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ELRCAllowedCause No 803 of 2016· [2023] KEELRC 2290 (KLR)

Karanja v Geosurve Systems Limited (Cause 803 of 2016) [2023] KEELRC 2290 (KLR)

Employment and Labour Relations Court
28 September 2023
MNMATHEWS N. NDUMA
1,057 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer who ends a job for 'lack of work' must follow redundancy rules, or pay compensation and costs.

What this practically means

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Executive summary

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The claimant, employed as a surveyor on 14 May 2014 on a verbal contract at a net monthly salary rising from Kshs 30,000 to Kshs 50,000, was terminated by letter dated 21 March 2016 on the ground that the respondent company had no work for him, the Kenya Power & Lighting Company project having lapsed, with effect from 22 March 2016. He testified that he received no notice, no notice to show cause and no hearing, and that he was not paid salary for days worked in March 2016, notice pay, accrued leave or overtime. The respondent's director (RW.1) asserted the claimant was not permanent and that March and April salary was paid, but produced no documents. The Court found the employment relationship established by a verbal contract and held that, if the termination was for lack of work, it was a redundancy requiring notice under Section 40 of the Employment Act, including notification of the Ministry of Labour, none of which occurred, and that no opportunity to be heard was given, violating Sections 36, 40, 41, 43 and 45 of the Act. The claimant proved his case on a balance of probabilities. The Court awarded terminal benefits of Kshs 159,000 (March 2016 arrears, one month's notice pay, 20 days' accrued leave and overtime) and, applying Section 49(1)(c) and (4) and precedent, compensation of four months' salary (Kshs 200,000), with interest at court rates and costs to the claimant, totalling Kshs 359,000.

Key legal issues

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01

Lawfulness of termination for lack of work

Holding

The termination was unlawful because the redundancy procedure under Section 40 was not followed - no notice to the claimant or the Ministry of Labour.

Reasoning

The respondent relied on lack of work following the end of the Kenya Power & Lighting Company project. Where termination is due to lack of work, it is a redundancy requiring notice under Section 40(1) and notification of the Ministry of Labour. Neither was done, and no hearing was afforded, violating Sections 36, 40, 41, 43 and 45 of the Employment Act, 2007.

p. 2
02

Quantum of terminal dues and compensation

Holding

Claimant awarded accrued salary, notice pay, leave and overtime dues totalling Kshs 159,000, plus four months' salary (Kshs 200,000) as compensation.

Reasoning

The claimant gave clear, unrebutted evidence of unpaid March 2016 salary, notice pay, accrued leave and overtime. Under Section 49(1)(c) and (4), the claimant did not contribute to the termination, served two years without blemish, and the respondent aggravated matters by failing to give notice or pay in lieu, warranting the equivalent of four months' salary.

p. 2

Legal principles established

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  • A termination attributed to lack of work must comply with the redundancy procedure in Section 40 of the Employment Act, including notice to the employee and the Ministry of Labour.
  • An employee must be given an opportunity to be heard before termination, and unrebuted evidence of unpaid dues is accepted on a balance of probabilities.

Court orders

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  1. 1.Judgment entered in favour of the claimant against the respondent
  2. 2.Kshs 200,000 in compensation for unlawful and unfair termination
  3. 3.Kshs 159,000 being terminal benefits
  4. 4.Total award of Kshs 359,000
  5. 5.Interest at Court rates from date of judgment till payment in full
  6. 6.Costs of the suit to the claimant

Authorities

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Legislation

  • Employment Act, 2007Section 40
  • Employment Act, 2007Section 40(1)
  • Employment Act, 2007Sections 36, 40, 41, 43 and 45
  • Employment Act, 2007Section 49(1)(c) and (4)

Cases cited (2)

  • Francis Mathira Kyule v Lavington Security Limited
    Cause No. 2255 of 2014 [2019] eKLR
  • Dennis Mbuvi v Raj Shah T/A Kenya Motor Sports Club and Restaurant
    Cause No 1479 of 2013
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (unlawful and 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, "Karanja v Geosurve Systems Limited (Cause 803 of 2016) [2023] KEELRC 2290 (KLR)", Case Analysis (2023). Cause No 803 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2290/eng@2023-09-28

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