Lugose v Tom Mboya Labour College (Appeal E059 of 2023) [2024] KEELRC 730 (KLR)
The bottom line
#Kenya's Employment Court confirmed that employers must consult staff before redundancy and follow fair procedure, or pay compensation even years later.
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 trial Magistrate erred in dismissing the cause on unfair termination/redundancy
- 2.Whether the Respondent complied with sections 40 and 41 of the Employment Act, 2007
- 3.Whether the claim was time barred under section 90 of the Employment Act
- 4.Whether the Appellant was entitled to house allowance
- 5.What remedies and costs should issue
Key legal issues
#Limitation
Suit filed within the 3-year limitation period under section 90 of the Employment Act
Termination was communicated by letter dated 23 September 2020 effective 1 October 2020; the suit was filed on 9 November 2022, within three years. The trial Magistrate's finding on time bar was erroneous.
Procedural fairness under section 41
Termination partly grounded on conduct required an opportunity to make representations, which was not afforded
Because one of the stated reasons was the Appellant's conduct, section 41 applied. The record did not show the Appellant was allowed to make representations in the presence of a colleague or union representative before termination.
Compliance with section 40 (redundancy)
Respondent failed to notify the Labour Officer in writing and the notice fell short of the statutory one month
Section 40 requires written notification of the Local Labour Officer at least one month in advance. No evidence of such notice was led, tainting fairness, and the notice from 23 September 2020 to 1 October 2020 was short of one month. Severance pay obligations were also not demonstrated, though gratuity was assumed to be a mislabelling of severance pay.
Compensation quantum
Equivalent of 9 months' gross salary awarded
Considering the Appellant's about 11 years of service and that some dues were paid, the Court found 9 months' gross salary (at Kshs 16,900/-) appropriate.
House allowance
Claim fails for want of evidential basis
Despite pleading non-payment, the Appellant adduced no evidence; appointment, confirmation letters and payslips produced by the Respondent showed payment of 15% of basic salary as house allowance.
Legal principles established
#- Consultation with employees or their unions prior to declaration of redundancy is an imperative requirement implicit in section 40(1) of the Employment Act
- A first appellate court must re-evaluate, re-assess and reanalyse the evidence and determine whether the conclusions reached by the trial court should stand
- Where termination is based partly on conduct, the employer must comply with the procedural fairness requirements of section 41 of the Employment Act
Court orders
#- 1.The judgment of the Senior Resident Magistrate is set aside and substituted with a judgment finding the Respondent unfairly terminated the Appellant's employment
- 2.The Appellant is awarded compensation of Kshs 152,100/- (equivalent of 9 months' gross salary)
- 3.The Appellant is granted costs before the Senior Resident Magistrate
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Senior Resident Magistrates Court
- Cause filed 9 November 2022 (unfair termination and breach of contract)
- Jurisdiction invoked
- First appellate jurisdiction of the Employment and Labour Relations Court over appeals from the Senior Resident Magistrates Court in employment causes
Relief refused
#Costs of the Appeal
Late filing of submissions without explanation
House allowance
No evidential basis pleaded or proved; payslips showed he received 15% of basic salary as house allowance
Costs
Costs of the Appeal denied to the Appellant for late filing of submissions without explanation; Appellant granted costs before the Senior Resident Magistrate.
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.
The judgment is set aside and substituted with a judgment finding that the Respondent unfairly terminated the Appellant’s employment.
The Appellant is denied costs of the Appeal for late filing of submissions without any explanation. The Appellant however is granted costs before the Senior Resident Magistrate.
Gratuity and severance pay are distinct, and the Respondent did not place any record before the Senior Resident Magistrate to show that by gratuity it meant the severance pay contemplated by section 40(1) (g) of the Employment Act, 2007.
The notice period fell short of the statutory one month set out in section 40(1) of the Employment Act, 2007.
Issues in the judgment
#Paragraph 32 appears as a heading fragment: the award 'Compensation Kshs 152,100/-' sits under '(i)' with no sub-paragraph (ii) following, leaving the numbered award list seemingly incomplete in the printed judgment
Citation of Barclays Bank case appears as '& Ar' in the judgment, an apparent typographical error
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lugose v Tom Mboya Labour College (Appeal E059 of 2023) [2024] KEELRC 730 (KLR)", Case Analysis (2024). Kisumu Appeal No. E059 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/730/eng@2024-03-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.