Kenya Union of Domestic, Hotels, Educational Institutions and Hospitals Workers (KUDHEIHA) v Hanos (K) Limited t/a Papillion Garden Bar Villa (Cause E001 of 2023) [2023] KEELRC 2475 (KLR)
The bottom line
#A Mombasa court ruled that keeping employees on indefinite unpaid leave without recall counts as redundancy, entitling them to notice, leave and severance pay.
What this practically means
#Executive summary
#Key legal issues
#Characterisation of indefinite unpaid leave as redundancy
The grievants' continued unpaid leave without recall or communication amounted to a redundancy under Sections 2 and 40 of the Employment Act
The court found that Covid-19 forced the respondent to lay off employees on unpaid leave from March 2020, with no recall ever occurring. Under Sections 2 and 40, layoff for operational reasons is redundancy. An employer lawfully terminating under Section 40 should recall employees upon recovery or give them priority to reapply; the respondent did neither and went silent, entitling the grievants to terminal dues under the CBA.
Entitlement under the CBA to notice pay and severance pay
All grievants are entitled to notice pay and severance pay per CBA clause 15 (notice at 1-3 months by service length; severance at 20/25 days per year of service)
The CBA between the recognised union and the respondent governs redundancy dues. Clause 15 provides notice pay scaled to length of service and severance at 20 days per year for up to 5 years' service and 25 days per year beyond. Since the termination was a redundancy, severance - not gratuity (clauses 12 and 15 distinguish termination for good cause from redundancy) - is payable, plus leave pay for 2020.
Effect of respondent's non-appearance
The claim proceeded by formal proof and was undefended; the claim was held successful
The respondent was served with summons but filed no appearance or response. The matter proceeded to formal proof, where the claimant's witness, Hezron Okwemba, testified for all grievants and produced the CBA, the leave memos and the advocates' notices. The court accepted the uncontroverted evidence and held the claim successful.
Legal principles established
#- Where an employer closes business or lays off employees for operational reasons and keeps them on indefinite unpaid leave, such layoff amounts to redundancy under Sections 2 and 40 of the Employment Act
- Keeping employees at bay without word on their employment status results in unfair labour practices
- Upon redundancy, CBA provisions on notice pay and severance pay apply, with gratuity reserved for termination for good cause and severance for redundancy
Court orders
#- 1.Hezron Mbeta awarded: two months' notice pay Kshs. 37,284; annual leave Kshs. 18,642; severance pay for 7 years Kshs. 108,745
- 2.Muthui Kiluma awarded: three months' notice pay Kshs. 55,926; annual leave for 2020 Kshs. 18,642; severance pay for 20 years Kshs. 310,700
- 3.Khamis Yamba awarded: three months' notice pay Kshs. 53,292; annual leave for 2020 Kshs. 17,764; severance pay for 16 years Kshs. 236,800
- 4.Kambua Muteme awarded: three months' notice pay Kshs. 35,528; annual leave for 2020 Kshs. 17,764; severance pay for 7 years Kshs. 103,6000
- 5.Gladys Kitumbui awarded: three months' notice pay Kshs. 35,528; annual leave for 2020 Kshs. 17,764; severance pay for 7 years Kshs. 103,6000
- 6.Claimant awarded costs assessed at Kshs. 300,0000
- Jurisdiction invoked
- Employment and labour relations jurisdiction (Employment Act, 2007; CBA between the parties)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Domestic, Hotels, Educational Institutions and Hospitals Workers (KUDHEIHA) v Hanos (K) Limited t/a Papillion Garden Bar Villa (Cause E001 of 2023) [2023] KEELRC 2475 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2475/eng@2023-10-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.