Wanjiku t/a Verjoda Gardens Villa v Amukhule (Employment and Labour Relations Appeal E012 of 2023) [2024] KEELRC 2067 (KLR)
The bottom line
#Kenya's Employment Court in Nakuru ruled employers must express unfair-termination compensation as months of salary, not blanket figures.
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 court erred in awarding compensation of Kshs. 100,000 contrary to section 49(1)(c) of the Employment Act
- 2.Whether the trial court's judgment complied with Rule 28(2) of the ELRC (Procedure) Rules 2016
- 3.Whether the trial court erred in determining the issue of piercing the corporate veil suo moto
- 4.Whether the finding on the commencement date of employment was contrary to the evidence (NSSF records)
- 5.Whether damages for public holidays and overtime were properly awarded contrary to the pleadings
Key legal issues
#Basis of compensation award under section 49(1)(c) Employment Act
The trial court erred in awarding a blanket Kshs. 100,000 without stating the number of months; the court substituted 8 months' salary compensation
Section 49 caps compensation at twelve months' gross wages. The trial court awarded Kshs. 100,000 without relating it to the Respondent's salary or indicating the number of months. The appellate court, applying Olpajeta Ranching, held the award must indicate the months and their basis, and exercising its own discretion substituted 8 months at 13,715.35 per month.
Unfairness of termination effected as redundancy
Termination of the Respondent for declining casual employment, in substance a redundancy, was unfair as the section 40 procedure was not followed
The employer pleaded financial hardship and laid off the Respondent, offering casual work which he declined. This was in substance a redundancy, triggering section 40 requirements: notice to the employee and labour officer, leave pay, notice pay and severance. None of these were complied with, so the termination was unfair and unjustified, entitling the Respondent to compensation.
Commencement date of employment and burden of proof
In the absence of the employer's contract, section 10(7) places the burden on the employer; the court took the Claimant's start date of 25.3.2016 despite doubts from his NSSF statement
The Claimant's NSSF statement showed employment from 1.9.2009, which the court found showed dishonesty or confusion. However, since the employer failed to produce the written contract, section 10(7) shifted the burden to the employer, and the court accepted the Claimant's pleaded start date of 25th March 2016.
Piercing of the corporate veil raised suo moto
The issue was immaterial; no prejudice was caused to the Appellant who produced no evidence of the entity's corporate nature
The Appellant complained the trial court addressed lifting the corporate veil suo moto. The appellate court held the Appellant gave no evidence of the nature of Verjodia Garden Villa (company or business name), so the issue did not change the landscape of the claim and caused no prejudice.
Public holiday pay where employee works alternate days
Holiday pay award of Kshs. 33,000 set off against the compensation; employee working alternate days needed proof of actual work on holidays
Since the Respondent worked alternate days, he would not necessarily have worked on public holidays; evidence of the specific days worked was required to qualify for holiday pay rates. The court accordingly deducted the Kshs. 33,000 holiday pay from the substituted compensation award.
First appeal - duty to re-evaluate evidence
As a first appeal, the court had a duty to independently re-evaluate the evidence
Relying on the authorities cited by the Appellant (Maore v Mwende; Selle v Associated Motor Boat Company), the court acknowledged its responsibility to re-evaluate the evidence and reach its own conclusions while making allowance for not having seen or heard the witnesses.
Legal principles established
#- Where an employer fails to produce a written contract or written particulars, the burden of proving or disproving an alleged term of employment is on the employer (section 10(7), Employment Act)
- A compensatory award under section 49 of the Employment Act must be expressed as a number of months' salary, not a blanket figure
- An employer terminating on redundancy must comply with section 40 of the Employment Act
Court orders
#- 1.Appeal dismissed save for alteration of the compensation payable to the Respondent for unfair termination
- 2.Compensation for unfair termination substituted with 8 months' salary i.e. 8 x 13,715.35 = 109,722.8, less 33,000 holiday pay
- 3.Rest of the award by the lower court left undisturbed
- 4.Respondent to be paid costs of this appeal and of the claim at the lower court plus interest at court rates with effect from the date of the judgment
- 5.Judgment delivered virtually on 24th July 2024
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Nakuru Chief Magistrate's Court (ELRC)
- Nakuru CM ELRC No. 249 of 2019
- Jurisdiction invoked
- Appellate jurisdiction of the Employment and Labour Relations Court over appeals from subordinate courts in employment matters
Relief refused
#Setting aside of the whole judgment of the trial court delivered on 15th November 2022
Appeal found to lack merit save for the compensation figure
Reversal of the underpayment award
There having been no cross-appeal, the trial court's figure of Kshs. 70,000 was left to stand
Costs
Respondents will be paid costs of this appeal and of the claim at the lower court plus interest at court rates with effect from the date of the judgment
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.
Having analyzed the evidence, the facts and the law and having considered the judgment of the trial court, I find the appeal lacks merit and is dismissed accordingly save for the alteration on compensation payable to the Respondent for unfair termination
I award the Respondent 8 months’ salary compensation given the nature of the injustice against her and this translates to 8 x 13,715.35 = 109,722.8/= Less 33,000 holiday pay
It was indeed an error to grant a blanket figure of 100,000/= without indicating how many months compensation were granted and the basis of the same.
The rest of the award by the lower court will remain undisturbed. The Respondents will be paid costs of this appeal and of the claim at the lower court plus interest at court rates with efiect from the date of this judgment.
Issues in the judgment
#Paragraph numbering is irregular/duplicated in the judgment's analysis section
The judgment uses inconsistent spellings of the company name ('Verjordia Garden Villa Limited', 'Verjodia Garden Villa Ltd', 'Verjodia Gardens Villa')
The compensation computation purports to award 8 months' salary at 13,715.35 but the stated arithmetic (8 x 13,715.35 = 109,722.8) does not reconcile with the correct product
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wanjiku t/a Verjoda Gardens Villa v Amukhule (Employment and Labour Relations Appeal E012 of 2023) [2024] KEELRC 2067 (KLR)", Case Analysis (2024). Nakuru ELRC Appeal (Judgment delivered 24th July 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2067/eng@2024-07-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.