KENYA UNION OF DOMESTIC ,HOTELS,EDUCATIONAL INSTITUTIONS AND HOSPITAL WORKERS VS GAME ON SOLUTIONS (K) LIMITED

The claimant, KUDHEIHA Workers, is representing 24 grievants. The issue in dispute is the wrongful and unfair termination of employment following a redundancy and lockout.

The claimant is registered as a trade union under the provisions of the Labour Relations Act. It represents employees in domestic, hotels, educational institutions, and hospitals. The respondent is in the hospitality and gaming industry.

The claimant and the respondent have a Recognition Agreement.

The grievants were employed by the respondent on different dates and positions. On 5 May 2019, the respondent wrote to the branch secretary of the claimant, informing the union of the closure of business, hence terminating the employment of the grievants on account of redundancy. There was no notice to the labour office before the wrongful and unlawful action. This violated Sections 40, 43, 78, 77 and 76 of the Employment Act and Regulation 15 of the Regulation of Wages Conditions of Employment (Hotels and Catering Trade) Order.

The claim is that the respondent's actions are in gross violation of Articles 41 and 47 of the Constitution on fair labour practices. This is also in violation of Sections 5, 40, 43, 45, and 46 of the Employment Act, which prohibits discrimination against any employee. There was wrongful and unfair termination of employment.

The claim is that the respondent refused to pay the grievants' terminal dues, including their salaries, allowances and service gratuity, due under the parties' contractual obligations.

The claimant is seeking payment for each grievant as follows;

1. GEOFFREY SILALI TITI

Date of employment 1^st November 2013

Occupation: Security

Basic Salary; Kshs. 14,420.00

House Allowance; Kshs. 2,163.00

Date of Termination; 8^th May, 2019

Duration in Service; 5 years & 6 months.

Claims

1. 2 months' pay in lieu of notice x 16,583.00 = Kshs. 33,166.00
2. l month’s salary notification x 16,583.00 = Kshs. 16,583.00
3. Severance pay at 15 days x 5 years x 16,583 = Kshs. 41, 457.50
4. 12 months' salary compensation x 16,583 = Kshs. 198,996
5. TERESIA AKINYI OTIENO

Date of employment 1^st November 2013

Occupation: Dealer

Basic Salary; Kshs. 14,783.00

House Allowance; Kshs; 2,217.00

Date of Termination; 8^th May, 2019

Duration in Service; 5 years & 6 months.

Claims

1. 2 months' pay in lieu of notice x 17,000.00 = Kshs. 34,000,00
2. 1 month’s salary notification x 17,000.00 = Kshs. 17,000.00
3. Severance pay at 15 days x5 years x17,000 = Kshs.42,500.00
4. Leave for 2 years x 17,000.00 = Kshs. 34, 000.00
5. 12 months' salary compensation x16,583 = Kshs. 204,000.00
6. EMMANUEL ZUMA

Date of employment; 1^st November, 2013

Occupation: Cleaner

Basic salary; Kshs. 12,927.00

House Allowance; Kshs. 1,939.00

Date of Termination; 8^th May, 2019

Duration in Service 5 years & 6 months.

Claims

1. 2 months' pay in lieu of notice x14,866.00 = Kshs. 29,732.00
2. 1 month’s salary notification x 14,866.00 = Kshs. 14,866.00
3. Leave for 1-year x 14,866.00 = Kshs. 14,866.00
4. Severance pay at 15 days x5 years x14,866= Kshs.37,165.00
5. 12 months’ salary compensation x14,866 = Kshs.178,392.00
6. EUNICE AKOKO

Date of employment 5^th September 2017

Occupation: Waitress

Basic salary; Kshs. 12,927.00

House Allowance; Kshs. 1,939.00

Date of Termination; 8^th May, 2019

Duration in Service 5 years & 6 months.

Claims

1. 2 months' pay in lieu of notice x16,583.00 = Kshs. 33,166.00
2. l month’s salary notification x 16,583.00 = Kshs. 16,583.00
3. Severance pay at 15 days x5 years x16,583 =Kshs.41,457.50
4. 12 months' salary compensation x 16,583 = Kshs. 198,996
5. FRANCIS MAINA MANANI

Date of employment 1^st February 2014

Occupation: Supervisor

Basic salary; Kshs. 17,391.00

House Allowance; Kshs 2,609.00

Date of Termination 8^th May 2019

Duration in Service 4 years & 2 months.

Claims

1. 1 month’s pay in lieu of notice x 20,000.00 =Kshs. 20,000,00
2. 1 month’s salary notification x 20,000.00 = Kshs. 20,000.00
3. Severance pay at 15 days x4 years x 20,000 =Kshs. 40,000,00
4. 12 months’ salary compensation x20,000 = Kshs.240,000.00
5. 1 year leave for 2018 x 20,000.00 = Kshs. 20,000.00
6. HESBORN MUNGAI OTORA

Date of employment 1^st June 2015

Occupation: Shot Attendant

Basic Salary; Kshs. 15,652.00

House Allowance; Kshs. 2,348.00

Date of Termination 8^th May 2019

Duration in Service 5 years & 8 months.

Claims

1. 2 months' pay in lieu of notice x18,000.00 = Kshs. 36,000.00
2. 1 month’s salary notification x 18,000.00 = Kshs. 18,000.00
3. Severance pay at 15 days x5 years x 18,000 = Kshs.45,000.00
4. 12 months' salary compensation x18,000 =Kshs.216,000,00
5. 1 year leave for 2018 x 18,000.00  = Kshs. 18,000.00
6. HESBON NDUMBU

Date of employment 1^st February 2014

Occupation: Dealer

Basic salary; Kshs. 14,783.00

House Allowance; Kshs. 2,217.00

Date of Termination 8^th May 2019

Duration in Service 5 years & 2 months.

Claims

1. 2 months' pay in lieu of notice x 17,000.00 = Kshs.34,000.00
2. l month’s salary notification x 20,000.00 = Kshs. 17,000.00
3. Severance pay at 15 days x5 years x17,000 =Kshs.42,000.00
4. 12 months' salary compensation x17,000 =Kshs. 204,000.00
5. l year leave for 17,000.00 = Kshs.17, 000.00
6. IQBAL KAZUNGU KIPOONYO

Date of employment 1^st November 2013

Occupation: Cleaner

Basic salary; Kshs. 12,927.00

House Allowance; Kshs. 1,939.00

Date of Termination 8^th May 2019

Duration in Service 5 years & 6 months. </><><>></><><>>> </><>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><><> </>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></><><>> < ></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></><><>></></><>>> ><>><>><>><>>>><>><><>></><><>>></><> >= >></><>>></></><>< > (>></><> (>></><><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></></><><>></><>>> ><>><>><>><>>>><>><><>></><><>< > >></><>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></></><><>></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></></><><>></><>>>><>><>><>><>>> > </><>><><>></><><>>></><>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></></><><>></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></><><>></></><>>>><>><>><>><>>>><>><><>></><><>>></><>>></><>>></><>>></><>>></></><>><>>> >> ><>><>><>><>><>><>><>>> ><>><>><>><>… <>></><><>>> ></><>><>><><><><>></></></><>>><><>></></><>><>></></><> href="https://new.kenyalaw.org/akn/ke/judgment/keca/2013/492/eng@2013-07-05">Thomas De La Rue (K) Ltd v David Opondo Omutelema [2013] KECA 492 (KLR) the court held that although with respect to unionisable employees section 40 (1) (a) of the Employment Act requires at least one month’s notice before the effective date of the redundancy, the Act allows parties, in a collective agreement, to agree on more favourable terms and such terms apply and take precedence. 

In this case, notice was issued on the same day employment was due to terminate. There was no notice to the labour officer. This position is reiterated in the case of Josephine M. Ndungu, Job Ireri, Billy Wellington Kinyua, Jane Wambui Gitau, Millicent Njoki Gitau, Hudson Lubanga Kadagi, Bwibo Adieri & Martin Anthony Njogu Kimemia v Plan International Inc [2019] KEELRC 663 (KLR).

Upon the declaration of redundancy through notices required under Section 40(1)(a) and (b), the employer is allowed under Section 40(1)(f) to pay in lieu of notice as held in the case of Cargill Kenya Limited v Mwaka & 3 others [2021] KECA 115 (KLR).

In this case, upon notice dated 8 May 2019 to all the grievants that their employment would terminate on the same day, the respondent noted that each grievant would be paid;

1. Salary for days worked;
2. Salary arrears including March and April 2019;
3. One month in lieu of notice;
4. Overtime hours; and
5. Service pay equivalent to 14 days for each year worked.

Whereas the respondent filed a response, there are no work records to confirm how the terminal dues were paid.

From the notice dated 8 May 2019, the claimant filed this claim on 27 August 2021. A demand for payment of terminal dues was issued by the claimant but the respondent did not pay.

In the case of Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others [2014] eKLR the Court of Appeal held that even though the employer is allowed to terminate employment due to operational reasons, the affected employees must be paid their terminal dues as required under the provisions of Section 34, 45 and 49 of the Employment Act. Failure to make payment amounts to unfair termination of employment. The employees are justified in claiming compensation.

A redundancy should not be used to deny the employees their lawful terminal dues. Such conduct is tantamount to unfair termination of employment as held in Kenya Union of Domestic Workers, Hotels, Educational Institutions, Hospitals and Allied Workers v Matuu Youth Polytechnic [2024] KEELRC 1907 (KLR) and that;

… the record does not show that the Respondent complied with the procedure for termination of contract provided for either under section 40 or section 41 of the Employment Act before it terminated the Grievant’s employment. As such, the Grievant is entitled to compensation for unfair termination of her employment.

In the case of Ignas Karingo Mghona, Mathias Otonyo Sese, Miriam Chenye, Roseline Mghoi Kilio & Jennifer Mbinya Julius v Star of Hope International Foundation [2016] KEELRC 1612 (KLR) and the case of Emmanuel Limo Chang’oka v Plan International Kenya [2022] KEELRC 119 (KLR), the employer must justify the reasons leading to redundancy. In the absence of such a matter, termination of employment is unfair.

The work records required under Section 10(6) and (7) of the Employment Act would have clarified these facts. In the absence of the respondent, as the employer addressing such matter, the court finds that save for the lapse in addressing the redundancy procedures under Section 40, there was no due process, and hence compensation is due to the grievants.

In this case, the grievants are justified in their claims for compensation and in this case, each is awarded 6 months' pay.

Notice pay is claimed at one, two, or three months based on the employment duration for each grievant. The basis of the claimant is a collective agreement (CBA) which was not filed. A Recognition Agreement was filed, but no CBA is conferring the benefit of notice pay beyond the legal minimum of one month under Section 40(1) (f) of the Employment Act.

Each grievant is awarded notice pay at one month of the last gross wage paid.

On the claim for leave, such is due and should have been paid in cash as required under Section 40(1) (e) of the Employment Act. Each grievant will be awarded as pleaded.

Severance pay is due at the rate of 15 days for every full year worked. In the notice terminating employment, the respondent offered to pay service pay.

There is no evidence of any service payment. Such payment is foundationally different from severance pay. What is due in this case is severance pay.

The claim for costs is on a good foundation. The claimant is a trade union, and costs are not regulated under the Advocates Act. The court allows costs at Ksh. 100,000.

Accordingly, the claim is hereby allowed against the respondent in the following terms;

1. There was wrongful and unfair termination of employment;
2. The grievants are awarded compensation at 6 months of the gross wage each;
3. Severance pay for 15 days for each full year worked;
4. One-month notice pay;
5. Leave pay as set out in the Memorandum of Claim;
6. Costs assessed at ksh.100,000 all-inclusive;
7. Each grievant is awarded the following;
8. 6 months compensation;
9. One-month notice pay;
10. Severance for 15 days for each full year worked;
11. Leave pay.
12. The claimant to tabulate the dues and submit for adoption on 18 December 2024 for the following grievants;
13. Geoffrey Silali Titi.
14. Teresia Akinyi Otieno
15. Emmanuel Zuma
16. Eunice Akoko
17. Francis Maina Manani
18. Hesborn Mungai Otora
19. Hesborn Ndumbu
20. Iqbal Kazungu Kipoonyo
21. Jared O. Getuma
22. Alen Jimson Mwamuzi
23. Riziki Katana Kalachu
24. Kennedy Wanyonyi Lusameh
25. Remmy Kitsao Karisa
26. Lavenda Magomere Ingasiani
27. Bakari Matano Ramtu
28. Nyamvula Moses Lenga
29. Noel Righa Mwakio
30. Norah Fiona Mbotela
31. Rose Adhiambo Nyakachunga
32. Sharon Akinyi Ochieng
33. Simon Lewela Mwambamba
34. Vallentine Onyango Oyugi
35. Shilah Wairimu
36. Esther Wangare

Delivered via TEAMS virtual platform this 14^th day of November 2024.

M. MBARŨ

JUDGE