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ELRCPartially AllowedCause No. 35 of 2019

Stephen Munene Waititu v Kenya Tea Packers Limited & another [2020] KEELRC 963 (KLR)

Employment and Labour Relations Court of Kenya
2 June 2020
2,687 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The claimant, employed by the 1st respondent from 1996 as a driver and later as a sales representative earning Ksh.61,016 monthly, was declared redundant by letter dated 16th July 2018 following a restructuring that merged the Kitui and Machakos territories. He challenged the redundancy as procedurally defective and substantively unfair, alleging breach of Article 41 of the Constitution and section 40 of the Employment Act, absence of personal notice, and failure to consider seniority, skill and reliability. He sought nullity of the termination, reinstatement or re-engagement with back pay, and alternatively compensation, severance pay for 22 years and costs. The 1st respondent maintained that a lawful performance-based selection criterion was applied, that notices issued to the labour officer, the union and staff, and that terminal dues were paid in full. The court held that section 40 is mandatory and, for a non-unionised employee, requires personal written notice and notice to the labour officer at least one month before termination. There was no evidence the general notices of 4th and 6th July 2018 issued to the claimant, and the interval to the termination notice of 16th July 2018 fell short of the statutory period. The termination therefore lacked a valid and fair reason under section 43 and was unfair. Reinstatement was refused because terminal dues had been accepted and reinstatement would negate the redundancy. Instead, compensation of six months' gross pay (Ksh.366,366) was awarded, having regard to 22 years of untainted service and four years remaining to retirement. Notice pay and severance pay were found already paid, and no constitutional violation warranted remedies under section 12 of the ELRC Act. Judgment was entered for the claimant for Ksh.366,366 together with costs.

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 on grounds of redundancy complied with the mandatory procedure under section 40 of the Employment Act
  2. 2.Whether the redundancy was based on a valid and fair reason under section 43 of the Employment Act
  3. 3.Whether the termination was unfair, wrongful and unlawful
  4. 4.Whether the claimant is entitled to reinstatement or re-engagement
  5. 5.What remedies, including compensation, severance pay, notice pay and general damages, should issue

Key legal issues

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01

Compliance with section 40 of the Employment Act in redundancy

Holding

The termination failed the mandatory notice requirements of section 40 as there was no evidence the non-unionised claimant was personally notified, and the time span from the general notices of 4th and 6th July 2018 to the termination notice of 16th July 2018 did not meet the one-month statutory threshold

Reasoning

Section 40 is mandatory and, for non-unionised employees, requires personal written notification to the employee and the labour officer not less than one month before termination. The general restructuring notices were addressed to all staff and there was no evidence the claimant was invited to the town hall meetings or received personal notice. The interval between the notices and the termination notice of 16th July 2018 fell short of the statutory one-month requirement.

p. 3
02

Valid and fair reason under section 43

Holding

Without evidence of adherence to section 40, the termination lacked a valid and fair reason and amounted to unfair termination of employment

Reasoning

The respondent relied on restructuring and a performance analysis in which the claimant scored lower than his Machakos counterpart. However, the procedural failure under section 40 meant the threshold under section 43 was not met; the termination was therefore unfair. The court nonetheless accepted that redundancy premised on operational requirements is a lawful means of terminating employment.

p. 3
03

Reinstatement as a remedy

Holding

Reinstatement or re-engagement was refused because terminal dues had been paid and ordering reinstatement would negate the redundancy

Reasoning

The claimant had accepted terminal dues including severance pay at one month for each year worked. Since a genuine redundancy existed, reinstatement or re-engagement would be inconsistent with it. The court instead awarded compensation of six months' gross pay, taking into account the claimant's 22 years of untainted service and the four years remaining to retirement.

p. 4

Legal principles established

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  • Where an employee is not a member of a trade union, an employer declaring redundancy must notify the employee personally in writing and the labour officer not less than one month before the intended date of termination
  • Redundancy is a legitimate ground for termination only where there is a valid and fair reason based on operational requirements and the termination follows a fair procedure
  • A general notice to staff at head office is not evidence that the specific notice due to a non-unionised employee issued

Court orders

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  1. 1.A finding that the termination of the claimant's employment was unfair
  2. 2.Judgment entered for the claimant against the respondents for compensation of Ksh.366,366 (six months' gross pay at Ksh.61,016 per month)
  3. 3.Costs of the suit awarded to the claimant
  4. 4.The Order to be delivered to the parties via emails in line with COVID-19 directives

The bench

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

majority

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court Act, 2011 (section 12); Employment Act, sections 40, 43, 45 and 49

Relief refused

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Declaration that the termination was null and void and reinstatement or re-engagement with back pay and without loss of seniority

The claimant had already been paid terminal dues and reinstatement would negate the very redundancy found to exist

Notice pay

The claimant had already received one month's pay in lieu of notice and pay for 16 days worked

p. 4

General damages / constitutional remedies

No constitutional violation was established to warrant remedies under section 12 of the Employment and Labour Relations Court Act, 2011

p. 4

Costs

Judgment entered for the claimant against the respondent for compensation at Ksh.366,366 together with costs.

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.

Accordingly, the termination of employment is found unfair and judgement entered for the claimant against the respondent for compensation at Ksh.366, 366 together with costs.
p. 4Disposition and award
Section 40 of the Act is mandatory that the notices due to the employee where there is a redundancy must issue and particularly where the employee is not unionised, the notice(s) must be issued to the subject employee.
p. 3Mandatory redundancy notices for non-unionised employees
Even where these notice issued, which have no evidence, the time span and period from 4th July, 2018 and 6th July, 2018 and leading to the termination notice of 16th July, 2018 do not meet the statutory threshold set out under section 40 of the Act
p. 3Failure to meet the one-month statutory notice period
His record was therefore untainted for the 22 years of service.
p. 4Assessment of compensation - clean service record
Compensation is hereby found appropriate at six (6) months gross pay of Ksh.61, 016 x 6 all at Ksh.366, 366.
p. 4Quantum of compensation

Issues in the judgment

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minor

Internal inconsistency in the compensation figure: 61,016 x 6 equals 366,096, yet the judgment repeatedly states Ksh.366,366

minor

Typographical garbling in the passage on reinstatement, rendering the reasoning unclear

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, "Stephen Munene Waititu v Kenya Tea Packers Limited & another [2020] KEELRC 963 (KLR)", Case Analysis (2020). Cause No. 35 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/963/eng@2020-06-02

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