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ELRCPartially AllowedStatement of Claim filed 7th September 2017 (ELRC, Mombasa)· [2019] KEELRC 957 (KLR)

Charles Dzombo v Mombasa Retreads Ltd [2019] KEELRC 957 (KLR)

Employment and Labour Relations Court
29 July 2019
JRJames Rika
1,322 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer with a valid reason to cut jobs still lost in court because it skipped the legal redundancy steps — costing it over Kshs. 110,000.

What this practically means

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Executive summary

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The Claimant, employed as a Tyre Repair Man from 10th October 2011 at a monthly salary of Kshs. 14,000, was terminated by one month's notice dated 23rd December 2016, effective 22nd January 2017, on grounds of economic constraints. The Respondent conceded the employment history and characterized the termination as redundancy. The Court accepted the Respondent's evidence that the business suffered a downturn and ultimately closed, so a genuine redundancy situation existed. However, the Respondent failed to adhere to Section 40 of the Employment Act: there was no notice of intended redundancy under Section 40(1)(a), notice was not shown to have reached the Labour Office or the Claimant's Trade Union, no tripartite consultation took place, and nothing was paid beyond the December 2016 salary balance. The Respondent's claim to have paid Kshs. 35,000 in severance was contradicted by its own witness and unsupported by evidence. While the substantive reason for termination was valid, the procedural lapses rendered it unfair, entitling the Claimant to compensation of 5 months' salary (Kshs. 70,000) and severance at 15 days' salary per year over 5 completed years (Kshs. 40,384), totalling Kshs. 110,384. Claims for notice pay, annual leave pay and overtime pay were declined, as the notice period was given, leave was taken or encashed, and pay slips showed overtime was paid. The Court ordered a Certificate of Service, costs to the Claimant, and interest at 14% per annum from judgment until payment in full. Judgment dated and delivered at Mombasa on 29th July 2019 by James Rika, Judge.

Key legal issues

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01

Whether there was a genuine redundancy situation

Holding

The Court accepted there was a genuine redundancy; the business was experiencing a downturn and ultimately closed.

Reasoning

The notice issued to the Claimant and the County Labour Office, together with the testimony of Abdallah, established a genuine redundancy situation. Other employees were similarly released and the business was no longer open as at the date of hearing.

p. 2
02

Whether the Section 40 redundancy procedure was followed

Holding

The Respondent did not adhere to Section 40; no notice of intended redundancy to the Trade Union and no tripartite consultation; nothing paid other than December 2016 salary balance.

Reasoning

Notice to the Labour Office was not proved received and was not shared with the Claimant's Union. There was no notice of intended redundancy under Section 40(1)(a). Severance of Kshs. 35,000 was not proved paid. Procedural non-compliance rendered termination unfair despite a valid substantive reason.

p. 2
03

Remedies payable

Holding

5 months' salary compensation and 15 days' salary per year of service as severance, certificate of service, costs and interest.

Reasoning

Having worked 5 complete years, the Claimant was granted compensation equivalent to 5 months' salary and severance computed at 15 days' salary for each of the 5 years. Notice pay, leave pay and overtime were declined for want of merit.

p. 2

Legal principles established

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  • A Respondent with a substantive ground for termination must still adhere to the procedure laid down in Section 40 of the Employment Act; failure renders the termination unfair.
  • Redundancy requires notice of intended redundancy to the Trade Union and tripartite consultation where the employee belongs to a union.

Court orders

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  1. 1.The Respondent shall pay to the Claimant equivalent of 5 months' salary in compensation for unfair termination at Kshs. 70,000
  2. 2.Severance pay at Kshs. 40,384 (total award Kshs. 110,384)
  3. 3.Certificate of Service to issue
  4. 4.Costs to the Claimant
  5. 5.Interest allowed at 14% per annum from the date of Judgment till payment is made in full

Authorities

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Legislation

  • Employment ActSection 40
  • Employment ActSection 40(1)(a)
  • Employment ActSection 40(1)(f)
  • Employment ActSection 35(1)(c)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; Employment and Labour Relations Court Act)

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, "Charles Dzombo v Mombasa Retreads Ltd [2019] KEELRC 957 (KLR)", Case Analysis (2019). Statement of Claim filed 7th September 2017 (ELRC, Mombasa). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/957/eng@2019-07-29

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