Transport & Allied Workers Union v Societe Internationale De Telecommunications Aeronatiques (Cause 109 of 2010) [2011] KEIC 32 (KLR)
The bottom line
#Kenya's Industrial Court ruled a manager's redundancy was procedurally unfair because his employer skipped proper notification and consultation, awarding three months' salary.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether a Regional Manager of a Multinational Enterprise operating in Kenya is unionisable
- 2.Whether the CBA applied to the grievant
- 3.Whether the claimant had the capacity to bring the proceedings and negotiate the redundancy settlement on behalf of the grievant
- 4.Whether the redundancy was valid and procedurally fair
- 5.Whether the grievant was entitled to tax exemption, gratuity and service award
Key legal issues
#Unionisability of a Regional Manager
The grievant, as Regional Manager SITA East Africa, was not unionisable
Managers perform interpersonal, decisional and informational roles, represent capital, and have negotiating leverage unionisable workers lack. The Industrial Relations Charter excludes persons in charge of operations with decisional authority and confidential responsibilities. The practice in France did not alter the Kenyan distinction.
Applicability of the CBA to the grievant
The CBA did not apply as a collectively negotiated document but became the applicable contract upon the parties' adoption in the 2009 redundancy negotiations
The parties' exchange of letters in the redundancy negotiations adopted the CBA terms. Parties are free to negotiate and adopt terms so long as they meet the minimum threshold of the Employment Act 2007. The Court looks at the CBA as the contract adopted by the parties, not because the grievant was a union member.
Capacity of the union to act for the grievant
Though the grievant was not unionisable and could not be collectively represented, the union's individual representation of him in negotiations and litigation was permissible
Trade unions have a broader right to represent individuals beyond advocating collective rights. Once the CBA was adopted as the individual contract, engaging one of its authors was logical and suited the parties, within permissible industrial relations innovations.
Procedural fairness of the redundancy
The redundancy was procedurally flawed and the termination unfair under sections 43 and 45 of the Employment Act 2007
There was no formal notification of the intended redundancy to the employee, union and labour office; no evidence of consideration of alternative employment beyond a bare statement; and communications conveyed a decision rather than a proposal. Consultation requires engagement with an open mind and involves the entirety of the redundancy process.
Tax exemption, gratuity and service award
Claims for tax exemption, gratuity and service award failed as they are not demandable items
Tax payment is a personal statutory obligation of the employee under the Income Tax Act; a contract exempting a taxpayer would be illegal. Gratuity and tax assumption are discretionary good-faith gestures, and clause 30 made the Service Award discretionary. The tax had been remitted to KRA and the Court could not ask for more.
Legal principles established
#- Regional Managers and management staff are not unionisable under the Industrial Relations Charter framework in Kenya
- Employers must satisfy the Court that there was a genuine redundancy situation, notification of employee, union and labour office, consideration of alternative employment and consultation at every turn
- Consultation is distinct from negotiation of a separation package and must involve the entirety of the redundancy process, conducted with an open mind before a decision is made
- A CBA not applying to a non-unionisable employee as a collectively negotiated instrument may become the applicable contract of employment upon the parties' adoption in their negotiations
Court orders
#- 1.A declaration that the grievant's termination of employment on account of redundancy was procedurally flawed and therefore unfair
- 2.The respondent to pay the grievant 3 months' gross salary at the rate applicable on 30th November 2009 in compensation for unfair termination
- 3.The Award to be implemented in full within 45 days of its delivery
- 4.Each party to cater for their own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- Jurisdiction invoked
- Jurisdiction as the Industrial Court established to resolve trade disputes; dispute reported to the Minister for Labour under the Labour Relations Act and conciliation having failed, the matter came before the Court as a memorandum of claim
Relief refused
#Redundancy payments without tax deductions (tax exemption claim)
Employers have no mandate to exempt anyone from paying taxes; PAYE deduction is the employee's personal statutory obligation under the Income Tax Act and the tax had already been remitted to KRA
Gratuity of 3 months' salary
Gratuity is a discretionary payment and not an item the Court will order to be paid by the employer
Service Award under clause 30 of the CBA
Clause 30 stated the Award was at the discretion of the Company and is not demandable
12 months' salary compensation for wrongful termination
Claim made in afterthought; the payments already made reflected a fair package based on the adopted CBA provisions; only 3 months' salary awarded for procedural unfairness
Costs
Parties to cater for their own costs
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.
The grievant's termination of employment on account of redundancy was procedurally fiawed and therefore unfair.
The grievant be paid by the respondent 3 months' gross salary at the rate applicable on 3oth November 2009, in compensation for unfair termination.
The Award be implemented in full within 45 days of its delivery.
Parties to cater for their own costs.
Managers are not unionisable because they have a negotiating leverage unionisable workers lack.
It amounted to an unfair termination from employment under section 43 and 45 of the Employment Act 2007.
Issues in the judgment
#The judgment cites the Income Tax Act with two different chapter numbers
Inconsistent figures for the redundancy package communicated in the withdrawal letter (Kshs 20,415,771.88 vs Kshs 20,415,771.81)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Transport & Allied Workers Union v Societe Internationale De Telecommunications Aeronatiques (Cause 109 of 2010) [2011] KEIC 32 (KLR)", Case Analysis (2011). Cause 109 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keic/2011/32/eng@2011-05-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.