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ELRCPartially AllowedMombasa MCELRC 132 of 2018 (Appeal)· [2024] KEELRC 2623 (KLR)

Safina Transporters Limited v Onyango (Appeal E050 of 2024) [2024] KEELRC 2623 (KLR)

Employment and Labour Relations Court
24 October 2024
2,058 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenyan employers who fail to keep written employment records risk losing disputes on the employee's word alone.

What this practically means

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Executive summary

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This is a judgment of the Employment and Labour Relations Court at Mombasa, delivered by M. Mbarũ, J, on 24 October 2024, on appeal from the judgment of 29 February 2024 in Mombasa MCELRC No. 132 of 2018. The appellant, Safina Transporters, challenged the trial court's findings that it had changed its name from Ali Yislam Abeid Transporters in February 2016 and had therefore employed the respondent driver from October 2013, and that it had unfairly terminated his employment in December 2016 with an excessive award of 12 months' compensation. The respondent had claimed notice pay, 12 months' compensation, service pay, NSSF contributions, leave pay and a certificate of service. The court held that the employer bore the legal duty under Sections 10(6), (7) and 13 of the Employment Act to keep and submit employment records and to issue written particulars of any change in the employer's name or identity; in employment and labour relations the employee is protected, so a bare assertion of separate corporate identity was insufficient. Continuity of employment from October 2013 to 20 December 2016 was found. On termination, Section 44(4) must be read with Section 41(2), and absent any record that the appellant secured the respondent's procedural rights, the finding of wrongful and unfair termination was proper. However, the maximum 12 months' compensation required exceptional circumstances and cogent reasons, which were absent; taking into account the respondent's roughly 3 years of service and prior warnings, the award was reduced to 3 months' gross wage of Ksh.90,000. Notice pay of Ksh.30,000 and a certificate of service were confirmed; NSSF remittances had been made, disengaging Section 35(5) and (6). The appeal was partially allowed: the trial judgment was varied accordingly, with each party bearing its own costs in both the appeal and the trial.

Key legal issues

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01

Identity of the employer - whether Safina Transporters was a separate entity from Ali Yislam Abeid Transporters

Holding

The respondent's employment was continuous from October 2013 to 20 December 2016; the employer had a legal duty under Sections 10 and 13 of the Employment Act to document the change of name and specify the start of continuous employment, which it did not do.

Reasoning

The court applied Sections 10(3), 10(6) and (7), and 13(1), (6), (7) and (8) of the Employment Act. The employer failed to produce records or issue written particulars of the change of business name. In employment and labour relations the employee is protected, so a mere assertion of separate corporate identity is insufficient. The respondent was held to have worked cumulatively from October 2013 to December 2016.

p. 4
02

Whether the summary dismissal was fair

Holding

The termination was wrongful and unfair; the appellant produced no record showing it secured the respondent's procedural rights under Section 41.

Reasoning

Section 44(4) must be read with Section 41(2): the employer must notify the employee of the grounds for termination in a language he understands, in the presence of a fellow employee or trade union official, and hear his representations. The appellant's summary dismissal notice recorded a hearing, but the respondent denied being issued the notices, and no record proved procedural compliance, so the trial court's finding of unfair termination was proper.

p. 4
03

Whether the 12 months' compensation award was excessive

Holding

Yes; the maximum award requires exceptional circumstances and cogent reasons, absent here. Compensation reduced to 3 months' gross wage (Ksh.90,000).

Reasoning

Relying on Grace Otieno v Salaries and Remuneration Commission and the Court of Appeal in National Social Security Fund v Grace K. Kazungu (citing CMC Aviation v Mohammed Noor), the court held a trial court must assign reasons guided by Section 49(4). The respondent served about 3 years, and warnings had been issued over the deliveries, making 3 months' compensation appropriate.

p. 5
04

Whether notice pay and NSSF-related claims were payable

Holding

One month's notice pay of Ksh.30,000 was due upon the finding of unfair summary dismissal; NSSF remittances having been made, Section 35(5) and (6) did not apply.

Reasoning

Since the summary dismissal was found unfair, notice pay followed as a matter of course. There were remittances to the NSSF even though no payment statement was issued to the respondent, which removed him from the statutory exemptions in Section 35(5) and (6) of the Employment Act.

p. 5

Legal principles established

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  • The legal duty to submit employment records in court rests on the employer under Section 10(6) and (7) of the Employment Act, and where oral employment terms are not reduced to writing within two months as required by Section 10(3), the word of the employee is taken as correct.
  • Where the name of the employer is changed without change in identity, continuity of employment is preserved and the new entity bears the employment obligations; a mere assertion of separate legal identity is insufficient in employment and labour relations.
  • Section 44(4) of the Employment Act on summary dismissal must be read together with Section 41(2) on notification and hearing of the employee.
  • An award of the maximum 12 months' compensation under Section 49 of the Employment Act must be reserved for exceptional cases and supported by cogent reasons.

Court orders

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  1. 1.Judgment in Mombasa MCELRC No.132 of 2018 reviewed so that compensation is Ksh.90,000 (3 months' gross wage)
  2. 2.One month's notice pay of Ksh.30,000 confirmed
  3. 3.Certificate of service to issue
  4. 4.Each party to bear its own costs for both the appeal and the trial court proceedings

Authorities

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Legislation

  • Employment ActSection 10(3), 10(6) and (7)
  • Employment ActSections 9 and 10
  • Employment ActSection 13(1), (6), (7) and (8)
  • Employment ActSection 44(4)
  • Employment ActSection 41(2)
  • Employment ActSection 49 (including 49(1)(a), (b), (c) and 49(4))
  • Employment ActSection 35(5) and (6)
  • Employment Act, 2007Section 10(1) and (7)

Cases cited (6)

  • Caroline Gathoni Gikonyo v Kenya Association of Investment Groups
    [2015] eKLR
  • Elly Ayieko Gwara v Evans Sunrise Medical Center
    [2020] eKLR
  • Matsesho v Newton
    (Cause 9 of 2019) [2022] KEELRC
  • Grace Otieno v Salaries and Remuneration Commission
    [2020] eKLR
  • National Social Security Fund v Grace K. Kazungu & another
    [2018] eKLR
  • CMC Aviation Limited vs. Mohammed Noor
    [2015] eKLR
On appeal from
Employment and Labour Relations Court, Mombasa (trial court)
Mombasa MCELRC 132 of 2018
Jurisdiction invoked
Appellate jurisdiction of the Employment and Labour Relations Court over appeals from its own first-instance decisions (judgment delivered in Mombasa MCELRC 132 of 2018 on 29 February 2024)

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, "Safina Transporters Limited v Onyango (Appeal E050 of 2024) [2024] KEELRC 2623 (KLR)", Case Analysis (2024). Mombasa MCELRC 132 of 2018 (Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2623/eng@2024-10-24

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