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ELRCPartially AllowedCause No 237 of 2016· [2019] KEELRC 1194 (KLR)

Julia Wairimu Ndiritu v Forward Mobiles (K) Ltd [2019] KEELRC 1194 (KLR)

Employment and Labour Relations Court
15 July 2019
1,805 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that a company cannot avoid paying employees' dues just because a director died, awarding a former M-pesa agent notice pay and compensation.

What this practically means

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Executive summary

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The Claimant, employed on 15th January 2013 as an M-pesa agent at the Respondent's Karatina Branch earning Kshs. 7,000/- monthly, sued for unlawful termination effective 1st August 2016. She sought declarations that the termination and non-payment of terminal dues were unfair and unlawful, plus notice pay, leave pay, overtime pay, twelve months' compensation, a certificate of service and costs, totalling Kshs. 117,600/-. The Respondent attributed the closure of the Karatina shop to financial difficulties arising from succession proceedings following the death of its co-founder, denying any unlawful dismissal. Both parties testified and submitted. The court found the Claimant lost her employment suddenly due to the death of a director, and held the Respondent could not escape liability for employees' rights on that account, noting the business was sold for Kshs. 22 million. The court distinguished the authority relied on by the Claimant since Section 41 of the Employment Act (notice and hearing for misconduct) was not engaged; entitlement lay in notice pay for termination without notice. The court awarded Kshs. 7,000/- notice pay and six months' salary (Kshs. 42,000/-) as compensation, but rejected the leave and overtime claims for want of evidence and held the certificate of service claim superfluous as it had been issued on court order. Costs were awarded to the Claimant but capped at Kshs. 20,000/-. Judgment was entered partially in the Claimant's favour on 15th July 2019 at Nyeri.

Key legal issues

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01

Whether the termination was unlawful and unfair

Holding

The termination without notice was unlawful; the Claimant lost her employment suddenly on account of the demise of a director, and the Respondent was still bound to secure employees' rights

Reasoning

The Claimant was cleared from work without notice and her dues were unpaid. The Respondent attributed the closure to financial difficulties arising from a succession cause, but the court held the employer could not evade its obligations to employees due to a director's death. The business was in fact sold for Kshs. 22 million. Awarded notice pay plus six months' compensation.

p. 2
02

Whether Section 41 of the Employment Act (notice and hearing) applied

Holding

Section 41 was not engaged because the dismissal was not for misconduct or poor performance; entitlement was to notice pay for termination without notice

Reasoning

The authority relied on by the Claimant concerning Section 41 was held inapplicable since she was not accused of misconduct. The relevant remedy was notice pay for termination without notice.

p. 2
03

Leave and overtime claims

Holding

Both claims failed for want of evidence; the Claimant did not prove she was denied leave or that she worked overtime

Reasoning

The Claimant testified she obtained permission to attend to her child in boarding school, and the court doubted she was denied annual leave. On overtime, no sufficient evidence was adduced. Burden of proof not discharged.

p. 2

Legal principles established

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  • An employer cannot escape liability for employees' rights merely because a director has died and succession proceedings are pending
  • An employee terminated without notice is entitled to recover notice pay

Court orders

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  1. 1.Judgment for the Claimant against the Respondent for Kshs. 7,000/- as notice pay
  2. 2.Kshs. 42,000/- being 6 months' salary as compensation for unfair termination
  3. 3.Costs of the suit capped at Kshs. 20,000/-

Authorities

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Legislation

  • Employment ActSection 41

Cases cited (2)

  • Douglas Wanjohi Muchemi v Geoffrey Kibui Kamau T/A Hotel Starbucks
    [2016] eKLR
  • Shankar Saklani v DHL Global Forwarding (K) Limited
    [2012] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination and employment claims (Employment 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, "Julia Wairimu Ndiritu v Forward Mobiles (K) Ltd [2019] KEELRC 1194 (KLR)", Case Analysis (2019). Cause No 237 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1194/eng@2019-07-15

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