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ELRCPartially AllowedELRC Appeal (Nairobi), arising from CMEL No. 113 of 2018· [2021] KEELRC 1046 (KLR)

Multipackaging Limited T/A Printpak v Kilatya & another (Employment and Labour Relations Appeal 24 of 2019) [2021] KEELRC 1046 (KLR)

Employment and Labour Relations Court
2 September 2021
OMOnesmus N. Makau
4,691 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed the workers were unfairly terminated but halved their compensation to six months' salary each.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Nairobi against the judgment of the Senior Principal Magistrates Court at Nairobi in CMEL No. 113 of 2018, which found that two machine operators were unfairly terminated by their employer and awarded them notice pay, house allowance for 2001-2011, service pay, 12 months' salary compensation and certificates of service. The employer appealed on ten grounds condensed into three: that the claimants failed to prove unfair termination on a balance of probability, that the trial court gave no reasons for finding unfairness, and that the awards were inflated. The court framed four issues: whether the contracts lapsed or were terminated; whether termination was unfair; entitlement to the reliefs; and whether quantum should be disturbed. It held that after the 2013 fixed-term contracts expired on 30.8.2015 and the parties continued working, a fresh indefinite contract arose, which was terminated rather than lapsed. The trial court was faulted for deciding liability without reasons, contrary to Rule 28(2) of the ELRC Procedure Rules and Order 21 Rule 4 of the Civil Procedure Rules, but the appeal court's own re-evaluation found unfair termination established: the alleged absconding was unrebutted evidence of denial of access at the gate; show cause letters were not proved served; and the union meeting of 18.1.2018 occurred after the 6.12.2017 dismissal, breaching section 41. The 12 months' compensation was set aside for failure to consider section 49(4) factors and substituted with 6 months' salary each (total Kshs. 143,130.05 per respondent), house allowance and service pay claims up to January 2011 were struck as time barred under section 90, certificates of service were affirmed, and costs of the subordinate court with interest were allowed but no costs for the appeal.

Key legal issues

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01

Status of the employment relationship at termination

Holding

The respondents' contracts did not lapse automatically on 31.7.2017; they were terminated by the appellant for alleged misconduct.

Reasoning

The 2013 fixed-term contracts expired on 30.8.2015, but the parties continued working without renewal. Only the employer had discretion to extend. Continued performance of obligations impliedly created a fresh indefinite contract terminable on notice or for cause under the Employment Act. The 6.12.2017 letter confirming non-renewal for misconduct evidenced termination, not natural lapse.

p. 4
02

Adequacy of the trial court's judgment

Holding

The trial court erred by concluding liability without giving reasons, contrary to Rule 28(2) ELRC Procedure Rules and Order 21 Rule 4 CPR.

Reasoning

The magistrate found the case proved on a balance of probability without stating findings on valid reason or fair procedure under section 45. Judgments must state facts, issues, decision and reasons. However, on the court's own re-evaluation of the evidence, there was sufficient basis to find unfair termination.

p. 4
03

Fairness of the termination

Holding

Termination was substantively and procedurally unfair: absconding and failure to respond to show cause letters were unproved, and no fair hearing preceded dismissal.

Reasoning

The evidence that respondents were barred by security guards was unrebutted; no proof of service of show cause letters; the union meeting of 18.1.2018 occurred after separation. Dismissal on reasonable suspicion of machine tampering was substantively permissible under section 44(4)(g), but the section 41 hearing requirement was breached, rendering the termination unfair under section 45.

p. 5
04

Quantum of compensation

Holding

12 months' compensation set aside and 6 months awarded, reflecting over ten years of service and claimants' contribution to termination.

Reasoning

Section 49(4) factors were not considered by the trial court, warranting interference. The appellate court exercised its discretion afresh, awarding 6 months' salary computed on the General Wage Order minimum for a printing machine operator (basic Kshs. 17,447.15 plus Kshs. 3,000 house allowance).

p. 5

Legal principles established

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  • Where a fixed-term contract expires but the parties continue working, they impliedly enter into a fresh contract for an indefinite period terminable upon notice or for cause under the Employment Act.
  • An employer bears the burden under sections 43 and 45 of the Employment Act of proving valid reasons and fair procedure for termination; failure to prove service of show cause letters and rebuttal of evidence of denial of access defeats the alleged absconding.
  • A disciplinary meeting held after separation cannot satisfy the fair procedure requirement of section 41.
  • Maximum compensation of 12 months' salary cannot stand where the trial court failed to consider the factors in section 49(4) of the Employment Act.

Court orders

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  1. 1.Set aside the trial court's award of 12 months' salary compensation for unfair termination and substituted an award of 6 months' salary compensation to each claimant
  2. 2.Awarded each respondent Kshs. 20,447.15 in salary in lieu of notice and Kshs. 122,682.90 compensation, total Kshs. 143,130.05 each
  3. 3.Directed issuance of Certificates of Service to each respondent
  4. 4.Award subject to statutory deductions and in addition to costs of the suit in the subordinate court plus interest at court rates from the date of the impugned judgment
  5. 5.Declined the claims for house allowance and service pay for the period up to January 2011 as time barred
  6. 6.Awarded no costs for the appeal
On appeal from
Senior Principal Magistrates Court at Nairobi
CMEL No. 113 of 2018
Jurisdiction invoked
First appeal under the Employment and Labour Relations Court Act / Civil Procedure appellate jurisdiction from the magistrates' court

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, "Multipackaging Limited T/A Printpak v Kilatya & another (Employment and Labour Relations Appeal 24 of 2019) [2021] KEELRC 1046 (KLR)", Case Analysis (2021). ELRC Appeal (Nairobi), arising from CMEL No. 113 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1046/eng@2021-09-02

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