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ELRCPartially AllowedCause No 2508 of 2017· [2022] KEELRC 908 (KLR)

Stanley Kyule Mutuku v Swan Carriers Ltd [2022] KEELRC 908 (KLR)

Employment and Labour Relations Court
28 January 2022
2,448 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 that an employer who pays notice pay is treated as the one who ended the job, and must justify the dismissal.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a driver between June 2016 and September 2017, alleged that his services were verbally terminated by the respondent and sought Kshs 160,232 as notice pay, salary for days worked, unpaid leave days and gratuity. The respondent countered that it was the claimant who verbally intimated his wish to terminate employment, and that his computed terminal dues remained uncollected. The court framed three issues: whether employment was terminated, whether any termination was unfair and unlawful, and entitlement to reliefs. Applying sections 47(5), 35(1)(c) and 36 of the Employment Act, the court found that although neither party produced a termination letter, the respondent's letter computing terminal dues included one-month notice pay, which only the party initiating termination would be liable to pay; the court therefore inferred that the termination emanated from the respondent. On fairness, the respondent advanced no reasons for the termination, rendering it substantively unfair under sections 43(1) and 45(2); procedural fairness was not examined as that would be academic. The claimant was awarded notice pay (Kshs 26,775), September 2017 salary (Kshs 26,775), unpaid leave days (Kshs 7,761) and compensatory damages of Kshs 80,325 equivalent to three months' gross salary, totalling Kshs 141,636 with interest at court rates. Claims for October 2017 salary and gratuity/service pay were declined, the latter because the claimant admitted being an NSSF contributor under section 35(6). The claimant was also entitled to a certificate of service. Although his case succeeded, he was denied costs for failing to file submissions, with each party bearing its own costs.

Key legal issues

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01

Whether the claimant's employment was terminated by the respondent

Holding

The employment was terminated by the respondent, inferred from the respondent's inclusion of one-month notice pay in the terminal dues computation.

Reasoning

Where parties allege each other terminated employment, the court examined sections 35(1)(c) and 36 of the Employment Act. Notice pay is payable by the party initiating termination. The respondent's letter computing terminal dues included 'One-month notice pay', a paradox if the claimant had resigned. The court therefore inferred the termination emanated from the respondent's end.

p. 3
02

Whether the termination was unfair and unlawful

Holding

The termination was substantively unfair and unlawful because the respondent advanced no reasons for it.

Reasoning

Sections 43(1) and 45(2) require the employer to prove valid and fair reasons for termination. The respondent did not advance any reasons; it merely calculated dues and asked the claimant to collect them. With no reasons existing, the court could not assess their validity, rendering the termination substantively unfair; procedural fairness need not be examined as that would be academic.

p. 3
03

Entitlement to reliefs

Holding

The claimant was awarded notice pay, September 2017 salary, unpaid leave days and 3 months' salary as compensatory damages, but denied October 2017 salary and gratuity/service pay.

Reasoning

The court treated the claimant's prayer for 3 months' gross salary as a claim for compensatory damages arising from unlawful termination and awarded it. Notice pay, September salary and leave days were awarded as they featured in the respondent's own computation. The October 2017 salary claim failed as employment ended on 30th September 2017, and service pay failed due to NSSF contributions under section 35(6).

p. 3

Legal principles established

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  • It is the party initiating the termination of employment that is responsible for issuing notice or paying one month's salary in lieu of notice; an employer who pays notice pay is treated as having terminated the employment.
  • Under section 47(5) of the Employment Act the employee bears the burden of proving unfair termination or wrongful dismissal, while the employer bears the burden of justifying the grounds of termination.
  • A termination by an employer who advances no reasons at all is substantively unfair, since there is nothing upon which the court can assess validity and fairness of the reasons.

Court orders

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  1. 1.Judgment entered for the claimant against the respondent
  2. 2.One month's salary in lieu of notice of Kshs 26,775.00
  3. 3.Salary for September, 2017 of Kshs 26,775.00
  4. 4.Unpaid leave days of Kshs 7,761.00
  5. 5.Compensatory damages of Kshs 80,325.00 equivalent to 3 months gross salary
  6. 6.Total award of Kshs 141,636.00 with interest at court rates from the date of judgment till payment in full
  7. 7.Each party to bear its own costs

Authorities

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Legislation

  • Employment Actsection 47(5)
  • Employment Actsection 43(1)
  • Employment Actsection 45(2)
  • Employment Actsection 41(1)
  • Employment Actsection 35(1)(c)
  • Employment Actsection 35(6)
  • Employment Actsection 36
  • Employment Actsection 51(1)
  • Evidence Actsection 107
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48

Cases cited (3)

  • Kennedy Maina Mirera vs Barclays Bank of Kenya Limited
    (2018) eKLR
  • Rudolf Shitanda Daraja vs Zablon Juma Atulo t/a Atulo & Co. Advocates
    (2016) eKLR
  • Pius Machafu Isindu vs Lavington Security Guards Limited
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (claim for unfair/unlawful termination and terminal dues)

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, "Stanley Kyule Mutuku v Swan Carriers Ltd [2022] KEELRC 908 (KLR)", Case Analysis (2022). Cause No 2508 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/908/eng@2022-01-28

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