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ELRCPartially AllowedCause No. 1615 of 2015 (Consolidated with Cause No. 2247 of 2015)· [2019] KEELRC 244 (KLR)

Kenya Hotels and Allied Workers Union v Wilton Gateway Hotel Limited & another; Wilfred Magusa Nyangenyo (Interested Party) [2019] KEELRC 244 (KLR)

Employment and Labour Relations Court
22 November 2019
6,578 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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A Nairobi court ruled a hotel's redundancy was unlawful because it skipped mandatory notice and payment steps under Kenya's Employment Act, awarding workers compensation and dues.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Nairobi, Maureen Onyango J, delivered judgment on 22nd November 2019 in two consolidated causes filed by the Kenya Hotels and Allied Workers Union against Wilton Gateway Hotel Limited and Grace Wanjiku Ndirangu, with Wilfred Magusa Nyangenyo joined as Interested Party, over the redundancy of hotel employees in February, September and November 2015. The court framed four issues: existence of an employment relationship, propriety of the Interested Party's claim, whether there was redundancy and whether it was unprocedural, and entitlement to dues, interest and costs. It held that the grievants and the Interested Party were employees of the respondent, the respondent being bound by its pleadings and unable to deny employment for the first time in submissions. On the evidence, including the conciliator's report, the court found the respondent declared the grievants and Interested Party redundant but failed to comply with the mandatory requirements of Section 40 of the Employment Act - no one month notification to the union and labour officer, no termination notices, no fair selection criteria and no payment of terminal dues - rendering the terminations substantively and procedurally unfair. The respondent was also found to have had no authority to deduct meal monies under Section 17(5) of the Employment Act. The court awarded each grievant and the Interested Party compensation of four months' gross salary rather than the maximum twelve months sought, together with tabulated dues for notice pay, accrued leave, public holidays, severance, unlawful deductions and overtime. The Claimant and Interested Party were awarded costs, with interest at court rates from the date of judgment until payment in full.

Key legal issues

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01

Existence of an employment relationship

Holding

The documents annexed in the two claims sufficiently established that the grievants were employees of the respondent; the respondent's attempt to deny employment in submissions failed because it was not pleaded.

Reasoning

The court held parties are bound by their pleadings; the respondent's Memorandum of Response did not deny that the grievants were its employees, so the denial could not be raised in submissions. The documents annexed to the claims, together with the conciliator's report noting no employment records were produced by the respondent, established the employment relationship.

p. 5
02

Proper joinder of the Interested Party

Holding

The Interested Party was properly before the court pursuant to orders of 16th February 2016 enjoining him in the proceedings.

Reasoning

The court noted it had on 16th February 2016 directed that the Interested Party be enjoined and that he file a response to the Claim in Cause 2247 of 2015; accordingly his claim was properly before the court notwithstanding the respondent's objections on the Rules.

p. 5
03

Whether the terminations amounted to unfair and unprocedural redundancy

Holding

The respondent declared the grievants and Interested Party redundant but failed to comply with the statutory requirements of Section 40 of the Employment Act, rendering the terminations substantively and procedurally unfair.

Reasoning

Relying on the definition of redundancy in Section 2 of the Employment Act and on Josphat Ulenje Mando v ARM Cement, the court found the respondent made no attempt to comply with Section 40: no one month notification to the union and labour officer, no termination notices, no fair selection criteria and no payment of terminal dues. The conciliator's report confirmed the employees were laid off and unpaid.

p. 6
04

Entitlement to dues and compensation

Holding

The grievants and Interested Party were entitled to notification of at least one month, termination notice, leave, salary to the last day worked, severance pay and compensation of four months' gross salary each; unlawful food deductions were refundable.

Reasoning

The court applied the Regulation of Wages (Hotel and Catering Trades) Order Rule 20 on notice by length of service, found the deduction of meal monies unauthorized under Section 17(5) of the Employment Act, and assessed compensation at four months' gross salary for each grievant considering the circumstances of separation, lengths of service and the severance package payable, then tabulated the awards per grievant.

p. 6

Legal principles established

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  • Redundancy is a legitimate form of termination of employment but the stringent conditions in Section 40 of the Employment Act - notice to affected employees, the trade union and the labour office, fair selection criteria and payment of terminal dues - must be observed; failure to comply renders the termination substantively and procedurally unfair.
  • In redundancy, two separate and distinct notices are required: a redundancy notice to all employees likely to be affected and a termination notice specific to each employee individually.
  • Parties are bound by their pleadings; a respondent cannot raise for the first time in submissions a denial that was not pleaded in its Memorandum of Response.
  • An employer has no authority to deduct monies from an employee's wages for meals contrary to Section 17(5) of the Employment Act.

Court orders

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  1. 1.Judgment entered for the grievants and Interested Party against the Respondents for stated sums covering pay in lieu of notice, accrued annual leave, public holiday pay, severance pay, compensation of four months' gross salary each, unlawful food deductions and overtime as tabulated per grievant
  2. 2.Each grievant and the Interested Party awarded compensation equivalent to four months' gross salary
  3. 3.Claimant and Interested Party awarded costs of the suit
  4. 4.Interest to accrue at court rates from the date of judgment until payment in full
Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act

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, "Kenya Hotels and Allied Workers Union v Wilton Gateway Hotel Limited & another; Wilfred Magusa Nyangenyo (Interested Party) [2019] KEELRC 244 (KLR)", Case Analysis (2019). Cause No. 1615 of 2015 (Consolidated with Cause No. 2247 of 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/244/eng@2019-11-22

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