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ELRCPartially AllowedNot stated in the judgment text· [2019] KEELRC 1589 (KLR)

Kenya Hotels and Allied Workers Union v Clement Nganga Kamau & another [2019] KEELRC 1589 (KLR)

Employment and Labour Relations Court
17 May 2019
788 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~3 min to read original · ~4 min brief

The bottom line

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A Nairobi hotel that simply shut its doors without following Kenya's redundancy procedure was ordered to pay its waiters compensation and terminal dues.

What this practically means

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Executive summary

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A trade union claimant filed a memorandum of claim on 13.05.2015 on behalf of three grievants - Martin Chege Kinuthia, Daniel Maina Mugo and Carolyne Nekoye Simiyu - alleging refusal by the respondents to pay terminal dues and accrued rights after the grievants, employed as waiters, found the respondents' River Road premises in Nairobi closed on 27.11.2014. The claimant sought a declaration that the redundancy was unfair and unprocedural, maximum compensation and terminal dues, plus costs. The 1st respondent, proprietor of the 2nd respondent, was served at his home but neither entered appearance nor filed a response. CW Martin Chege Kinuthia testified. The Court framed one issue: whether the claimant was entitled to the remedies prayed for. It held the grievants were employees of the 1st respondent in his establishment, that the closure of the business amounted to constructive redundancy effected without compliance with section 40 of the Employment Act, 2007, rendering the termination unfair and unlawful. However, the claimant's reliance on the Regulation of Wages (Agricultural Industry) (Amendment) Order, 2012 was rejected as inapplicable to the hotel industry, so claims computed on underpayments, overtime, public holidays and related bases failed. The Court awarded each grievant six months' salary as compensation under section 49, two months' pay in lieu of the prescribed notices, 15 days' severance per completed year, one month's salary per year as service pay, and three months' pay in lieu of annual leave, totalling Kshs.86,000 for Martin, Kshs.62,000 for Carolyne and Kshs.68,000 for Daniel, plus fixed costs of Kshs.60,000 to the claimant.

Key legal issues

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01

Whether the grievants' termination amounted to lawful redundancy

Holding

It was constructive redundancy effected without complying with section 40 of the Employment Act, hence unfair and unlawful

Reasoning

The grievants reported to work on 27.11.2014 and found the respondent's premises closed; the business was closed without notice or the prescribed redundancy procedure. The Court therefore treated the closure as constructive redundancy and found the termination unfair and unlawful for failure to comply with section 40 of the Employment Act, 2007.

p. 1
02

Whether the Regulation of Wages (Agricultural Industry) (Amendment) Order, 2012 applied to the grievants

Holding

It did not apply because the grievants worked in the hotel industry

Reasoning

The claimant relied on a Wage Order effective 02.07.2012 applicable to the agricultural industry, yet the grievants were waiters in a hotel establishment. The claimant failed to justify its applicability, so claims computed on that basis (underpayments, overtime, public holidays, gratuity and severance on that scale) failed.

p. 2
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What remedies were due to the grievants

Holding

Six months' salary compensation under section 49, two months' pay in lieu of notices under section 40, 15 days' severance per completed year, service pay per completed year, and three months' pay in lieu of annual leave

Reasoning

Considering each grievant's period of service, the breach of section 40 leading to abrupt termination without notice, and that each grievant did not contribute to the termination and had a clean record, the Court awarded compensation and statutory dues, quantified per grievant at the last monthly pay of Kshs.4,000.

p. 2

Legal principles established

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  • Closure of business premises without compliance with section 40 of the Employment Act amounts to constructive redundancy and unfair, unlawful termination
  • Where a redundancy is unfair, compensation may be awarded under section 49 considering length of service, the breach and the employee's clean record

Court orders

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  1. 1.Declaration that the constructive redundancy was unfair and unprocedural
  2. 2.The respondents to pay the claimant Kshs.60,000.00, Martin Chege Kinuthia Kshs.86,000.00; Carolyn Nekoye Simiyu Kshs.62,000.00; and Daniel Maina Mugo Kshs.68,000.00 by 01.07.2019 failing interest at Court rates from the date of judgment till full payment
  3. 3.Costs of the suit fixed at Kshs.60,000.00 in favour of the claimant

Authorities

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Legislation

  • Employment Actsection 40
  • Employment Actsection 49
  • Regulation of Wages (Agricultural Industry) (Amendment) Order2012 (effective 02.07.2012)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 40 and 49 applied)

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, "Kenya Hotels and Allied Workers Union v Clement Nganga Kamau & another [2019] KEELRC 1589 (KLR)", Case Analysis (2019). Not stated in the judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1589/eng@2019-05-17

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