James Kioko Mwanthi & 12 others v Athi River Shalom Community Hospital (Cause 1062 of 2017) (Employment and Labour) [2021] KEELRC 690 (KLR)
The bottom line
#A Kenyan hospital was ordered to pay 11 workers it pushed out for refusing to sign contracts with an outsourcing firm.
What this practically means
#Executive summary
#Key legal issues
#Existence of a contract of service
On a balance of probabilities, the claimants established a contract of service with the respondent, evidenced by memo, payslips, NSSF statements and other documents even where contracts of employment were lacking
Only the 5th and 6th claimants produced employment contracts, but the others relied on circumstantial documents including the respondent's memo of 2nd January 2017, payslips, NSSF statements and recognition letters. The court held these documents evidenced an employment relationship despite not being contracts of employment.
Whether the termination was unfair and unlawful
The respondent's conduct of ambushing the claimants with an outsourcing memo and forcing them out of the workplace for refusing to sign new contracts amounted to constructive dismissal and unfair termination for want of substantive and procedural fairness
The respondent outsourced cleaning services without consulting staff, gave them one day to sign contracts with Rene Superclean Services Limited, and chased them from the premises when they refused. The claimants' uncontroverted evidence showed no termination letters, reasons or notice. This conduct constituted a repudiatory breach amounting to constructive dismissal and unfair termination contrary to sections 41 and 45 of the Employment Act and Article 41 of the Constitution.
Remedies entitlement
The eleven claimants were entitled to notice pay, house allowance for duration served, modest compensation (one or two months' salary) and certificates of service; leave, overtime and public holiday claims failed for want of proof
The court applied section 49(1)(c) of the Employment Act in assessing compensation, considering duration of service and the claimants' own failure to take proactive steps to engage the respondent. House allowance was mandatory under section 31. Overtime and public holiday claims lacked evidential support, as did the 12-month maximum compensation claim.
Legal principles established
#- An employer may not transfer employees to an outsourcing agency without the express acceptance of each affected employee, and must settle all outstanding obligations before outsourcing takes effect
- Forcing employees out of the workplace for refusing to sign new contracts amounts to a repudiatory breach and constructive dismissal
- House allowance is a statutory right under section 31 of the Employment Act, and employers may satisfy it by providing housing, paying house allowance, or paying a consolidated salary
- Change management is a process requiring employer consultation and preparation of employees, not an event imposed on them
Court orders
#- 1.Judgment entered for the eleven (11) successful claimants for one month's salary in lieu of notice, house allowance for the duration served, damages for unfair termination (two months' gross salary for those who served 2 years or more, one month for those who served less), and certificates of service, as itemised per claimant
- 2.Claim of the 6th claimant (Martin Ndunda Muia) dismissed; he is entitled only to a certificate of service
- 3.Claim of the 13th claimant (Kennedy Omwoso Olanda) withdrawn by his counsel on record
- 4.Costs of the suit awarded to the eleven (11) successful claimants
- 5.Interest at court rates till payment in full
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 and Article 41 of the Constitution of Kenya, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "James Kioko Mwanthi & 12 others v Athi River Shalom Community Hospital (Cause 1062 of 2017) (Employment and Labour) [2021] KEELRC 690 (KLR)", Case Analysis (2021). ELRC Cause (memorandum of claim dated 8th June 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/690/eng@2021-10-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.