Jacob Chacha v Lti Kisii Safari Inns Ltd t/a Kaskazi Beach Hotel [2020] KEELRC 649 (KLR)
The bottom line
#A Kenyan hotel's flawed redundancy cost it over Kshs. 3.4 million because it skipped mandatory legal steps before ending the employee's job.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy was lawful and fair under Section 40 of the Employment Act
The redundancy was substantively and procedurally unfair; apart from the termination letter, there was no evidence of compliance with Section 40, and the accusations of poor performance and misconduct cast doubt on the genuineness of the redundancy
The Court set out the seven conditions in Section 40 grouped into notices, objective selection criteria and statutory dues. Only a termination letter dated 2nd November 2014 was produced; there was no notification to the Labour Officer, no selection criteria, and no proof of payment of statutory dues. The Respondent, which did not attend the hearing, also introduced unproved accusations of poor performance and misconduct, suggesting the termination was motivated by reasons other than redundancy.
Whether the Claimant was entitled to the remedies sought
Compensation of six months' salary, unpaid salary and leave arrears and severance pay were awarded; pay in lieu of notice and general damages were refused
The Court considered the Claimant's length of service and the Respondent's failure to observe the law in fixing compensation at six months' salary. Salary and leave arrears were uncontested and payable, and a declared redundant employee is entitled to severance pay at 15 days' pay per completed year. Notice pay was disallowed because notice had been given, and general damages were dismissed for lack of basis.
Whether the Respondent's counterclaim was proved
The counterclaim failed as it was unsupported by evidence
The Respondent alleged professional negligence, including an irregular payment of Kshs. 600,000 to a former employee named Campbell, and claimed that amount plus interest and general damages. The Respondent did not attend the hearing despite due notification, and the accusation was not supported by any evidence, so the counterclaim was unproved.
Legal principles established
#- Section 40 of the Employment Act requires two separate and distinct notices of at least 30 days each for a valid redundancy - a redundancy notice to the employee/union and Labour Officer, and a termination notice
- The conditions under Section 40 of the Employment Act are mandatory, not optional, and a redundancy undertaken outside them is an unfair termination
- Where the selection criteria for redundancy is non-existent or opaque, the statutory threshold of Section 40(1)(c) is not met
Court orders
#- 1.Judgment entered in favour of the Claimant for 6 months' salary in compensation of Kshs. 1,500,000
- 2.Payment of outstanding salary and leave pay arrears of Kshs. 1,718,200
- 3.Severance pay for 2 years of Kshs. 250,000 (total award Kshs. 3,468,200)
- 4.Interest at court rates from the date of judgment until payment in full
- 5.The Claimant awarded the costs of the case
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (original claim for unfair termination)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Jacob Chacha v Lti Kisii Safari Inns Ltd t/a Kaskazi Beach Hotel [2020] KEELRC 649 (KLR)", Case Analysis (2020). Cause No 922 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/649/eng@2020-07-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.