Edith Mutuku & another v Karesh Hardware Construction Co Ltd & another [2016] eKLR

Key Facts

Issues

• The court determined whether the claimants were terminated by the respondents without valid cause and whether the termination was justifiable and fair under the Employment Act, 2007.
• The court assessed the claimants' entitlement to remedies such as compensation for wrongful termination, leave pay, house allowance, and other financial claims.
• The court evaluated the respondents' counterclaims for notice pay, considering whether the claimants left voluntarily without notice.

Holdings

• Leave pay and service pay claims were allowed due to lack of evidence showing NSSF contributions by the Respondents.
• Claims for underpayment and overtime compensation were not supported by documentary evidence, leading to their rejection.
• The Claimants' house allowance claims succeeded as the Respondents neither provided housing nor included house allowance in the basic salary, with 15% of basic salary awarded monthly.
• Unpaid salary claims for specific periods were validated based on signed documents provided by the Respondents, with amounts awarded accordingly.
• The court determined that the Claimants' employment was terminated without substantive justification and in disregard of procedural fairness, awarding each four months' salary in compensation.
• The Claimants were not casual employees as defined by law, and the Respondents failed to prove desertion or provide due notice, leading to rejection of counterclaims for notice pay.

Remedies

• Service pay for one year was awarded, calculated as Kshs.4,600.00 for Edith Mutuku and Kshs.10,511.00 for Mary Wavinya, due to lack of NSSF contributions by the Respondents.
• Leave pay for one year was awarded. Edith Mutuku received Kshs.6,440.00 and Mary Wavinya received Kshs.6,134.00.
• Each Claimant received one month's salary in lieu of notice, amounting to Kshs.9,200.00.
• House allowance at 15% of the basic salary was awarded for the entire employment period. Edith Mutuku received Kshs.22,800.00 and Mary Wavinya received Kshs.20,040.00.
• The Court awarded each Claimant four months' salary in compensation for unfair termination, as per Sections 45 and 41 of the Employment Act, 2007.
• Prorata leave for months worked was granted. Edith Mutuku received Kshs.3,757.00 for 7 months and Mary Wavinya received Kshs.6,134.00 for 5 months.
• Unpaid salary claims were allowed. Edith Mutuku received Kshs.33,200.00 (December 2011, June–August 2012, and 12 days in September 2012), while Mary Wavinya received Kshs.67,760.00 for her periods of unpaid salary.

Legal Principles

• The court ruled that employers asserting desertion as a defense must demonstrate proper notification to the employee. In this case, no evidence of disciplinary process or communication was provided, leading to rejection of the employer's defense.
• The court applied Kenya's Employment Act 2007 to determine that termination must be substantively justified and procedurally fair. It rejected the employer's claim of casual employment due to lack of written contracts, emphasizing that absence of documentation does not automatically classify workers as casual. The judgment also held that failure to provide housing or consolidate house allowance into basic salary requires separate payment as per Section 31(1) of the Act.

Precedent Name

Cited Statute

Judge Name

Passage Text

• 24. The Respondents did not produce any leave records to counter the Claimants' claims for leave pay which therefore succeed and are allowed. The claims for service pay are also allowed as there was no evidence that the Respondents made any National Social Security Fund (NSSF) contributions on account of the Claimants.
• 22. Following my finding that the Respondents terminated the Claimants' employment without substantive justification and in total disregard of procedural fairness, I award each of the Claimants the equivalent of four (4) months' salary in compensation.
• 21. Consequently, the inescapable conclusion is that the Claimants' claims for house allowance succeed. I therefore award each of the Claimants house allowance at 15% of their basic salary for the entire period of their employment.