Mung’oni v Rama Homes Limited t/a Rama Group of Companies & another (Cause E6500 of 2020) [2024] KEELRC 839 (KLR)
The bottom line
#Kenya's Employment Court ruled two related companies jointly employed a worker whose unfair redundancy lacked proper notice, awarding him damages plus costs.
What this practically means
#Executive summary
#Key legal issues
#Existence of employer-employee relationship with the 1st Respondent
The employment was joint; both Respondents shared varied responsibilities over the Claimant since the 1st Respondent paid his salary and terminal dues
The 1st Respondent conceded paying the Claimant's salary and terminal dues, explaining it was bailing out the 2nd Respondent. Following Patrick Mutua Mwanzia v Habo Group, payment of salary in all probability indicates employment. The court questioned why the 1st Respondent did not pay the 2nd Respondent's account directly, and found the employment joint, with the companies sharing responsibilities alongside Rama Holdings Limited.
Whether the termination was lawful
The termination on account of purported redundancy was afoul of the law because the requisite notice under section 40 of the Employment Act was not given
The termination was on account of the voluntary winding up of the 2nd Respondent, engaging section 40 of the Employment Act requiring notification of intended lay-off. The only fault identified was failure to give the requisite notice. No disciplinary hearing took place, and the procedural requirements of section 40 were not satisfied.
Quantum of relief
Claimant entitled to notice pay of Kshs. 600,000/-, pro rata leave of Kshs. 20,000/-, and compensation capped at one month (Kshs. 200,000/-), less Kshs. 99,866/- already paid, netting Kshs. 720,134/-
Having served only about three months, pro rata leave equated to roughly Kshs. 20,000/-. Three months' notice pay was due under clause 6 of the contract. Maximum compensation under section 49 was refused because damages cannot exceed the service period; compensation was capped at one month for failure to give the section 40 notice. Terminal dues already paid were offset.
Legal principles established
#- Where one company pays an employee's salary and terminal dues while claiming to be bailing out the nominal employer, the employment may be treated as joint between the companies sharing responsibility over the employee
- Compensation for unfair termination cannot exceed what is proportionate to the length of service
Court orders
#- 1.Judgment entered against the Respondents jointly and severally for one month's compensation – Kshs. 200,000/-
- 2.3 months' salary as notice – Kshs. 800,000/- less amount paid – Kshs. 99,866/- leaving balance of Kshs. 700,134/- under this head
- 3.Pro rata leave – Kshs. 20,000/-
- 4.Costs of the suit
- 5.Interest at court rates on the sums in (a), (b) and (c) above from the date of judgment till payment in full
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (original employment dispute)
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.
- Nyanga v Afrilog Limited (Cause 2376 of 2017) [2024] KEELRC 2104 (KLR)[2024] KEELRC 2104 (KLR)2 Aug 2024
Cite this brief
#Cite this brief
Caselaw, "Mung’oni v Rama Homes Limited t/a Rama Group of Companies & another (Cause E6500 of 2020) [2024] KEELRC 839 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/839/eng@2024-04-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.