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ELRCPartially AllowedNot stated in the judgment as provided· [2019] KEELRC 1799 (KLR)

Jackson Angwenyi Abuga v Manmo Co-operative Savings & Credit Society Limited [2019] KEELRC 1799 (KLR)

Employment and Labour Relations Court
26 April 2019
3,300 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~13 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The claimant, employed as a Manager by the respondent Sacco from January 2011 and terminated effective 31st August 2014 on account of old age and frailty, sued for unfair termination and withheld terminal benefits. The court framed three issues: limitation, fairness of termination, and reliefs. On limitation, it held that time runs from termination under section 90 of the Employment Act, so a suit filed on 9th March 2015 was within three years. On substance, the court found old age does not per se amount to incapacity; the employer knew of the claimant's age at hiring and produced no evidence of incapacity, rendering the termination substantively unfair. It also held the claimant was employed for an indefinite term, not a fixed term as he contended. On procedure, the respondent failed to prove the mandatory hearing under section 41, so the termination was procedurally unfair. On reliefs, the court awarded 10 months' salary compensation (assessed on pleaded gross pay of Kshs. 36,675 at Kshs. 366,750), gratuity at 25% of annual basic pay for 3 years (Kshs. 171,828), and house, medical and commuter allowances from 1.6.2012 to 31.8.2014, totalling Kshs. 1,240,578. The claims for one month's salary in lieu of notice (having been paid three months), leave allowance (never taken) and underpayment (no clear particulars pleaded) were dismissed. The claimant also received a certificate of service, costs plus interest at court rates, with the award subject to statutory deductions.

Key legal issues

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01

Whether the suit is time barred under section 90 of the Employment Act

Holding

The suit is not time barred; it was filed within 3 years of the termination on 31st August 2014

Reasoning

The respondent argued the cause of action arose in 2011. The court held the correct trigger point is the date of termination, which the respondent admitted was by letter dated 21st August 2014 effective 31st August 2014. The suit filed on 9th March 2015 was about 7 months later, well within the 3-year limitation period under section 90.

p. 3
02

Whether the reason for termination (old age and frailty) was a valid and fair reason

Holding

The termination was substantively unfair; the respondent employed the claimant knowing his age and produced no evidence of incapacity

Reasoning

Old age does not per se constitute incapacity. The employer knew of the claimant's advanced age when hiring and enjoyed his services for over 3 years, and was therefore bound to prove on a balance of probability that he could no longer discharge his duties as manager. Rw1 tendered no such evidence, rendering the termination substantively unfair.

p. 3
03

Whether the procedure followed was fair

Holding

The termination was procedurally unfair because the respondent did not prove the claimant was accorded a hearing under section 41

Reasoning

Termination for cause is subject to the mandatory procedure in section 41, including explanation of reasons and hearing representations. Rw1 only mentioned payment of 3 months' salary in lieu of notice and gave no evidence of a hearing. Failure to prove a fair hearing rendered the termination procedurally unfair.

p. 3
04

Applicability of the 2013 Terms and Conditions of Service and entitlement to allowances and gratuity

Holding

The claimant was entitled to the salary increment, allowances and gratuity effective from 1.6.2012 because the increment was automatic and implementation from December 2014 did not waive the arrears

Reasoning

The terms were approved on 28.2.2014 with salary increment backdated to 1.6.2012. Any deferment to December 2014 was not shown to have been voluntarily accepted, and even if consented, it would only postpone the date of payment, not waive the benefits. The respondent implemented the terms from December 2014, entitling the claimant to arrears; gratuity at 25% of annual basic pay applied under clause 7(iii).

p. 4
05

Nature of the employment contract

Holding

The claimant was employed for an indefinite term terminable by notice or for cause, not a fixed term

Reasoning

Although the claimant contended his 3-year contract was impliedly renewed to 31.12.2016, the court, after considering the appointment letter dated 5.3.2013, agreed with the respondent that the employment was not for a fixed term but for an indefinite term terminable by notice or for cause. This did not save the termination, which failed on substance and procedure.

p. 3

Legal principles established

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  • Termination is unfair unless the employer proves both a valid and fair reason and a fair procedure
  • Old age and frailty do not per se amount to incapacity; the employer must prove the employee is incapable of discharging duties
  • Termination for cause attracts the mandatory hearing procedure under section 41 of the Employment Act
  • A claim under section 90 of the Employment Act is filed within 3 years of termination, not of the start of employment

Court orders

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  1. 1.Judgment entered for the claimant against the respondent for Kshs. 1,240,578 comprising compensation for unfair termination (Kshs. 366,750), gratuity for 3 years (Kshs. 171,828), house allowance (Kshs. 260,000), medical allowance (Kshs. 234,000) and commuter allowance (Kshs. 208,000)
  2. 2.The claimant to be issued with a certificate of service
  3. 3.Costs to the claimant plus interest at court rates from the date of judgment
  4. 4.The award of damages is subject to statutory deductions

Authorities

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Legislation

  • Employment Actsection 90
  • Employment Actsections 8 and 74
  • Employment Actsections 41, 43, 44 and 45(2)(c) & (5)
  • Employment Actsection 49(1)(c)
  • Employment Actsection 51
  • Evidence Actsection 119

Cases cited (6)

  • Anthony Mkala Chitavi v Malindi Water & Sewerage Co. Limited
    [2013] eKLR
  • John Rioba Maugo v Riley Falcon Security Services Limited
    [2016] eKLR
  • Maria Machocho v Total Kenya Limited
    [2013] eKLR
  • Fred Mudave Gogo v G4S Security Services (K) Ltd
    [2014] eKLR
  • Abraham Gumba v Kenya Medical Supplies Authority
    [2014] eKLR
  • John Benson Githinji v Attorney General & 4 Others
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; suit for unfair termination and terminal benefits)

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, "Jackson Angwenyi Abuga v Manmo Co-operative Savings & Credit Society Limited [2019] KEELRC 1799 (KLR)", Case Analysis (2019). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1799/eng@2019-04-26

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