Nyandiago & 3 others v Sibo Water & Sanitation Co Ltd (Cause 57 of 2020) [2023] KEELRC 1482 (KLR)
The bottom line
#A Kenyan court awarded four water company employees compensation because their sudden dismissal ignored their contracts and gave them no chance to be heard.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the Claimants' employment was wrongful and in breach of contract
The termination was wrongful and in breach of contract because no written notice or pay in lieu was given and no hearing was afforded
The Respondent's real reasons were a hostile working environment, security concerns and external interference, none of which fall within section 41 of the Employment Act. The contracts required written notice or pay in lieu, which was not given, and the Claimants were not heard. The termination also fell outside the contractual termination clause.
Whether each Claimant was entitled to pay in lieu of notice, compensation and earned wages
Each Claimant entitled to pay in lieu of notice, 3 months' gross salary as compensation and earned salaries for August 2017
For wrongful termination each Claimant is entitled to the equivalent of salary for the notice period. Section 49 allows compensation irrespective of the nature of separation, and the Court allowed 3 months' gross salary. Earned wages for August 2017 were due as of right and not disputed.
Entitlement to gratuity/service pay
Only the 1st Claimant was entitled to gratuity; the others were on permanent terms
The 1st and 2nd Claimants' contracts provided for gratuity at 31% of annual basic salary, but the 2nd Claimant's contract was converted to permanent terms from 1 November 2014, as were the 3rd and 4th Claimants' terms. Under the HR Manual, gratuity for permanent management staff was discretionary and permanent staff were eligible for the pension scheme instead.
Legal principles established
#- Where the reasons for termination are not misconduct or poor performance, the Court looks outside the procedural confines of section 41 of the Employment Act and tests the termination against the contract and natural justice
- Section 49 of the Employment Act permits compensation regardless of whether the separation is unfair or wrongful termination in breach of contract
Court orders
#- 1.Declaration that the termination of the Claimants' contracts was wrongful and in breach of contract
- 2.Pay in lieu of notice to each Claimant (1st: Kshs 198,000/-; 2nd: Kshs 186,750/-; 3rd: Kshs 85,350/-; 4th: Kshs 51,000/-)
- 3.Compensation equivalent to 3 months' gross salary to each Claimant (1st: Kshs 390,000/-; 2nd: Kshs 186,750/-; 3rd: Kshs 85,350/-; 4th: Kshs 51,000/-)
- 4.Lost income of Kshs 2,340,000/- to the 1st Claimant
- 5.Earned wages for August 2017 to each Claimant (1st: Kshs 110,000/-; 2nd: Kshs 52,673/-; 3rd: Kshs 24,073/-; 4th: Kshs 14,384/-)
- 6.Gratuity of Kshs 736,560/- to the 1st Claimant only
- 7.Awards to attract interest at court rates from date of judgment if not paid within 60 days
- 8.Respondent to issue Certificates of Service to each Claimant within 30 days
- 9.Claimants to have costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment cause)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nyandiago & 3 others v Sibo Water & Sanitation Co Ltd (Cause 57 of 2020) [2023] KEELRC 1482 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1482/eng@2023-06-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.