Kenya Union of Domestic Hotels, Educational Institution and Hospital v Sandton Palace Hotel Limited

his employment on account of redundancy. As at the time of the termination, the grievant was Acting Food and Beverage Supervisor serving a basic salary of Kshs. 22,000.00 and house allowance of Kshs. 2,200.00 per month. 3. Upon termination, the grievant reported the matter to the Claimant and it brought this suit on 11 th March 2016 accusing the Respondent of wrongful and un-procedural redundancy, and prayed for the following reliefs: a. Reinstatement of his employment position. b. In the alternative he be paid Kshs. 538,266.67 made up of notice, severance pay, leave, off days, unpaid salary and compensation for wrongful termination. 4. The Respondent filed its defence on 14 th April 2016 admitting that it carried out redundancies which affected the Claimant. It averred that it strictly followed the procedure for redundancy and promptly paid the Claimant all his dues in full including salary in lieu notice, salary due and severance pay. It denied the claim for wrongful termination and averred that the Claimant lacked locus standi to bring the suit on JUDGMENT ELRC CAUSE NO. 376 OF 2016 2

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behalf of the grievant. Therefore, it prayed for the suit to be dismissed with costs. Evidence 5. The Claimant adopted his undated statement as his evidence and produced six documents. In brief, his evidence was that he was employed by the Respondent on 1 st August 2009 and on 2nd August 2010 he was promoted to Restaurant Captain earning basic salary of Kshs. 8,000.00 and Kshs. 2,000.00 house allowance. On 12th June 2012 he was appointed as Food and Beverage Supervisor. 6. He further stated that he was a member of the Claimant union and he executed his duties diligently. He contended that he was victimized for being union member of the Shop Steward during the time when there was conflict between the management and employees. 7. He contended that on 11th July 2013 the management requested him to apply for leave and he was given leave of 108 days upto 18th December 2013 when he was to resume work. However, upon resuming duty he was met with JUDGMENT ELRC CAUSE NO. 376 OF 2016 3

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hostility and on 21st January 2014 he was given a termination letter. He contended that the termination was unfair and that he was not paid his dues as provided in the CBA. 8. On cross-examination he stated that he was a member of the union and his payslips showed deduction of union dues. He admitted that he was given warning letter dated 14 th September, 2009 but it lapsed. 9. He reiterated that the Claimant and Respondent had a CBA and he was being intimidated to leave the union. Clause 28 of the CBA provided that the CBA shall continue until amendment by the parties. He contended that he was forced to take 108 leave days inclusive of off days but admitted that he was paid Kshs. 22,000.00 being salary for January 2014. 10. The Respondent called it Director James Mahianyu Gachue, who testified as RW1. He adopted his statement dated 14 th April 2016 as evidence in chief and produced 5 documents in exhibits. In brief, he confirmed that the Claimant was employed by the Respondent from 1st August 2007 as a Waiter and rose to become a Food and Beverages Supervisor JUDGMENT ELRC CAUSE NO. 376 OF 2016 4

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he further confirmed that the Claimant’s employment was terminated on account of redundancy in January 2014 as the company was going through financial hardships. 11. RW1 stated that upon termination the grievant was paid salary in lieu of notice, severance pay and salary for January 2014 in full. He contended that the grievant had no pending leave or off days. In addition, he stated that redundancy is allowed by the law and that the claim for wrongful termination is without basis as the redundancy complied with the law. Finally, RW1 stated that the Claimant has no capacity to sue in this case since the CBA cited had expired at the material time to the suit. Therefore, he prayed for the suit to be dismissed with costs for being frivolous. 12. On cross-examination RW1 admitted that the Respondent and the Claimant had operated within a CBA. He admitted that clause 28 of the expired CBA provides that the CBA shall remain in force until another one is made. He did not have any documentary proof that the parties to the CBA met and resolved to terminate the CBA. JUDGMENT ELRC CAUSE NO. 376 OF 2016 5

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13. Finally, he admitted that the grievant’s employment was declared redundant without prior notice and that he was only given a termination letter. 14. In re-examination, he contended that the CBA was for two years, from, 1st November 2011 to 30th November 2013 and therefore the burden is on the Claimant to prove that the CBA was still in force on 20 th January 2014 when the grievant was laid off. Submissions 15. After the close of the hearing both sides filed written submissions. Having considered the submissions, the pleadings and evidence tendered, it is clear that the grievant was employee of the Respondent from August 2009 to January 2014 when he was laid off. 16. The issues for determination are: a) Whether the Claimant has locus standi to bring this suit on behalf of the grievant. b) Whether the termination of the grievant’s employment on account of redundancy was wrongful and unlawful. JUDGMENT ELRC CAUSE NO. 376 OF 2016 6

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c) Whether the reliefs sought are merited. Locus standi 17. The Respondent raised a preliminary point that the Claimant lacks the legal capacity to represent the grievant because as at the time of the impugned redundancy, the CBA between the Claimant and the Respondent had expired. It alleged that the CBA was for only two years from November 2011 to November 2013 while the redundancy occurred in January 2014. 18. I see no big issue with the Respondent’s objection because RW1 admitted in evidence that clause 28 of the CBA provided that the CBA would remain in force until replacement or amendment by the parties. The position is in synch with section 59(2) and (3) of the Labour Relations Act which provides that:“(2) A collective agreement shall continue to be binding on an employee or employer who were parties to the agreement at the time of its commencement and includes members who have JUDGMENT ELRC CAUSE NO. 376 OF 2016 7

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resigned from that trade union or employer’s association. (3)The terms of the collective agreement shall be incorporated into the contract of employment of every employee served by the collective agreement.” 19. In view of the express provisions of the law and the CBA, I find that the material CBA was still applicable to the grievant’s employment as at January 2014 when his services were terminated. Therefore, the Claimant was clothed with the legal capacity to represent the grievant in bringing this suit. The redundancy 20. For redundancy to be lawful, it should comply with section 40 of the Employment Act and the applicable CBA between the parties. Section 40(1) of the Act provides that:“(1)An employer shall not terminate a contract of service on JUDGMENT ELRC CAUSE NO. 376 OF 2016 account of redundancy unless 8

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the employer complies with the following conditions— (a)where the employee is a member of a trade union, the employer notifies the union to which the employee is officer in a charge member of the and the labour area where the employee is employed of the reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy; (b)where an employee is not a member of a trade union, the employer notifies the employee personally in writing the selection and the labour officer; (c)the employer has, in of employees to be declared redundant had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy; JUDGMENT ELRC CAUSE NO. 376 OF 2016 9

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(d)where there is agreement between union setting out in existence a collective an employer and terminal benefits a trade payable upon redundancy; the employer has not placed the employee at a disadvantage for being or not being a member of the trade union; (e)the employer has where leave is due to an employee who is declared redundant, paid off the leave in cash; (f)the employer has paid an employee declared redundant not less than one month's notice or one month's wages in lieu of notice; and (g)the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days’ pay for each completed year of service.” 21. RW1 admitted that the above law was not complied with as the grievant was merely given a termination letter without any prior notification. I will therefore not belabor the point since it is clear the Respondent never complied with the JUDGMENT ELRC CAUSE NO. 376 OF 2016 10

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mandatory redundancy procedure set out by section 40 of the Employment Act, and Clause 11 of the CBA. 22. The failure to follow the mandatory redundancy procedure set out under section 40 of the Act and clause 11 of the CBA rendered the termination unfair and unlawful within the meaning of section 45 of the Employment Act termination on account of redundancy is for no fault on the part of the employee and therefore the employer should treat the employee with fairness and dignity. Reliefs 23. The Claimant’s primary prayer is for reinstatement but the same is not tenable now since the section 12(2) (vii) of the ELRC Act bar the court from reinstating an employee after three years from the date of separation. In this case, the Claimant was laid off ten years ago. 24. The rejection of the primary relief leaves me with the alternative reliefs for consideration. I have already made a finding of fact that the redundancy herein amounted to unlawful termination and therefore the Claimant is entitled JUDGMENT ELRC CAUSE NO. 376 OF 2016 11

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to reliefs under section 49(1) of the Employment Act including salary in lieu of notice and compensation. 25. RW1 averred that the Claimant was paid salary in lieu of notice together with severance pay upon redundancy. CW1 averred that the payment was not in line with the CBA’s clause 9 and 11 of the CBA which provides for one month notice before terminating services of an employee who had served for less than 5 years. 26. The Claimant prayed for one-month salary in lieu of notice but he did not rebut that evidence and therefore I decline to award the Claimant the prayer for salary in lieu of notice. 27. As regarding compensation, I have noted that the Claimant served for over 4 years and the termination was not done to any misconduct on his part. Therefore, I award him four months gross salary as compensation for the unlawful termination being Kshs. 88,000.00. 28. The claim for severance pay and salary for January 2014 are declined because RW1 produced documentary evidence to prove that they were paid after the redundancy. JUDGMENT ELRC CAUSE NO. 376 OF 2016 12

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29. The claim for leave for 2013/2014 is allowed since the Respondent has not proved that Claimant took the leave for the said period. The only leave record produced was leave application form for 2014. Consequently, I grant leave of 26 days x Kshs. 22,000.00/30 = Kshs. 19,066.66. 30. The claim for 224 off days lack particulars and supporting evidence and it is therefore declined. Conclusion 31. I have found that the termination of the grievant’s employment was unlawful and therefore he is entitled to some of the reliefs sought. Consequently, I now enter judgment for him against the Respondent as follows: a) Compensation Kshs. 88,000.00 b) Leave Kshs. 19,066.66 Total Kshs. 107,066.66 c) Costs and interest at court rates from the date of judgment. JUDGMENT ELRC CAUSE NO. 376 OF 2016 13

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d) The award of damages is subject to statutory deductions. DATED, SIGNED AND DELIVERED VIRTUALLY IN OPEN COURT AT NAIROBI THIS 29TH DAY OF SEPTEMBER, 2026. ONESMUS MAKAU JUDGE Nyanchwa for Claimant No appearance for Respondent JUDGMENT ELRC CAUSE NO. 376 OF 2016 14

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