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ELRCPartially AllowedKisumu Appeal No. E059 of 2023

Lugose v Tom Mboya Labour College (Appeal E059 of 2023) [2024] KEELRC 730 (KLR)

Employment and Labour Relations Court
20 March 2024
1,978 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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This was a first appeal to the Employment and Labour Relations Court at Kisumu against the judgment of a Senior Resident Magistrate delivered on 19 October 2023 dismissing Nelson Lugose's claim against Tom Mboya Labour College for unfair termination and breach of contract. The Appellant's employment was terminated by letter dated 23 September 2020 effective 1 October 2020, citing his conduct and the economic effects of the COVID-19 pandemic. Guided by the first appellate court's duty to re-evaluate the evidence, the Court held the suit was filed within the three-year limitation period under section 90 of the Employment Act. It found the trial Magistrate had erred by relying on the minority dicta in the Kenya Airways case; the majority position in Kenya Airways, affirmed in Barclays Bank of Kenya Ltd v Gladys Muthoni, requires consultation before redundancy. The Court found that because conduct was one ground of termination, section 41 procedural fairness was required and was not accorded; and that the Respondent failed to notify the Labour Officer in writing and gave a notice shorter than the statutory one month under section 40(1). The Respondent also failed to demonstrate that gratuity paid equated to statutory severance pay, though the Court assumed it was a mislabelling. The house allowance claim failed for want of evidence, payslips showing payment of 15% of basic salary as house allowance. The Court set aside the trial judgment, substituted a finding of unfair termination, and awarded compensation of Kshs 152,100/- being nine months' gross salary, granting the Appellant costs before the Magistrate but denying costs of the appeal for late filing of submissions.

Questions the Court framed

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

  1. 1.Whether the trial Magistrate erred in dismissing the cause on unfair termination/redundancy
  2. 2.Whether the Respondent complied with sections 40 and 41 of the Employment Act, 2007
  3. 3.Whether the claim was time barred under section 90 of the Employment Act
  4. 4.Whether the Appellant was entitled to house allowance
  5. 5.What remedies and costs should issue

Key legal issues

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01

Limitation

Holding

Suit filed within the 3-year limitation period under section 90 of the Employment Act

Reasoning

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.

p. 2
02

Procedural fairness under section 41

Holding

Termination partly grounded on conduct required an opportunity to make representations, which was not afforded

Reasoning

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.

p. 4
03

Compliance with section 40 (redundancy)

Holding

Respondent failed to notify the Labour Officer in writing and the notice fell short of the statutory one month

Reasoning

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.

p. 4
04

Compensation quantum

Holding

Equivalent of 9 months' gross salary awarded

Reasoning

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.

p. 4
05

House allowance

Holding

Claim fails for want of evidential basis

Reasoning

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.

p. 4

Legal principles established

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  • 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

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  1. 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. 2.The Appellant is awarded compensation of Kshs 152,100/- (equivalent of 9 months' gross salary)
  3. 3.The Appellant is granted costs before the Senior Resident Magistrate

The bench

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

majority

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

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Costs of the Appeal

Late filing of submissions without explanation

p. 5

House allowance

No evidential basis pleaded or proved; payslips showed he received 15% of basic salary as house allowance

p. 4

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

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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.

The judgment is set aside and substituted with a judgment finding that the Respondent unfairly terminated the Appellant’s employment.
p. 5disposition - appeal allowed in part
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.
p. 5costs order
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.
p. 4gratuity versus severance pay
The notice period fell short of the statutory one month set out in section 40(1) of the Employment Act, 2007.
p. 4redundancy notice period

Issues in the judgment

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minor

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

minor

Citation of Barclays Bank case appears as '& Ar' in the judgment, an apparent typographical error

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, "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.