Joshua Toroni Ntabo v Hipora Business Solutions (Ea) Limited (Cause 28 of 2019) [2020] KEELRC 1062 (KLR)
The bottom line
#A Kenyan court upheld a redundancy on a fixed-term contract, ruling severance is only owed per completed year of service.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy complied with section 40 of the Employment Act
The redundancy was lawful; notice was given (payment in lieu), the labour officer was notified and terminal dues were paid and acknowledged
Section 40 read with section 2 permits termination on operational requirements. The claimant received notice dated 5 March 2018 effective immediately with payment in lieu, the labour officer was notified, and he was paid terminal dues and signed a discharge voucher. Having served only 3 complete months under the last fixed term contract, he was not entitled to further severance under section 40(1)(g).
Whether there was breach of contract
No breach; the parties were governed by lawful annual fixed term contracts which operated on their terms
The employment was regulated by successive annual fixed term contracts, the last dated 1 January 2018. Each contract is separate and distinct; the last is the operational and regulating document. The redundancy terminated the last contract before its expiry but in accordance with section 40, so no compensable breach arose.
Claims for deductions, allowances and holiday pay
Uniform and polo t-shirt refunds are available upon return of the items; lunch deductions, relocation allowance and public holiday pay fail
Refund of uniform deductions on clearance is reasonable. Food provision was not contractually agreed, so consumed subsidised meals cannot be reclaimed. Relocation allowance applied only to employer-initiated transfers, not disciplinary or intra-town moves. The claimant was contracted for 6 days weekly and paid overtime, and the holidays claimed fell outside his 2018 contract.
Sacco dues
Claims against the respondent fail; Sacco claims lie against the Saccos under their rules
Vachu and Metropolitan Saccos are separate entities outside the respondent's control; membership is voluntary and by application. Deductions were founded on membership. Following Javan Were Mbango v H. Young & Co. (EA) Ltd, an employee must pursue savings and dues through the Sacco's collective rules, not from the employer after termination.
Legal principles established
#- Fixed term contracts operate on their terms and each is separate and distinct from any other; the last contract regulates the employment relationship
- Severance pay under section 40(1)(g) of the Employment Act is payable for completed years of service
- Employer may deduct for branded items but must refund upon return of the items on termination
- Employees who voluntarily join Saccos must pursue Sacco dues under Sacco rules, not from the employer, after termination
Court orders
#- 1.The claims made are dismissed
- 2.The claimant shall clear with the respondent to access the wage deductions for uniform and polo t-shirt
- 3.Each party shall pay own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (labour dispute under Cause No. 28 of 2019)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Joshua Toroni Ntabo v Hipora Business Solutions (Ea) Limited (Cause 28 of 2019) [2020] KEELRC 1062 (KLR)", Case Analysis (2020). Cause No. 28 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1062/eng@2020-05-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.