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IndustrialPartially AllowedCause No 1354 of 2011· [2012] KEIC 14 (KLR)

Ngugi v Advertising Co. Ltd (Cause 1354 of 2011) [2012] KEIC 14 (KLR)

Industrial Court of Kenya
24 September 2012
2,943 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court ruled that firing an employee after 9 months, with no reason and right after hospitalisation, was unlawful and awarded her compensation.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent on 22nd September 2010 as a Personal Assistant/Office Administrator at a gross salary of Kshs. 60,000/- per month, was dismissed on 23rd June 2011 after 9 months and a day of service, upon her return from hospital where she had lost her child following pregnancy complications and an emergency Caesarean section. The Respondent asserted the Claimant lacked locus standi, relying on Section 45(3) of the Employment Act 2007, which restricted unfair termination claims to employees with over 13 months' service. The Court held it was properly seised under Article 162(2)(a) of the Constitution and Section 12 of the Industrial Court Act 2011, and concurred with the declaration in Samuel G. Momanyi v Attorney General that Section 45(3) was unconstitutional as discriminatory and contrary to access to justice. On the merits, the Court found the termination letter gave no reason for dismissal and no misconduct was proved; the termination was therefore unlawful and inhuman. The Court ordered three months' salary in lieu of notice and payment for unfair termination, and awarded house allowance of Kshs. 250,000/-, computed at Kshs. 25,000/- monthly for 10 months, since neither the appointment letter nor payslip provided for housing. However, the claim for loss of expected earnings failed as unproved special damages, and the claim for a Certificate of Service was abandoned as one had already been issued. Costs and interest at court rates were awarded to the Claimant. Judgment was delivered at Nairobi on 24th September 2012 by Nzioki Wa Makau, Judge.

Key legal issues

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01

Locus standi of an employee with less than 13 months' service

Holding

The Claimant has standing; the 13-month threshold in Section 45(3) of the Employment Act was declared unconstitutional and cannot bar the claim.

Reasoning

The Court is established under Article 162(2)(a) to hear employment disputes, with exclusive jurisdiction under Section 12 of the Industrial Court Act. Section 45(3) of the Employment Act, limiting unfair termination claims to employees with over 13 months' service, was declared unconstitutional in Samuel G. Momanyi v Attorney General as discriminatory and denying access to justice. The Court concurred, holding there is no magic in the 13-month period and constitutional rights cannot be abridged by statute.

p. 3
02

Fairness of the dismissal

Holding

The termination was unfair, unlawful and inhuman - no reason was given and the Claimant was dismissed on return from hospital after losing her child.

Reasoning

The termination letter gave no reason for the dismissal and no misconduct was evidenced. The Claimant's hospitalisation due to pregnancy complications was not controverted, and the Respondent took no steps to ascertain her whereabouts before treating her absence as abscondment. Requiring prompt attendance at work over medical care was described as preposterous. The failure to confirm the employee after a 3-month probationary period for 9 months also weighed against the employer.

p. 4
03

Loss of expected earnings

Holding

Claim fails; special damages not proved and no assurance of long-term employment.

Reasoning

Expected earnings constitute special damages which must be specifically pleaded and proved. The Court analysed the principles for computing past and future earning capacity but found the Claimant had not established a basis for the claim: there was no guarantee she would have worked until 60, the job was not permanent and pensionable, and applying a multiplier would stretch the bounds of employment damages.

p. 5
04

House allowance

Holding

Claimant entitled to house allowance of Kshs. 25,000/- per month, totalling Kshs. 250,000/- for 10 months.

Reasoning

Section 31(1) of the Employment Act obliges the employer to provide reasonable housing or pay a sufficient sum as rent. Neither the appointment letter nor the payslip indicated any housing provision or that gross pay was inclusive of house allowance. The position held would have attracted a house allowance of Kshs. 25,000/- per month, computed for 9 months worked plus one month's notice.

p. 6

Legal principles established

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  • The Industrial Court established under Article 162(2)(a) has jurisdiction over employment disputes irrespective of length of service, Section 45(3) of the Employment Act having been declared unconstitutional.
  • A termination without a stated reason and without notice, following an employee's hospitalisation for pregnancy complications, is unlawful and inhuman.
  • Loss of expected earnings is special damages which must be pleaded and proved.
  • Where the contract is silent on housing, the employer must pay house allowance in lieu of housing under Section 31 of the Employment Act.

Court orders

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  1. 1.Payment of 3 months' salary in lieu of notice
  2. 2.Damages/payment for the unfair termination
  3. 3.House allowance of Kshs. 250,000/- computed at Kshs. 25,000/- per month for 10 months
  4. 4.Costs in favour of the Claimant
  5. 5.Interest at court rates in favour of the Claimant

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2), 162(3), 27, 43, 48
  • Industrial Court ActSections 4(1), 4(2), 4(3), 12(1)(a)
  • Employment Act 2007Sections 10(2)(h), 28(1)(a), 31(1), 45(3)
  • Labour Institutions ActPart III, Sections 11 to 27 (repealed)
  • South African Act (as referenced)Section 36

Cases cited (2)

  • United States International University (USIU) v Attorney General
    [2012] eKLR, Petition No. 356 and 359 of 2012
  • Samuel G. Momanyi v Attorney General and Another
    Nairobi Petition No. 341 of 2011
Jurisdiction invoked
Article 162(2) of the Constitution of Kenya 2010 and Section 12 of the Industrial Court Act, 2011

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, "Ngugi v Advertising Co. Ltd (Cause 1354 of 2011) [2012] KEIC 14 (KLR)", Case Analysis (2012). Cause No 1354 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2012/14/eng@2012-09-24

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