Kenya Building, Construction, Timber & Furniture, Industries Employees Union v M/S Sagoo and Nyota Limited [2022] KEELRC 195 (KLR)
The bottom line
#A Kenyan court ruled workers paid by one company but placed under a sister company were still employees, and their unfair redundancy earned compensation.
What this practically means
#Executive summary
#Key legal issues
#Whether all or any of the Grievants were employees of the Respondent
All three Grievants who testified were employees of the Respondent; the claimed separateness from A.G. Printers and Publishers was not established
There was no written contract, an obligation the Respondent failed to meet under section 9 of the Employment Act. The Respondent admitted Lazarus Ndenga was its employee, paid the other Grievants' salaries, shared directorship and premises with A.G. Printers, and produced no employment records or reimbursement documents to prove an internal salary arrangement. The evidential burden having shifted, the Respondent failed to discharge it, and NSSF statements naming another company could not be considered in isolation.
Whether the Grievants' employment was terminated on account of redundancy
Yes - the termination was on account of redundancy, as the Grievants' work had diminished and there was no proof of a just cause
The Respondent claimed Ndenga was dismissed for a just cause after a disciplinary process but produced no evidence of the process or the specific cause, contrary to section 43 of the Employment Act. The Grievants testified they were told there was no more work, which was not discounted, fitting the statutory definition of redundancy as loss of employment through no fault of the employee where services are superfluous.
Whether the termination was procedurally fair
The termination was procedurally unfair because the section 40 procedure was not followed
Section 40 of the Employment Act requires specific notices to the employee or union and to the labour office, plus consultations, before a redundancy declaration. None of these steps was taken in this matter.
What reliefs the Claimant is entitled to
Declarations of redundancy and unfair termination, compensation of four months' gross salary per Grievant under section 49(1)(c), interest, certificates of service and costs
Though the pleadings lacked specificity because drafted by a layman, and parties are bound by their pleadings, the court was constrained by the interest of justice and the Respondent's stated willingness to pay to award nominal compensation rather than the globally tabulated sum of Kshs. 1,836,048.
Legal principles established
#- Where an employer fails to issue a written contract under sections 9 and 10 of the Employment Act, the burden of proving or disproving an alleged term of employment rests on the employer
- The evidential burden shifts from party to party as a trial progresses according to the balance of evidence given at any particular stage
- Where an employer alleges dismissal for just cause, it must prove the specific reason for termination under section 43 of the Employment Act
- Courts may disregard the separateness of sister companies with common directorship where the corporate structure places barriers in the way of employees realising their employment rights
- A redundancy not preceded by the statutory notices and consultations under section 40 of the Employment Act is procedurally unfair
Court orders
#- 1.A declaration that the termination of the Grievants' employment was by way of them being declared redundant
- 2.A declaration that the termination was both procedurally and substantively unfair
- 3.Compensation under section 49(1)(c) of the Employment Act, 2007 at 4 months' gross salary of each Grievant: Stanley Anyerere Kshs. 50,780; John Andeka Kshs. 50,780; Lazarus Ndenga Kshs. 66,000
- 4.Interest on the awarded sum from the date of filing suit till full payment at court rates
- 5.The Respondent to issue certificates of service to the Grievants within one month of the date of the Judgment
- 6.Costs of the suit to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes under the Employment Act, 2007 (no specific constitutional provision invoked)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Building, Construction, Timber & Furniture, Industries Employees Union v M/S Sagoo and Nyota Limited [2022] KEELRC 195 (KLR)", Case Analysis (2022). Cause No 1650 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/195/eng@2022-03-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.