Shah v Vitafoam Products Limited (Employment and Labour Relations Cause 342 of 2019) [2024] KEELRC 2278 (KLR)
The bottom line
#A Kenyan court upheld a redundancy but ordered the employer to pay over Kshs 3 million for untaken leave days it had already acknowledged in writing.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the Claimant's employment by way of redundancy was unfair and unlawful
The redundancy was lawful and procedural; the Claimant and the Labour Officer were served with the one-month redundancy notice as envisaged by section 40(1)(a) of the Employment Act
The court found the employment was terminated by redundancy following the fire that destroyed the Respondent's premises. The redundancy notice dated 21st August 2015 was issued to both the Claimant and the Labour Officer, and gave one month's notice with severance pay at half a month's pay per completed year of service, in line with section 40 of the Employment Act. The Claimant's contention that the process was a sham was not upheld.
Whether the Claimant was entitled to payment for accrued but untaken leave days
The Respondent was bound by its own letter acknowledging 134 accrued leave days; the forfeiture clause relied on was an afterthought in bad faith, and leave not taken is a monetised accrued benefit
A letter dated 26th February 2016 from the Respondent's CEO acknowledged 134 leave days and attempted to negotiate down to 40 then 75 days without success. The court held the Respondent's later reliance on the contractual forfeiture clause was an afterthought in bad faith. Relying on Rumba Mnyika Nguta, the court held leave not taken accrues and must be paid out; the Claimant was awarded 129 remaining days at Kshs. 3,082,500.00.
Legal principles established
#- Leave not taken becomes an accrued benefit which must be monetised and paid out; contractual forfeiture clauses are not supported by the Employment Act
- Failure to follow the procedure in section 40 of the Employment Act renders a redundancy termination unprocedural and unfair
Court orders
#- 1.Judgment entered for the Claimant in the sum of Kshs. 3,240,577.00 for leave days
- 2.The Respondent directed to issue a certificate of service to the Claimant
- 3.The Claimant awarded costs and interests at court rates
- Jurisdiction invoked
- Original jurisdiction of the Employment and Labour Relations Court under Article 41 of the Constitution and the Employment Act (employment and labour relations dispute)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shah v Vitafoam Products Limited (Employment and Labour Relations Cause 342 of 2019) [2024] KEELRC 2278 (KLR)", Case Analysis (2024). Memorandum of Claim dated 24th May 2019 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2278/eng@2024-09-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.