Sinohydro Corporation Limited v Gufu (Employment and Labour Relations Appeal E001 & appeals Number E002 – E035 of 2022 (Consolidated)) [2024] KEELRC 844 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the appellant's witness's testimony was recorded and considered by the trial court
The trial court recorded and considered the testimony of Mr. Zhang Yang; the missing portion was due to the appellant's own counsel and the appeal would not be struck out as the appellant was not condemned unheard.
The court perused the lower court files and confirmed the witness's testimony was recorded and adopted in all files and that the judgment mentioned and considered his evidence. The record of appeal was incomplete because counsel left out part of the typed proceedings and the further list of documents, so the appellant could not claim prejudice. The court nonetheless declined to strike out the appeal and considered its merits.
Whether the respondents were unfairly terminated, resigned voluntarily or absconded
The work suspension notice terminated the employment contracts effective 22nd April 2020; the purported resignation letters were authored by the appellant and not understood by the illiterate respondents; the termination was unfair for want of procedural fairness under sections 35, 40, 41 and 45 of the Employment Act.
The suspension letter stated the contracts would automatically terminate on 22nd April 2020. The subsequent resumption notice acknowledged termination and invited fresh engagement, so respondents had no obligation to report back. The letters referenced 'Termination Letter' were authored by the appellant in Nairobi, signed before its Chinese officers without interpretation, and could not amount to voluntary resignation. Absence of notice and hearing rendered the termination unfair.
Whether the damages awarded by the trial court should stand
The finding of unfair termination was upheld but the damages were disturbed: compensation reduced to two months' salary, overtime set aside, leave reassessed at the statutory rate, underpayment allowed only for Hillary Nura Diba, and the gratuity/service pay award set aside entirely.
Guided by Butt v Khan, the court interfered because the trial court failed to consider length of service, doubled the compensation for some respondents in error on the face of the record, awarded leave at a rate unsupported by section 28, and awarded gratuity after dismissing the claim. The overtime and underpayment claims failed for lack of particulars and proof that wages exceeded the General Wage Order.
Legal principles established
#- On a first appeal, the court is empowered to re-evaluate the evidence and make its own independent conclusions, bearing in mind it did not see or hear the witnesses.
- Continuous service by a casual employee converts the employment into a contract of service under section 37 of the Employment Act.
- An employer must comply with sections 35, 40 and 41 of the Employment Act (notice, redundancy procedure and hearing) before terminating employment, even where the reason (such as Covid-19) may be justified.
- A letter headed 'termination letter' authored by the employer and signed by illiterate employees before officers who did not interpret it does not constitute voluntary resignation.
- An appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate or the judge proceeded on wrong principles.
- Compensation for unfair termination must be guided by section 49(4) of the Employment Act, including length of service and reasonable expectation of continued employment, and must be supported by reasons.
- Section 74 of the Employment Act does not entitle an employee to make generalized claims and succeed merely because the employer failed to produce employment records; the burden of precise pleadings and proof rests with the party claiming.
Court orders
#- 1.A declaration that the termination of the respondents' employment was unfair and unlawful.
- 2.Each respondent awarded one-month salary in lieu of notice.
- 3.Each respondent awarded two-month salary compensation for unfair termination.
- 4.Leave awarded at 21 days annual leave per year for respondents who served one year and above and 1.75 leave days per month for those who served less than one year.
- 5.Underpayment awarded to Hillary Nura Diba in the sum of Kshs 51,540.
- 6.An order that the Respondents are entitled to Certificates of service to be issued within 60 days.
- 7.Each party to bear own costs of the appeal but the Respondents to have costs of the suit in the lower court.
- 8.Awards to attract interest at court rate from the date of the impugned judgment, subject to statutory deductions.
- 9.Appellant given 30 days to compute the awards and file a report in court for adoption as part of the judgment; in default the respondents at liberty to do so.
- 10.Mention fixed for 27th May 2024 for adoption of the assessment as part of the court judgment.
- On appeal from
- Principal Magistrates Court at Marsabit
- E001 of 2020 (consolidated with E002, E005, E010 of 2020, E001A, E001B, E004, E008 of 2021; E008 of 2020 with E003 of 2020, E002A, E002B, E005, E006, E007, E009 of 2021; E10 of 2021 with E006, E007 of 2020 and E011-E026 of 2021)
- Jurisdiction invoked
- First appellate jurisdiction over appeals from the Principal Magistrates Court (Employment and Labour Relations Court Act; appeals arising from suits under the Employment Act, 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sinohydro Corporation Limited v Gufu (Employment and Labour Relations Appeal E001 & appeals Number E002 – E035 of 2022 (Consolidated)) [2024] KEELRC 844 (KLR)", Case Analysis (2024). ELRCA/E001 of 2022 (Consolidated with Appeals E002-E035 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/844/eng@2024-04-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.