Mathenge v DLR Group Africa Limited (Cause E942 of 2021) [2024] KEELRC 960 (KLR)
The bottom line
#A Kenyan court ruled a COVID-19 salary cut couldn't be permanently kept by the employer, awarding over Ksh. 10 million in dues despite upholding the redundancy itself.
What this practically means
#Executive summary
#Key legal issues
#Date of commencement of the employment relationship
The employment relationship commenced on 1st September 2017; between 4th September 2015 and September 2017 the Claimant served as an independent contractor under a consultancy agreement with DLR Group Inc.
The 2015 consultancy agreement expressly disclaimed an employment relationship; payment required invoicing; the Claimant bore his own tax obligations (no PAYE); no annual leave or other section 10 Employment Act features were provided. Parole evidence of emails was inadmissible to contradict the unambiguous written contract.
Legitimacy of the COVID-19 salary reduction and entitlement to arrears
The 50% reduction for April–June 2020 was agreed, but the withheld half was not forfeited since the Claimant never agreed to forfeiture; the continued withholding from June 2020 to February 2021 was without consent; all withheld amounts (Ksh. 5,272,315.00 for ten months) are recoverable with interest.
Section 17 obliges payment of salary for work done; deductions are only lawful under section 19; section 10(5) and clause 15.2 of the contract forbid unilateral variation. Treating the half salary as forfeited was an unfair labour practice contrary to article 41 and offended article 47.
Validity of the redundancy process
The redundancy was valid: the COVID-19 pandemic provided a valid operational reason; the notice ran for more than one month; the labour office was notified; no selection was required for a single-holder position; and consultations were held.
Section 40 requirements are notice, selection (where a pool exists) and payment of dues. The notice of 24th November 2020 was emailed on 25th November 2020 and termination issued 28th January 2021, exceeding one month. The stamped copy showing receipt by the County Labour Office, Nairobi on 9th December 2020 satisfied the notification requirement. Minutes of meetings on 21st December 2020 and September 2020 evidenced consultations.
Terminal dues and irregular deductions
The Claimant was awarded salary arrears, commuted leave for 69 days, February 2021 salary and severance computed on full salary; the deductions of Ksh. 1,000,000.00 (club fees) and Ksh. 300,000.00 (computer) were irregular and unlawful.
The contract provided club membership as a benefit without any recovery clause; the computer deduction was unexplained, the Claimant's obligation being to return the gadget; severance had to be computed on full salary of Ksh. 1,054,463.00; the Claimant's claim of 69 unutilised leave days was uncontroverted given the employer's failure to produce records.
Legal principles established
#- An employer may not unilaterally reduce or withhold an employee's salary; deductions are only permissible in the circumstances set out in section 19 of the Employment Act, and unilateral variation of remuneration without the employee's concurrence is an unfair labour practice
- A redundancy notice need not expressly state a one-month duration so long as the employer demonstrates that at least one month elapsed between notice and termination; delivery of the notice by email is valid; and a copy of the notice to the employee suffices as notice to the local labour officer
- No selection process is required where the position declared redundant is held by a single individual; selection only has meaning where a pool of employees is affected
- Where the contract is unambiguous, parole or extrinsic evidence is inadmissible to vary its terms
- The burden of proving whether an employee utilised leave days lies on the employer as custodian of employment records
Court orders
#- 1.The Claimant's case against the Respondent for unfair termination of his contract of service is dismissed
- 2.The Respondent is ordered to pay the Claimant redundancy terminal dues of Ksh. 10,333,737.40 (salary arrears Ksh. 5,272,315.00; leave commutation for 69 days Ksh. 2,425,264.90; salary for February 2021 Ksh. 1,054,463.00; severance pay Ksh. 1,581,694.50)
- 3.The Respondent is prohibited from deducting Ksh. 1,000,000.00 towards recovery of club fees from the amount awarded
- 4.The Respondent is barred from effecting recovery of Ksh. 300,000.00 conditional on the Claimant returning the computer supplied to him
- 5.The amount awarded attracts interest at court rates from the date of the judgment
- 6.The sum awarded is subject to the applicable statutory deductions
- 7.Each party to bear own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and the Constitution (employment and labour relations dispute); specific provisions invoked include articles 41 and 47 of the Constitution of Kenya 2010 and sections 10, 17, 19, 28, 40, 45 and 74 of the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mathenge v DLR Group Africa Limited (Cause E942 of 2021) [2024] KEELRC 960 (KLR)", Case Analysis (2024). Cause No E942 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/960/eng@2024-05-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.