Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedNot stated in the judgment

Van Kappel Kenya Limited v Wanjohi (Appeal E015 of 2023) [2024] KEELRC 2193 (KLR)

Employment and Labour Relations Court
12 September 2024
3,684 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

#

Kenya's Employment Court slashed a retrenched mechanic's award because skipping mandatory redundancy steps still counts as unfair termination—but excessive damages won't survive appeal.

What this practically means

#

Executive summary

#
The appellant employer appealed against a judgment of the subordinate court (Hon Mararo SPM, delivered 3rd October 2023) which found that the retrenchment of the respondent, a Mechanic employed on 14th August 2017 at a monthly salary of Kshs 50,000 and retrenched on 31st May 2019 due to low business, amounted to unfair and unlawful termination, awarding him two months' salary in lieu of notice, severance pay for two years, and twelve months' compensation totaling Kshs 752,500 plus costs and interest. The appellant did not participate in the hearing and contended it was condemned unheard and that the awards were erroneous. The ELRC at Nyeri (Onesmus N Makau, J), guided by Selle v Associated Motor Boat Co Ltd on its first-appeal mandate, framed three issues. On the first, it held the appellant was served with a hearing notice by email and an affidavit of service was filed; its failure to attend was deliberate and raising the issue on appeal without seeking review was an afterthought. On the second, applying sections 45 and 40 of the Employment Act, the court held the retrenchment was procedurally unfair: no prior one-month notice was given to the employee or labour officer, no fair selection was demonstrated, and statutory payments were not made. On damages, invoking Butt v Khan and OlPejeta Ranching Ltd v David Wanjau Muhoro, the court found the maximum 12-month compensation was unjustified because the trial court ignored the section 49(4) factors, and reduced compensation to six months' salary (Kshs 300,000); notice pay was reduced to one month (Kshs 50,000); severance of Kshs 50,000 was upheld; and the award is subject to statutory deductions. The appeal was partially successful, with each party bearing its own costs of the appeal and the trial court's costs award undisturbed.

Questions the Court framed

#

The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Appellant was condemned unheard.
  2. 2.Whether the retrenchment of the respondent amounted to unfair and unlawful termination.
  3. 3.Whether this Court should disturb the award of damages by the trial Court.

Key legal issues

#
01

Whether the appellant was condemned unheard

Holding

The appellant was afforded an opportunity to be heard but deliberately failed to participate; raising the matter on appeal without seeking review is an afterthought.

Reasoning

The hearing notice was served on the appellant's counsel by email on 5th April 2023 and an affidavit of service was filed on 6th April 2023. The matter was fixed for hearing on 13th June 2023 and the appellant did not attend, nor follow up until judgment. The decision to proceed was made in June 2023, so the right of appeal against it lapsed before judgment.

p. 4
02

Whether the retrenchment amounted to unfair and unlawful termination

Holding

The retrenchment was unfair and unlawful because the mandatory procedure under section 40 of the Employment Act was not followed.

Reasoning

The employer did not serve one month's prior notice on the employee or the labour officer, did not demonstrate fair selection, and did not pay salary in lieu of notice, severance pay or accrued dues. The employee bears no fault in a redundancy, and the employer must strictly comply with section 40 conditions for a lawful retrenchment.

p. 6
03

Whether the trial court's award of damages should be disturbed

Holding

The awards were varied: compensation reduced to six months' salary, notice pay reduced to one month, severance pay of Kshs 50,000 upheld, and the award subjected to statutory deductions.

Reasoning

The trial court awarded the maximum 12 months' compensation without considering the section 49(4) factors such as length of service and availability of alternative employment, making the award manifestly excessive for a two-year service. The award of two months' notice pay was unsupported by evidence, while severance at fifteen days' pay per completed year for two years was correctly computed.

p. 7

Legal principles established

#
  • A trial court must justify an award of the maximum compensation under section 49(1)(c) of the Employment Act by taking into account the relevant factors in section 49(4); failure to do so invites appellate interference.
  • An employer who fails to comply with the mandatory conditions under section 40(1) of the Employment Act effects an unfair and unlawful termination on account of redundancy.
  • An award made under section 49 of the Employment Act must be subjected to statutory deductions.

Court orders

#
  1. 1.The appeal is partially successful
  2. 2.The appellant is ordered to pay the respondent Notice Kshs 50,000.00
  3. 3.Compensation Kshs 300,000.00
  4. 4.Severance pay Kshs 50,000.00 (total Kshs 400,000.00)
  5. 5.Each party to bear costs of the appeal but the award of costs in the court below remains undisturbed
  6. 6.Interest at court rate from the date of the impugned judgment
  7. 7.The award of damages is subject to statutory deduction

The bench

#

One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

On appeal from
Magistrates' Court (ELRC jurisdiction), Nanyuki Law Courts
Not stated in the judgment
Jurisdiction invoked
First appellate jurisdiction over the subordinate court's judgment (Memorandum of Appeal dated 13th October 2023); ELRC Procedure Rules referenced

Relief refused

#

Setting aside of the whole judgment and dismissal of the respondent's suit

The appellant was served with a hearing notice and deliberately failed to attend; the retrenchment was procedurally unfair, so the finding of unfair termination was upheld.

p. 4

Upholding of the maximum 12 months' salary compensation

The trial court failed to consider the relevant factors under section 49(4) of the Employment Act, making the award manifestly excessive.

p. 7

Upholding of the award of Kshs 100,000 as salary in lieu of notice

No evidence justified two months' salary in lieu of notice; the correct award is one month's salary.

p. 7

Costs

Each party to bear costs of the appeal but the award of costs in the court below remains undisturbed.

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.

Consequently, I enter judgment as follows: a. The appeal is partially successful
p. 8Disposition - appeal partially successful
Each party to bear costs of the appeal but the award of costs in the court below remains undisturbed.
p. 8Costs order
I am satisfied that an award six (6) months gross salary as compensation for unfair and unlawful termination equaling to Kshs 300,000 is reasonable.
p. 7Substituted compensation award
The award of damages is subject to statutory deduction.
p. 8Statutory deductions on award
An appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate.
p. 6Principles for disturbing damages on appeal

Issues in the judgment

#
minor

Internal inconsistency in dates of the retrenchment letter - the background states the retrenchment letter was dated 31st May 2019, while the respondent's evidence is described as showing retrenchment by a letter dated 31st August 2019.

minor

Submissions refer to collapse of grounds 1, 2, 3 & 9 into one issue, but the Memorandum of Appeal contains grounds (a) to (i) with no numbering matching '9' as ninth ground being cited consistently.

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Van Kappel Kenya Limited v Wanjohi (Appeal E015 of 2023) [2024] KEELRC 2193 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2193/eng@2024-09-12

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