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ELRCPartially AllowedNot stated in the judgment· [2024] KEELRC 1548 (KLR)

Kamau v Cleanshelf Supermarket Limited (Cause 662 of 2020) [2024] KEELRC 1548 (KLR)

Employment and Labour Relations Court
21 June 2024
2,603 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, employed from 13th December 2011 and promoted to Reporting Accountant in May 2016 on a gross salary of Kshs. 64,000, was suspended without pay on 27th May 2020 over alleged delayed VAT filings, shortly after receiving a final warning and surcharge. On reporting back on 10th June 2020 she was issued a termination letter citing redundancy, originally back-dated to 10th May 2020 and later corrected. The Respondent attributed termination to the introduction of an integrated ERP system and had offered terminal dues of Kshs. 367,269, which partial judgment had already compelled it to pay following a Ruling dated 24th September 2021. The Court framed three issues: fairness of procedure, validity of reason, and remedies. It held that the Respondent wholly disregarded Section 40 of the Employment Act: no notices issued to the Claimant or the Labour Office, no tripartite consultation, and no explanation for her selection. It further found the redundancy colourable - a device to justify termination after the employer realised disciplinary proceedings would fail - so there was no valid reason under Sections 40, 43 and 45. On remedies, the Court awarded 12 months' salary (Kshs. 768,000) as compensation, plus refund of a Kshs. 5,000 VAT penalty deduction, total Kshs. 773,000. It declined the suspension amount, unexplained salary reduction, increment arrears (finding praise by superiors created no enforceable obligation), terminal benefits already paid, and exemplary damages. Costs and interest at court rate were granted to the Claimant.

Key legal issues

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01

Fairness of redundancy procedure

Holding

Procedure was unfair and unlawful; no notices to the Claimant or Labour Office, no tripartite consultation, no selection criteria disclosed

Reasoning

Section 40 requires notification of the employee and Labour Office and consultation. The Claimant was suspended without pay on disciplinary grounds, issued a final warning with no subsequent misconduct, then handed a termination letter citing redundancy upon reporting back. The Court found a complete aberration of the statutory redundancy procedure and, alternatively, a breach of Sections 41 and 45.

p. 4
02

Validity of the reason for termination

Holding

No valid reason; the redundancy was colourable, designed to cloak a failed disciplinary agenda

Reasoning

The ERP system was not shown to render the Reporting Accountant role superfluous; the role was not phased out and the system was already in motion during suspension. The reason radically shifted from late VAT filing to sudden redundancy, indicating the employer realised disciplinary proceedings would fail.

p. 5
03

Remedies for unfair termination

Holding

Maximum compensation of 12 months' gross salary (Kshs. 768,000) awarded given 8½ years of exemplary service, no contribution to termination, and the deficient manner of termination

Reasoning

The Claimant served 8½ years, was promoted on merit, described as exemplary, did not contribute to termination, and had an indefinite contract. Terminal dues of Kshs. 367,269 were only paid after court intervention. The Court granted the equivalent of 12 months' salary at Kshs. 64,000 monthly.

p. 5
04

Unlawful deduction of VAT penalty

Holding

Refund of Kshs. 5,000 granted; deduction unsupported and imposed without a hearing

Reasoning

The Respondent did not prove it incurred the VAT penalty through the Claimant's acts or omissions, and no hearing was conducted before deducting the sum from her terminal dues.

p. 5
05

Enforceability of promised salary increment

Holding

Hortatory praise by superiors did not create an enforceable obligation to increase salary by Kshs. 25,000 monthly

Reasoning

Although promoted and commended, no document showed an agreed or enforceable commitment to a specific Kshs. 25,000 monthly increment; the Claimant received annual increments applicable to all staff.

p. 6

Legal principles established

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  • An employer who elects redundancy as the mode of termination must fully comply with Section 40 of the Employment Act
  • Employees cannot be made to bear their employer's VAT obligations without a hearing establishing their liability

Court orders

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  1. 1.It is declared that termination was unfair and unlawful
  2. 2.The Respondent shall pay to the Claimant compensation for unfair and unlawful termination equivalent of 12 months' salary at Kshs. 768,000 and refund of Kshs. 5,000 - total Kshs. 773,000
  3. 3.Costs to the Claimant
  4. 4.Interest granted at court rate, from the date of Judgment, till payment is made in full
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; Statement of Claim filed 16th October 2020)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Kamau v Cleanshelf Supermarket Limited (Cause 662 of 2020) [2024] KEELRC 1548 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1548/eng@2024-06-21

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