David Ambuli Ngota v Universal Newspapers Distributors Limited & another [2020] KEELRC 1205 (KLR)
The bottom line
#When a Kenyan employer's business collapses, workers can still win notice pay, severance pay and salary arrears — but only claims backed by documents survive.
What this practically means
#Executive summary
#Key legal issues
#Whether termination on cessation of the employer's business was unlawful and unfair
The claimants became redundant under Section 2 read with Section 40 of the Employment Act on 7th August 2015; the redundancy was lawful and fair and no compensation is payable.
The Nation Media Group abruptly stopped supplying newspapers on 7th August 2015, the 1st respondent's only business, so operations ceased and all claimants became redundant. The claimants failed to prove unlawful or unfair termination; moreover, they managed the business and were responsible for its collapse through failure to remit sales proceeds, so they cannot complain of unfair termination.
Entitlement to notice pay, severance pay and salary arrears
Each claimant is entitled to one month's salary in lieu of notice, severance pay at 15 days' salary per completed year of service, and unpaid salary for months worked after July 2015.
Section 40 of the Employment Act entitles redundant employees to one month's notice or pay in lieu and severance pay at not less than fifteen days per completed year of service. Because operations ceased suddenly with no time to serve notice, payment in lieu was owed. The court also found that claimants worked unpaid from August 2015 (CW1 until December, others until November) collecting debts.
Overtime, leave, and underpayment claims
All dismissed for want of proof on a balance of probabilities and, for overtime, partial time-bar.
No claim for overtime was ever made during the long service period, and no documentary evidence supported the claims. Underpayment for 2013-2015 was alleged for a period when the claimants themselves ran the business, and no prior claim was made. No evidence proved untaken leave. The claims therefore failed on the burden of proof.
Legal principles established
#- On redundancy under Section 40 of the Employment Act, an employee whose operations cease suddenly without time to serve notice is entitled to one month salary in lieu of notice and severance pay at not less than fifteen days' salary for each completed year of service
- Claims not proved on a balance of probabilities, and overtime/underpayment claims limited to the last three years before filing suit, fail
Court orders
#- 1.Judgment entered in favour of David Ambuli Ngole against the 1st respondent: one month salary in lieu of notice Kshs. 25,000; severance pay Kshs. 412,500; salary arrears for 5 months Kshs. 143,750
- 2.Judgment entered in favour of John Odoyo Okongo: one month salary in lieu of notice Kshs. 10,107.10; severance pay Kshs. 131,392.30; salary arrears for 4 months Kshs. 40,048.40
- 3.Judgment entered in favour of David Omondi Aindo: one month salary in lieu of notice Kshs. 23,262; severance pay Kshs. 11,631.20; salary arrears for 4 months Kshs. 93,049.20
- 4.Judgment entered in favour of Michael Angole Amboko: one month salary in lieu of notice Kshs. 10,107.10; severance pay Kshs. 161,713.60; salary arrears for 4 months Kshs. 40,048.40
- 5.Interest at court rates from date of filing suit till payment in full
- 6.Costs of the suit to the claimants
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "David Ambuli Ngota v Universal Newspapers Distributors Limited & another [2020] KEELRC 1205 (KLR)", Case Analysis (2020). Cause No. 130, 131, 132 and 133 of 2016 (consolidated; Cause No. 131 of 2016 as lead file). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1205/eng@2020-04-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.