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ELRCPartially AllowedNot stated in the judgment· [2025] KEELRC 2852 (KLR)

Kariuki & 3 others v Goodhope Caterers Limited (Cause E046 of 2024) [2025] KEELRC 2852 (KLR)

Employment and Labour Relations Court
21 October 2025
3,474 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Four hotel workers won statutory severance pay for redundancy after their employer shut down, though most other claims failed for lack of proof.

What this practically means

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Executive summary

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Four employees of a hotel/bar business, unionised through KUDHEIHA Workers Union, sued for terminal dues after the Respondent wound up its business in November 2021, citing COVID-19-induced losses. The Claimants alleged underpayment, unpaid house allowance, unpaid half salaries for March–October 2021, unpaid public holidays, unpaid leave and severance pay, and sought declaratory orders. The Respondent maintained it complied with Section 40(1) of the Employment Act, paid a month's salary in lieu of notice and accrued leave, and that employees were paid for days actually worked under a shift system. The Court framed one issue: whether the Claimants were entitled to the reliefs pleaded, holding that the fairness of the termination did not arise since it was never pleaded. The underpayment claims of the 1st, 2nd and 4th Claimants failed because the Wages Order prescribed no minimum wage for their categories, and house allowance claims failed as salaries were consolidated. The 3rd Claimant, a waiter paid below the statutory consolidated minimum, was awarded underpayment of Kshs. 48,876.48. Leave, half-salary and public holiday claims were dismissed for lack of proof and the statutory lapse of leave. Severance pay was awarded to all four Claimants at fifteen days' pay per completed year, Section 40(1)(g) being mandatory and no severance having been paid. Each party was ordered to bear its own costs.

Key legal issues

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01

Entitlement to severance pay on redundancy

Holding

Claim succeeded; each Claimant entitled to severance pay at 15 days' pay per completed year of service, as none was paid

Reasoning

Section 40(1)(g) of the Employment Act mandatorily requires severance pay of not less than fifteen days' pay for each completed year of service upon redundancy. It was not disputed that the terminations arose from redundancy, and there was no evidence that the Respondent paid severance pay. The Court therefore awarded each Claimant severance computed on their respective years of service.

p. 7
02

Salary underpayment and house allowance

Holding

Only the 3rd Claimant's underpayment claim succeeded, to the extent of the proven shortfall; house allowance claims failed because salaries were consolidated

Reasoning

Consolidated salaries are presumed to cover allowances, but a claim survives where the consolidated salary falls below the statutory minimum wage. The Wages Order prescribed a minimum for waiters, and the 3rd Claimant's consolidated pay of Kshs. 15,500 fell below the computed minimum of Kshs. 16,857.68. For the other Claimants, no comparable minimum wage category existed, so the claims could not be established.

p. 6
03

Half salary for March to October 2021

Holding

Claim declined; Claimants worked alternate-day shifts and were paid for days actually worked during the COVID-19 period

Reasoning

The muster roll and CW1's own admission showed the Claimants worked alternating shifts and not every day. Taking judicial notice of COVID-19 disruptions, the Court found the Respondent was not operating at full capacity and that paying half salary for a month in which only half the days were worked would be unreasonable and unconscionable.

p. 7
04

Leave pay and public holidays

Holding

Both claims dismissed for lack of proof and the statutory lapsing of untaken leave

Reasoning

Terminal dues already included an element of leave pay, and the Claimants did not show any shortfall; under Section 28(4) of the Employment Act untaken leave must be taken within the statutory window. On public holidays, the Claimants produced no evidence of working gazetted holidays without pay, and the burden of proving excess work rests on the employee.

p. 6
05

Fairness of termination

Holding

Not determined; the issue was not pleaded despite being argued in submissions

Reasoning

Although the Claimants submitted on the substantive and procedural fairness of the redundancy, they did not plead those issues in the Statement of Claim, which identified the dispute solely as failure to pay terminal benefits. No declaration of unfair termination or attendant reliefs was sought, so the question did not arise for determination.

p. 5

Legal principles established

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  • An employer declared redundant employees must be paid severance pay at not less than fifteen days' pay for each completed year of service, a statutory obligation couched in mandatory terms
  • Where a consolidated salary falls below the statutory minimum wage, the employee is entitled to the proven underpayment
  • The burden of proving work done in excess of the legal maximum (including work on public holidays) rests with the employee

Court orders

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  1. 1.The 1st Claimant awarded severance pay of Kshs. 142,500.00, computed at 15 days' pay for each of the 15 years served
  2. 2.The 2nd Claimant awarded severance pay of Kshs. 89,250.00, computed at 15 days' pay for each of the 7 years served
  3. 3.The 3rd Claimant awarded severance pay of Kshs. 101,146.08, computed at 15 days' pay for each of the 12 years served
  4. 4.The 3rd Claimant further awarded Kshs. 48,876.48 (Kshs. 1,357.68 * 36 months) being underpayments for 36 months
  5. 5.The 4th Claimant awarded severance pay of Kshs. 142,500.00, computed at 15 days' pay for each of the 12 years served
  6. 6.Each party to bear its own costs

Authorities

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Legislation

  • Employment ActSection 40(1)
  • Employment ActSection 40(1)(g)
  • Employment ActSection 28(4)
  • Labour Institutions ActSection 48
  • Regulation of Wages (General) (Amendment) Order, 2018Minimum wage provisions
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (2)

  • Kenya Ports Authority v Munyao & 4 others
    [2023] KESC 112 (KLR)
  • Rogoli Ole Manadiegi v General Cargo Services Limited
    [2016] KEELRC 1607 (KLR)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over the employment dispute referred through the Kenya Union of Domestic, Hotels, Educational Institutions and Hospital Workers (KUDHEIHA Workers Union); Employment Act and Labour Institutions Act invoked

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, "Kariuki & 3 others v Goodhope Caterers Limited (Cause E046 of 2024) [2025] KEELRC 2852 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2852/eng@2025-10-21

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