Thomas & Piron Grand Lacs Limited v Momanyi (Appeal E097 of 2023) [2024] KEELRC 2186 (KLR)
The bottom line
#A Kenyan court cut a worker's unfair termination payout but confirmed employers must follow strict redundancy rules or face liability.
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 trial court erred in finding that the Respondent was unfairly terminated
- 2.Whether the trial court erred in awarding compensatory damages and severance pay at the same time
- 3.Whether the trial court erred in awarding the Respondent leave days not taken
Key legal issues
#Validity of reason and fairness of procedure in redundancy
The termination was unfair: the employer did not prove financial difficulties justifying the redundancy and failed to comply with sections 40 and 41 of the Employment Act.
The employer alleged Covid-19-driven financial hardship but produced no financial statements, failing the validity test under section 43. No month's notice was issued to the union or the employee, no selection criteria were set down, and no consultation meeting was proved. Termination on account of redundancy must satisfy both a valid reason and fair procedure under sections 40, 41, 43 and 45.
Whether compensatory damages and severance pay can be awarded together
Yes; severance pay under section 40(1)(g) is statutory and distinct from compensatory damages under section 49(1)(c).
Severance pay attaches to redundancy declarations regardless of unfairness, while section 49(1)(c) compensation addresses terminations for invalid reasons or by unfair procedure. The two serve different purposes, so both awards may stand. However, severance is calculated on complete years only: 15/30 x 35,000 x 3 years = Kshs 52,500, not the prorated formula the trial court used.
Quantum of compensation for unfair termination
The maximum 12 months' award lacked justification; four months' salary (Kshs 140,000) substituted, taking judicial notice of Covid-19's business impact.
Citing Kenya Broadcasting Corporation v Geoffrey Wakio, an award of maximum 12 months' pay must rest on sound judicial principles, not be capricious or whimsical. The trial court gave no justification. Though the employer proved no financial hardship, the court took judicial notice that Covid-19 negatively impacted businesses, making a four-month award reasonable.
Leave days not taken - burden of proof
The trial court did not err; once the employee alleged untaken leave, the employer bore the burden of disproving it.
Leave is a statutory entitlement under section 28 of the Employment Act. Claims limited to the three years preceding the suit are not time-barred under section 90. As custodian of employment records under section 74, the employer had to produce evidence of leave taken; it could not demand that the employee seek court-ordered production.
Legal principles established
#- Severance pay under section 40(1)(g) of the Employment Act is statutory and payable regardless of whether the termination is found unfair; it is distinct from compensatory damages under section 49(1)(c), which may be awarded simultaneously.
- Severance pay is calculated at 15 days' salary for each complete year of service, with no proration for a portion of a year.
- An award of the maximum 12 months' compensation for unfair termination must be justified on sound judicial principles.
- Once an employee alleges untaken leave, the burden shifts to the employer, as custodian of employment records under section 74 of the Employment Act, to prove the leave was taken.
Court orders
#- 1.The 12 months' salary compensation for unfair termination is substituted with four months' salary as compensation at Kshs 140,000/=
- 2.Severance pay is substituted from Kshs 66,635/= to Kshs 52,500/=
- 3.Leave days not taken remains at Kshs 46,667/=
- 4.The other prayers not challenged in this appeal remain the same
- 5.Each party shall bear their own costs for this Appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Milimani Chief Magistrates Court
- Employment Cause No. E827 of 2020
- Jurisdiction invoked
- First appeal from the Chief Magistrate's Employment Cause under the Employment and Labour Relations Court's jurisdiction under the Employment Act, 2007
Relief refused
#Appellant's challenge to the award of leave days not taken (Kshs 46,667)
The burden shifted to the Appellant as custodian of employment records to disprove the claim, which it failed to discharge
Appellant's challenge to the finding of unfair termination
The Appellant failed to prove valid reason and fair procedure under sections 40, 41, 43 and 45 of the Employment Act
Costs
Each party shall bear their own costs for this Appeal.
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.
a. The 12 months' salary compensation for unfair termination is substituted with four months' salary as compensation at Kshs 140,000/= b. Severance pay is substituted from Kshs 66,635/= to Kshs 52,500/= c. Leave days not taken remains at Kshs 46,667/=
The other prayers not challenged in this appeal remain the same and since the appeal partially succeeds each party shall bear their own costs for this Appeal.
This award is statutory regardless whether the termination is found to be unfair or not. An award under section 49(1)(c) is compensatory and is intended to compensate an employee who has been terminated for invalid reasons and or using an unfair procedure.
An employee in entitled to 15 days salary for each complete year of service. There is no provision for payment of a portion of the year. That is to say, the Act does not provide for a prorated payment.
This Court has established the rule that an award of the maximum 12 months' pay must be based on sound judicial principles.
The Appellant is the custodian of employment records as provided for under section 74 of the Employment Act and it ought to have produced evidence to the contrary without stating that the Respondent must have applied to court for the production of the documents.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Ongubo v Nyangena Hospital Ltd (Appeal E029 of 2024) [2025] KEELRC 1279 (KLR)[2025] KEELRC 1279 (KLR)5 May 2025
- Mayienda v Nyangena Hospital Limited (Appeal E030 of 2024) [2025] KEELRC 1273 (KLR)[2025] KEELRC 1273 (KLR)5 May 2025
Cite this brief
#Cite this brief
Caselaw, "Thomas & Piron Grand Lacs Limited v Momanyi (Appeal E097 of 2023) [2024] KEELRC 2186 (KLR)", Case Analysis (2024). Appeal from Milimani Chief Magistrates Court Employment Cause No. E827 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2186/eng@2024-09-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.