Ibrahim v Rahisi International Limited & another (Cause E362 of 2022) [2024] KEELRC 1317 (KLR)
The bottom line
#A Kenyan employer's flawed redundancy cost it Kshs 616,000 plus costs because it skipped mandatory notice steps and never notified the labour office.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the redundancy was lawful and procedural
- 2.Whether the Claimant's salary was consolidated including house allowance
- 3.Whether the Claimant is entitled to the reliefs sought
Key legal issues
#Whether the redundancy was lawful and procedural
The redundancy was substantively unjustified and procedurally flawed, amounting to unlawful and unfair termination
The Respondents produced no board resolutions declaring employees redundant, no financial statements to prove operational requirements, no letters to other affected employees and no selection criteria. They could not prove service of the redundancy notice or termination letter, and admitted they never notified the labour office as required under section 40 of the Employment Act. The Claimant was given no opportunity to be heard under section 41.
Whether the Claimant's salary was consolidated including house allowance
The salary was not consolidated; the Claimant was entitled to house allowance
The employment contract produced by the Respondents was undated and not signed or countersigned by the Claimant, so he was not bound by it. His March 2022 pay slip did not indicate that his salary was consolidated. The court adopted authority holding that basic salary does not include allowances, and awarded house allowance at 15% of basic salary, totalling Kshs 216,000/=.
Whether the Claimant is entitled to the reliefs sought
Compensation for unfair termination, house allowance and a certificate of service were awarded, taking into account the short tenure and the terminal dues already agreed
Having found unfair termination, the court exercised discretion under section 49 of the Employment Act, considering the Claimant's service of about one year and two months and the consent payment of Kshs 163,332/= in terminal dues. A certificate of service was granted under section 51 of the Employment Act, with costs and interests to the Claimant.
Legal principles established
#- Redundancy must be based on a valid reason and follow a fair procedure, including notice to the employee and the labour office, a fair selection criterion and an opportunity to be heard
- An unsigned, undated employment contract is not binding on an employee, and in the absence of records showing a consolidated salary the employee is entitled to house allowance at 15% of basic salary
Court orders
#- 1.Compensation for unfair termination of Kshs 400,000/= (described in the concluding orders as six months' compensation)
- 2.House allowance of Kshs 216,000/=
- 3.Total award of Kshs 616,000/=
- 4.Certificate of service to be issued to the Claimant
- 5.Costs and interests of the suit to the Claimant
- 6.Consent recorded: Kshs 163,332/= offered by the Respondents to be paid in full and final settlement of the claim for terminal dues within 30 days
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment and labour relations disputes (Employment Act; claim for unfair termination and terminal dues)
Relief refused
#Terminal dues of Kshs 1,576,000/= as particularised (notice pay, service pay beyond agreed sum)
By consent the parties agreed that Kshs 163,332/= would be paid in full and final settlement of the claim for terminal dues
Costs
Costs and interests of the suit awarded to the Claimant ('Costs and interests of the suit')
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In conclusion the Claimant's claim is allowed with costs follows. a. Six months Compensation for unfair termination— Kshs 400,000/= b. House Allowance- Kshs 216,000/= Total Kshs 616,000/= c. Certificate of service. d. Costs and interests of the suit.
In conclusion I am of the view that the Claimant's termination was substantively unjustified and procedurally fiawed hence unlawful and unfair termination.
I therefore find and hold that the Claimant's minimum consolidated wage should have been 15% of the basic salary as housing allowance as provided in the General Order.
The Respondents also acknowledged during hearing that they never notified the labour ofice of the decision to terminate the Claimant on redundancy grounds which is a mandatory requirement under section 40 of the Employment Act.
Issues in the judgment
#Internal contradiction in the award: the analysis awards four months' compensation while the concluding orders describe it as six months, and six months' salary at Kshs 100,000/= would be Kshs 600,000, not Kshs 400,000
The judgment twice refers to the Respondents' 'statement of Response' dated 20th June, 2022 but elsewhere recites the termination date of 7th May, 2022 and a notice dated 19th April, 2022; more notably the concluding narrative states the Respondent 'paid' the terminal dues while the record shows the cheque was dishonoured/stale and the payment was by consent to be paid within 30 days
The judgment contains typographical and drafting errors in the framing of issues ('Whether Whether the Claimants' salary...') and the disposition sentence is incomplete
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ibrahim v Rahisi International Limited & another (Cause E362 of 2022) [2024] KEELRC 1317 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1317/eng@2024-05-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.