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ELRCPartially AllowedCause No 77 of 2019· [2022] KEELRC 1428 (KLR)

Otieno v United Millers Limited (Cause 77 of 2019) [2022] KEELRC 1428 (KLR)

Employment and Labour Relations Court
23 June 2022
2,719 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, employed as a secretary by the Respondent on 4th December 2010 at a gross monthly salary of Kshs.97,020, proceeded on annual leave in April 2016 to seek medical attention. She underwent treatment and surgeries, ultimately losing her eyesight, and informed the Respondent in writing that she was still recuperating. The Respondent stopped her salary at the end of August 2016 without notice or reasons and made no further contact. The Respondent denied terminating her, contending it merely ceased paying salary for no work done after her sick leave lapsed, and that the burden of proving unfair termination lay with the Claimant. The court framed two issues: whether the Claimant was unfairly terminated, and whether she was entitled to the remedies sought. The court held that the Respondent's silence upon stoppage of the Claimant's salary was an implied termination, and that in the absence of notice, reasons and a hearing, the termination fell short of Sections 41, 43, 45 and 47 of the Employment Act, being both procedurally and substantively unfair. The court applied authority obliging employers to reasonably accommodate ill employees beyond sick leave. Judgment was entered for the Claimant with a declaration of unfair termination, one month's salary in lieu of notice (Kshs.97,020), 12 months' salary as compensation for unfair termination (Kshs.1,164,240), Kshs.3,000,000 in exemplary damages for the discriminatory and distressing treatment, and a certificate of service. The claim for three months' salary in lieu of notice failed as the contract provided for one month's notice. The judgment is signed, dated and delivered at Kisumu this 23rd day of June, 2022 by Christine N. Baari, Judge. No costs order appears in the disposition.

Key legal issues

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01

Whether the stoppage of the Claimant's salary amounted to a termination

Holding

Yes - the employer's silence and stoppage of salary constituted an implied termination, and the assertion that the Claimant was never terminated does not hold.

Reasoning

The court found the Respondent was fully aware of the Claimant's ailment and visual impairment, having received her letter of 23rd August 2016. Despite this, the Respondent stopped her salary without notice, without reasons, and without any response to her letter. RW1 confirmed no outreach was made. The court held that an employer's silence upon stoppage of salary is an implied termination, rejecting the Respondent's claim of 'no work no pay'.

p. 4
02

Whether the termination was procedurally and substantively unfair

Holding

Yes - the termination fell short of Sections 41, 43, 45 and 47 of the Employment Act, 2007.

Reasoning

The employer neither gave the Claimant notice nor reasons for the stoppage of her salary/termination, nor was she accorded a hearing despite her illness and long service. The court relied on authority that an employer must reasonably accommodate an ill employee beyond sick leave and, where termination is inevitable, give specific notice of impending termination. The termination was therefore both procedurally and substantively unfair.

p. 5
03

Whether the Claimant was entitled to the remedies sought

Holding

Partially - 12 months' compensation (maximum), one month's salary in lieu of notice, Kshs.3,000,000 exemplary damages and a certificate of service were granted; three months' notice pay was refused.

Reasoning

Having declared the termination unfair, the court awarded maximum compensation under Sections 49 and 50 considering the Claimant's visual impairment, limited chances of alternative employment and long service. Notice pay was capped at one month per the contract. Exemplary damages were awarded because the Respondent's silence on learning of the Claimant's blindness caused distress and anxiety and violated her right to non-discrimination on the basis of health.

p. 5

Legal principles established

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  • Silence on the part of an employer upon stoppage of an employee's salary amounts to an implied termination.
  • An employer has an obligation to reasonably accommodate an employee taken ill during employment, beyond grant and exhaustion of sick leave.
  • Termination without notice and reasons falls short of the procedural and substantive fairness requirements of Sections 41, 43, 45 and 47 of the Employment Act.
  • Exemplary damages may be awarded for discriminatory acts suffered by an employee in employment, in addition to compensation for unfair termination, where the conduct caused distress and intolerable anxiety.

Court orders

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  1. 1.A declaration that the Claimant's termination is unfair.
  2. 2.One-month salary in lieu of notice at Kshs.97,020.00/-
  3. 3.12 months' salary as compensation for unfair termination at Kshs.1,164,240/-
  4. 4.Kshs.3,000,000/- in exemplary damages
  5. 5.A certificate of service.

Authorities

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Legislation

  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Sections 41, 43, 45 and 47
  • Employment Act, 2007Sections 49 and 50
  • Constitution of KenyaNot specified (referenced re constitutional violations and non-discrimination)

Cases cited (7)

  • Joseph Chigodi Mwarocha Vs. Winstar Security Guards
    Mombasa ELRC No.364 of 2018
  • Kenya Plantations & Agricultural Workers Union v. Rea Vipingo Plantations & Another
    (2015) eKLR
  • Kennedy Nyaguncha Omanga v Bob Morgan Services Limited
    (2013) eKLR
  • Samuel Wanyonyi Wamalwa v Wells Fargo Limited
    (2014) eKLR
  • Benjamin Langwen v National Environment Management Authority
    (2016) eKLR
  • Margaret Omondi v Kenya Revenue Authority
  • Rookes v Benard
    (1964) AC 1129
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "Otieno v United Millers Limited (Cause 77 of 2019) [2022] KEELRC 1428 (KLR)", Case Analysis (2022). Cause No 77 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1428/eng@2022-06-23

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