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ELRCDismissedELRC Cause No. 60 of 2018 (Memorandum of Claim dated 13th February 2018, amended 4th April 2018)· [2020] KEELRC 651 (KLR)

Hassan Abdallah Muhati v A To Z Transporters Limited [2020] KEELRC 651 (KLR)

Employment and Labour Relations Court
16 July 2020
1,356 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~5 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed an employer can lawfully declare redundancy if it follows Section 40: proper notices to union and labour officer, plus full payment of dues.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a Mechanic from 1st July 2014 at a monthly salary of Kshs. 19,009, sued for unlawful termination of employment and failure to pay terminal dues after his employment was terminated on 17th December 2016 on account of redundancy. He sought one month's salary in lieu of notice, service pay, underpayment of Kshs. 569,240, twelve months' salary in compensation, a certificate of service, costs and interest. The Respondent admitted the employment and salary but contended that it strictly complied with Section 40 of the Employment Act: it notified the Claimant's Union (Kenya Long Distance Truck Drivers & Allied Workers Union) and the Mombasa County Labour Officer of the intended redundancy more than one month before termination, notified the Claimant of the reasons and extent of the redundancy, and paid dues totalling Kshs. 47,408 covering notice pay, accrued leave and severance pay at 15 days per completed year of service. It also raised a pending related suit by the Union (Mombasa ELRC Cause No 336 of 2017) and sought a stay. Framing two issues - lawfulness and fairness of the termination, and entitlement to remedies - the court found the redundancy notice issued on 18th November 2016, payment of one month's notice pay and full statutory dues proved, and found no fault in the execution of the redundancy. No basis was established for service pay and underpayment claims. The entire claim was disallowed with each party bearing their own costs.

Key legal issues

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01

Whether the termination of the Claimant's employment on account of redundancy was lawful and fair

Holding

Yes - the Respondent complied with Section 40 of the Employment Act: it notified the Union and the County Labour Officer more than a month before termination, notified the Claimant, gave reasons and extent of the redundancy, and paid notice pay, accrued leave and severance pay.

Reasoning

The court set out the statutory definition of redundancy and the conditions in Section 40, grouping them into notices, selection criteria and payment of dues. Evidence showed the redundancy notice issued to the Labour Officer and Union on 18th November 2016, the termination letter of 17th December 2016, payment of one month's notice pay and full accrued statutory dues including severance. The Claimant admitted being paid Kshs. 47,408. Accordingly no fault was found in the execution of the redundancy.

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02

Whether the Claimant is entitled to the remedies sought

Holding

No - having found the termination lawful, the claims for notice pay, service pay, underpayment and compensation all fail.

Reasoning

Because notice pay and statutory dues had been paid under Section 40 and the redundancy was properly executed, the heads of claim - notice pay, service pay, underpayment and 12 months' compensation - lacked foundation. The Claimant's admission of receipt of Kshs. 47,408 and the proof of payment of dues dispositive of the monetary claims. The court found no basis for service pay and underpayment claims and disallowed the entire claim with no order as to costs.

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Legal principles established

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  • An employer may lawfully terminate on account of redundancy where the conditions in Section 40 of the Employment Act are met, including notification of the union and labour officer not less than one month before termination, and payment of notice pay, accrued leave and severance pay.

Court orders

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  1. 1.The Claimant's entire claim is disallowed
  2. 2.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSection 2 (definition of redundancy)
  • Employment ActSection 40(1)(a)-(g)

Cases cited (1)

  • Mombasa ELRC Cause No 336 of 2017: KLDTAWU v A to Z Transporters Limited (formerly Nairobi ELRC Cause No 2615 of 2016)
Jurisdiction invoked
First-instance jurisdiction of the Employment and Labour Relations Court over employment and labour relations disputes; the judgment does not cite a specific jurisdictional provision.

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, "Hassan Abdallah Muhati v A To Z Transporters Limited [2020] KEELRC 651 (KLR)", Case Analysis (2020). ELRC Cause No. 60 of 2018 (Memorandum of Claim dated 13th February 2018, amended 4th April 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/651/eng@2020-07-16

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