Peter Muchemi Mwangi & 3 others v Blue Seas Car Hire and Tours Limited t/a Temple Road Total Service Station [2020] KEELRC 1629 (KLR)
The bottom line
#A Kenyan court ruled that losing your job when a business changes hands counts as termination, but workers only got notice pay and NSSF dues.
What this practically means
#Executive summary
#Key legal issues
#Whether a termination of employment took place when the employer's dealership was taken over
A termination took place for good cause albeit without notice
The court found the facts undisputed that an abrupt event occurred on 15th September 2016 without notice, with a hostile takeover that did not engage the employees. Although the Respondent asserted the employees were absorbed by the new dealer, the employees lost continuous service and some quit, so a termination without notice was found. However the cause was good, so the full remedial provisions were not triggered.
What remedies flow from a termination without notice but for good cause
Only notice pay and unpaid NSSF dues were awarded; general compensation under Sections 43, 45 and 49 was declined
Applying the Section 49 factors, the court considered the unprecedented and unexpected nature of the event, the employees' conduct and continued engagement with the new dealer, and concluded that only notice pay and NSSF dues were due, capping costs across the consolidated files.
Legal principles established
#- An abrupt change of ownership resulting in job losses amounts to a termination for good cause albeit without notice
- In determining remedies under Section 49 of the Employment Act the court considers the wishes of the employee, the circumstances of termination, contribution of the employee, practicability of reinstatement, length of service and mitigation among other factors
Court orders
#- 1.Peter Muchemi Mwangi to be paid NSSF dues of Kshs. 4,800 and one month's salary in lieu of notice of Kshs. 9,930
- 2.Peninah Wanjiru Mwangi to be paid NSSF dues of Kshs. 4,800
- 3.Stephen Macharia Gachiuri to be paid NSSF dues of Kshs. 4,800 and one month's salary in lieu of notice of Kshs. 9,930
- 4.James King'ori Kairu to be paid NSSF dues of Kshs. 4,800 and one month's salary in lieu of notice of Kshs. 10,370
- 5.Costs capped at Kshs. 40,000 for all the 4 files
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 43, 45 and 49 applied)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Peter Muchemi Mwangi & 3 others v Blue Seas Car Hire and Tours Limited t/a Temple Road Total Service Station [2020] KEELRC 1629 (KLR)", Case Analysis (2020). Cause No. 174 of 2017 (consolidated with Causes Nos. 175, 176 and 178 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1629/eng@2020-02-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.