Ofyze Holdings Limited t/a Harris Tavern v Mutisya (Appeal E191 of 2024) [2025] KEELRC 256 (KLR)
The bottom line
#Kenya's Employment Court ruled that a Covid-19-forced business closure satisfied redundancy rules despite procedural shortcuts, but employers must still prove salaries include housing allowance.
What this practically means
#Executive summary
#Key legal issues
#Whether non-compliance with section 40 of the Employment Act rendered the termination unfair
The finding of unfair termination was set aside; the employer's actions, including payment of leave, severance pay for 7 years and underpayment pursuant to settlement negotiations, met the standard of reasonableness notwithstanding the Covid-19 compelled closure.
The trial court found non-compliance with section 40 without explaining the basis of that conclusion. The business closure followed a government directive on Covid-19, leaving no room or time to observe the procedural requirements of section 40. The employer entered settlement negotiations and paid leave, severance pay and underpayment, payments consistent with section 40. Substantial compliance without prejudice suffices.
Whether the award of housing allowance should stand
The award of housing allowance stands; the appeal on this ground is dismissed.
Housing allowance is a statutory right and the burden lay on the employer to show by evidence that the salary paid was consolidated and inclusive of housing allowance. No such evidence was tendered, so the learned Magistrate was right to award it as prayed.
Legal principles established
#- On a first appeal, the court must re-evaluate the evidence on facts and law and draw its own conclusions, while allowing for the trial court's advantage of seeing witnesses.
- Section 40 of the Employment Act need not be observed clause by clause; an omission that does not significantly affect the character and purpose of the redundancy and occasions no prejudice cannot vitiate the redundancy as unfair termination.
Court orders
#- 1.The finding that the respondent was unfairly terminated for want of compliance with section 40 of the Employment Act is set aside
- 2.The consequential award of compensation for unfair termination is set aside
- 3.The appeal on the award of housing allowance fails and is dismissed
- 4.Each party shall bear their own costs of the appeal
- On appeal from
- Senior Resident Magistrate's Court
- Not stated in judgment
- Jurisdiction invoked
- First appeal from subordinate court (magistrates' court); appellate jurisdiction not expressly cited
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ofyze Holdings Limited t/a Harris Tavern v Mutisya (Appeal E191 of 2024) [2025] KEELRC 256 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/256/eng@2025-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.