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ELRCPartially AllowedCause No. 145 of 2018· [2021] KEELRC 175 (KLR)

Teresia Muthoni Mwangi v Ernest Muibu Kiarie t/a Avenue Suits Hotel [2021] KEELRC 175 (KLR)

Employment and Labour Relations Court
7 December 2021
HWHellen Wasilwa
1,885 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Nakuru court awarded a hotel worker over Kshs. 575,000 after her employer dismissed her without a hearing and paid her below Kenya's minimum wage.

What this practically means

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Executive summary

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The claimant sued the respondent, proprietor of Avenue Suits Hotel, alleging unfair termination after roughly a decade of employment as a room steward and later receptionist. She claimed notice pay, underpayments against the minimum wages orders, pay for public holidays and untaken leave, gratuity/service pay for 10 years, seven days' salary for March 2018, and compensation for unfair termination under section 49(1)(c) of the Employment Act. The respondent conceded employment but denied dismissal, contending the claimant absconded duty on 7 March 2018 after being transferred to its sister establishment, Carnation Hotel, following a show cause letter of 21 February 2018 alleging fraud. The respondent relied on authorities on desertion, arguing it took steps to trace her. The court found from the letter of 7 March 2018 that the claimant's services as receptionist were terminated. She had responded to the show cause letter denying the allegation and requesting a hearing, but no disciplinary hearing was ever held; the validity of the dismissal reason was never established. The termination was therefore unfair under section 45(2) of the Employment Act. The court awarded 10 months' salary as compensation, one month's salary in lieu of notice, underpayments for the three years preceding termination (the rest being time barred), leave pay for 2018 only, and service pay for 10 years, totalling Kshs. 575,178 less statutory deductions, with costs and interest to the claimant. Judgment delivered on 7 December 2021 by Hellen Wasilwa, J.

Key legal issues

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01

Whether the claimant was dismissed or absconded

Holding

The letter of 7 March 2018 showed services were terminated; the claimant did not abscond

Reasoning

The court found from the letter of 7/3/2018 that the claimant's services as a receptionist at Avenue Suites Hotel were terminated and she was to report to Carnation Hotel. The respondent's claim of abscondment was inconsistent with this letter. The claimant's testimony that she was turned back from Carnation Hotel for lack of communication supported the finding of termination.

p. 3
02

Whether the termination was unfair

Holding

The termination was unfair and unjustified under section 45(2) of the Employment Act

Reasoning

The claimant was served with a show cause letter alleging fraud, responded denying the allegation and requesting to be heard, but was never subjected to a disciplinary hearing. RW-1 conceded there was no disciplinary hearing concerning the issue. The validity of the reason for dismissal was never established, so both the reason and the procedure failed the section 45(2) test.

p. 3
03

Whether the claimant was underpaid

Holding

The claimant was underpaid relative to the applicable minimum wages orders; award limited to 3 years preceding termination

Reasoning

Comparing the wages actually paid (rising from Kshs. 4,500 to 7,500) with the prescribed minimums in the legal notices of 2012, 2013, 2015 and 2017, the court found the claimant was underpaid throughout. Awards were limited to the three years preceding termination as pleaded, the rest being time barred.

p. 3

Legal principles established

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  • A termination of employment is unfair where the employer fails to prove a valid reason, a fair reason related to conduct, capacity or compatibility or operational requirements, and a fair procedure
  • Where an employer alleges an employee absconded duty, the employer bears the burden of demonstrating steps taken to trace the employee

Court orders

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  1. 1.Damages for unfair termination of 10 months' salary at Kshs. 18,201.95 per month (Kshs. 182,002)
  2. 2.One month's salary in lieu of notice (Kshs. 18,202)
  3. 3.Underpayment of wages for 3 years preceding termination (Kshs. 429,562)
  4. 4.Leave pay for 2018 (Kshs. 18,202)
  5. 5.Service pay for 10 years (Kshs. 91,010)
  6. 6.Grand total of Kshs. 575,178 less statutory deductions
  7. 7.Respondent to pay costs of the suit plus interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment Actsection 49(1)(c)
  • Employment Actsection 35(1)(c)
  • Employment Actsection 36
  • Employment Actsection 41
  • Employment Actsection 45 (including 45(2))
  • Employment Act 2007section 45(2)
  • Minimum Wages Order (Legal Notice of 16/5/2017)
  • Legal Notice of 20/5/2015
  • Legal Notice of 2013 (minimum wage)
  • Legal Notice of 2012 (minimum wage)

Cases cited (2)

  • Simon Mbithi Mbane V Inter Security Services Limited
    [2018] eKLR
  • Joseph Nzioka V Smart Coatings Limited
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act and Labour Relations 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, "Teresia Muthoni Mwangi v Ernest Muibu Kiarie t/a Avenue Suits Hotel [2021] KEELRC 175 (KLR)", Case Analysis (2021). Cause No. 145 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/175/eng@2021-12-07

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