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ELRCPartially AllowedNot stated in the judgment as provided

Muasa v China Road And Bridge Corporation (K) (Cause 2115 of 2016) [2024] KEELRC 1742 (KLR)

Employment and Labour Relations Court of Kenya
5 July 2024
3,557 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a redundancy unlawful because the employer posted a notice board instead of serving individual notices, awarding the worker notice pay, severance and compensation.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent around January 2015 on the Mombasa-Nairobi SGR construction project at a gross salary of Kshs 28,000 per month, sued for unpaid terminal dues of Kshs 1,120,000, general damages and damages for unlawful termination, contending his July 2016 termination breached sections 41 and 45 of the Employment Act. The Respondent maintained that the Claimant was given notice, lawfully terminated upon completion of the project, and paid all terminal dues. The court framed two issues: whether the termination was unlawful and whether the Claimant was entitled to the reliefs sought. Noting two letters of 24th July 2016 and a union letter referring to planned redundancy affecting about 500 employees, the court treated the termination as redundancy. It found the reason not valid and fair under section 43, since no report showed the project or section was complete, and the procedure flawed: the redundancy notice was merely posted on a notice board and not served individually, and the requirements of section 40, including one month's notice and notice to the Labour Office, were not met. The termination was thus unlawful and unfair under section 45. Fixing the monthly salary at Kshs 19,093 (basic pay plus house allowance, excluding overtime), the court awarded two months' salary as compensation under section 49, one month's pay in lieu of notice and severance pay of Kshs 2,863 (15% for one completed year), totalling Kshs 60,142, with costs. General damages were refused for want of special circumstances, and leave pay was refused as already paid. The judgment was delivered virtually at Nairobi on 5th July 2024 by Abuodha Jorum Nelson, Judge.

Questions the Court framed

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

  1. 1.Whether the termination of the Claimant's employment was unlawful.
  2. 2.Whether the Claimant is entitled to the reliefs sought.

Key legal issues

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01

Whether the termination of the Claimant's employment was unlawful

Holding

The termination was on account of redundancy and was both substantively and procedurally flawed, hence unlawful and unfair under section 45 of the Employment Act.

Reasoning

The court found that despite the Respondent avoiding the word redundancy, the termination was for reduced workload as the project neared completion. No report showed the project section was complete, so the reason was not valid under section 43. Procedurally, the notice was posted on a board and not served individually, and section 40 requirements of one month's notice to the employee and union and notice to the Labour Office were not met.

p. 6
02

Whether the Claimant was entitled to compensation, notice pay and severance pay

Holding

The Claimant was awarded two months' salary as compensation for unfair termination, one month's salary in lieu of notice, and 15% severance pay for one completed year of service.

Reasoning

Considering the Claimant's service of about one year and two months and that the Respondent had paid part of the terminal dues (service and leave pay), the court awarded two months' compensation under section 49. Notice pay of one month was due under the Act, and severance at 15% of salary for one completed year of service was payable.

p. 7
03

The Claimant's monthly salary for computation purposes

Holding

The court relied on the payslips, fixing basic pay plus house allowance at Kshs 19,093, excluding overtime.

Reasoning

There was a discrepancy between the parties on the monthly salary and the employment contract did not state it. The court relied on the payslips showing basic pay of Kshs 15,912 plus house allowance of about Kshs 3,181, totalling Kshs 19,093, excluding overtime as not part of regular pay.

p. 7

Legal principles established

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  • Even in termination on account of redundancy, the reason must be valid under section 43 of the Employment Act and the employee must be given a right to be heard under section 41.
  • Posting a redundancy notice on a notice board for a workforce of over 500 employees, without individual service, does not satisfy section 40 of the Employment Act.
  • General damages are not ordinarily awarded in unfair termination cases except upon proof of special circumstances.

Court orders

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  1. 1.One month salary in lieu of Notice of Kshs 19,093/=
  2. 2.Severance pay of Kshs 2,863/=
  3. 3.Compensation for unfair termination of two months' salary, Kshs 38,186/=
  4. 4.Total award of Kshs 60,142/=
  5. 5.Costs of the suit to the Claimant

The bench

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

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Court Act (as first-instance employment cause; no specific provision quoted)

Relief refused

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General damages

The Claimant did not prove special circumstances warranting an award of general damages beyond statutory compensation under section 49 of the Employment Act.

p. 7

Leave pay

The Claimant acknowledged that leave pay had been paid to him in February 2016 and in his last pay.

p. 7

Costs

The Claimant's claim is allowed with costs of the suit to the Claimant.

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.

In conclusion the Court is of the view that the Claimant's termination was not for a fair and valid reason and was procedurally fiawed hence unlawful and unfair termination under section 45 of the Employment Act.
p. 6Unlawful and unfair termination
In conclusion the Claimant's claim is allowed with costs as follows.
p. 7Final orders and award
One month salary in lieu of Notice Kshs 19,093/= Severance pay Kshs 2,863/= Two Compensation for unfair termination-Kshs 38,186/= Total……KSHS 60,142/=
p. 7Quantum of award
…redundancy is a legitimate ground for terminating a contract of employment provided there is a valid and fair reason based on operational requirements of the employer and the termination is in accordance with a fair procedure.
p. 6Redundancy - valid reason and fair procedure (Kenya Airways)

Issues in the judgment

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minor

The judgment gives inconsistent dates for the termination notice: the Respondent's pleadings allege 30th May 2016, the documents state 20th May 2016, and the Respondent's amended response refers to a termination notice of 20th May 2016 and termination on 24th July 2016.

minor

The judgment gives inconsistent dates of the Claimant's termination: 23rd July 2016 in the pleadings and cross-examination, and 24th July 2016 in the Respondent's pleadings and submissions.

minor

Internal textual garbling in the framing of issues (duplicated words) and an apparent typographical confusion between basic pay figures: the payslip figure is stated as Kshs 15,150 in evidence and Kshs 15,912 in the determination.

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, "Muasa v China Road And Bridge Corporation (K) (Cause 2115 of 2016) [2024] KEELRC 1742 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1742/eng@2024-07-05

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