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ELRCPartially AllowedCause No. 126 of 2016· [2022] KEELRC 381 (KLR)

Nancy Wangui Kuria v Thomsons Falls Lodge [2022] KEELRC 381 (KLR)

Employment and Labour Relations Court
30 March 2022
HWHellen Wasilwa
2,387 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan hotel was ordered to pay maximum compensation for firing a sick employee without giving her a hearing first.

What this practically means

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Executive summary

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The claimant, a kitchen steward employed by the respondent on 1st August 2007 on a gross salary of Kshs. 8,452, sued for unfair termination and terminal dues after the respondent terminated her employment by letter dated 30th January 2015 on medical grounds under section 16(a)(iii) of the Collective Bargaining Agreement, she having been on sick leave following a diagnosis of severe osteoarthritis. She sought notice pay, service gratuity, arrears of underpaid wages, reimbursement of medical expenses, 12 months' compensation for wrongful termination, a certificate of service and costs. The respondent denied the claim, asserting that the claimant failed to resume work after leave and that termination followed the CBA. The respondent's own witness admitted the claimant had been granted lighter duties through a transfer to housekeeping, which she declined, and that she had cleared with the respondent without receiving terminal dues. The court held that clause 16(a)(iii) of the CBA requires an arrangement between employer and employee before retirement on medical grounds, which is a form of hearing contemplated by Section 41 of the Employment Act. No hearing was afforded and the claimant was simply handed a termination letter. The dismissal was therefore unfair and unjustified under Section 45(2). The court awarded maximum compensation of 12 months' gross salary (Kshs. 101,424), three months' notice pay (Kshs. 25,356) and service gratuity (Kshs. 23,666), totaling Kshs. 150,446 less statutory deductions, ordered issuance of a certificate of service, and awarded costs plus interest. The claims for underpaid wages and medical reimbursement were not awarded.

Key legal issues

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01

Procedural fairness in termination on medical grounds

Holding

The termination was unfair because the claimant was not accorded a hearing as required by Section 41 of the Employment Act; the CBA clause requiring an arrangement before retirement on medical grounds constitutes a form of hearing

Reasoning

Clause 16(a)(iii) of the CBA provides that where an employee cannot resume work after sick leave, an arrangement shall be made between employer and employee for retirement on medical grounds per Clause 10. The court read this arrangement as a form of hearing contemplated by Section 41 of the Employment Act. Since no such hearing or arrangement took place and the claimant was simply issued a termination letter, the dismissal was procedurally unfair and unjustified under Section 45(2).

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02

Entitlement to compensation and terminal dues

Holding

The claimant was entitled to maximum compensation of 12 months' gross salary, 3 months' notice pay under CBA clause 9(c), and service gratuity under CBA clause 10(i)

Reasoning

Because the claimant was terminated while on sick leave and without any hearing, the court found the respondent acted in the most callous manner, justifying the maximum compensation of 12 months. Notice pay and service gratuity flowed from the express provisions of the CBA, computed on gross pay of Kshs. 8,452 over 7 completed years of service.

p. 4

Legal principles established

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  • Even where sick leave is exhausted and medical grounds justify retirement, an arrangement between employer and employee amounting to a hearing under Section 41 of the Employment Act is required before termination
  • Termination without notice or hearing is unfair and unjustified under Section 45(2) of the Employment Act
  • Terminating an employee on sick leave without a hearing warrants maximum compensation of 12 months' gross salary

Court orders

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  1. 1.Maximum compensation of 12 months' gross salary of Kshs. 101,424 for unfair termination
  2. 2.Notice pay of 3 months' salary (Kshs. 25,356) as per clause 9(c) of the CBA
  3. 3.Service gratuity of Kshs. 23,666 under clause 10(i) of the CBA, being 2/5 of gross pay for each completed year of service for 7 years
  4. 4.Total award of Kshs. 150,446 subject to statutory deductions
  5. 5.Respondent to issue the claimant with a certificate of service
  6. 6.Respondent to pay costs of the suit plus interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment Act 2007Section 41(1) and (2)
  • Employment Act 2007Section 45(1) and (2)
  • Employment and Labour Relations ActSection 12(4)
  • Employment and Labour Relations ActSection 12(3)(viii)
  • Collective Bargaining AgreementClause 16(a)(iii) and Clause 16(b) (sick leave)
  • Collective Bargaining AgreementClause 9(c) (notice pay)
  • Collective Bargaining AgreementClause 10(i) (service gratuity) and Clause 10

Cases cited (2)

  • Sylvester Oduor Othwila V Phoenix Aviation Limited
    [2013] eKLR
  • David Gichana Omuya V Mombasa Maize Millers Limited
    [2014] eKLR
Jurisdiction invoked
Sections 12(3) and 12(4) of the Employment and Labour Relations Act (as invoked in the claim for reliefs)

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, "Nancy Wangui Kuria v Thomsons Falls Lodge [2022] KEELRC 381 (KLR)", Case Analysis (2022). Cause No. 126 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/381/eng@2022-03-30

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