Agnes Gesare Ogutu v Fun An Shop Limited & another [2020] KEELRC 1737 (KLR)
The bottom line
#A Kenyan court awarded a cashier Kshs.307,122 after her employer closed her branch without following redundancy rules, showing employers must keep proper records.
What this practically means
#Executive summary
#Key legal issues
#Nature of the Claimant's employment - casual or regular employee
The Claimant was a regular employee, not a casual employee, her employment having converted on working more than 30 days continuously.
The Respondent called no witness and produced no records as required under Sections 10(6) and 10(7) of the Employment Act, shifting the burden to it. The Claimant's uncontroverted evidence that she was employed therefore stood, and continuous service beyond 30 days converted her engagement into a regular contract under Section 37(1).
Whether the termination amounted to a redundancy
Closing the branch without transferring the Claimant or complying with Section 40(1) of the Employment Act amounted to an unlawful redundancy.
The Respondent conceded it closed the shop where the Claimant worked. It gave no one month's notice to the employee or labour officer, made no selection on seniority or skill, paid no leave in cash, no notice or wages in lieu, and no severance pay. This breached Sections 40(1), 41, 44(2) and 45(1) of the Employment Act.
Whether the Claimant was entitled to notice pay, house allowance, leave, severance and overtime
All these claims succeeded as the Respondent led no evidence to controvert them; overtime was however limited to 12 months.
The Respondent produced no records of notice, house allowance payment, leave taken or hours worked. Leave accrues at 21 days per year, giving 84 days over 4 years. Overtime at 2 hours daily for 6 days a week for 52 weeks at 1.5 times rate was awarded, though the correct formula would yield a higher figure.
The correct basis of salary for computing the awards
The court read minimum statutory terms into the contract, fixing basic salary at Kshs.17,118 (cashier's rate in 2011) plus 15% house allowance.
Sections 3(6) and 26 of the Employment Act as read with Section 48 of the Labour Institutions Act require minimum statutory terms to be read into every contract. The Respondent denied employing the Claimant but never stated the nature of her employment or produced records, so her testimony that she was a cashier was accepted.
Legal principles established
#- If an employer fails to produce a written contract or written particulars, the burden of proving or disproving an alleged term of employment falls on the employer.
- Continuous employment exceeding 30 days converts a casual employee's engagement into a regular contract of service.
- An employer who closes a business and fails to comply with Section 40(1) of the Employment Act renders the affected employee redundant contrary to Sections 41, 44(2) and 45(1).
- Where the employer fails to adduce any evidence, the uncontroverted averments of the claimant must be taken as correct.
Court orders
#- 1.Notice pay of Kshs.19,685.60 being consolidated wage (basic salary of Kshs.17,118 plus 15% house allowance)
- 2.Leave pay of 84 days based on basic pay at Kshs.55,304.30
- 3.Severance pay for 4 years at Kshs.39,503
- 4.House allowance of Kshs.123,249.60 (Kshs.2,567.70 x 4)
- 5.Overtime pay of Kshs.69,379.20 (for 12 months only, 2 hours per day, 6 days a week, 52 weeks, at 1.5 times rate)
- 6.Total award of Kshs.307,122
- 7.Respondent to pay the Claimant's costs
- 8.Interest to accrue from date of judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Institutions Act (not expressly cited in judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Agnes Gesare Ogutu v Fun An Shop Limited & another [2020] KEELRC 1737 (KLR)[2020] KEELRC 1737 (KLR)31 Jan 2020
Cite this brief
#Cite this brief
Caselaw, "Agnes Gesare Ogutu v Fun An Shop Limited & another [2020] KEELRC 1737 (KLR)", Case Analysis (2020). Nairobi ELRC Cause 1035 of 2015 (as cited in submissions; judgment does not state its own cause number). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1737/eng@2020-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.