Samuel Gechiko & 21 others v Kapil Bakery Limited & another [2017] KEELRC 1999 (KLR)
The bottom line
#A Kenyan court ordered an employer facing a redundancy suit to deposit Kshs 400,000 as security because the company had wound up and its director was leaving the country.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Claimants' unopposed application for a warrant of arrest against the 2nd Respondent and for deposit of Kshs 10,000,000/- as security should be granted
- 2.Whether there was evidence that the Respondents might not satisfy any eventual decree, warranting security
- 3.Whether the Respondents had factored in pay in lieu of accrued leave in the redundancy payments made
Key legal issues
#Whether security for due discharge of any decree should be ordered against the 2nd Respondent
Yes, but in a reduced sum: the Respondents were to deposit Kshs 400,000/- with the County Labour Office as security
The Court noted the redundancy notices admitted that the main director was relocating, and the 2nd Respondent was an Indian citizen on the verge of leaving the jurisdiction, risking an unsatisfied decree. Weighing this against the average wage of about Kshs 16,000/- per Claimant, the Court found the 10,000,000/- sought excessive and tailored security to at least cover accrued leave pay. The full merits of the claims were left open for determination.
Whether accrued leave had been paid out on redundancy
At the very least, pay in lieu of accrued leave was not factored into the payments made
The Court compared the memorandum of claim, which sought pay in lieu of notice, overtime pay, annual leave, severance pay and compensation for wrongful termination, with the Respondents' benefits schedules, which showed only severance pay was paid. It did not determine the merits but found leave and the fairness of the redundancies remained live issues, and directed the County Labour Officer to inspect employee records and report.
Legal principles established
#- On termination on account of redundancy, an employee is entitled to pay for outstanding leave and, where notice is not given, at least one month's pay in lieu of notice
- A court may order a defendant who is a foreign citizen about to leave the jurisdiction to deposit security to answer an eventual decree
Court orders
#- 1.The Respondents to deposit with the County Labour Office Kshs 400,000/- as security within the next 10 days
- 2.The County Labour Officer to inspect and examine the Respondents' employee records with a view to determining any outstanding leave due
- 3.The County Labour Officer to file a report with the Court on or before 15 December 2017
- 4.Respondents to file and serve a Response and other requisite documents before 30 November 2017
- 5.Claimants to take a date in the registry for further directions
- 6.Costs in the Cause
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original jurisdiction under the Employment Act, 2007 over employment claims (redundancy, leave, overtime) and incidental interlocutory security for due discharge of decree
Relief refused
#Warrant of arrest against the 2nd Respondent (Kantilal V. Rabadiya)
The Court instead tailored a lesser order for deposit of a computed security amount rather than arrest
Deposit of Kshs 10,000,000/- as security
The Court held the full sum was not justified; security scaled to cover accrued leave only, given average wages of about Kshs 16,000/- per Claimant
Costs
Costs in the Cause.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
(i) The Respondents to deposit with the County Labour Office Kshs 400,000/- as security within the next 10 days.
the 1st Respondent had wound up its activities and the 2 nd Respondent, a director and citizen of India was on the verge of leaving the jurisdiction of the Court, and therefore any eventual decree would remain unsatisfied.
Section 40 of the Employment Act, 2007 provides that on termination on account of redundancy, an employee is entitled to pay for outstanding leave, at least 1 month pay in lieu of notice where notice is not given.
In the schedules filed by the Respondents, the Claimants were paid only severance pay.
Issues in the judgment
#The Court itself noted uncertainty about the earlier order for deposit of Kshs 10,000,000/- made on 15 June 2017
The case number of the Cause is not stated anywhere in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Samuel Gechiko & 21 others v Kapil Bakery Limited & another [2017] KEELRC 1999 (KLR)", Case Analysis (2017). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1999/eng@2017-11-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.