Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedEmbu CMELRC No. E001 of 2021 (Appeal from trial court decision dated 20th January 2022)· [2024] KEELRC 58 (KLR)

Kibeti v New Embu Garage Limited (Employment and Labour Relations Appeal E001 of 2022) [2024] KEELRC 58 (KLR)

Employment and Labour Relations Court
26 January 2024
2,572 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

#

A Kenyan court more than doubled a fired manager's payout to Kshs 2.3 million after ruling her termination without reasons or a hearing was unfair.

What this practically means

#

Executive summary

#
This is a first appeal to the Employment and Labour Relations Court at Nyeri (Onesmus N Makau, J) against the judgment of Hon. Nyakweba SPM in Embu CMELRC No. E001 of 2021. The appellant, employed as Assistant Manager on 28th August 2001 and later promoted to Manager, had her employment terminated on 16th November 2019 for unspecified 'unresolved issues' without notice or hearing. The trial court found the termination unlawful but awarded only November salary and one month's pay in lieu of notice, declining compensation and other dues. The respondent did not participate in the appeal. The court, guided by Kenya Ports Authority v Kuston, re-evaluated the evidence and framed four issues: compensation for unfair termination, house and telephone allowance, accrued leave and holidays worked, and service pay. It held the trial court erred in failing to award compensation under section 49 of the Employment Act, awarding 12 months' salary (Kshs. 1,092,500) given 19 years of diligent service and the abruptness of termination. House allowance was assessed at 15% of basic pay (Kshs. 133,500) since the promotion letter fixed no amount; the telephone allowance claim was unsubstantiated. Accrued leave was computed at Kshs. 623,000 under section 28, while the holidays worked claim failed for want of particulars. Service pay of Kshs. 475,000 was awarded, no pension or NSSF contribution having been proved. The appeal was declared partially successful: the trial court's judgment was set aside and substituted with awards totalling Kshs. 2,324,000, with costs of the appeal and interest at court rates from the date of filing the appeal, subject to statutory deductions and in addition to the trial court's award.

Key legal issues

#
01

Whether the appellant was entitled to compensation for unfair termination under section 49 of the Employment Act

Holding

Yes; the trial court erred in failing to award compensation. The termination cited 'unresolved issues' with no valid reason or fair procedure, and 12 months' salary was awarded

Reasoning

Section 45 requires the employer to prove a valid and fair reason and fair procedure; section 41 requires explanation and hearing. The termination letter gave no reason save 'unresolved issues' never brought to the appellant's attention, and no redundancy procedure was followed. Termination was therefore unfair. Considering 19 years of diligent service and the abruptness of termination, the maximum of 12 months' salary was awarded at Kshs. 57,500 (basic 50,000 plus 15% house allowance).

p. 5
02

Whether the appellant was entitled to house and telephone allowance

Holding

Telephone allowance not substantiated; house allowance assessed at 15% of basic pay, totalling Kshs. 133,500

Reasoning

The burden was on the appellant to plead and prove her entitlement on a balance of probabilities. The promotion letter did not fix any amount and no evidence showed what was payable. Following emerging jurisprudence, house allowance was assessed at 15% of basic pay across the whole period of service.

p. 5
03

Whether the appellant was entitled to accrued leave and holidays worked

Holding

Accrued leave awarded at Kshs. 623,000 computed under section 28; holidays worked claim dismissed for want of particulars

Reasoning

The termination letter affirmed the leave claim, so the court computed it on salary in the appointment and promotion letters at 21 days per year for the full service period. The holidays worked claim failed because the appellant gave no particulars of the dates on which she worked despite testifying that she was sometimes on duty on public holidays.

p. 6
04

Whether the appellant was entitled to service pay under section 35(5) of the Employment Act

Holding

Yes; Kshs. 475,000 being 15 days' pay for each of 19 years on the terminal basic salary

Reasoning

There was no evidence of membership of an employer pension or gratuity scheme or of employer registration and contribution to social security. Service pay is therefore payable at 15 days' pay per year worked, computed on the basic salary at the time of termination (Kshs. 50,000 x 15/30 x 19).

p. 6

Legal principles established

#
  • A first appellate court must re-evaluate the evidence and make its own independent conclusions while making due allowance for not having seen or heard the witnesses
  • Defiance of the statutory procedure for termination amounts to unfair termination and the employee is entitled to compensation
  • Where house allowance is not stated, courts will assess it at 15% of basic pay
  • An employee not in a pension or social security scheme is entitled to service pay of 15 days' pay per year worked
  • A claim for public holidays worked must fail for want of particulars

Court orders

#
  1. 1.Set aside the judgment of the trial court and substitute with: compensation for unfair termination Kshs. 1,092,500; house allowance Kshs. 133,500; accrued leave Kshs. 623,000; service pay Kshs. 475,000; total Kshs. 2,324,000
  2. 2.Costs of the appeal to the appellant plus interest on the four awards at court rates from the date of filing the appeal
  3. 3.The award is subject to statutory deductions and in addition to the award by the trial court
  4. 4.Costs of the appeal

Authorities

#

Legislation

  • Employment Act (Cap 226)section 31
  • Employment Act (Cap 226)sections 10 and 74
  • Employment Act (Cap 226)section 28
  • Employment Act (Cap 226)section 35(5)
  • Employment Act (Cap 226)section 45
  • Employment Act (Cap 226)section 41
  • Employment Act (Cap 226)section 49(1)
  • Employment (ELRC) Procedure RulesRule 28(3)

Cases cited (6)

  • Rajab Barasa & 4 Others versus Kenya Meat Commission
    [2016] eKLR
  • Trevar Marambe v For You Chinese Restaurant
    [2021] eKLR
  • Kenya Corporation vs Geoffrey Wakio
    [2019] eKLR
  • David Matanga Mbirika v Cosmopolitan Club
    [2020] eKLR
  • Gichuru v Package Insurance Brokers Ltd
    (Petition 36 of 2019) [2021] KESC 12 (KLR) (22 October 2021)
  • Kenya Ports Authority versus Kuston (Kenya) Limited
    (2009) 2EA 212
On appeal from
Chief Magistrate's Court (ELRC), Embu
Embu CMELRC No. E001 of 2021
Jurisdiction invoked
First appellate jurisdiction under the Employment and Labour Relations Court Act over appeals from the ELRC sub-registry of the magistrates' court

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (1)

#

Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

#

Cite this brief

Caselaw, "Kibeti v New Embu Garage Limited (Employment and Labour Relations Appeal E001 of 2022) [2024] KEELRC 58 (KLR)", Case Analysis (2024). Embu CMELRC No. E001 of 2021 (Appeal from trial court decision dated 20th January 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/58/eng@2024-01-26

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