Njuki v Roche Kenya Limited (Cause 311 of 2019) [2023] KEELRC 1850 (KLR)
The bottom line
#A Kenyan court upheld an employer's redundancy but ordered it to pay Kshs 3.3 million in house allowance because the employment contract never included it in salary.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant's position was statutory and directorship attracted remuneration
The position was not shown to be statutory and no directorship allowance was due absent authorizing documents or resolution
The contract of employment did not state that the position existed to facilitate compliance with section 21 of the Pharmacy and Poisons Act, the job description was not produced, and another registered pharmacist was employed. Further, directors are not paid unless the constituting documents or a general meeting resolution authorize remuneration, and none was produced; the Respondent's witness confirmed directors served without pay.
Whether the Claimant was entitled to car allowance
The claim failed because the parties acquiesced in the retired company car benefit until the employment ended
The letter of October 4, 2017 made the new allowance payable only after purchase or return of the company car. The Claimant continued receiving the retired taxable company car benefit of Kshs 95,898.20 monthly and only purchased the car in March 2018, outside the three-month window. Ordering payment of the new allowance too would sanction double payment of the transport benefit.
Whether the Claimant was discriminated against at work
No discrimination established; the expatriate pay differential rested on a reasonable policy basis
Apart from a general employee satisfaction survey, the Claimant produced no actual data showing differential treatment on discriminatory grounds. The Respondent's International Assignment Policy required expatriates on short-term assignments to retain home country salary scales, providing a reasonable and rational explanation for the disparities, consistent with section 5 of the Employment Act.
Whether the Claimant was entitled to bonus pay
Bonus was performance-linked and the Claimant failed to meet her 2017 targets; the court cannot substitute its view for the employer's managerial prerogative
The performance compensation statement showed the Claimant failed to meet targets after moderation by the second evaluator. There was no evidence the score was successfully challenged or that the Respondent acted with ulterior intent. Absent a breach of law or internal regulation, the court cannot interfere with the employer's assessment.
Whether the warning letter of January 2018 was unfair
The warning was validly issued
The training request was communicated on November 27, 2017, three weeks before the Claimant proceeded on leave on December 15, 2017, sufficient time to complete it. She did not notify her supervisor that her eye ailment would delay the training, and although heard on January 30, 2018, she did not satisfactorily explain the failure.
Whether the termination on account of redundancy was valid
The redundancy was valid both in reason and process
The restructuring genuinely eliminated the position, which was outsourced to Surgipharm Ltd; Susan Ndung'u was registered as superintendent pharmacist, not as the Claimant's replacement. Statutory notices under section 40 were issued, one notice of intention suffices under Cargill, selection criteria were unnecessary where only one position was affected, and consultation is required only after notice. Enhanced severance was paid.
Whether the Claimant was entitled to house allowance
Yes - the contract did not expressly consolidate house allowance in basic pay; the Claimant was awarded Kshs 3,355,858.00
Section 31 of the Employment Act obliges the employer to provide housing or house allowance; consolidation requires an express statement in the salary clause, which was absent, and the pay slips showed no house allowance. The claim was a periodic entitlement, not a continuing injury, and time ran from termination per G4S, so the claim was filed within three years. Fifteen per cent of monthly salary was applied across the 45 months of service.
Legal principles established
#- Directors of a company are not remunerated unless authorized by the company's constituting documents or a resolution of shareholders
- Mere inequality of treatment is not discrimination; the differentiation must be shown to be unreasonable, arbitrary or irrational
- A redundancy notice under section 40(1)(a) and (b) of the Employment Act may be directed to a specific individual employee
- Consultations on redundancy are meant to commence after, not before, issuance of the redundancy notice
- Where only one position is affected by redundancy, there is no need to demonstrate a selection criteria
- House allowance is a statutory entitlement payable in addition to basic salary unless the contract expressly consolidates it
- Unpaid house allowance is a periodic entitlement, not a continuing injury claim under section 90 of the Employment Act
- House allowance is assessable at 15% of monthly salary for employees not covered by Wage Orders
Court orders
#- 1.Dismissal of the entire of the Claimant's case against the Respondent save for the claims for accrued house allowance, interest thereon and costs of the suit
- 2.Award of accrued house allowance dues totalling Kshs 3,355,858.00
- 3.Interest on the house allowance award at court rates from the date of judgment
- 4.Costs of the case awarded to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (claim for unfair termination on account of redundancy under the Employment Act)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (3)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Othoo v Aga Khan Education Service Kenya & another (Constitutional Petition E108 of 2022) [2025] KEELRC 2995 (KLR)[2025] KEELRC 2995 (KLR)30 Oct 2025followed
- Kenya Union of Commercial, Food and Allied Workers v Sunmatt Ltd (Employment and Labour Relations Cause 1360 of 2018) [2025] KEELRC 151 (KLR)[2025] KEELRC 151 (KLR)30 Jan 2025followed
- Matoke v Suchak (Appeal E046 of 2022) [2023] KEELRC 2393 (KLR)[2023] KEELRC 2393 (KLR)5 Oct 2023applied
Cite this brief
#Cite this brief
Caselaw, "Njuki v Roche Kenya Limited (Cause 311 of 2019) [2023] KEELRC 1850 (KLR)", Case Analysis (2023). Not indicated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1850/eng@2023-07-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.