Maina v Muriungi & 2 others (t/a Sheikh & Co Advocates) (Cause 23 of 2021) [2024] KEELRC 2252 (KLR)
The bottom line
#A Nakuru court ruled a law firm's redundancy of its employee was unfair, awarding her over Kshs 1.3 million because the employer skipped legally required redundancy steps.
What this practically means
#Executive summary
#Key legal issues
#Fairness and lawfulness of redundancy under Section 40 of the Employment Act
The redundancy was unfair and unlawful; the mandatory conditions in Section 40 were not complied with
The court recited Section 40 of the Employment Act and tested the respondents' conduct against each condition. Beyond the letter of termination dated 30th July 2020, there was no evidence of notice to the employee or labour officer, consultation, disclosure of selection criteria, or payment of leave, notice and severance dues before the redundancy. The procedure adopted was therefore unfair and unlawful.
Quantum of reliefs following unfair termination
Notice pay of Kshs120,000/=, compensation of six months' pay (Kshs720,000/=), leave pay of Kshs196,000/=, severance pay of Kshs390,000/=, unpaid commissions of Kshs103,105/= and salary arrears of Kshs180,000/= awarded
The court applied Section 40(1)(f) for notice pay, exercised discretion to award six rather than twelve months' compensation given the claimant's marketability and prompt re-employment, drew adverse inferences from the respondents' failure to keep leave, pay-slip and commission records under Sections 10 and 74, and held the April-only pay-cut memo could not justify deductions for May, June and July.
Proof of the counter-claim for loan balance of Kshs367,851/=
Counter-claim proved on a balance of probabilities; the claimant failed to rebut evidence of the unpaid loan balance
The court was satisfied that a Finance Agreement dated 11th November 2014 evidenced an advance of Kshs850,000/= repayable by monthly salary deductions over 36 months. Although the repayment schedule (exhibit 13) was unsigned and unauthenticated, the burden shifted to the claimant to produce her own evidence of repayment by any mode, which she failed to do, having not testified on the counter-claim.
Whether the Covid-19 pay cut could extend beyond April 2020
Only April 2020 was covered; salary arrears for May, June and July 2020 at 50% were awarded
The internal memo of 1st April 2020 expressly limited the 50% pay cut for partners and associates to the month of April 2020, with other staff taking 20%. If the respondents wanted the cut to continue they could easily have said so. Continued deductions for May and June and non-payment for July 2020 were therefore unjustified and the arrears of Kshs180,000/= were granted.
Legal principles established
#- Section 40 of the Employment Act imposes mandatory conditions precedent to a lawful redundancy, and failure to issue notice to the employee and labour officer, disclose selection criteria, consult, and pay leave, notice and severance dues renders the termination unfair and unlawful
- An employer is the custodian of employment records and must keep and produce them under Sections 10 and 74 of the Employment Act; failure to avail records such as leave records, pay-slips and commission records means withheld evidence may be presumed against the employer
- A certificate of service is an unconditional statutory right under Section 51 of the Employment Act regardless of the circumstances of exit
- A pay-cut memo limited by its terms to one month cannot be extended indefinitely without express agreement or further notice
- Where an employee denies repayment of a proved employer loan, the burden lies on the employee to prove repayment
Court orders
#- 1.A declaration issued that the termination of the claimant by the respondents on purported redundancy was unfair and unlawful
- 2.The claimant awarded a total of Kshs1,341,254/= after set-off of the counter-claim balance of Kshs367,851/= from the gross award of Kshs1,709,105/=
- 3.The respondents to issue and deliver a certificate of service to the claimant within 30 days of the judgment
- 4.The respondents to release and deliver the logbook of the purchased vehicle within 30 days of the judgment
- 5.The claimant awarded costs of the cause
- 6.Each party to meet own costs for the counter-claim
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes under the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Maina v Muriungi & 2 others (t/a Sheikh & Co Advocates) (Cause 23 of 2021) [2024] KEELRC 2252 (KLR)", Case Analysis (2024). Memorandum of Claim dated 27th May 2021 (cause filed at Nakuru ELRC). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2252/eng@2024-09-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.