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ELRCPartially AllowedNot stated in judgment· [2021] KEELRC 1771 (KLR)

Christopher Muli Mbiti v Ready Consultancy Limited [2021] KEELRC 1771 (KLR)

Employment and Labour Relations Court
6 May 2021
LNLinnet Ndolo
1,253 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled a security guard's redundancy unfair because his employer ignored mandatory Employment Act procedures, awarding him over Kshs. 254,000.

What this practically means

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Executive summary

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The Claimant, a security guard employed by the Respondent from September 2009 on a monthly salary of Kshs. 20,020, was terminated by letter dated 10th October 2016 on account of redundancy. He claimed notice pay, leave pay, severance pay, 12 months' compensation and a certificate of service. The Respondent denied the employment and termination, asserting the redundancy letter was issued erroneously, recalled four days later, and that the Claimant was offered a transfer to Kisumu on unchanged terms which he declined, after which a show cause letter was issued. The Claimant denied receipt of the transfer and show cause letters. The court found the Respondent's allegations unsupported by any witness testimony and therefore unverified and unproved, leaving the redundancy letter as the only solid evidence. Applying Section 40 of the Employment Act, which sets conditions including notices, an objective selection criteria and payment of statutory dues, and following its own decision in Fatma Ali Dabaso v First Community Bank Limited, the court held that the Respondent's total failure to observe those conditions amounted to unfair termination of employment. The Claimant was awarded 8 months' salary in compensation, one month's salary in lieu of notice, leave pay for one year and severance pay for six years, totalling Kshs. 254,254, with interest at court rates from the date of judgment until payment in full. The Claimant was also granted a certificate of service and costs of the case. Judgment was delivered at Mombasa on 6th May 2021 via Microsoft Teams owing to COVID-19 restrictions.

Key legal issues

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01

Whether the termination was unlawful

Holding

Termination on account of redundancy was unfair because the Respondent failed to comply with Section 40 of the Employment Act

Reasoning

The Respondent alleged the redundancy letter was recalled and the Claimant declined a transfer, but called no evidence to support those allegations. The redundancy letter of 10 October 2016 therefore stood as the only solid evidence. Section 40 sets stringent conditions including notices, objective selection criteria and payment of statutory dues, none of which the Respondent observed. Such failure amounts to unfair termination.

p. 3
02

Whether the Claimant is entitled to the remedies sought

Holding

Claimant awarded 8 months' compensation, notice pay, leave pay and severance pay, plus certificate of service

Reasoning

Compensation of 8 months' salary was awarded considering length of service and the Respondent's breach of the law. One month's notice pay was awarded. In the absence of contrary leave records, leave pay succeeded. Having been declared redundant, the Claimant was entitled to severance pay.

p. 3

Legal principles established

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  • Redundancy is undertaken at the instance of the employer and the conduct of the employee is not in question
  • Failure by an employer to observe the conditions in Section 40 of the Employment Act amounts to unfair termination of employment

Court orders

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  1. 1.8 months' salary in compensation (Kshs. 160,160)
  2. 2.1 month's salary in lieu of notice (Kshs. 20,020)
  3. 3.Leave pay for 1 year (Kshs. 14,014)
  4. 4.Severance pay for 6 years (Kshs. 60,060)
  5. 5.Total judgment of Kshs. 254,254 with interest at court rates from the date of judgment until payment in full
  6. 6.Certificate of service for the Claimant
  7. 7.Costs of the case to the Claimant

Authorities

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Legislation

  • Employment ActSection 40
  • Employment ActSection 2
  • Labour Relations Actcorresponding section defining redundancy

Cases cited (2)

  • Jane I Khalechi v Oxford University Press E.A. Ltd
    [2013] eKLR
  • Fatma Ali Dabaso v First Community Bank Limited
    [2018] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (employment and labour relations dispute)

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, "Christopher Muli Mbiti v Ready Consultancy Limited [2021] KEELRC 1771 (KLR)", Case Analysis (2021). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1771/eng@2021-05-06

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