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ELRCPartially AllowedELRC Cause (test suit) considered with Cause Nos 3, 39, 40, 41, 54, 55, 56, 86, 87, 88, 132, 161, 410 and 411 all of 2017· [2023] KEELRC 397 (KLR)

Gangla v Linksoft Intergrated Services (EA) Ltd & another (Cause 36 of 2017) [2023] KEELRC 397 (KLR)

Employment and Labour Relations Court
16 February 2023
4,306 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court in Nakuru found the worker's dismissal unfair, awarding modest dues against the company that had taken over his employment by consent.

What this practically means

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Executive summary

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This was a test suit in the Employment and Labour Relations Court heard alongside 14 similar causes arising from the same facts. The Claimant, employed on February 3, 2015 by Career Directions Ltd (2nd Respondent) and seconded to a geothermal project at Menengai, was terminated on June 15, 2016 by a letter issued by the 1st Respondent. He claimed unfair termination, a declaration that a January 2016 three-month addendum contract was illegal, notice pay, leave, public holidays, house allowance, compensation of twelve months' salary, unremitted NSSF and NHIF dues, general damages and a certificate of service. The 1st Respondent argued the Claimant was employed and seconded by the 2nd Respondent, that termination followed loss of the parent GDC contract by a government directive, and that the Claimant had notice. The 2nd Respondent blamed the 1st Respondent, relying on a consent in Milimani Civil Suit No. 4943 of 2016 under which the 1st Respondent took over employment issues from January 2016 and indemnified the 2nd Respondent. The court held the 2nd Respondent was the employer under the original contract but that, by the unappealed consent, the 1st Respondent was liable for dues arising in the contested period. The termination was found unfair for want of notice and due process. The court awarded one month's salary as compensation, one month's notice pay, house allowance at 15% for two months only, unremitted statutory dues, outstanding leave and a certificate of service, with costs borne by the 1st Respondent. The finding was extended to the 14 consolidated suits, with dues to be calculated and recorded as part of the judgment.

Key legal issues

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01

Identity of the employer and liability

Holding

The 2nd Respondent was the employer under the February 3, 2015 contract, but liability for dues arising after January/February 2016 falls on the 1st Respondent by virtue of the consent in CMCC No. 4943 of 2016

Reasoning

The written contract named Career Directions Ltd (2nd Respondent) as employer, seconding the Claimant to GDC. However, the parties' consent in Milimani Civil Suit No. 4943 of 2016 required the 1st Respondent to handle all issues for staff seconded to GDC and to indemnify the 2nd Respondent from claims in that period. That consent was never appealed or impugned as fraudulent or coerced, so it binds the Respondents and the 1st Respondent bears liability.

p. 7
02

Fairness of termination

Holding

The termination was unfair; no notice or due process was accorded

Reasoning

The 1st Respondent issued the termination letter of June 15, 2016 after the consent order. No notice was given. The court awarded one month's salary as compensation, taking into account that the exhibited fixed-term contract had expired in April 2016 and the Claimant was serving on an unexhibited new contract. One month's salary in lieu of notice was also awarded.

p. 8
03

House allowance

Holding

Not payable for the original contract period (all-inclusive salary) but payable at 15% for the post-April 2016 period

Reasoning

The February 2015 contract stated a salary of Kshs 36,500 all inclusive, so no house allowance arises for that period. For the period after the expiry of the fixed-term contract (April 12 to June 15, 2016), the court found the Claimant entitled to house allowance at 15% of salary for two months, computed at Kshs 10,950.

p. 8

Legal principles established

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  • A consent order of court, not appealed and not shown to be fraudulent or coerced, binds the parties and indemnifies the party protected by it
  • Termination without notice or due process renders the terminating employer liable to compensation

Court orders

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  1. 1.1 month's salary as compensation for the unfair termination
  2. 2.1 month's salary in lieu of notice
  3. 3.2 months' salary (14th April to June 15, 2016) at 15% of salary as house allowance
  4. 4.Payment of NHIF & NSSF dues deducted and not remitted
  5. 5.All outstanding leave not taken
  6. 6.Issuance of a Certificate of Service
  7. 7.Costs of the suit to be borne by the 1st Respondent
  8. 8.Parties to calculate the dues and record them as part of the judgment, failing which the court may give further directions

Authorities

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Legislation

  • Employment Actsection 35
  • Employment Actsection 43
  • Employment Actsection 10(5)

Cases cited (5)

  • James Angawa Atanda & 10 others v Judicial Service Commission
    [2017] eKLR
  • Naim Bilal Yaseen v Judicial Service Commission
    [2019] eKLR
  • David Barasa v British Peace Support Team and another
    [2016] eKLR
  • Rev John Mugania v Kenya Methodist University and Prof Mutuma Mugambi, Cause 133 of 2013
  • Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho Kariuki
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (first-instance unfair termination 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, "Gangla v Linksoft Intergrated Services (EA) Ltd & another (Cause 36 of 2017) [2023] KEELRC 397 (KLR)", Case Analysis (2023). ELRC Cause (test suit) considered with Cause Nos 3, 39, 40, 41, 54, 55, 56, 86, 87, 88, 132, 161, 410 and 411 all of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/397/eng@2023-02-16

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