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ELRCPartially AllowedMombasa ELRC Appeal No. E180 of 2022

Hakika Transport Services Limited & another v Nyongesa & another (Appeal E116 of 2023) [2024] KEELRC 438 (KLR)

Employment and Labour Relations Court
29 February 2024
1,551 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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A Kenyan court threw out awards for notice pay, leave pay, and house allowance against an employer because the driver's dismissal followed a fair process and he had already been paid what he was owed.

What this practically means

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Executive summary

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This is a first appeal from the judgment of the magistrates' court in Mombasa CM ELRC No. E180 of 2022 delivered on 19 October 2023. The respondent, employed by the appellant as a truck driver from 2016 until his dismissal on 14 August 2021 over alleged siphoning of fuel, obtained awards for notice pay (Kshs. 21,410), accrued leave (Kshs. 132,050), house allowance (Kshs. 64,800), costs and interest, the magistrate having found due process was followed but terminal dues payable. The appellant appealed, contending leave for 2020 and 2021 was paid in cash, notice pay was unjustified because a fair disciplinary process was followed and the contract permitted summary dismissal for gross misconduct, and house allowance was already included in the wage structure. On appeal, the court reiterated its duty to re-evaluate the entire record. It held that where an employee is taken through a fair disciplinary process and the employer discharges its burden under sections 43(1) and 45(2) of the Employment Act, notice pay does not accrue. On leave, the court found the respondent had been paid for 21 days for 2020 and prorated days for 2021 in final dues, and that section 28(2) caps leave accrual at 18 months. On house allowance, applying the Regulation of Wages Orders and the 15% rule, the respondent was already well compensated. The court set aside all three awards, allowed the appeal, and ordered each party to bear its own costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether notice pay was payable given that the respondent was taken through a fair disciplinary process
  2. 2.Whether accrued leave days were already compensated in the final dues
  3. 3.Whether house allowances were payable on top of the contractual house allowance

Key legal issues

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01

Notice pay

Holding

Notice pay not justified where due process was followed and employer discharged its burden under sections 43(1) and 45(2).

Reasoning

Section 35 provides for notice or pay in lieu. Where termination is for misconduct and the employee was invited to a disciplinary hearing and allowed to call witnesses, due process is not faulted and notice pay does not accrue. The employer having discharged its burden of proving a valid reason, notice pay ought not be awarded.

p. 3
02

Accrued leave pay

Holding

Award set aside as leave for 2020 and prorated 2021 was already paid in final dues.

Reasoning

Section 28(2) caps leave accrual at 18 months. The appellant produced a payment statement showing payment of 21 days for 2020 at Kshs. 16,720 and prorated 12 days for 2021 at Kshs. 9,554. A further award would negate that evidence and amount to double payment.

p. 3
03

House allowance

Holding

Award set aside; wages already included contractual house allowance exceeding the statutory 15% of minimum wage.

Reasoning

A truck driver in Mombasa in 2020 earned a minimum wage of Kshs. 17,561; house allowance at 15% would be Kshs. 2,634.15, giving a total gross of Kshs. 20,195.15. The respondent was paid basic wage plus a contractual house allowance within that range, so claiming outside the contract and minimum wage would be unjust enrichment.

p. 4

Legal principles established

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  • Where employment is terminated for misconduct but the employee is taken through a fair disciplinary process, notice pay does not accrue.
  • Where an employer has compensated untaken leave days in final dues, a further award of leave pay amounts to double payment.

Court orders

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  1. 1.The awards for notice pay, leave pay and house allowances in the judgment delivered 19 October 2023 in Mombasa CM ELRC No. E180 of 2022 are set aside
  2. 2.The appeal is allowed
  3. 3.Each party is to bear its own costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

On appeal from
Chief Magistrate's Court (ELRC), Mombasa
CM ELRC No. E180 of 2022
Jurisdiction invoked
First appeal from the magistrates' court pursuant to the Employment Act framework / ELRC appellate jurisdiction

Relief refused

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Confirmation of the lower court's awards

The awards were not justified on the evidence

p. 4

Respondent's costs

Each party to bear own costs

p. 4

Costs

Each party is to bear its own costs.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

However, where employment is terminated due to misconduct and the employee is taken through a fair disciplinary process, he cannot justify a claim in notice pay.
p. 3Notice pay after fair disciplinary process
Section 28(2) of the Act only allows an employee to accrue leave days for up to 18 months.
p. 3Leave accrual cap
to claim outside his employment contract and the minimum wage allowed is an unjust enrichment.
p. 4House allowance and minimum wage
In this analysis, the appeal is with merit. The awards for notice pay, leave pay, and house allowances allocated in the judgment delivered on 19 October 2023 in Mombasa CM ELRC No. E180 of 2022 is not justified. To this extent, the awards are hereby set aside and the appeal allowed. Each party is to bear its own costs.
p. 4Disposition

Issues in the judgment

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minor

Claim figure inconsistent: notice pay claimed at Ksh. 26,41 in reliefs but Ksh. 26,410 in the judgment body

minor

Appellant's stated basic wage inconsistent between paragraphs (Kshs. 18,000 vs Ksh. 14,200)

minor

Typographical error 'My place of employment is Jomvu, Changamwe'

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, "Hakika Transport Services Limited & another v Nyongesa & another (Appeal E116 of 2023) [2024] KEELRC 438 (KLR)", Case Analysis (2024). Mombasa ELRC Appeal No. E180 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/438/eng@2024-02-29

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