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ELRCPartially Allowed· [2020] KEELRC 1031 (KLR)

Michael Kinyua Mutugi & 7 others v Vil Limited [2020] KEELRC 1031 (KLR)

Employment and Labour Relations Court
28 May 2020
MNMathews N. Nduma
1,071 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Eight Kenyan workers won roughly Kshs. 14 million in unpaid salaries, leave and notice pay, but lost separate house allowance claims because their pay was consolidated.

What this practically means

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Executive summary

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This was an undefended employment claim by eight former employees of a road construction contractor, filed by amended statement of claim dated 17th December 2018. The claimants sought arrear salaries of Kshs. 11,700,000, pay in lieu of leave (Kshs. 980,000), unpaid house allowance (Kshs. 1,911,000), notice pay (Kshs. 490,000), damages, interest and costs. Interlocutory judgment was entered on 18th January 2019 after service by registered post was effected, and the suit proceeded as an undefended cause. The 1st claimant testified for all eight claimants under written authority, adopting his witness statement and producing employment records, sample pay slips, demand letters and a letter from the Ministry of Labour, all unanswered. He demonstrated non-payment of salaries for 24 to 26 months and testified that the claimants suffered distress, including rental arrears and Credit Reference Bureau listing. The court found the claims for arrear salaries, leave pay and notice pay proved on a balance of probabilities. However, it held that because the claimants were paid consolidated salaries, they were not entitled to a separate house allowance, and dismissed that head. It also dismissed the claim for damages under section 49 of the Employment Act, finding the claimants had not proved violation of sections 41, 43 and 45. Judgment was entered for each claimant in specified sums totalling approximately Kshs. 13.94 million, with interest at court rates from the date of filing suit and costs of the suit. The judgment was delivered online pursuant to COVID-19 court directions.

Key legal issues

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01

Entitlement to terminal benefits (arrear salaries, leave pay, notice pay)

Holding

Claimants proved on a balance of probabilities they were owed the terminal benefits set out in the schedule, except house allowance

Reasoning

The 1st claimant testified for all eight claimants under authority, produced employment records and pay slips showing non-payment of salaries for 24 to 26 months. Demand letters and a Ministry of Labour letter went unanswered. The claims were undefended. The court found the claims for arrear salaries, leave and notice pay proved, but rejected house allowance because salaries were consolidated.

p. 4
02

Damages for failure to comply with the Employment Act

Holding

Claim for compensation under section 49 dismissed

Reasoning

Section 49 compensation requires proof of termination without valid reason and without fair procedure. The claimants did not prove violation of sections 41, 43 and 45; indeed the claim concerned non-payment of salaries rather than termination. The damages claim therefore lacked merit and was dismissed.

p. 4

Legal principles established

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  • Compensation under section 49 of the Employment Act is only available where an employee proves termination without valid reason and without fair procedure
  • House allowance is not payable separately where salary is consolidated

Court orders

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  1. 1.Judgment entered in favour of each claimant against the respondent: Michael Kinyua Mutugi – Kshs. 4,050,000; James Ngugi Gatanga – Kshs. 1,755,000; Jackson Mulilu – Kshs. 1,880,000; Jonah Melisi Jumanne – Kshs. 1,350,000; Judith Odipo – Kshs. 1,080,000; David Simiyu – Kshs. 1,400,000; Julius Nyang'au Bogonko – Kshs. 2,025,000; Augustus Ndana – Kshs. 540,000
  2. 2.Interest at court rates from date of filing suit till payment in full
  3. 3.Costs of suit to the claimants

Authorities

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Legislation

  • Employment Actsections 41, 43, 45, 49
  • Civil Procedure RulesOrder 21 rule 1
  • Civil Procedure Actsection 18
  • Constitution of KenyaArticles 159(2)(d), 48
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (implied); judgment delivered pursuant to Article 159(2)(d) and Article 48 of the Constitution and Section 18 of the Civil Procedure 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, "Michael Kinyua Mutugi & 7 others v Vil Limited [2020] KEELRC 1031 (KLR)", Case Analysis (2020). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1031/eng@2020-05-28

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