#Cite this brief
Caselaw, "Stephen Kathenya v Keroche Breweries Limited [2019] KEELRC 218 (KLR)", Case Analysis (2019). Cause No. 240 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/218/eng@2019-11-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.