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ELRCPartially AllowedCause No 715 of 2016· [2021] KEELRC 896 (KLR)

Joseph Muriungi Rukioya v Methodist Church of Kenya [2021] KEELRC 896 (KLR)

Employment and Labour Relations Court of Kenya
24 September 2021
3,275 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The claimant, employed by the respondent from 9th January 2009 as an assistant internal auditor and later promoted to Project Manager at Marimati Rural Training Centre, sued for Kshs 4,309,557.00 over unpaid salary, notice pay, leave, compensation for unfair termination, unremitted provident funds and loan penalties. His salary was withheld from January 2015 and his employment was terminated by letter dated 28th July 2015, effective 4th August 2015, on the ground that the centre could no longer afford his salary. The respondent filed no response to the memorandum of claim and did not appear at the hearing, whereupon the court heard the claimant's unchallenged evidence. The court framed three issues: unfair labour practice, lawfulness of the termination, and entitlement to reliefs. It held that the transfer to the centre did not extinguish the employment relationship or transfer the salary obligation, so withholding salary breached the contract and Section 17(1) of the Employment Act and amounted to an unfair labour practice under Article 41(1) of the Constitution. The termination reason was neither valid nor fair, and the employer gave only 7 days' notice against a contractual 3 months and accorded no hearing, contrary to Sections 41, 43(1) and 45(2) of the Employment Act and the respondent's own HRM Manual. Judgment was entered for the claimant in the sum of Kshs 3,340,085.00, covering notice pay, 9 months' compensation, unpaid salary for 7 months 4 days, 2015 leave allowance and 27.5 accrued leave days, with interest at court rates and subject to statutory deductions. Awards for provident fund, 2014 leave allowance and loan penalties were declined. The respondent was ordered to bear the costs of the suit.

Key legal issues

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01

Whether withholding of salary constituted an unfair labour practice

Holding

Yes. Withholding salary for about 7-8 months without justifiable cause breached the employment contract and Section 17(1) of the Employment Act, and constituted an unfair labour practice contrary to Article 41(1) of the Constitution.

Reasoning

The claimant's salary was payable by the respondent under the letter of appointment. The transfer letter to Marimati Rural Training Centre did not alter the contractual terms or transfer the salary obligation to the centre. The respondent breached both the contract and the mandatory statutory duty under Section 17(1) of the Employment Act. The withholding exposed the claimant to pecuniary embarrassment and amounted to an unfair labour practice under Article 41(1).

p. 3
02

Whether the termination was unlawful and unfair

Holding

Yes. The reason advanced (that the centre could no longer afford his salary) was neither valid nor fair as the claimant remained the respondent's employee, and fair procedure was not followed.

Reasoning

Under Sections 43(1) and 45(2) of the Employment Act and the respondent's own HRM Manual, the employer had to prove a valid, fair reason and fair procedure. Inability of the centre to pay was not a valid reason since the employment relationship subsisted with the respondent. Only 7 days' notice was given against a contractual 3 months' notice, and no hearing or explanation of reasons was accorded as required by Section 41(1).

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03

Entitlement to reliefs

Holding

Claimant awarded 3 months' salary in lieu of notice, 9 months' gross salary as compensation for unfair termination, unpaid salary for 7 months 4 days, leave allowance for 2015 and accrued leave days; provident fund, 2014 leave allowance and loan penalties refused.

Reasoning

The court awarded the pleaded heads only to the extent supported by evidence and law: notice pay per the contract; 9 months' compensation considering the no-fault termination and unfair labour practice; unpaid salary adjusted to 7 months 4 days since service ended on 4th August; and prorated leave. Provident fund contributions had been reimbursed; no evidence supported the 2014 leave allowance or loan penalties.

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Legal principles established

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  • An employer must pay the entire amount of wages earned by or payable to an employee for work done, and failure to do so breaches both the contract and a mandatory statutory provision
  • Transfer of an employee does not extinguish the employment relationship with the original employer nor diminish accruing rights, including the right to remuneration
  • An employer bears the burden of proving a valid and fair reason for termination and fair procedure, failing which termination is unfair
  • Inability to pay salary is not a valid or fair reason for termination where the employment relationship subsists with the original employer
  • Beyond notice, an employer must explain reasons for termination in the presence of another employee or union official and consider the employee's representations before terminating

Court orders

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  1. 1.Judgment entered in favour of the claimant against the respondent in the total sum of Kshs 3,340,085.00
  2. 2.3 months' gross salary in lieu of notice - Kshs 494,100.00
  3. 3.Compensation equivalent to 9 months' gross salary - Kshs 1,482,300.00
  4. 4.Unpaid salary for 7 months 4 days - Kshs 1,174,860.00
  5. 5.Leave allowance for 2015 - Kshs 37,850.00
  6. 6.Accrued leave days for 2014 and 2015 (27.5 days) - Kshs 150,975.00
  7. 7.Interest at court rates from the date of judgment until payment in full
  8. 8.Award subject to statutory deductions
  9. 9.Respondent to bear the costs of the suit

Authorities

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Legislation

  • Employment ActSection 17(1)
  • Employment ActSection 17(10)
  • Employment ActSection 41
  • Employment ActSection 43(1)
  • Employment ActSection 45(2)
  • Constitution of KenyaArticle 41(1)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (5)

  • Postal Corporation of Kenya vs Andrew K. Tanui
  • Ol Pejeta Ranching Limited vs David Wanjau Muhoro
  • Kenfreight (EA) limited vs Benson K. Nguti
    Civil Appeal No. 31 of 2015
  • Christopher Kinama Mutunga vs Neno Evangelism Centre through its registered Trustees
  • Elizabeth Washeke & 62 Others vs Airtel Networks (K) Ltd & another
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under Article 162(2) of the Constitution (implied; claim filed under the Employment Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Joseph Muriungi Rukioya v Methodist Church of Kenya [2021] KEELRC 896 (KLR)", Case Analysis (2021). Cause No 715 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/896/eng@2021-09-24

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