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ELRCPartially AllowedConsolidated: Cause No. 924 of 2017 and Cause No. 49 of 2020 (ELRC Mombasa)· [2025] KEELRC 994 (KLR)

Mwoja & 24 others v Nyali Sun Africa Beach Hotel and Spa Limited (Cause 924 of 2017 & 49 of 2020 (Consolidated)) [2025] KEELRC 994 (KLR)

Employment and Labour Relations Court
27 March 2025
7,780 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~31 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled hotel employees keep their rights when a business changes hands, but workers claiming redundancy must produce actual redundancy notices to win severance pay.

What this practically means

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Executive summary

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The claimant union, KUDHEIHA, filed two consolidated claims (Cause No. 924 of 2017 and Cause No. 49 of 2020) against Nyali Sun Africa Beach and Spa Limited on behalf of former hotel employees, alleging that their employment was terminated on account of redundancy without notice to the union or the labour officer, contrary to Sections 40, 43, 76, 77 and 78 of the Employment Act and clause 11 of the CBA, and claiming reinstatement or, alternatively, terminal dues including notice pay, severance pay, service gratuity, 12 months' compensation, salary arrears, service charge and leave dues. The respondent denied any employment relationship, recognition agreement or CBA with the grievants, asserting it acquired the property from a bank free of liabilities, and challenged the competence of the suit under Sections 34 and 36 of the Advocates Act and for duplicity of suits. The court held the union was properly before the court under the Labour Relations Act and Section 22 of the ELRC Court Act. It found the grievants' employment protected under Sections 12(6)-(8) of the Employment Act despite the change of employer entity, making the respondent a proper party. However, the alleged redundancy could not be established because no redundancy or termination notices were filed, and evidence showed term contracts issued after the alleged termination date. Severance pay and compensation were therefore not awarded. Applying Section 18(4), the court awarded payment of salary arrears, service charge arrears and leave pay (for the last 18 months only), to be tabulated by the parties with access to work records and approval by the court within 30 days, with mention on 30 April 2025 and no orders on costs. Judgment was delivered by M. Mbarũ, J, on 27 March 2025.

Key legal issues

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01

Competence of the union's claim and representation (Sections 34 and 36 Advocates Act objection)

Holding

The claimant union, registered under the LRA and representing its members, is duly authorised to file and appear; the objection under Sections 34 and 36 of the Advocates Act fails.

Reasoning

The court found that the Labour Relations Act permits a trade union to represent its members, and Section 22 of the ELRC Court Act allows a trade union official, an advocate, or the party to file and appear before the court. Following KMPDU v County Government of Kilifi, the union was held to be a proper party to these proceedings, and the Advocates Act provisions were distinguished as directed at unqualified persons drawing pleadings.

p. 16
02

Whether the respondent is the correct employer entity liable to the grievants

Holding

The respondent is a proper party; the change of employer entity without breaking continuity of employment is protected under Sections 12(6), (7) and (8) of the Employment Act.

Reasoning

Despite the respondent acquiring the property from a bank without assuming third-party liabilities, the grievants' employment continued through the transfer of business. The court relied on Section 12(6) of the Employment Act, which protects employees where the employer's identity changes without breaking continuity, and distinguished Chitavi v Malindi Water, where separate contracts broke continuity. The grievants here did not cease employment upon the takeover.

p. 16
03

Whether the terminations constituted an unlawful redundancy under Section 40 of the Employment Act and clause 11 of the CBA

Holding

The alleged redundancy could not be established because no redundancy or termination notices were filed, and evidence showed term contracts issued after the alleged termination date of 1 September 2017.

Reasoning

The court found that some grievants were issued letters of employment effective 4 October 2017, months after the alleged termination, and one grievant's contract was expressly not renewed by notice dated 9 September 2018. Without the subject notices, the allegations of unlawful redundancy could not be audited. The mode and reason of termination remained unclear, defeating the redundancy claims.

p. 19
04

Remedies available for salary arrears, service charge and leave

Holding

Payment for work done is due regardless of the reason for termination; salary arrears, service charge and leave accrued within the statutory period are payable, to be tabulated by the parties with access to work records.

Reasoning

Applying Section 18(4) of the Employment Act and authorities including Nzivo v Bamburi Cement and Mombasa Apparels, the court held that all monies due for work done are payable even upon summary dismissal unless the employee has a liability. Leave is payable for the last 18 months only under Section 28(4). The service charge, an agreed CBA term, is due for the period worked, with the respondent to provide work records.

p. 20

Legal principles established

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  • Where there is a change in the identity of the employer in circumstances in which the continuity of the employee's employment is not broken, the employees' contracts are protected and the incoming employer assumes the employment obligations under Sections 12(6)-(8) of the Employment Act
  • Under Section 18(4) of the Employment Act, an employee is entitled to payment of all monies, allowances and benefits due up to the date of termination of employment, whatever the reason for termination, unless the employee has a liability to the employer
  • Severance pay accrues only upon a redundancy; a claim for unfair termination requires the basis of termination to be established before remedies can be applied
  • Annual leave accrues only for the 18 months preceding termination and accumulated leave days beyond the legal threshold are not claimable
  • An agreed term in a CBA registered with the court, such as service charge earned for the period worked, is lawful and legitimate and enforceable

Court orders

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  1. 1.Judgment entered for the claimant against the respondent for payment of earned and accrued dues during employment
  2. 2.Payment of salary arrears unpaid
  3. 3.Payment of service charge arrears
  4. 4.Payment of leave pay under Section 28(4) of the Employment Act
  5. 5.Parties to tabulate the dues owing to each grievant and take a schedule for approval by the court within 30 days, with the respondent to allow access to work records; failing cooperation, the claimant at liberty to take a tabulation and report to court
  6. 6.Parties at liberty to seek the assistance and facilitation of the County Labour Officer
  7. 7.Mention on 30 April 2025
  8. 8.No orders on costs
Jurisdiction invoked
Employment and Labour Relations Court Act, Section 22 (representation by trade union officials); Employment and Labour Relations Court jurisdiction over employment disputes

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, "Mwoja & 24 others v Nyali Sun Africa Beach Hotel and Spa Limited (Cause 924 of 2017 & 49 of 2020 (Consolidated)) [2025] KEELRC 994 (KLR)", Case Analysis (2025). Consolidated: Cause No. 924 of 2017 and Cause No. 49 of 2020 (ELRC Mombasa). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/994/eng@2025-03-27

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