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ELRCPartially AllowedELRCA No. E015 of 2023· [2024] KEELRC 1421 (KLR)

Radar Limited v Ali & another (Appeal E015 & E014 of 2023 (Consolidated)) [2024] KEELRC 1421 (KLR)

Employment and Labour Relations Court
14 March 2024
MMM. Mbarũ
2,022 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court cut a security guard's award, confirming employers must give reasons in termination notices but leave pay claims only reach back 18 months.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Mombasa (ELRCA No. E015 of 2023, consolidated with ELRCA No. E014 of 2023) against the judgment of the learned magistrate in Kaloleni CMELRC No. E004 of 2021, delivered on 26 July 2023, which found unfair termination of a security guard employed from 1st August 2015 to 31st October 2018 and awarded maximum 12 months' compensation, notice pay, unpaid leave, severance pay, costs and interest. The employer appealed, contending that proper notice was issued, that leave pay was contrary to Section 28(2), that severance was inapplicable absent redundancy, and that 12 months' compensation was excessive. The court re-evaluated the record as required on a first appeal and held that although notice was issued under Section 35, Sections 43 and 45 obliged the employer to assign genuine reasons in the notice; the notice of 1st October 2018 was silent on reasons, so the finding of unfair termination stood. However, the maximum compensation award was excessive for 3 years' service and was reduced to three months (Kshs. 53,460). Notice pay was struck out as double allocation since notice was issued and served. Severance pay was disallowed because no redundancy was declared and the loss of the third-party contract was not stated in the notice. Leave pay was confined to the statutory 18-month window, computed at 33 days and Kshs. 19,602. On costs, the court held that costs do not follow the event in employment claims absent gross employer unfairness, and set aside the trial court's costs award, directing each party to bear its own costs. The appeal partially succeeded; the trial judgment was reviewed accordingly on 14th March 2024.

Key legal issues

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01

Whether termination by notice under Section 35 without stated reasons was fair

Holding

Unfair; the notice dated 1st October 2018 assigned no reason for termination, contrary to Sections 43 and 45

Reasoning

Even a Section 35 contractual termination requires the employer to give reasons under Sections 43 and 45. The loss of the third-party contract advanced in submissions was not stated in the notice. Reasons relied on must be those the employer genuinely held at the time and must appear in the termination notice. A blank notice constitutes unfair termination, so the magistrate's finding could not be faulted.

p. 3
02

Whether the maximum 12 months' compensation was justified

Holding

No; the award was excessive for 3 years of service and reduced to 3 months' compensation (Kshs. 53,460)

Reasoning

Section 45(2) requires regard to the employer's efforts to comply with the law and prompt payment of dues. The maximum award must address exceptional circumstances and be supported by stated reasons. The respondent served only 3 years, so an award of three months' compensation was appropriate, following the approach in Alfred Muthomi and Teachers Service Commission v Timothy Onyango Olale.

p. 4
03

Notice pay

Holding

Not payable; notice was issued and served, so payment in lieu is double allocation

Reasoning

The record shows the respondent received the termination notice dated 1st October 2018 and served to the end of it. Under Section 35, payment in lieu of notice is only due where notice is not given; since notice was given and served, the award of notice pay was in error and is set aside.

p. 4
04

Severance pay

Holding

Not payable; no redundancy was declared and the notice assigned no operational reason

Reasoning

Severance pay is contingent on a declaration of redundancy. The termination notice dated 1st October 2018 did not disclose loss of the third-party contract or any operational requirements. Since the termination was found unfair rather than a redundancy, the award of severance pay by the trial court was not justified.

p. 4
05

Untaken leave for the full period of service

Holding

Leave pay confined to 18 months: 33 days accrued at Kshs. 19,602

Reasoning

Annual leave is a right under Section 28, and the employer bears the duty to keep records and allow leave. However, leave cannot accumulate beyond 18 months absent employer approval or a declined leave application. The respondent admitted going on leave and did not show any application was declined. Payment in lieu therefore goes back only 18 months, yielding Kshs. 19,602.

p. 4

Legal principles established

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  • Even where notice is issued under Section 35, Sections 43 and 45 require the employer to assign genuine reasons for termination in the notice; a blank notice renders the termination unfair.
  • The maximum 12-month compensation under Section 45(2) must be reserved for exceptional circumstances and supported by stated reasons.
  • Untaken leave can only be claimed going back 18 months, and the employee has a duty to apply for leave which cannot accumulate beyond 18 months without employer approval.
  • In employment claims, costs do not follow the event once the employee's dues are paid, absent gross unfairness by the employer.

Court orders

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  1. 1.Compensation for unfair termination awarded at Kshs. 53,460 (reduced from 12 months to 3 months)
  2. 2.Leave pay of Kshs. 19,602 for 33 accrued leave days over 18 months
  3. 3.Each party to bear its own costs

Authorities

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Legislation

  • Employment Act, 2007Section 35
  • Employment Act, 2007Section 28 (including 28(2) and 28(4))
  • Employment Act, 2007Section 43 (including 43(2))
  • Employment Act, 2007Section 45 (including 45(2))
  • Employment Act, 2007Section 90
  • Regulation of Wages (General) (Amendment) Orders
  • Employment and Labour Relations Court Act, 2011Section 12(4)
  • ILO Convention 132 (Holiday with Pay Convention (revised) 1970)

Cases cited (9)

  • Togom v Radar Limited
    ELRCA No. E003 of 2023
  • Radar Limited v Daniel Jom Machera
    [2022] eKLR
  • Luka Mbuvi v Economic Industries Limited
    [2020] eKLR
  • Jared Mangera & 11 others v Professional Clean Care Limited
    [208] eKLR
  • Eric Odhaiambo Owade & 2 others v Professional Cleaning Care Limited
    [2018] eKLR
  • Matsesho v Newton
    (Cause 9 of 2019) [2022] eKLR
  • Gas Kenya Limited v Odhiambo
    (Appeal E006 of 2022) [2022] eKLR
  • Alfred Muthomi & 2 Others v National Bank of Kenya Limited
    [2018] eKLR
  • Teachers Service Commission v Timothy Onyango Olale
    [2022] eKLR
On appeal from
Kaloleni Magistrates' Court (CMELRC)
CMELRC No. E004 of 2021
Jurisdiction invoked
First appeal from the magistrates' court under the Employment and Labour Relations Court Act, 2011

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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

Cite this brief

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Cite this brief

Caselaw, "Radar Limited v Ali & another (Appeal E015 & E014 of 2023 (Consolidated)) [2024] KEELRC 1421 (KLR)", Case Analysis (2024). ELRCA No. E015 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1421/eng@2024-03-14

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