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ELRCPartially AllowedNot stated in judgment text provided· [2024] KEELRC 2323 (KLR)

Sirere & 6 others v Nesco Services Ltd (Employment and Labour Relations Cause 75 of 2016) [2024] KEELRC 2323 (KLR)

Employment and Labour Relations Court
24 September 2024
5,851 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~23 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that losing a client contract doesn't excuse an employer from following the legal redundancy procedure before terminating workers.

What this practically means

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Executive summary

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Seven cleaners of a cleaning services company sued claiming their employment was unfairly and unlawfully terminated on 30th January 2014, seeking declarations, terminal dues, 12 months' compensation, certificate of service, costs and interest. The Respondent asserted the termination followed the loss of its cleaning contract with the World Bank (Kenya), that notices were issued and dues paid, and objected that the suit was a defective representative suit lacking authority. The Court first rejected the objection, holding the matter involved co-claimants and that no law required the 1st Claimant to hold written authority to swear a verifying affidavit. On the merits, the Court found the termination arose from operational requirements, i.e. redundancy, and that the mandatory Section 40 Employment Act procedure - redundancy notices and consultation - was not followed, rendering the terminations procedurally unfair. On substantive justification, although the employer alleged a lapsed client contract, neither the contract nor evidence of the unsuccessful bid was tendered; applying the BMD Knitting Mills fairness test, the Court found no valid and fair reason proved. The claims for overtime, house allowance, underpayment, gratuity and salary in lieu of notice all failed for lack of specificity or proof, or because salaries were consolidated and one month's notice was given. The claim for untaken leave succeeded as uncontroverted. The Court awarded compensation of 3 to 12 months' gross salary per Claimant plus three years' untaken leave pay, with interest and costs. Judgment delivered on 24th September 2024 by Ocharo Kebira J.

Key legal issues

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01

Whether the suit was defective as a representative suit filed without authority

Holding

The suit was not representative but one of co-claimants; the objection failed

Reasoning

The Respondent argued the 1st Claimant lacked written authority. The Court held the suit involved co-claimants, not a representative action, and that no law required written authority for a verifying affidavit sworn for verification purposes. The Claimant's own submissions relied on inapplicable Civil Procedure Rules, but the objection itself stood on no legal footing and was rejected.

p. 8
02

Whether the termination was procedurally fair

Holding

Termination was procedurally unfair as the Section 40 redundancy procedure was not followed

Reasoning

The loss of the client's contract constituted termination on operational requirements, i.e. redundancy. Section 40 requires redundancy notices and consultation, which were not issued or undertaken. The Court adopted the reasoning that the notice requirement allows parties to explore alternatives to mitigate terminations, and found no consultations occurred at all.

p. 10
03

Whether there was a valid and fair reason (substantive justification)

Holding

No valid and fair reason was proved; the alleged contract was not tendered in evidence

Reasoning

The employer bore the burden under Sections 43 and 45(2) to prove a valid and fair reason. Despite alleging that its contract with the World Bank lapsed and its bid failed, the Respondent did not tender the contract or evidence of the unsuccessful bid. Applying the BMD Knitting Mills fairness test, the claimed commercial rationale was not substantiated.

p. 12
04

Entitlement to compensatory damages under Section 49(1)(c)

Holding

Compensation of 3 to 12 months' gross salary awarded based on length of service and conduct of termination

Reasoning

The Court exercised its discretionary power under Section 49(1)(c), considering each Claimant's length of service, the termination's non-compliance with the law, and the absence of contribution by the Claimants to the termination. Long-serving claimants received up to 12 months' compensation; shorter-serving ones 3 to 6 months.

p. 14
05

Claim for untaken leave days

Holding

Allowed; the Respondent did not controvert the Claimants' evidence of never taking leave

Reasoning

The contracts provided 21 days' annual leave consistent with Section 28. The Claimants' uncontroverted evidence that they never took leave, coupled with the Respondent's position as keeper of employment records under Section 74, justified compensation for three years of untaken leave per Claimant.

p. 13

Legal principles established

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  • For a termination to pass the fairness test there must be both substantive justification and procedural fairness
  • Termination on grounds of operational requirements is redundancy and must strictly comply with Section 40 of the Employment Act, including redundancy notices and consultation
  • Fairness of an operational reason is tested by examining whether a reasonable commercial basis exists and whether the decision was fair to the affected employee, not merely whether it was the choice the court would have made
  • An overtime claim must be pleaded with specificity as to the particular days and hours worked; Section 74 does not create an automatic pass to judgment where the employer fails to produce records
  • A co-claimant who swears a verifying affidavit need not produce written authority to swear it on behalf of other claimants; such a suit is not a representative suit

Court orders

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  1. 1.Judgment entered for the Claimants against the Respondent with compensation for unfair termination equivalent to 3 to 12 months' gross salary depending on each Claimant's length of service (George Oduor Sirere Kshs. 109,250; Jackonia Omondi Ogego Kshs. 98,739; Christine Nyamoramambo Maangi Kshs. 52,343.40; Gladys Lukendo Ambuchi Kshs. 98,379; James Sangani Monayo Kshs. 121,716; Pamela Nanguni Naibeni Kshs. 26,171.70; Winfred Mwiva Kshs. 149,500)
  2. 2.Compensation to each Claimant for earned but untaken leave days for 3 years (e.g. Kshs. 22,942.50 for the 1st Claimant), totalling per Claimant: Kshs. 132,192.50; 119,474; 70,663.59; 119,474; 143,016.30; 44,491.89; 180,895
  3. 3.Interest on the sums awarded at court rates from the date of Judgment until payment in full
  4. 4.Costs of the suit to the Claimants, instruction fee to be computed on the basis of the total amount awarded
  5. 5.Rejection of the Respondent's contention that the claim should be struck out

Authorities

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Legislation

  • Employment ActSection 45
  • Employment ActSection 41
  • Employment ActSection 40
  • Employment ActSection 43
  • Employment ActSection 47(5)
  • Employment ActSection 28
  • Employment ActSection 74
  • Employment ActSection 35(1)
  • Employment ActSection 49(1)(c)
  • Labour Relations Act (South Africa)Section 213
  • Evidence Act, Cap 80 Laws of KenyaNotice to produce
  • Civil Procedure RulesOrder 21 Rule 1
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Section 1B
  • ILO Convention No. 158 - Termination of Employment Convention, 1982

Cases cited (10)

  • Walter Ogal Anuro v Teachers Service Commission
    (2013) eKLR
  • Hasbon Ngaruya Waigi vs. Equatorial Commercial Bank
    [2013]
  • Kenya Airways Limited vs Aviation [and Allied Workers Union]
  • Isdor Rachuonyo vs. Brava Food Industries Limited
    Nairobi ELRC No. 907 of 2017
  • Wilson vs. Atomic Energy of Canada Limited
    2016 SCC 29
  • BMD Knitting Mills [Pty] Limited vs. SACTWU
    [2001] 73 LLR 705 [LAC]
  • Bandi vs. Mason Services Limited
    [Cause No. 166 of 2018] [2023] KEELRC 1054 [KLR] [28th April 2023]
  • James Orwaru Nyaundi vs Kilgoris Klassic Sacco Limited
    [2022] eKLR
  • Bamburi Cement Ltd v William Kilonzi
    (2016) eKLR
  • Kenya Kazi Services Ltd v Dickson Onjwaya Wasike & 42 others
    [2021] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 35, 40, 41, 43, 45, 47(5), 49(1)(c) and 74)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Sirere & 6 others v Nesco Services Ltd (Employment and Labour Relations Cause 75 of 2016) [2024] KEELRC 2323 (KLR)", Case Analysis (2024). Not stated in judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2323/eng@2024-09-24

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